Catch the wave of innovation… Faster, Better and then Cheaper 6 Steps to Putting the “Service” back in “Public Service” Lee Scott, CEO Unleashing Leaders, Inc The thoughts and ideas here are the opinions of Unleashing Leaders, Inc. and do not necessarily reflect the view of the EDD. ©

Catch the wave of innovation… Why should you care? Does your team … –Deliver a valuable service to Californians? –Struggle at times to meet service levels ? –Struggle with limited or shrinking resources? –Rely more on heroic efforts than sustainable processes? –Feel that performance is good but have cool ideas to make it better, if only you had the time? ©

Catch the wave of innovation… 3

Why the EDD Story? We help Job Seekers get back to work, Employers meet their business needs, and Claimants to get what they need to get back on track. 4 ©

Catch the wave of innovation… Strategic Goals One Vision, One Team - EDD 5 - Vision- To strengthen the economic vitality of Californians and their communities - Vision- To strengthen the economic vitality of Californians and their communities Skilled Workforce Enabling Innovation Sustainable Operations Fiscal Stewardship Responsible Service

Catch the wave of innovation… The Leadership Challenge How do we deal with … ? Significant cuts in Federal Funding High service level demands for Claimants Volatile workload and swings in workforce Major technology changes in progress Complex Federal, State and Case Law Regulations 6 ©

Catch the wave of innovation… The Integrated Strategy Agile Project Management –Dedicated & Empowered team –Deliver every 30 days (sprints) Theory of Constraints –Surgically target PROCESS Bottlenecks –Measure 3 Key Performance Indicators Six Sigma –Use Clear Leadership Roles –Use Data Collection methods –Reduce Defects that clog the Bottleneck Lean –Focus on Faster First –Reduce 8 Wastes that bog the Bottleneck 7 ©

Catch the wave of innovation… One Vision, One Team – EDD People – The Agile BPI Team BPI Core Analysts 6-8 Advisors ~2000 Field Reps 3 Million California UI Claimants 6 UI Chiefs 1 Executive Champion - Sabrina Reed - 1 Executive Champion - Sabrina Reed - 3 Innovation Coaches ~100 IT & Admin

Catch the wave of innovation… The Core Team - Innovation Ninjas 9 “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has.” – Margaret Mead ©

Catch the wave of innovation… Process – The Agile Approach Project Initiation & Planning (Sprint 0) –Sponsor Selects PM, Product Owner & Advisors –Build & Train Team (1 day Teamwork, 1 day Analysis) –Create Simple Enterprise Process Map (SIPOC) –Categorize Major Workflow Scenarios (Pareto) –Use Scenarios to create Plan Project Execution & Management (Sprint 1-N) –Pick Target Scenarios –Collect Data & Analyze –Develop & Deliver Recommendations 10©

Catch the wave of innovation… 30 Day Sprint Process – Monthly Sprints Deliver in 30 day, time-boxed Sprints Simplified version of DMAIC from 6σ 11 Day 3-15: Analyze Causes Day 1: Define Scenario Day 2-10: Measure Data Day 10-29: Recommend Improvements Day 30: Decide & Control Results © Week 1Week 2Week 3 Week 4

Catch the wave of innovation… 6 Steps to Process Innovation © Map the System 2.Define our Goal 3.Identify the Bottleneck 4.Get the most from the Current Bottleneck 5.Align Other work to Pace with Bottleneck 6.Invest Savings to Expand the Bottleneck Rinse & Repeat

Catch the wave of innovation… 1. Map the System © Our eyes deceive us. Maps are always wrong, but some can be helpful. Connect with others to sketch a simple, clear map.

Simple – Complex – Simple 14© Enterprise SIPOC Process SIPOC Scenario Value Stream Map Transaction Value Stream Map

Catch the wave of innovation… 2. Define the Goal © Relevance: Does anyone still want our product? 2.Faster (Speed): Do customers want more or faster? 3.Better (Quality): Do customers want the ones we create better? 4.Cheaper (Cost): Do customers want the ones we create cheaper? Warning: Working out of order is harmful to your health.

Catch the wave of innovation… 3. Identify the Bottleneck © Business process = series of links in a chain Which link determines the maximum strength? What happens if you improve any other link? –To the local link’s strength? –To overall chain’s strength? –To overall cost? –To overall ROI? Where should we TARGET innovation?

Catch the wave of innovation… 4. Get the Most out of Bottleneck As Is © Before CHANGING policies, resources or technology, get the most from what you ALREADY have within current budget and policy constraints Stop siphoning bottleneck resources to non-bottleneck tasks Make sure bottleneck resources have appropriate knowledge/skills Stop doing unnecessary work at the bottleneck

Catch the wave of innovation… 5. Align Other Work to Pace Bottleneck © Bottleneck limits the MAXIMUM Don’t Start what you can’t Finish STOP sending defective work through the bottleneck REDUCE allocations to match the pace of bottleneck (temporarily) Result Frees up resources WITHIN current budget SELF FUND your Innovation Teams With NO impact to Customer

Catch the wave of innovation… 6. Reinvest Savings on the Bottleneck © Policy –Actual law or rule Procedure –Our interpretation of how we should meet it Practice –What we actually do Only AFTER improving the process Change Technology or Equipment Acquire more Operators Lower Goals

Catch the wave of innovation… The Products – Few Practical Tools Define: Scenario Pareto Chart Measure: Data Collection Analyze: Process Maps –SIPOC: Supplier-Input-Process-Output-Customer –VSM: Value Stream Map Recommend: Issue paper & presentation Deliver: Implementation plan & presentation Communicate: Organizational Change artifacts Control: Performance Dashboard with KPIs © Be LEAN to Get LEAN!

Catch the wave of innovation… EDD UI - Enterprise SIPOC ©

Catch the wave of innovation… Categorize Scenarios Happy Path (Clean Claim) –Fastest, simplest –Desirable outcome Alternate Paths –Longer, more complicated –Desirable outcome Exception Paths –More complicated –Defective or Late outcome ©

Catch the wave of innovation… Scenario Pareto Chart © Pareto = 80/20 Rule Take a small, random sample (about ) Analyze the amounts for each scenario and arrange in order Focus on higher frequency, higher impact scenarios

Catch the wave of innovation… Balanced Performance Dashboard 24© Overall, Outcome/Lagging Key Performance Indicators –Keeps team focused on Big Picture –BPI Team can influence but many other factors Specific, Input/Leading KPIs for each Solution –BPI Team has more influence on numbers –Only temporary relevance

Catch the wave of innovation… Process SIPOC – “Clean Claim” 25

Catch the wave of innovation… Clean Claims – By the Numbers © ChannelThroughputCostInventory OnlineTAT < 1 dayTinyAlmost None MailTAT = 3-4 daysSmall~ 1 days worth ChannelInitial FilingWeekly Certifications Online79%20% (as of 7/14) Other21%80% (as of 7/14) Clean Claims are 20-30% of all claims. Once received, EDD turns them around in less than a day.

Catch the wave of innovation… Clean Claim: Step 4. Get Most from As Is 27 Analysis 79% initially file online, but only 20% certify online Asked “Why?” 5 Times Answer: Because we tell them to use paper & call Solutions Shift message on common interactions Added to 3 existing channels Results >633,000 free micro marketing impressions to date Reduced Turn Around Time by 2 days Contributed to increase to 26% online certs Analysis 79% initially file online, but only 20% certify online Asked “Why?” 5 Times Answer: Because we tell them to use paper & call Solutions Shift message on common interactions Added to 3 existing channels Results >633,000 free micro marketing impressions to date Reduced Turn Around Time by 2 days Contributed to increase to 26% online certs

Catch the wave of innovation… VSM – Wage Overlap Scenario (By Popular Request from the Field) 28

Catch the wave of innovation… 29 © Wage Overlap: Step 4 Get the Most out As Is

Catch the wave of innovation… Wage Overlap © Analysis Only 11% of Common Practice matched Procedure Hard working reps trying to do the right thing in the moment Created other issues downstream Solutions Communication and Education Campaign to Reps Update Manual and Procedures to clarify WHY Estimated Results Faster: Claimant paid 10 days (32%) sooner Better: 370,000/yr unnecessary work items avoided Cheaper: Net savings of $1 – 2 million/yr Analysis Only 11% of Common Practice matched Procedure Hard working reps trying to do the right thing in the moment Created other issues downstream Solutions Communication and Education Campaign to Reps Update Manual and Procedures to clarify WHY Estimated Results Faster: Claimant paid 10 days (32%) sooner Better: 370,000/yr unnecessary work items avoided Cheaper: Net savings of $1 – 2 million/yr

Catch the wave of innovation… VSM – “Determination Only Scenario” 31©

Catch the wave of innovation… 32 BOTTLENECK # Days VSM Close up – “Determination Only Scenario”

Catch the wave of innovation… © Determinations: As Is based on FIFO Common Practice: Prioritize by FIFO

Catch the wave of innovation… © Determinations: Step 4. Get Most from As Is Recommendation: Prioritize by FPP when date is the same

Catch the wave of innovation… Determinations: Step 4. Get Most from As Is 35 Analysis FIFO made some initial claims “barely miss” FPP Asked Why 5 Times. Answer: Because FIFO is “fair” First Claims have 14 days. Continued Claims have 21 days. Solutions Prioritize by FPP on same day using existing tech Provide brief “Training Bite” Results Reduce Turn Around Time by 1-3 days Increased First Claim Timeliness by 1.4% No impact to Continued Claim Timeliness Analysis FIFO made some initial claims “barely miss” FPP Asked Why 5 Times. Answer: Because FIFO is “fair” First Claims have 14 days. Continued Claims have 21 days. Solutions Prioritize by FPP on same day using existing tech Provide brief “Training Bite” Results Reduce Turn Around Time by 1-3 days Increased First Claim Timeliness by 1.4% No impact to Continued Claim Timeliness

Catch the wave of innovation… Determinations: Step 5. Align other work to Pace 36 Analysis 32% of determinations are “Clarification” only Asked “Why?” 5 Times Answer: Claimants and Claim Filers are confused Solutions Provide brief “Training Bite” to Internal Filers Clarify wording only on Application (Phase 1 – No Macro) Update wording on Application (Phase 2 – Impacts Macro) Estimated Results Faster: Reduce TAT by 10+ days. Increase FPP %. Better: Avoid 10k determinations/yr Cheaper: Phase 1 = $124k/yr. Phase 2 = $15 Million/yr. Analysis 32% of determinations are “Clarification” only Asked “Why?” 5 Times Answer: Claimants and Claim Filers are confused Solutions Provide brief “Training Bite” to Internal Filers Clarify wording only on Application (Phase 1 – No Macro) Update wording on Application (Phase 2 – Impacts Macro) Estimated Results Faster: Reduce TAT by 10+ days. Increase FPP %. Better: Avoid 10k determinations/yr Cheaper: Phase 1 = $124k/yr. Phase 2 = $15 Million/yr.

Catch the wave of innovation… VSM – “Determination Only Scenario” 37©

Catch the wave of innovation… Determination Only Scenario Days BOTTLENECK #2 17 min11 min

Catch the wave of innovation… Determination – Step 6. Expand Bottleneck 39 Analysis If Rep is short 10 min, then Claimant waits 4 days Most time spent on notes from call Re-enter same phrases & data with lots of scrolling Fastest performers create copy/paste libraries Solutions Simplify Record Forms for most common scenarios Provide a “Determination Toolbox” with common patterns Results Reduce TAT by 4 days when not a 48 hr hold Save $1 - 2 million/yr Analysis If Rep is short 10 min, then Claimant waits 4 days Most time spent on notes from call Re-enter same phrases & data with lots of scrolling Fastest performers create copy/paste libraries Solutions Simplify Record Forms for most common scenarios Provide a “Determination Toolbox” with common patterns Results Reduce TAT by 4 days when not a 48 hr hold Save $1 - 2 million/yr

Catch the wave of innovation… The Waves of Change just keep coming. Are you going to Surf them or be Pummeled by them? © Lee Scott