Process Management Key to Survival for School Systems Quality New Mexico June 9, 2011

Traditional Accreditation Model “Managing by Inputs” Inputs Payroll Expenses Equipment Facilities Library Books Master’s Degrees Science Labs Certification Data

“Managing by Outcomes” NCLB Model “Managing by Outcomes” Outcomes Test Results Ach. Gap AYP Rates Grad. Rates Data

“Managing by Inputs, Processes & Outcomes” Improvement Model “Managing by Inputs, Processes & Outcomes” Outcomes Inputs Assess Student Achievement Recruit Teachers Manage Info. Technology Processes Data Payroll Expenses Equipment Facilities Test Results Achievement Gap AYP Graduation Rates Data Data

Process Management Founder & CEO, C. Jackson Grayson, Jr. Founded 25 years ago in 1977 Founder & CEO, C. Jackson Grayson, Jr. President: Carla O’Dell Located in Houston, Texas A nonprofit 501 (c )( 3) organization Staff of 80; Budget of $11 million Board of Directors: 40 leaders in business, government, education Mission: Improve productivity and quality in all organizations.

Problems of Functional Management Sub-optimization; Low cross-functions Sub-systems often don’t work together Silo mentality, bureaucracy, red tape, change resistance, turf wars, high costs Slowness, errors, and rework Waste, Redundancy, Non-value-added

So leading businesses are moving, or have moved, from functional management toward process management

Deere’s Process Mgmt. Model Worldwide Business Environment Customer’s Process Needs Business Controlling Process Business Measurement Process Core Processes Process that creates value for the external customer Customer Acquisition Product Delivery Order Fulfillment Customer Support Enabling Processes Leadership Process Processes that supply resources to other processes Channel Management Supply Management Info. Tech. Application Business Acquisition Supplier’s Processes

Process Management (Category 6) Baldrige for Education Key aspects of your organization’s process management Key learning-centered processes for your educational program offerings Services that create student, stakeholder, and organizational value Key support processes All key processes and all work units

Business found Large Gains through a Process Focus 20-50% Process Management 10-20% Process Innovation 2-10% Process Improvement 1–2% Cost Reduction

Education Process Management?

APQC’s 8 benchmarking studies found that one “missing link” in education improvement is a greater focus on processes Most educators do not think processes. They focus functionally, not cross-functionally. They do not map, or measure processes. They do not analyze or benchmark processes. They don’t link: inputs—processes—outcomes They don’t manage or organize by processes. The ability to improve performance is very limited without improving processes.

Why so little process thinking in education? Focus is on functions, inputs, & outcomes Districts not accustomed to using data to compare themselves with others. No common taxonomy of processes Low urgency to change No infrastructure for process mgmt. Don’t know how to change

So where could education start? Founded 25 years ago in 1977 Founder & CEO, C. Jackson Grayson, Jr. President: Carla O’Dell Located in Houston, Texas A nonprofit 501 (c )( 3) organization Staff of 80; Budget of $11 million Board of Directors: 40 leaders in business, government, education Mission: Improve productivity and quality in all organizations.

Steps toward process mgmt. Functional Management—appoint process owners inside functions, but add members from other functions to make a cross-functional team. Matrix Management —begin organizational changes that combine process and functional management—a matrix. Process Management —move toward total or almost total process management across the entire organization

Process Managed system ISS Chose Option 3 Move toward a totally --or almost totally-- Process Managed system (Can that be done?)

Malcolm Baldrige Education Criteria 6.0–Process Management (85 pts) 6.1 Work Systems Design: How do you design your work systems? (35 points) 6.2 Work Process Management and Improvement: How do you manage and improve your key organizational work processes? (50 points)

Malcolm Baldrige Education Criteria Defining Systematic Systematic – Two Components Processes A approach – clearly defined steps D deployment – to all levels L learning – cycles of improvement I integration – organizational knowledge Results Le levels of performance C comparisons T trends I integration

I-SS Enterprise Model Here is the I-SS Enterprise Model.

We started putting our processes on sticky notes We started putting our processes on sticky notes. We tried to decide which were core, guiding, and supporting. We kept narrowing the field.

Process GUIDES INPUT OUTPUT ENABLERS Triggering Event What helps us know why, when and how we do what we do? Policies · Regulations · Knowledge Standards · Laws Triggering Event End INPUT OUTPUT Process What do we need to do this? Information Materials People Consumed or transformed by the process. What do we produce or deliver? Results Information Deliverables Products People Explain the IGOE components. Walk participants through “Plan a wedding IGOE” Participants will offer input. Marty will facilitate. Brenda and Diane will capture and post. Completed IGOE will be word processed and shared with participants on Day 2. ENABLERS Where do we do it and who/what helps us do it? Human Resources · Assets Tools · Facilities Equipment · Systems

Manage Financial Resources to Activity Level Remember you should have 5-10 Sub-processes Show sub-processes with control financial resources 8 Activities (see next slide)

Control Financial Resources to Activity Level Sub-process to activity level using a node tree Take IGOE and pick 1 sub-process and do the same thing

Control Financial Resources Team John Kachmarik Assistant Finance Officer – Lead Terry Holliday – Superintendent Kay Fulp – Chief Finance Officer Mathew Fail – Chief Quality Officer Kenny Miller – Executive Director Facilities, Maintenance and Planning Dale Ellis – Assistant Superintendent for Human Resources Vicki Meadows – Purchasing Agent Stakeholders – principal at each grade level (3) and department heads (2) Think back to our discussions on cross-functions (click to slide 6). Remember how important it is to establish those cross functional relationships. Read through the people and positions on this slide. Why would these departments need to be represented on the “Control Financial Resources” team?

Stakeholder Analysis for Control Financial Resources External Stakeholder Requirement Output Department of Public Instruction External Audit Audit Report Taxpayer Meet legal and ethical requirements Provide education at low cost Tax Rate Board of Commissioners Monthly Budget Amendments Internal Stakeholder Board of Education Audit Findings Fund Balance Principals and Department Heads Process Expenditure Requests Approve Budgets Approve Position Requests Payments Approved Budgets Staff Allocation Matrix Senior Leadership Monitor Expenditures Monthly Expenditure Reports Variance Reports Position Allocation Reports Audit Reports This table capture the interview with key stakeholders to validate the requirements and outputs.

Control Financial Resources GUIDES Federal, Local, State Allocation BOE Policy Regulatory Guidelines Reimbursement Procedure Improvement Plans (SIP/DIP) 0 Audit Findings Maintain Fund Balance Annual Audit INPUT OUTPUT Staffing Allocation Revenue Month Exp. Report Budget Audit Report Operating Budget SIP/DIP Budget Reimbursement Fund Balance Report Staffing Allocation Revenue Month Exp. Report Budget Audit Report Operating Budget SIP/DIP Budget Reimbursement Request Control Financial Resources Facilitator Notes: Model the post-it note process that validates the architecture Model dots for health check – explain why we did it that way. Note – they cannot practice on our IGOE because they do not have the requisite knowledge. ENABLERS Financial Training Technology (ISIS Software) Budget Owners

Conducting the Health Check Do we have the data we need? Key strengths Key OFI’s These are the questions you’ll use to do your health check.

Control Financial Resources Flow Chart Draft Recommend Oversight Monitor Recommend Operating Expense Budget Committee Budget to Reports Amendments BOE Develop Finance Approve spending Monitor Revise Budget District Department (POs or Expense Operating and BOE Budget reimbursements) Budget Reports Amendments Approves Monitor Expense QAD SIP/DIP Reports Human Resource Monitor Staff Department Personnel Revise Cross-functional Matrix Terry will send his version before Kathy messed it up. Participants will create flow of activities Connect back to Control Financial Resources IGOE Re-visit IGOE. Create IGOE on Activity –show examples Allocation Alocation Allocations Reports Develop Local Request spending Principals Develop Monitor Revise Operating (POs or SIP Expense Budget Budget reimbursements) Reports Develop Request spending Department Local Develop (POs or Revise Heads Operating DIP Budget reimbursements) Budget

What tool do you use to manage and improve processes? PDCA PDSA DMAIC SIPOC SIPOC plus Guides and Enablers Six Sigma Lean Six ???? Share I-SS examples Share John’s example Provide participants with a blank I-SS PDSA template. Diane…we need closure slides after this We’ll add and put it in tomorrow. We want to make sure we end well.

Handout

Other areas of improvement – bus discipline, energy savings, faith based partners, highly qualified teachers, overtime costs, child nutrition costs, maintenance, custodial, workmen’s compensation ratio, fund balance, credit recovery Expenditures per Pupil – remain in bottom 10 in NC - $700 below state average

Contact Information ASQ Christa Kautz – ckautz@asq.org Follett ISS APQC – North Star Project Jack Grayson – jgrayson@apqc.org Diane Kline – dkline@apqc.org 713-685-4602