Modern Management Controllers Conference November 23, 2010.

Modern Management

Controller’s ConferenceController’s Conference

November 23, 2010November 23, 2010

What is Modern Management

““Modern Management” is a set of management functions that Modern Management” is a set of management functions that ensures:ensures: Ethical behaviourEthical behaviour Conscious management of risksConscious management of risks Clear lines of accountabilityClear lines of accountability Stewardship of resources, andStewardship of resources, and Reporting and evaluation of results against stated Reporting and evaluation of results against stated

objectives.objectives. ““Modern Management” is not an end-state but rather an on-Modern Management” is not an end-state but rather an on-

going process that adjusts to changes in the business going process that adjusts to changes in the business environment and adopts emerging management practicesenvironment and adopts emerging management practices

Our Changing Management Environment

The environment that we manage has been impacted by a The environment that we manage has been impacted by a variety of changes:variety of changes: Technological advancesTechnological advances Information/Knowledge access & sharingInformation/Knowledge access & sharing Increasing public expectations w.r.t. transparency and Increasing public expectations w.r.t. transparency and

accountabilityaccountability Increasingly complex business relationships and Increasingly complex business relationships and

partnerships partnerships These changes are having a profound impact on how we:These changes are having a profound impact on how we:

Make decisionsMake decisions Evaluate our programs and services, andEvaluate our programs and services, and Monitor and control the programs we deliver. Monitor and control the programs we deliver.

The Changing Paradigms of Management:

Impacts on our Control Processes

Managers design their Managers design their own controls within own controls within

the frameworkthe framework

Controls to achieve Controls to achieve compliance with rulescompliance with rules

Controls based on Controls based on risk assessmentrisk assessment

Managers focus on Managers focus on compliancecompliance

Managers focus onManagers focus on accountability &accountability &

learninglearning

OLD WORLD

Controls imposed Controls imposed from the centrefrom the centre

NEW WORLD

Focus on resource Focus on resource utilizationutilization

Focus on outcomes Focus on outcomes achieved withachieved with

resourcesresources

Measurement Measurement of financial resultsof financial results

Balanced performance Balanced performance measurementsmeasurements

OLD WORLD NEW WORLD

The Changing Paradigms of Management:

Impacts on our Evaluation Processes

Authority retained Authority retained by a few by a few

The Changing Paradigms of Management:

Impacts on our Decision Making Processes

Authority delegated Authority delegated to all managersto all managers

Integrated expert Integrated expert advice to decision makersadvice to decision makers

Department-specific Department-specific thinkingthinking Enterprise-wide thinkingEnterprise-wide thinking

OLD WORLD NEW WORLD

Isolated functional Isolated functional specialist advice to specialist advice to decision-makersdecision-makers

Fundamental Enablers of Modern Management

Championship by Senior ManagementChampionship by Senior Management Leadership from the top-downLeadership from the top-down Clear statements of roles and responsibilitiesClear statements of roles and responsibilities Well trained and capable staffWell trained and capable staff Adequate staffing levelsAdequate staffing levels Time to do a good jobTime to do a good job Tools & Information to support staff and Tools & Information to support staff and

decision makingdecision making Flexible approach that allows change as Flexible approach that allows change as

situations requiresituations require

GNWT Management Assessment 2006/07

We looked at practices of other jurisdictionsWe looked at practices of other jurisdictions Treasury Board Canada developed an assessment tool called Treasury Board Canada developed an assessment tool called

“Comptrollership Capacity Check”“Comptrollership Capacity Check” Government of Ontario adapted the Treasury Board tool and Government of Ontario adapted the Treasury Board tool and

developed a web-based self-assessment survey that they called developed a web-based self-assessment survey that they called “Controllership Capacity Check”“Controllership Capacity Check”

Government of Ontario offered the GNWT the use of their tool Government of Ontario offered the GNWT the use of their tool and the rights to alter it to suit our needs.and the rights to alter it to suit our needs.

A consultant experienced with the Ontario tool was engaged to A consultant experienced with the Ontario tool was engaged to assist the GNWT in adapting the tool and implementing it within assist the GNWT in adapting the tool and implementing it within the GNWT.the GNWT.

GNWT Management Assessment Objectives were: The use of the Modern Management Capacity Assessment in GNWT The use of the Modern Management Capacity Assessment in GNWT

was designed to:was designed to: Build awareness for modern management practices across the organizationBuild awareness for modern management practices across the organization Assist in the identification of corporate and departmental initiatives that Assist in the identification of corporate and departmental initiatives that

support a Modern Management frameworksupport a Modern Management framework Assist the FMBS in identifying how it can support modern management Assist the FMBS in identifying how it can support modern management

practices across the GNWT practices across the GNWT What were the objectives of the assessment:What were the objectives of the assessment:

Education & awarenessEducation & awareness Improvement of our modern management practicesImprovement of our modern management practices Compare current management practices against industry best practicesCompare current management practices against industry best practices Identify weaknesses with our current state in support of corporate Identify weaknesses with our current state in support of corporate

current/future corporate Modern Management initiatives, such as: FIS current/future corporate Modern Management initiatives, such as: FIS Replacement, development of a risk management policy framework, Re-Replacement, development of a risk management policy framework, Re-writes of the FAA and FAM, etc.writes of the FAA and FAM, etc.

What we did…

Undertook departmental workshops with Undertook departmental workshops with Senior Management TeamsSenior Management Teams

Undertook broad-based web survey with all Undertook broad-based web survey with all levels of management, program/policy levels of management, program/policy analysts, and financial staffanalysts, and financial staff

Review & compilation of results for Review & compilation of results for departmental and government-wide planning departmental and government-wide planning purposespurposes

Ranking by Importance – Top 10

Half of the Top 10 priorities identified through departmental workshops and through web survey are the same.

Identified in Departmental Workshops

Identified in Web Survey

Valuing People's ContributionResource AllocationLeadership CommitmentEmployee SatisfactionEthics and ValuesRisk ManagementModern Management CompetenciesBusiness PlanningManagerial CommitmentBudgeting and Forecasting

Leadership CommitmentBusiness PlanningInternal ControlsManagerial CommitmentLinkage to Strategic PlanningModern Management CompetenciesBudgeting and ForecastingClient SatisfactionModern Management Specialist SupportAccounting Practices

Ranking12345678910

Comparison of Greatest Gaps and Departmental Priorities

The size of the gap between the current and desired states is not a predictor of the perceived importance of the criterion. Only 4 criteria are on both lists:• Leadership Commitment• Resource Allocation• Modern Management Competencies• Employee Satisfaction

As identified in departmental senior management workshops

Criteria Current Desired Gap Criteria Current Desired Gap PriorityConsistency of Information 1.91 3.73 1.83 Valuing People's Contribution 2.41 3.88 1.47 10Financial Information 1.83 3.63 1.79 Resource Allocation 1.82 3.49 1.67 6Transaction Tracking Systems 1.97 3.68 1.71 Leadership Commitment 2.21 3.78 1.57 6Modern Management Competencies 1.71 3.45 1.75 Employee Satisfaction 1.67 3.31 1.63 5Modern Management Tools & Techniques 1.34 3.03 1.69 Ethics and Values 2.29 3.85 1.56 4Resource Allocation 1.82 3.49 1.67 Risk Management 1.79 3.36 1.57 5Knowledge Enabling Technology 1.81 3.42 1.61 Modern Management Competencies 1.71 3.45 1.75 4Modern Management Specialist Support 2.01 3.67 1.66 Business Planning 2.27 3.70 1.43 4Employee Satisfaction 1.67 3.31 1.63 Managerial Commitment 2.09 3.55 1.47 3Leadership Commitment 2.21 3.78 1.57 Budgeting and Forecasting 2.11 3.59 1.48 3

Top 10 Gaps Top 10 Priorities

Department Recommendations -Major Themes from Workshops

GNWT needs to define management GNWT needs to define management competencies and develop training/ competencies and develop training/ orientation for managersorientation for managers

Departments need improved service from Departments need improved service from some shared services, which so far have not some shared services, which so far have not all delivered anticipated results or savingsall delivered anticipated results or savings

Widespread support for new FISWidespread support for new FIS

Observations from Web Survey

Lack of understanding of the term “Modern Management”, although Lack of understanding of the term “Modern Management”, although strong interest in many concepts, e.g. performance agreements, strong interest in many concepts, e.g. performance agreements, valuing people, managers’ sense of ownership/ control of results and valuing people, managers’ sense of ownership/ control of results and resources, process improvement, management trainingresources, process improvement, management training

Relevance of business plan to front line staff could be improvedRelevance of business plan to front line staff could be improved Staff recommend willingness to shift resources to meet priorities – not Staff recommend willingness to shift resources to meet priorities – not

simply the same as last yearsimply the same as last year Recognition that while good efforts have been made, progress in many Recognition that while good efforts have been made, progress in many

areas can still be made, e.g. ethics statements, staff surveys, areas can still be made, e.g. ethics statements, staff surveys, performance measurementperformance measurement

Generally complimentary about financial staff but not about the current Generally complimentary about financial staff but not about the current financial system (poor cost management info, financial information is financial system (poor cost management info, financial information is “late, confusing”)“late, confusing”)

Recommend more client surveys to understand service issues and Recommend more client surveys to understand service issues and service standardsservice standards

2006/07 Recommended Next Steps

GNWT needs to be proactive in maintaining a focus on modern management GNWT needs to be proactive in maintaining a focus on modern management practicespractices

Use Modern Management practices as framework for corporate initiatives that Use Modern Management practices as framework for corporate initiatives that promote good management, e.g.:promote good management, e.g.: FIS, FAA and FAM rewritesFIS, FAA and FAM rewrites Increasing capacity for evaluationIncreasing capacity for evaluation Improving business planning and resource allocationImproving business planning and resource allocation

Maintain commitment to promoting modern management practices:Maintain commitment to promoting modern management practices: Encourage all managers to take web survey to improve awareness, begin Encourage all managers to take web survey to improve awareness, begin

change processchange process Redefine role of Directors of Finance and Administration Committee to Redefine role of Directors of Finance and Administration Committee to

champion modern management across the GNWT and within departmentschampion modern management across the GNWT and within departments Continue DM level Committee oversight to guide implementation and Continue DM level Committee oversight to guide implementation and

ongoing reviewongoing review

2006/07 Recommended Next Steps Develop corporate action plan to tackle top Develop corporate action plan to tackle top

priorities such as:priorities such as: Corporate management training program Corporate management training program

based on key competencies, beginning based on key competencies, beginning with financial competencieswith financial competencies

New FISNew FIS FAA, FAM rewritesFAA, FAM rewrites

Communicate with GNWT staff about survey Communicate with GNWT staff about survey results and corporate action planresults and corporate action plan

Benefits we expect to see

Increased awareness and implementation of Increased awareness and implementation of good management practicesgood management practices

Supports leadership role of Senior Financial Supports leadership role of Senior Financial Officers in good management practices and Officers in good management practices and leads to better implementation of corporate leads to better implementation of corporate initiatives such as SAM, Shared Services, risk initiatives such as SAM, Shared Services, risk managementmanagement

Focus on top priorities to demonstrate Focus on top priorities to demonstrate progressprogress

So where are we with Modern Management?

Further actions were set aside in February 2007 while Further actions were set aside in February 2007 while the GNWT focused its resources on SAM and FSSCsthe GNWT focused its resources on SAM and FSSCs

SAM is now in serviceSAM is now in service

FSSCs plans are moving towards implementationFSSCs plans are moving towards implementation

So where are we with Modern Management?

Information gathered in 2007 dated but have things Information gathered in 2007 dated but have things changed with respect to the areas we should focus on?changed with respect to the areas we should focus on?

Logical focus following the implementation of Financial Logical focus following the implementation of Financial Shared Services Centers (FSSCs) is to continue to Shared Services Centers (FSSCs) is to continue to focus on the capacity building that was identified focus on the capacity building that was identified previouslypreviously

Supports both the success of FSSCs and Department Supports both the success of FSSCs and Department Program/Financial Advisory staffProgram/Financial Advisory staff

Next Steps

Implement FSSCs – with Governance in place that Implement FSSCs – with Governance in place that supports continuous improvement supports continuous improvement

Research opportunities to build risk and financial Research opportunities to build risk and financial analysis capacity analysis capacity

Research opportunities to build budgeting capacityResearch opportunities to build budgeting capacity

Appendix

Detailed Survey findingsDetailed Survey findings

Priorities as identified by each depart-mental workshop

Departmental PrioritiesGNWT PWS ENR Leg FMBS Exec Just MACA Trans Fin Hous AAIR ECE ITI HR H&SS

CriteriaLeadership Commitment 6 x x x x x xRole of the SFO 0Managerial Commitment 3 x x xEthics and Values 4 x x x xBusiness Planning 4 x x x xLinkage to Strategic Planning 2 x xRisk Management 5 x x x x xResource Allocation 6 x x x x x xBudgeting and Forecasting 3 x x xModern Management Competencies 4 x x x xBusiness Process Improvement 3 x x xModern Management Specialist Support 1 xModern Management Tools & Techniques 2 x xKnowledge Enabling Technology 2 x xTransaction Tracking Systems 2 x xInternal Controls 0Accounting Practices 0Internal Audit and Review 0External Audit and Review 0Consistency of Information 1 xDepartment Performance Information 3 x x xOperating Information 1 xClient Satisfaction 2 x xEvaluative Information 0Service Standards 1 xEmployee Satisfaction 5 x x x x xFinancial Information 1 xCost Management Information 1 xClarity of Senior Management Responsibilities 2 x xPerformance Appraisals and Evaluation 0Authority Levels 0Incentives 0Valuing People's Contribution 10 x x x x x x x x x xExternal Reporting 0

LegendTop priority - choice of 10 departmentsSecond priority - choice of 6 departmentsThird priority - choice of 5 departmentsFourth priority - choice of 4 departments

Departmental Recommendations

FMBS Recommend corporate training in management practices

Recommend corporate approach to policies and tools for risk management

PW&S no corporate work on competency assessment - recommend action to corporate HR

suggestion to FMBS - GNWT needs to compete for new staff - may involve $, housing, etc.

suggest employee satisfaction surveys as corporate initiative

ENR GNWT needs FMBS to facilitate the approach to improving internal controls.

Client satisfaction needs to be addressed at a central agency level.

FMBS needs to be encouraged to demonstrate all the modern management practices, i.e. to "walk the talk"

Transportation Manual reporting of time on cards is archaic - we need a new way to track attendance. HR system needs significant improvements.

The Modern Management Capacity Assessment tool places a lot of emphasis on formal surveys of clients and staff. The tool was built for the federal government, so formal surveys may be appropriate in that environment, but in NWT, a less formal approach is more appropriate and more effective.

Corporate systems (e.g. FIS, HR) need to be integrated to provide better information for decision-making and monitoring.

Central agencies need to ensure that new systems (e.g. for performance measurement, FIS, etc.) are user-friendly and provide added value. Managers are already very busy, so any new work they need to do needs to be justified.

Departmental Recommendations

Finance FMBS should conduct training for staff using FIS to encourage data accuracy.

PeopleSoft and TCA systems are not user-friendly or timely and do not deliver satisfactory management reports. FMBS needs to rectify this situation and determine how to avoid similar problems with the new FIS.

IT/IS services were moved to TSE, however it is now much harder to obtain help. Management needs better information on its requests for assistance and resolution of problems. There is no confidence that problem patterns are identified and resolved to client satisfaction. Existing performance agreements with TSE are not being honoured.

There is a lack of good management information in corporate systems.

Departments cannot back out of IT service agreements or change the chargeback arrangement even though service has deteriorated and costs have not decreased.

HR resources were pulled out of departments to form corporate resource, but the local manager's link with HR has now been lost, and managers have lost a lot of information on what is going on.

There have been improvements in overall government standards, but service to departments has not improved and costs have not decreased.

Housing Centralization has not proven to deliver the benefits anticipated. Service delivery has deteriorated and costs have not been reduced, particularly in IT and HR.

HR support needs to be improved significantly.

Management competency definition and training should be tackled by FMBS for the GNWT as a whole.

The widespread practice of chargeback for services across departments should be replaced by departments having the resources to provide GNWT-wide services. Chargeback simply avoids scrutiny. There is no choice, service has declined and it adds unnecessary administrative work. It also does not foster a sense of teamwork, as departments will cross-charge for simply attending meetings. Departments have given up resources but not all the work the resources performed (e.g. HR staff did attendance management which now has to be done by departments.) Some departments have hired staff to perform work that has been centralized (e.g. HR, IT) in order to maintain service levels.

Departmental Recommendations

Aboriginal Affairs and Intergovernmental Relations

Executive Office needs to play a key leadership role in supporting and promoting Modern Management practices to ensure its success in GNWT.

Centralization of certain services has not had the anticipated results. While some corporate standards have been established, overall, the delivery of services has failed. Departments have lost the resources they relied upon to deliver services, and the newly centralized services have not delivered promised results, nor have promised savings been achieved. HR services in particular are dysfunctional. Expertise in IT is varied at best.

The business planning process needs improvement.

Central agencies need to show departments how they can support departments in their program delivery and not be limited to a control role. As as example, FMBS is very credible in reviewing submissions and adds real value.

There should be an automatic orientation for new GNWT managers, including their signing authorities and responsibilities and rules they are expected to live by.

GNWT needs to develop a package of training for new managers and disseminate information about the availability of courses that are part of the package.

Education, Culture and Employment

As GNWT is developing a set of management competencies, skills and practices and preparing corporate training, additional human resource elements need to be considered in addition to the management responsibilities identified in the Modern Management Capacity Assessment

GNWT has a unique opportunity and responsibility to reflect in the Modern Management Capacity Assessment criteria, such as Values and Ethics and Valuing People's Contributions, the values of the aboriginal community which GNWT serves.

Corporate systems and services need to support department service delivery, or at least not interfere with it.

GNWT needs to assess its government-wide systems to ensure they support government objectives, e.g. Business Incentives Policy.

When developing corporate systems and processes, GNWT needs to consider the high turnover rate and ensure that systems and processes are easy to use and that instructions are clear and easy to follow without extensive training.

Departmental Recommendations

Industry, Tourism and Investment

GNWT could play valuable role in providing corporate training for new managers, e.g. supervisory role, expectations, responsibilities, etc.

GNWT could promote its values and ethics codes to ensure wider understanding and acceptance.

Departments are limited in their ability to improve the various components of the business planning cycle without a different GNWT corporate model.

HR Employees want consistent treatment, so a common understanding of ethics and values is important. A consistent corporate approach would help managers manage properly. GNWT could provide some useful, concrete examples of what ethical behaviour means in the GNWT, e.g. not offering a new employee a salary level that is above the level for the position, and not taking outside work that might conflict with the employee's role in GNWT.

There needs to be a corporate approach taken to improving business planning in GNWT. This would involve the business planning process itself, linking business plans to the GNWT strategic plan and developing budgeting and forecasting tools for departments. Departments need to build real and meaningful 3 year plans.

Regarding specialist support, there should be further regionalization of IT. Finance should begin a shared service for transaction processing. Financial analysis services should be reviewed in terms of a shared service approach to ensure that departments don't keep the analytical resources but use them for transaction processing. IT experienced this problem when it centralized the maintenance function but left the analytical function with departments. These analytical staff were asked to do the maintenance that departments gave up to the central organization.

It is critical for GNWT to select a financial system that is compatible with its current PeopleSoft HR system to facilitate file sharing.

MACA Recommend to FMBS to improve business planning process - longer term strategic plan and more relevant business plan.

Recommend to FMBS - there is a lack of capacity at central agencies to properly support departments in HR, IT and legal.

Recommend to FMBS - there needs to be improved access to strategic planning data, such as resource development impact projections.

Justice There is no tool kit for government managers, no required management competencies. A defined set of competencies would be most useful for hiring and training purposes.

Comparison of Web Survey Results (Senior vs. Non-Senior Management)

Senior managers are less optimistic about current state but more ambitious about desired state

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Web Survey Results(Gap/Priority Relationship)

Comparison shows that there is little relationship between importance ranking and size of gap

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Importance Ranking

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Gap