Module 3.0 Restructuring Your Agency’s Administrative Services Organization 1.

Module 3.0 Restructuring Your Agency’s Administrative Services Organization
1

The objective of this module is to ...
Introduce concepts and tools that can assist with designing an effective structure for administrative services regardless of the size of your agency Provide agencies with information to understand strengths and weaknesses of different structures for Simplified Administrative Services Discuss the timeline and transition issues related with changing the structure 2

8:45 Assessing your current organization’s infrastructure
Our Agenda for the day…. 8:30 Overview 8:45 Assessing your current organization’s infrastructure 9:15 Developing your “to-be” infrastructure 10:15 Break 10:30 Implementing your new Administrative Services infrastructure 11:00 Lessons Learned and Next Steps Throughout our work in organizational design and workforce transition, we have defined “Infrastructure” as actual organizational structure, internal policies and procedures, relationships between organizational units, and even geographical location.. During this workshop, we’ll take a closer look at “Infrastructure” in its entirety -- including such important organizational considerations as staff development and leadership 3

OVERVIEW 4

We are now at the agency Organizational Infrastructure process for Simplified Administrative Services Conceptual Design Framework Develop organization vision themes to support overall vision Define key relationships between processes Identify areas for integration Redesign Processes Identify target process areas Define processes and organizational responsibility Identify initial skills needed Directional Design Align processes with current org. activities Identify leadership responsibilities Identify organization attributes Assess alternative organization models Select model and develop high-level organization chart for central admin services operations We are here Process Refinement Align processes with system vendor Detail redesigns to organizational and human resource levels Integrate overlapping processes Detailed Organizational Design Finance and Administration Develop job design, management, and accountability structures Develop competency requirements Map employees to roles Develop next layer of org. chart Organizational Infrastructure for Agencies’ Administrative Services Processes Share with agency organizational teams Identify organization attributes Assess alternative organization models Select model and develop high-level organization chart 5

Specifically for the agencies we will...
We are here Organizational Infrastructure for Agencies’ Administrative Services Processes Share with agency organizational teams Identify organization design criteria Assess alternative organization choices Propose models and help develop high-level organization charts and plans Share “the new F&A structure, processes and outcomes” with agency organizational teams”…touched on during Workforce Transition Planning. Will continue to look at that during this session. 6

As part of our preparation for today, we met with many of you regarding your current structures
We asked specific questions related to your structure, approval path, and processes for doing material and financial management activities We developed model as-is structures to identify common strengths and weaknesses of the structures across the Commonwealth We will be discussing these things as well as other items that make up an effective structure on which to base your administrative services operations. Those are 7

Structure alone will not support the success you need...
However, organizational infrastructure is comprised of a number of building blocks Structure alone will not support the success you need... Organization Structure Leadership Think of “Infrastructure” as consisting of several building blocks or “characteristics” that can either: 1) make your organization’s structure truly effective or 2) if those characteristics are missing or used incorrectly, can allow your organization to become the type of bureaucracy that we are all working very hard right now to avoid. Define each from an administrative services perspective... You will continue to see these boxes throughout the session this morning in the upper right hand of the slide to ensure that you see we are tracking with the key focus areas We will be addressing each of these different characteristics throughout the morning Rewards/ Incentives Staff Development Recruitment/ Deployment 8

How involved does leadership need to be?
Today, we will discuss the important factors related to these characteristics of organizational design How involved does leadership need to be? What are potential hazards of changing the structure? Where are the critical points for decision making? 9

Hard copies of tools and templates are located in your handouts
Today’s session will be supported by a number of tools, templates, and examples Hard copies of tools and templates are located in your handouts Each participant will receive an electronic folder with the tools and templates They will be sent to your address on Monday and Tuesday of next week Examples are imbedded within today’s module. Primary example will be the Finance and Administration Cabinet and organizations within 10

Tools that you will receive:
File Name Description asis_assess.doc handouts.doc orgdoc_out.doc How to assess your organizational infrastructure A case example of the Finance and Administration Cabinet that includes a number of templates and documents that you can modify to meet your agency’s needs Outline for creating an integrated organizational briefing document to support desired organizational changes 11

To improve your agency’s Administrative Services approach, ask the following questions:
Does your agency lack a clearly defined set of vision and design criteria for your administrative services organization? Does your agency currently have a Central data entry organization that enters data from field or program areas? Does your agency have more than three approval paths? Does your agency currently store copies of forms, invoices and bills in more than one location for your agency’s transactions? Does your agency have redundant activities occurring in your administrative services area (e.g. duplicative data entry)? Does your agency receive complaints regarding the amount of time it takes to process documents, receive payments, get things approved? Does your agency strive to be recognized as having “Best Practices” Third bullet (approval path) examples, if needed: general procurements disbursements payables Run thru the list individually (5 min) Compare your answers with others who are with you from your agency Process - next slide 12

If the answer was YES to ONE or more questions, consider the following process:
Assess current organizational processes & characteristics Create design criteria Create to-be organizational processes & characteristics Develop a new organizational infrastructure IMPLEMENT! We will provide you with a roadmap for completing these activities this morning. If you did not answer yes to even one of the questions, your organization may very well have nothing to learn from this morning’s activity. Please feel free to go. 13

Assessing Your Current Organization's
Infrastructure There are three steps that I will be walking you through for assessing your agency’s current infrastructure. It is very important to understand where the weak links are in your organization. Oftentimes I work with individuals that feel a new structure is necessary when in fact the structure could support the desired activities. To begin the assessment process, I generally ask agencies to consider the following [enter]: 14

Assessing your agency’s current organizational infrastructure requires:
STEP 1 Understanding the current administrative services activities that employees in your agency do A current organizational structure diagram with an understanding of reporting relationships and approvals Evaluating your administrative services organizations’ current approach to other Organizational Characteristics Description Strengths and weaknesses STEP 2 STEP 3 15

The first two steps are complete...
In the fall of last year, many of you completed the as-is analysis. This data provides a good baseline for beginning the assessment process In January and February, a number of you worked with us to define as-is organizational structures Over the last six months, you began collecting information for the first two steps. As a result, you are nearly in the position to begin developing a more detailed design for your agency based upon analytical and defendable data. 16

As-is models are located in Appendix A by size of agency
Organization Structure Our initial analysis of current structures and approval approaches identified several findings…. STEP 2 Size of agency was not a key determining factor for structure or number of approvals Differences in centralized and decentralized structures were fairly significant Agencies that had the same structure on paper, did not necessarily identify the same strengths and weaknesses As-is models are located in Appendix A by size of agency First, I would like to share with you a little bit of analysis about the information that you shared with us when we asked about your agency’s current structures and approach to administrative services. If we saw any major differences, it was between the centralized and the decentralized agencies. Not surprising to me was how agencies with almost exactly the same structure had very different views of the efficiency and effectiveness of their organization. Typically, it is because there is differences in the other characteristics of the organization, policies and procedures, and agency mission/direction. 17

Small Agencies included:
Organization Structure Small Agency Models STEP 2 Small Agencies included: Agriculture Economic Development Military Affairs Arts & Humanities Small Agencies generally had 2 models: Centralized Decentralized 18

Medium agencies included:
Organization Structure Medium Agency Models STEP 2 Medium agencies included: Natural Resources and Environmental Protection Cabinet Public Protection and Regulation Cabinet Medium sized agencies generally had 3 models: Central approval and processing Central approval Decentralized 19

Large agencies included:
Organization Structure STEP 2 Large Agency Models Large agencies included: Cabinet for Families and Children Transportation Workforce Development Cabinet for Health Services Justice Cabinet Finance and Administration Cabinet Large agencies generally had 3 models: Central approval and processing Central approval Decentralized 20

Sample of Financial Management (Centralized/functional)
Organization Structure Sample of Financial Management (Centralized/functional) STEP 2 Finance & Administration Cabinet Agency Department Department Department Department or Office or Office or Office or Office Approval 3 & 5 Approval 2 Division Division Division If you look under the tab “models,” the first section says “Appendix A” as-is models. These models were based upon many of your agencies’ input. This appendix is currently divided between small, medium and large, but it doesn’t need to be. In fact, you will see an almost parallel structure of some of the models across the small, medium, and large agencies even down the similar names for branches and sections. Similarly, when I compared the as-is information in terms of activities performed within different organizations I saw that they were frequently similar, just at different volume levels. Branch Approval 1 Administrative Branch Origin of Transaction Financial Approval 4 Branch 21

Assessing the Organizational Infrastructure
STEP 3 How do leadership actions support the development and direction setting for Administrative Services? How are they promoted and used? Is there an opportunity to use them better? Develop new ones? How is training viewed and communicated? Are staff proactive in identifying appropriate training? Are staff encouraged to develop a career plan? Is performance measured and managed effectively? How does your agency address recruitment and deployment of employees? Do you have a career path? Leadership Rewards/ Incentives Staff Development [DRIVER: Bring in each of the building blocks and then stop] Gail introduced the building blocks of organizational infrastructure earlier and we just discussed parts of the first block on organization structure. As we move into the third step of assessing your infrastructure, you are primarily trying to understand how your agency’s administrative services organizational units approach each of these areas. For some of you, this will require an assessment of each of the administrative areas you have such as a Division of Financial Management and a Division of Administrative Services (which I recognize often includes payroll, time sheets, etc). Some of the specific items that you are considering for each area include: [bring in line wait for signal or request for next line] Recruitment/ Deployment 22

Beginning the assessment process
STEP 3 Use the assessment in your handouts Work with your agency team members to review and begin the assessment We will reconvene in ten minutes to discuss Please go to the tab marked handouts/tools. Behind the blue sheet of paper, is an assessment document to better understand some of these key characteristics. The questions target activities, policies or process that are known to affect how well a public sector organization functions including productivity, morale, and customer satisfaction. I have used different forms of this assessment in varying ways with organizations including the Division of Purchases, the Division of Accounts, and other relevant components of the Finance and Administration Cabinet. In environments where it is a commonly shared belief that the organization must change structurally and otherwise, you can use the form in a work session environment and have people share their opinions openly. In more closed or potentially volatile environments, I recommend that you hold one-on-one interviews and to the extent possible bring in a third party to help do the assessment such as someone in GSC or conduct a change readiness assessment that allows employees to comment on their current perceptions of the organization in each of these areas. What I would like to do now is have you take a little time to begin assessing your organization in each of these areas. If you feel that there are other questions that need to be added to your assessment then feel free to add them. As mentioned before, this table will be sent to you electronically. I should mention that when I first began this process with some sections of the F&A Cabinet, they were convinced that all of the problems were with the Personnel Cabinet. At the end of the process, that was no longer the belief. 23

Administrative Services
for the Future Now, how do you design a new organization structure that is right for your agency, conforms to Commonwealth wide administrative policies and complements rather than competes with or duplicates what the Finance and Administration Cabinet does? 24

This section will address how to...
STEP 1 Create agency-specific organizational design criteria and performance objectives Identify influences and constraints Conduct preliminary analysis Create to-be organizational characteristics Determine new model structures Develop a briefing document for the new organization STEP 2 STEP 3 STEP 4 I am going to walk you through a six step process and we are going to revisit the Finance and Administration Cabinet’s old and new structure and their process to provide you a concrete case of how this works so that you may be able to see how it can contribute to your own agency’s development of an appropriate structure….. If you would all turn to the tab marked handouts/tools. The very first document is what we will be going through now. I recommend that you takeit out of your notebooks or your handout section and keep it handy because we will refer to it frequently. [Driver: put on lense cap switch to handout presentation….I will be going through the first seven pages] STEP 5 STEP 6 25

Create design criteria and performance objectives
STEP 1 Design criteria define what the new organization should ideally be able to provide. Design criteria may conflict with one another Performance objectives define what high level outcomes you want to achieve as an organization and will help drive the design. The first step begins the process of defining what you want your administrative services organization to accomplish in the future on all parameters. In the beginning, you should bring together a group of individuals who can brainstorm what these criteria would be without discussing them. Typically, I have found, that there will be design criteria that clash with one another. This is okay and the conflicting criteria or performance objectives should both be recorded. Conflicting design criteria often lead to some very important insights into how the organization should be structured. [Driver please press enter] I would like to have you turn once again to the case handout to the 8th page (which is not marked) that looks like this….. These design criteria are some of those that working groups comprised of agency leadership, GOPM, and other agencies developed during a working session. Following these two pages of criteria are some of the initial high level performance objectives Is high level a consultant term? When I worked for state government in Montana I never recall this term being used -- Maybe it was just Montana Example 26

Identify influences and constraints
STEP 2 This step is the reality check and identifier of potential roadblocks Important to complete after establishing the design criteria and performance objectives Examples of influences and constraints include: Geographic Dispersion Employee Skills Legislation/ Statutes Other influences and constraints include a lack of a clearly defined business case or reason for changing the organizational structure, Lack of consensus, stakeholder resistance, Concern by employee groups, complexity of the design and/or ambiguity,low morale, change fatigue, and few quick win/success opportunities all contribute Readiness for Change Political Influences 27

Draft some influences and constraints In ten minutes we will reconvene
Beginning the process STEP 2 With your agency team members, draft some design criteria and performance objectives Draft some influences and constraints In ten minutes we will reconvene As with before spend about seven minutes creating the design criteria and performance objectives that you envision for your administrative services organization. Think of the big picture. After the seven minutes, draft some influences and constraints. We will reconvene in 10 minutes to share and discuss some of our thoughts. I will walk around and be available for questions. Are there any questions before we begin? [Driver, please leave this slide up] 28

Conduct Preliminary Analyses: prioritize and assess gaps
STEP 3 With leadership, identify which criteria and objectives are a priority. Use a rating scale of 1-5 with 1 being a priority Assess the current priority of that criteria within the organization today Design Criteria Priority Future Priority Today Gap Improve processing times Reduce duplicative activities Once you have the design criteria, you need to begin to prioritize and categorize them into logical groupings. I like to recommend organizations assess whether the design criteria are a current priority and the future priority they would desire. In some cases, the design criteria is so new that it has no current priority and thus receives a ZERO. For instance, with the Finance and Administration Cabinet, it was apparent that customer service related criteria were a high priority and could be grouped together, while the control and accountability activities needed to be separate but were equally as important. 29

Conduct Preliminary Analyses: assess the effort to change and associated costs
STEP 3 The gap analysis and the influences and constraints provide the data to assess the effort it will take to change Associated costs relate to areas where there may be funding or staffing required Design Criteria Effort to Change Costs Issues Associated Improve Hardware Kentucky Processing Times Medium Derby set-up Reconfigured may change Office Space timing Reduce duplicative High Training Old activities efforts continue until 12/99 If gap is 1 or less then effort would be low If gap is 2 then effort is medium if gap is 3-5 effort is high. Discuss GAP for CRC If there is an influence or constraint specifically related to the criteria or performance objective it may sway the effort one direction or another Influence was strong leadership support for emphasis on agency support, which reduced effort to change at the leadership level a medium. 30

Develop to-be organizational characteristics
STEP 4 Organization Structure Leadership Hopefully throughout the process of defining the design criteria, the to-be characteristics of the new organization are beginning to emerge. To ensure that each is addressed at an appropriate level, we have the following guidelines.. Rewards/ Incentives Staff Development Recruitment/ Deployment 31

Develop criteria and leadership skill and competency needs
STEP 4 Develop criteria and leadership skill and competency needs Public sector environment makes this an important activity Guides executive leadership in making political decisions Create leadership action plans that detail necessary communications and actions The political rather that profit driven nature of the public sector presents some challenges in this area. However, it is not insurmountable. What we have found to be received fairly well are the development of selection criteria and guidelines for Branch Managers, Division Director, Commissioners and Executive Directors and even Deputy Secretaries. Furthermore, research indicates that strong leadership in the public sector is more important than in the private sectors. With fewer incentives and career opportunities, the leaders at the top often make the difference. Policy making criteria, action plan development etc. are a few things that the leadership in your administrative services area should be doing to effect change. I understand that you may be asking -- how can we effect such change??? 32

Identify and define the rewards and incentives that you can use
STEP 4 Identify and define the rewards and incentives that you can use Existing statutes and resource constraints somewhat limit ability to provide rewards and incentives With leadership support there are still many opportunities to recognize employees Well-defined performance measures will make assessment of who deserves rewards and recognition easier and fair Well-defined career path can also contribute First bullet -- Personnel Cabinet continues to work on this and they will be releasing some new regulations that may help. I have found that here and elsewhere this is often an excuse for not doing anything. But there are many other opportunities In your handouts are a list of reward mechanisms that you can consider. The key is the support by management and the employees 33

Create staff development needs for the new organization
STEP 4 Create staff development needs for the new organization What skills or competencies will be needed? Do they need to become part of class specifications requirements? Define agency approach to training in administrative services area and required trainings Develop guidelines for management and staff Promote development of “career plan” that includes training plans and significant career milestones Define performance measures (e.g., reduce documentation preparation and approval time by one-third). If staff believe that an organization supports them, they are more willing to give more back to the organization. The key with staff development is to change the way people think about the organization. Change the culture to have them more invested. 34

Define future approach to recruiting and deploying new employees
Recruitment/ Deployment STEP 4 Define future approach to recruiting and deploying new employees Create list for future administrative services recruitment needs Create agency specific selection guidelines that may include knowledge, skills, and abilities requirements Develop a career path using existing class specifications and new class specifications provided by the Finance and Administration & Personnel Cabinets With retirements this may become especially important 35

Determine key organization model components
Structure Determine key organization model components STEP 5 Use the design criteria, performance objectives, and list of influences and constraints Review the common organizational design models Assess criteria using Fit Model Blank Fit Model is in your handouts and will be in the folder sent to you next week How you structure your organization is dependent upon a number of things as you are all aware. Personnel policies, political influences, customers served, type of service or product your organization provides, number of transactions, and internal policies to name but a few. The process that we used for developing the preliminary structure for each of the changes in the finance and administration cabinet used this process. Like you, some components of the organization cannot yet be defined since the policies and procedures have not been defined. But the Cabinet did have the reengineering goals and the redesigned processes that guided the lower levels of the organization. 36

There are some common organizational models that can help
Structure There are some common organizational models that can help STEP 5 Customer Process- Centered Functional Hybrid These models are defined in your handouts. They are models that are appropriate for the government. Service Geographic 37

Example of Organizational Fit Charting
Structure Example of Organizational Fit Charting STEP 5 Design Criteria Functional Geographic Customer Process Service Enhances Responsiveness Encourages Innovation Provides Streamlined Structure and Processes Provides Flexibility to accommodate environmental change Focuses on core competencies Improves Cost efficiency/effectiveness of service Enhances work environment The bottom two lines were left blank intentionally. Please take five minutes to review the common organizational models table and complete these lines from a Commonwealth perspective. High Medium Low 38

Organization Structure STEP 5 Develop Organization Alternatives -- Create and select models that will work for your agencies Process-Centered Hybrid Customer Focused Hybrid Agency Head Agency Head Functional COEs Func 1 Func 2 Func 3 Func 4 Func 5 Customer Owner 1 Customer Owner 2 Customer Owner 3 Process Owner 1 End to end process Process Owner 2 End to end process Function Owner 1 Function Owner 2 Function Owner 3 Process Owner 3 End to end process Centers of Expertise Agency Head Geographic Focused Hybrid Geography Owner 1 Geography Owner 2 Geography Owner 3 Function Owner 1 Function Owner 2 Function Owner 3 39

To-be models to consider
Organization Structure To-be models to consider STEP 5 Models address the structure only Two agencies could have the same structure, but not be equally effective or efficient due to differences in their other processes & characteristics Goal is to reduce the number of approvals and the redundant activities To assist in the modeling process, we have provided some “to-be” models. They do not go down to the internal modeling of your administrative services organizations yet. What we do know, however is that your organizations will best complement the F&A Cabinet’s efforts if they remain more flexible and process oriented. Another significant factor will be how your organization designs its workflow. The structure needs to accommodate the workflow Julie is handing out some of the models now. As more information comes available on the policies of MARS we will continue to refine and provide detail for the organization . 40

Create your model organization
Structure Create your model organization STEP 5 Using the organizational fit model, the design criteria, and the sample models, develop a directional design for your administrative services organization Hybrids of different types of models are common Models need to support the business processes Don’t need to get into the specific details of the design yet 41

Organization Structure Then apply to your agency To-Be Model “Centralized” and Geographic Primary/FunctionalSecondary STEP 5 Finance & Administration Cabinet Agency Department Department Department Department or Office or Office or Office or Office Approval 3 Approval 2 Division/Region Division Division Branch Administrative Branch Approval 1 Origin of Transaction Financial Branch 42

Begin to define the new structure
Organization Structure Begin to define the new structure STEP 5 Each component of the new structure should have a purpose statement and a defined activities set Policies and procedures for the new structure will need to be developed Cross walk roles from the to-be roles for Administrative Services to the structure Reassess associated costs to change…the new structure may have introduced new needs 43

Develop a briefing document for the new organization
STEP 6 Develop a briefing document for the new organization Becomes a roadmap for leadership and employees Outline provided in handouts and in the documents we will provide to you Clarifies and integrates all of the Organizational Infrastructure Processes and Characteristics Creates the justification and need for change 44

IMPLEMENT 45

Key implementation factors your agency should consider
Communications Workforce Transition Training Needs Organizational Readiness Number of Affected People Degree of Impact Geographic Dispersion Timing Executive Leadership Support 46

Timing of implementing the structural changes can be as critical as the structure itself...
Freeze on Executive Orders and Administrative Orders that will affect Chart of Accounts through August of 1999 Capacity to change and achieve desired benefits given limited resources Uncertainty about the exact impact the system will have on an agency’s operations. 47

Create an implementation plan that addresses each of these factors
Agency approach: Timing: Assigned responsibility: Status: 48

Ensure the effectiveness of the implementation
Measuring the agency’s ability to meet the design criteria and performance objectives after implementation is critical Continuous improvement should become a part of the agency’s culture (maybe made formally) True effectiveness will take time. Make sure to measure and acknowledge the small successes. 49

Questions???? 50

Thank You!!! 51

Module 3.0 Restructuring Your Agency’s Administrative Services Organization 1.

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Module 3.0 Restructuring Your Agency’s Administrative Services Organization 1.

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