Business Transformation Initiative Strategy and Planning Phase Deliverable

Business Transformation Initiative Strategy and Planning Phase Deliverable 06 – Enterprise Strategy Final

Index § § § Enterprise Strategy Executive Summary Approach Mission Vision Guiding Principles Desired User Experience Characteristics Supporting Capabilities Lines of Business Success Measures Transformation Strategies Lines of Business Next Steps Overview Appendix Washington State Department of Labor & Industries 2

Executive Summary Who We Are L&I’s mission is to Keep Washington safe and working. Our vision for the future is a Washington where the lives and livelihoods of the people who live and work in our state are protected. Where We Are Going To achieve its aspirations L&I must do two things extraordinarily well: prevent those things that threaten the lives and livelihoods of the people who live and work in Washington from ever happening, and assure remediation and recovery when they do. To make that true L&I will align our capabilities (i. e. , our people, processes, and systems) across divisions into a Prevention Line of Business and a Recovery Line of Business. Each of these will be supported by the capabilities of a Support Line of Business. All three Lines of Business will collectively share the enterprise-wide goal of making L&I an employer of choice. Washington State Department of Labor & Industries 3

Executive Summary cont. How We Will Get There Making this transformation happen and be sustainable over time involves changing L&I into a much more performance-oriented (vs. control-oriented) organization and committing to a set of innovative strategies to get us there. Part of our change involves redesigning the experiences that employers, workers, property owners, owners of equipment L&I regulates, providers and others have with L&I to be personal, easy, trustworthy, seamless and readily accessible. To deliver those experiences, L&I must be capable of assuring ready access, useful information, insightful analytics, privacy, and continuously improved user experiences enabled by effective people, processes and systems. Principles to Guide our Transformation As L&I transforms into a more performance-oriented organization we will be guided by principles that keep those we serve at the forefront of our work, empower our staff to serve them effectively, and make the purpose of our work and consequences of our policies and actions transparent and understandable to all those affected. Delivery Strategies Our next step is to create delivery strategies for all three Lines of Business that are informed by the Enterprise goals, strategies and principles we have established. Washington State Department of Labor & Industries 4

Approach (1/4) Overview and Purpose L&I’s Enterprise Strategy includes an articulation of the agency’s mission, 10 -year vision including key metrics, lines of business, and enterprise operating principles and strategies. The strategy was developed by L&I’s Business Transformation Steering Committee through a series of Enterprise Strategy Design Labs, which combine the skills of both analysis and design to develop an organization-wide strategy. In the coming decade, the expectations of the people who live and work in Washington for L&I to achieve this mission – and do so in a fiscally responsible manner - will continue to increase. L&I delivers good results today; it will need to be even better tomorrow. And so L&I is choosing to transform itself as an agency over the next 10 years so that it can deliver even better results for Washington in the future. The purpose of the Enterprise Strategy is to outline the vision for that transformation. Washington State Department of Labor & Industries 5

Approach (2/4) Structure and Format Five Design Labs and several additional review sessions were conducted between November 2015 and January 2016 to develop and gain alignment on the strategy. Participants included the members of L&I’s Business Transformation Steering Committee, L&I PMO staff, and Accenture SMEs and designers. Accenture provided background materials, research and case studies to provoke the Design Team’s thinking and support the strategy development. Decision Making The Design Team agreed to use the “Fist to 5” method of decision making. All components of the Enterprise Strategy received a vote of 3 or higher by all Design Lab voting participants, indicating the group was comfortable enough with the components to accept, include and support them. Washington State Department of Labor & Industries 6

Approach (3/4) Mission and Vision The Steering Committee reviewed L&I’s mission and agreed to keep the existing mission: Keep Washington safe and working. Additionally, the Steering Committee decided to add a vision statement for the future: A Washington where the lives and livelihoods of the people who live and work in our state are protected. Guiding Principles In addition to upholding traditional organizational values, the Steering Committee identified transformation guiding principles that will be critical for all employees to strive to follow as the agency transforms into a more performance-oriented organization. User Experience Characteristics and Supporting Capabilities The Steering Committee refined the characteristics of desired future user experiences and the capabilities needed to deliver those experiences that were identified through the creation of L&I’s User Personas (See Del 03 User Personas and Experience Maps) and built out the Enterprise Strategy with those characteristics and capabilities in mind. Washington State Department of Labor & Industries 7

Approach (4/4) Lines of Business (LOBs) After considering several approaches, the Steering Committee identified two delivery lines of business– Prevention and Recovery-- and one Support line of business around which to organize its capabilities to best achieve its aspirations. The Steering Committee then sought to test the validity of these LOBs through the LOB Design Lab process to assess the extent to which they resonate with staff. Success Measures Based on the focus identified for each line of business, the Steering Committee developed possible measures of success for the LOBs to use as guide posts in establishing those measureable goals that each LOB will seek to achieve over the coming decade. Strategies Recognizing that transforming L&I to produce dramatically better results for Washington will require innovative strategies that can improve performance, the Steering Committee identified a collection of strategies for the LOBs to consider as they develop plans for how to deliver on their respective missions. Washington State Department of Labor & Industries 8

Mission L&I’s Mission: To keep Washington safe and working Safe means things such as…. . Working means things such as…. . • Workplaces have very few (if any) serious, preventable safety or health incidents, resulting in no worker fatalities, injuries and illnesses. • Workers injured on the job promptly receive the highest quality medical care and return to work as quickly as possible, avoiding long-term disability and the accompanying negative financial and health consequences. • Elevators, boilers, and manufactured homes are properly maintained and do not fail in ways that harm the public. • Electricians, contractors, and plumbers are properly licensed and bonded, and their work does not put homeowners, property owners and the public-at-large at risk of injury or financial harm. • Workers are compensated appropriately by their employers and receive the rights and protections to which they are entitled under the law. • Companies experience a fair, competitive playing field because everyone in their industry fully complies with their regulatory obligations or are held accountable if they do not. • Plentiful apprenticeship opportunities exist throughout the state for individuals who want to learn a new trade. Washington State Department of Labor & Industries 9

Vision L&I’s Vision Statement for the Future: A Washington where the lives and livelihoods of the people who live and work in our state are protected. The agency will pursue this vision with the following elements in mind: • The primary beneficiaries of L&I’s mission and vision are three key user groups: Washington’s workers, employers, and owners whose property, equipment or profession is regulated by L&I. • Being an employer of choice is critical for the agency to achieve its mission and vision. That includes attracting top talent and providing dynamic opportunities for the staff to develop and be successful. • All L&I employees are part of a single enterprise and need to support and work together as a community to deliver better results for beneficiaries. Washington State Department of Labor & Industries 10

Guiding Principles As L&I transforms into a more performance-oriented organization it will be critical for all employees to strive to follow L&I’s transformation guiding principles include: • • We measure our success by the difference we make for the people who live and work in Washington and the degree to which we meet or exceed the expectations they set for us. We identify the needs of those we serve, view things from their perspective, and work to make things easier and better for them. We communicate with people in the language and manner that will maximize their understanding. We gather as much feedback as we can, take concerns seriously, and learn from the feedback we receive. We assume most people want to do the right thing, and we provide them with the information and tools they need to do so. At the same time, we hold accountable those who fail to comply with their obligations. We empower staff to make decisions as close to the “front line” as possible. We value transparency – sharing data on our performance, explaining why we do things the way we do, and outlining what we plan to do next. Washington State Department of Labor & Industries 11

Desired User Experiences Characteristics In the future users will experience L&I as: Personal, Easy, Trustworthy, Seamless and Readily Accessible. Personal Trustworthy § Users see L&I as a helpful partner to them personally, who has their best interests in mind § Interactions and communications with L&I - including frequency, content, privacy, medium, and payment method -are controlled through choices made by the user Easy § Service and information is available at times and locations convenient to users § With L&I there are no surprises - users understand what to expect, and what is expected of them, and why L&I does what it does § L&I anticipates – sending information and reminders in advance of required actions § L&I responds – getting people what they want and quickly § L&I asks users for information only once and only for information it does not already have. Data entry is easy and intuitive. § L&I users get the information they want through a single point of connection § § Users trust L&I to always have there best interests in mind Users trust that the information they get from L&I is accurate Users feel safe interacting and sharing info with L&I Users feel they are better off as a result of their interactions with L&I Seamless § Users always know where they are in their L&I process and are able to move through it without interruption § Users can view information on all of their L&I interactions through their single point of connection § Users and L&I staff can view the same information at the same time § L&I information is integrated with that of other agencies providing related services to common users Readily Accessible § Information is checked for accuracy and promptly made available and accessible to all relevant parties § Users can access L&I, and L&I teams can access each other where and when needed Washington State Department of Labor & Industries 12

Supporting Capabilities To deliver its intended user experiences, L&I must be capable of assuring ready access, useful information, insightful analytics, privacy, and continuously improved user experiences enabled by effective people, processes and systems. Ready Access § A personalized point of access for users that: § Is available 24/7 § Provides choice and control over when and how to interact § Ability to interact remotely § Ability to communicate in a manner that facilitates common understanding Useful Information § Automated ability to capture, authenticate, correct and process data in digital form, from internal and external sources (agencies, providers and partners), in real time § All user information and data securely linked and integrated into ‘one view’ of the User – so users get the right answer and the same answer every time § Ability to anticipate user needs § Ability to respond to user requests promptly Insightful Analytics § Analytics based assessments that provide predictive and prescriptive insights for service, compliance, and provider decisions Identity & Privacy § Unique identity and single log in for each person and organization/ location § Secure data capture and management § Secure access based on roles and responsibilities Continuously Improved Experiences § User feedback and performance metrics that serve as the basis for continuous improvement § Flexible delivery models that can provide integrated and collaborative responses across all functional areas to users based on their circumstances People, Processes and Systems § People – ability to define, discover, develop and deploy the right skills and capabilities, at the right time, to the right place § Knowledge/ Learning - ability to continuously capture knowledge and use it to develop capabilities of people inside and outside L&I § Processes – ability to continuously improve processes § Systems – ability to continuously improve systems § Technology that significantly enhances user effectiveness Washington State Department of Labor & Industries 13

Lines of Business To achieve its aspirations L&I must do two things extraordinarily well: • We must prevent those things that threaten the lives and livelihoods of the people who live and work in Washington from ever happening, and • We must assure remediation and recovery when they do – striving to make individuals, workplaces, and communities whole again. To make that true, L&I will effectively collaborate across our divisions to align our capabilities (i. e. , our people, processes, and systems) into a Prevention Line of Business and a Recovery Line of Business, each of which will be supported by the capabilities of a Support Line of Business. L&I’s Lines of Business: • Prevention: Preventing things that threaten lives and livelihoods • Recovery: Assuring response, recovery, and remediation when those things do happen • Support: Providing enterprise-wide services and support to those conducting prevention and recovery Washington State Department of Labor & Industries 14

Success Measures Each Line of Business will establish measures of success that will be used to determine its performance over the coming decade. Below are guidelines for these success measures. • • Prevention The rate at which “never events” or violations happen, with the goal being to drive these numbers as close to zero as possible The satisfaction of employers, workers, and owners with L&I’s interactions with them to help prevent these events from happening Support The satisfaction of the Prevention and Recovery LOBs with the services provided The level of compliance that L&I achieves with meeting its key organizational obligations • • • Recovery The share of negatively impacted individuals, workplaces, or communities that achieve the best intended outcome of L&I’s response The speed with which L&I responds and ultimately takes action to remedy the situation The share of violators that are held accountable for their willful non-compliance The satisfaction of employers, workers, and owners with L&I’s interactions with them to implement the recovery/remedy solution The degree to which its feedback and information sharing helps improve future prevention efforts Washington State Department of Labor & Industries 15

Transformation Strategies (1/2) Recognizing that transforming L&I to produce dramatically better results for Washington will require innovative strategies that can improve performance, we will consider the following strategies as we develop plans for how each Line of Business will deliver on their respective missions. L&I Primary Strategy Considerations*: • Setting bold 10 -year performance commitments in each of the three Lines of Business, with ambitious and measurable goals • Developing compelling, aspirational profiles of how workers, employers, owners, providers, and our own employees will experience a future, transformed L&I • Establishing specific, challenging standards of performance in each Line of Business around the timeliness and quality of the interactions that users have with L&I and then holding ourselves accountable to those standards • Redesigning how we win compliance from those we regulate by dramatically improving our efforts at educating people about what is expected of them; identifying ways to make doing the right thing as easy as possible; Continuing to make those who fail to live up to their obligations experience significant consequences for their fraud or non-compliant behavior *See complete Enterprise Strategy for full description of strategies Washington State Department of Labor & Industries 16

Transformation Strategies (2/2) L&I Primary Strategy Considerations Cont. *: • Undertaking a systematic approach to identifying and removing the internal bureaucratic barriers that get in the way of our employees performing their work efficiently and effectively • Bringing a more strategic and disciplined approach to setting priorities within the organization • Seeking significantly increased authorities and flexibilities from the Legislature and central control agencies (such as OFM) in exchange for accountability for specific, measureable outcomes, such as those we will develop in our 10 -year performance commitments Additional Strategies for Future Consideration*: • Making the results we achieve more personal for employees by encouraging individuals and work units to collect and share compelling stories about the difference L&I made in their lives. • Finding more ways to put our customers “in the driver’s seat” • Aligning individual employee performance goals directly with the overall goals of the organization • Creating cross-agency program review teams that examine the performance of a particular program, identify how where it is successful, and provide feedback and suggestions about how it can improve *See complete Enterprise Strategy for full description of strategies Washington State Department of Labor & Industries 17

Lines of Business Next Steps Overview The next step is to create delivery strategies for all three Lines of Business that are informed by the goals, strategies and principles outlined in the Enterprise Strategy. LOB Design Teams comprised of employees from across L&I have been “chartered” to develop the strategy components listed below for their respective Line of Business: LOB Design Team Deliverables: • Aspirations and measurable targets for LOB • Key delivery strategies for LOB • Identification and assessment of critical - capabilities and processes - skills and competencies - systems and technology • Accountability plan for LOB • Estimate of benefits of changes Washington State Department of Labor & Industries 18

Appendix § § Enterprise Design Lab Participants Del 04 Benchmark Comparison Report Executive Summary Del 05 Trends and Risks Summary Index of Related Materials Washington State Department of Labor & Industries 19

Appendix Design Lab Participants Steering Committee §Joel Sacks (Director) §Ernie La. Palm (Co-Chair) §Randi Warick (Co-Chair) §Kim Contris (Web & Communications) §Vickie Kennedy (Insurance Services) §Bob Lanouette (Information Services) §David Puente (Human Resources) §Jose Rodriguez (Field Services & Public Safety) §Liz Smith (Fraud Prevention Labor Standards) §Anne Soiza (DOSH) §Chris Freed (Admin Services) PMO §Rachel Mercer (Project Director) §Geoff Kohles (Project Manager, Point B) Accenture §Peter Hutchinson (Project Director) §Steve Struthers (Strategy Design Lead) §Elena Boyd (Project Manager) Washington State Department of Labor & Industries 20

Appendix Del 04 Benchmark Comparison Report Executive Summary (1/3) There are two ways to evaluate performance: §Compare to past performance to see if performance is improving or not §Compare to the performance of others – a benchmark – to see how performance “measures up” This report was created by 1) reviewing existing and past information on L&I’s performance and 2) comparing it to the performance of peer organizations. We considered the information in the context of three strategic questions about L&I’s performance as it affects L&I users: 1. Are people who live and work in Washington safe? • Including safe workplaces, safe equipment, and appropriate licensing 2. Are people who live and work in Washington working? • Including return-to-work, fair worker compensation and treatment, and apprenticeship opportunities 3. Are users/customers satisfied with their relationship with L&I? Note: The report summary distributed during the Enterprise Design Lab used a forth question “Is L&I achieving the levels of compliance that people can expect? ”. This has been folded into questions 1 and 2. Washington State Department of Labor & Industries 21

Appendix Del 04 Benchmark Comparison Report Executive Summary (2/3) Findings: L&I has strong, outcome based measures related to workers being safe and working, is able to track that performance over time, and L&I compares favorably to peer organizations in these areas. In contrast, L&I has few enterprise level, outcome based measures on equipment safety and licensing. This is an area where peer organizations also struggle. In these areas measures tend to focus on volume of activity, cycle time or finances rather than outcomes. L&I has multiple measures of customer satisfaction but none are enterprise wide. Peer organizations offer a spectrum of examples of metrics in this area. Some peers have developed effective mechanisms to make performance information easily available and accessible to the public. The ability for the public to access relevant L&I data in an easy and centralized manner remains limited. Washington State Department of Labor & Industries 22

Appendix Del 04 Benchmark Comparison Report Executive Summary (1/2) Action Steps: Based on findings of this review we recommend L&I explore the following: Action Steps Considerations Develop outcome-based metrics for equipment safety and licensing • Consider collaborating with peers in other states, equipment manufacturers and owners and license holders to develop relevant metrics • While multiple factors outside of L&I’s control may contribute to equipment failures, consider tracking and benchmarking against total number of reported failures, regardless of inability to isolate lack of inspection as major contributing factor • Explore using crowd sourcing and public accountability mechanisms to engage public Develop enterprise wide customer service performance and satisfaction metrics • Establish standard metrics of user satisfaction that can be rolled-up into an enterprise-wide metric, e. g. by using common survey question language and scoring rubric • Develop easy, real time user feedback mechanisms versus relying on lagging surveys Make performance information easily available and accessible to the public • Upgrade the visual display of information available to the public • Make data sets easily accessible Washington State Department of Labor & Industries 23

Appendix Del 05 Trends and Risks Summary IMPLICATIONS TRENDS CHANGING WORK • Growth in high risk occupations/ industries will increase demand on L&I • Regional differences will require differentiation in L&I regional capabilities • ‘Alternative’ work arrangements will be more difficult to monitor and determination of when and where incidents occur will be more difficult • Data security will be key to L&I credibility with employers CHANGING WORKFORCE • L&I users will be more diverse and more vulnerable – increasing the demand for service and requiring more diversity in service approaches • Wage replacements costs will rise • Shadow economy workers and employers are harder to serve and more difficult to regulate – will challenge L&I’s traditional methods • • • Rapid growth in high risk occupations and industries Increased use of remote work and flexible work options Increased concern for data security Slow growth in the workforce – much of that growth will come from migration and immigration making the workforce more diverse Continued wage increases slow workforce growth and rising minimum wage Large underground or shadow economy ( 9% of GDP nationally) CHANGING HEALTH CARE • • Continued cost increases Increasing use of digital technologies Continued innovation in care and care technology Increased use of value-based payment CHANGING TECHNOLOGY • • • Increasing use of digital, mobile and personalized technology Increasing use of cloud based services Increasing use of data analytics • Costs per claim will continue increasing – perhaps more rapidly • But, effectiveness of treatment will also likely increase – leading to faster return to work • Those living and working in Washington will expect digital, mobile and personalized services • Opportunity to gain flexibility, reduce obsolescence, integrate services, and reduce cost using cloud based services • Opportunity to target resources and increase program effectiveness through data analytics CHANGING REGULATION • • WA’s regulatory approach is rated unfriendly at a time when states are increasingly pursuing business-friendly agendas Workplace safety is improving WA is one of only 4 states with an exclusive WC program Many states have decreased WC benefits and increased barriers to access CHANGING L&I STAFF • • • L&I has 5 generations within its staff The staff is aging rapidly Washington State Millennials are the largest and fastest growing part of the working age population • • Changes in other states may raise questions about WA regulations, the structure of workers’ compensation, and level of benefits Increased safety will lead to fewer violations and fewer claims • L&I must develop strategies for managing a multi-generational workforce • L&I must develop strategies to recruit and retain Millennials in order to replace those who are retiring Department of Labor & Industries 24

Appendix Index of Related Materials The following materials are available on L&I’s Business Transformation Share. Point site here. § § § Enterprise Strategy document Enterprise Strategy Design Lab agendas WA L&I Best and Worst Outcomes Catalogue of possible operating strategies Lines of Business (LOB) charters Readings, case studies and materials provided to Design Lab participants Washington State Department of Labor & Industries 25