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Using Lean Methods to Drive OperationalExcellence in Regulatory Environments

Portland, OregonSeptember 17, 2016

Council on Licensure, Enforcementand Regulation 2016 Annual Educational Conference 1

Using Lean Methods to DriveOperational Excellence in aRegulatory Environment

Michelle Z Pedersen and Greg Bellomo

Agenda

• Presentation on Lean in a Regulatory Environment (45 min)

• Open Q&A (45 min)

– Concepts and our experience

– Challenges in YOUR agency

How Experienced is yourAgency with Lean Methods?

1 = We have no experience with Lean/ContinuousImprovement.

2 = We have dabbled with the concept; some people aretrained.

3 = We have an organized program and regularly executeLean (and/or other CI methods) to improve processes.

4 = We use the Lean philosophy & tactics to delivermeasureable gains and transform our culture.




Objectives

1. Connect with the Lean philosophy and demonstratehow it accelerates improvement

2. Build familiarity with practical tools to increase thevolume and quality of your improvement efforts

3. Leave with some tangible ideas you could apply onMonday

Today is about both Philosophy AND Tactics

Philosophy“Players gonna play, play,play, play, play and thehaters gonna hate, hate,hate, hate, hate.

I’m just gonna shake, shake,shake, shake, shake.

And improve operations.”

Taylor Swift, 2016

Some More Philosophy“The task is not so much tosee what no one yet hasseen, but to think whatnobody yet has thoughtabout that which everybodysees.”

Arthur Schopenhauer, 1850




Learning to See DifferentlyHere are the mainparts of the bodythat allow us tosee

Here are the mainparts of the bodythat prevent usfrom seeingdifferently

Butt

Feet

Brain

Eye

Why Do We Care?

Why You Better Care!

Agency Project* Results

Public Safety On-boarding Efficiency # of Approvals(17 to 5)

Local Affairs Housing ChoiceVouchers

# of Forms(103 to 47)

RegulatoryAgencies

Call Center GoldStandard

First Call Resolution(from 53% to 90%)

Personnel andAdministration

State ArchivesCustomer Service

# days of wait time(from 14 days to same day)

HumanServices

Time to Fill Vacancies Median days to hire(from 110 to 55)

*Projects average 6-8 weeks in duration

70%

50%

-13

50%

65%




Temperature Check

Which of these statements best matches yourfeeling about that last slide?

1 = You lie like a rug.

2 = This is interesting. Please tell me more.

LEAN FUNDAMENTALS FORREGULATORS

True or False

In a regulatory environment, we do not have customers:

1 = True

2 = False

In a regulatory environment, the customer is always right:

1 = True

2 = False




Truths in a RegulatoryEnvironment

• The customer is NOT always right, but they always haverights.

• Most products that take minutes to process, wait daysto be processed. Those that take days of work oftenwait weeks or months.

• Perfect often gets in the way of better.

Defining the CustomerIf everyone is a customer, then no one is –

and focus on the real customer is lost

Type of Customer Definition Example (State Patrol)

Direct End user/consumer of theprocess, product or service

Highway motorists

Stakeholder Affects or is affected by theprocess, product or service, butdoes not directly consume

Businesses – interstatecommerce flowLocal law enforcement

Beneficiary Indirectly benefits from theprocess, product or service

General publicTaxpayers

Customers, and only customers, identify the value

The Value Stream

Definition• Network of steps

• Provides result for customer

Characteristics• Some activities add value to the

result

• Some activities do not add value

• Sometimes the process stops with

no activity

BEGIN

END




3 Versions of the Value Stream

What it Actually is …

What we Think it is …

What is Achievable …

Waste and Value

Value• The portion of the process the

customer would be willing topay for

• Transforms the product orservice

• Done right the first time

Waste• Everything else

Waste: What Will I See?

Waiting When the process stops

Approvals Approvals or inspections that don’t improve the product or service

Silos Handoffs between people and organizations

Transportation Any movement of paper or people (motion)

Errors Things not done right the first time; requires rework

Failure to Prioritize Working in crisis mode because “everything is important”

Underutilized Talents Not using all of an employee’s skills

Lack of Standards The absence of standard methods and targets




The Difference

Typical Regulatory View• Strong focus on vertical

functions and departments

• Front line supervisors judgedon end-of-process results only

• Decisions made by managersfar away from the point ofvalue creation

Lean View• Strong focus on the horizontal

flow of business processes (thevalue stream)

• Front line supervisors judged onthe performance of theirprocess - "If the process isright, the results will be right”

• Decisions made at the point ofvalue creation

Leadership’s Role

“The greatest leaders of the 20th century wereHitler, Stalin and Mao: If that is “leadership,” Iwant nothing to do with it.”

Peter Drucker “Social Ecologist”

Leadership’s RolePurpose Process People

What’s the problem?(Not the solution)

“If it ain’t broke, you mightwant to fix it anyway”

Front line in front and get outof the way

Where’s the value?That’s the way we’ve always

done itTeam of change agents ortransformation agents?

Shifts “ownership”Break out of

“government-ese”How about some customers or

stakeholders?

People and culturedevelopment

It is 2016 Ask the difficult questions

Continuous Improvement But that’s my JOB!Emotions – Emotions -

Emotions




Maslow and Public Sector Lean

Higher-order Needs• Teamwork• Connection to a mission• Accomplishment• Personal growth

Lower-order Needs• Job security• Reasonable pay• Safe working conditions

Biological and Physiological Needs

Safety Needs

Belongingness and Love Needs

Esteem Needs

Self-actualization

LEAN IN ACTION: CASES

Case 1: P & E InspectionsSituation: The State of Colorado assumed responsibility for anadditional ~20% of the state (from local jurisdictions) but weregranted only an additional ~10% more inspectors.

Additional details:• 39 inspectors cover all plumbing and electrical inspections in the

non-metro portions of the state• This group conducts ~50k inspections across 104,185 mi2

• Statute requires the group to conduct all inspections within 3 days

The inspections team needed to identify and eliminate waste tomake the most of their available capacity.




Alternate Means of InspectionScenario: A plumbing inspectorarrives at a new gas serviceinspection 110 miles from thecenter of his territory. A gas pipeis inadequately supported.

Gas Pipe

Wastes: Waiting,Transportation

Impact: Allowing alternatemeans of inspection saved 220miles (5 hours) and allowed thecustomer to occupy their house 3days earlier.

Sticker

Alternate Means of InspectionConditions:

• Previously been tothe site

• Familiar with theinstallation (obvious)

• Non-life-safety issue• Alternate means has

sufficientresolution/clarity

• Corrections only

Potential Application of:

Electrical Plumbing

Exemptions NO-GO ZoneChange Code Via

Rules Process

Alternatemeans

Electronic means available forselect conditions:• Skype• Facetime• Photos• Video

Case 2: Enforcement Fact FindingSituation: Citizens claiming discrimination (housing, employment orpublic accommodation) were not introduced to an investigator untilseveral weeks after their first contact with the Colorado Civil RightsDivision.

• Nearly 1,000 formal charges are received from claimants annually (anaverage of 70% of employment cases are dual filed with the EEOC)

• Investigations take 12-18 months• Approximately 95% find no probable cause

A customer service nightmare for vulnerable populations




Process Mapping

Cla

imant

CallDivision

Adm

in

Inta

ke

Specia

list

Invest

i-gato

r

Direct toWeb

CompleteWeb Form

Package forInvesti-gator

Print andMail

CallClaimantfor Info

ReviewPacket

Batch forIntake

ReviewPacket

ProvideRequested

Info

Redesigned Process

Cla

imant

CallDivision

Adm

in

Inta

ke

Specia

list

Invest

i-gato

r

OfferAppoint-

ment

ProvideVerbalRecap

Consultwith

Claimant

CompletePacket

Impact:• Lead time to file

from 3 weeks to<7 days

• Similar workloadfor investigators

• Intake SpecialistFTEs reassigned asan investigator

• Customer feelsheard

Case 3: Call Center ImprovementSituation: A department of regulatory agencies had 5 different callcenters, each with long hold times and poor first call resolution.Resources for improvement were limited.

Additional details:• ~4,000 calls per month• 53% first call resolution• Overall customer satisfaction was 68%

Management committed to achieving a gold standard




0

20

40

60

80

100

120

140

160

180

200

0 10 20 30 40 50 60 70 80 90 100

Ave

rage

Cal

lDu

rati

on

(se

c)

Number of Calls

Plotting Duration v. Frequency

Dup. License

Other

Application Status

New App Renewals

Tech Support

Ver Request

New Complaint

Get it to an expert quickly

Allow self-service todecrease volume

Transfer to Licensing

Customer Experience Mapping

90 Seconds ofGreeting 75 Seconds of

Phone Menus 4 Minutes ofWaiting Live Agent

Learns Issues

Transfer to NewAgent

Deliver the Infothe CustomerWanted

Live AgentLearns Issues

Phone Tree Diagram




Call Center ImpactOver the course of 7 months:• Increased first call resolution from 53% to 91%• ~10% decrease in call volume due to fewer repeat calls• Overall customer satisfaction was 68% to 82%• Set the stage for automation of some self-service

functions

Myth Busting—Episode 2

Which of these statements is true?

1 = It takes only months to make significant gainsin process performance.

2 = It takes 3-5 years to transform a traditionalculture to a continuous improvement culture.

3 = Both are true

HOW TO




SOLVE: Lean in 5 Steps

S

O

L

V

E

Scope the Opportunity: Define the problem to be solved

Organize the Resources: Make a plan and engage the right people

Lean it!: Apply Lean tools to define potential solutions

Verify the Impact: Test to make sure our fixes work

Ensure Sustainment: Make it stick!

SOLVE: Template and Checklist

TemplateChecklist with

Tool References

SOLVE: Tool Overviews

Page 1:• Which SOLVE step• Overview & “how to”• Wisdom & links

Page 2:• Replicable example(s)• Key points and/or tips




Making it Work

Champion

• Confirmed after completing required training and demonstratingapplication of tools and techniques on meaningful projects

• Directs Lean within their agency; mentors sponsors andfacilitators

Sponsor

• Responsible business leader who owns the value stream and whocan approve the project scope and objectives

• Chairs the steering committee and selects the “can-care-knows”project team

Facilitator

• Trained expert who guides the project team through theproblem-solving process

• Identifies barriers to success and helps coach the team

Where Do I Start?1. Select one of your “products” and identify the customer

(end user).

2. Talk to your customers about what frustrates anddelights them.

3. Walk the process that delivers the product/service.Discuss with employees what gets in their way.

4. Summarize the suggestions you receive and rate each.

5. Engage with employee to make change.

6. Celebrate.

Continuously Solve Problems

Time

Performance

What people THINKimprovement looks like:

“You better pack a lunch if you’re gonna play Wisconsin, brother,because you’re gonna be there ALL DAY!

- Keith Jackson

Time

Performance

What improvementACTUALLY looks like:




Some More Philosophy“People who work togetherwill win, whether it beagainst complex footballdefenses, or the problemsof modern society.”

- Vince Lombardi

“

Speaker Contact Information

Government PerformanceSolutions, Inc. (GPS)

Greg BellomoManaging Partner,Government Performance [email protected]

Michelle Z. PedersenFormer Deputy Executive Director,Colorado Department of Regulatory [email protected]