V7 vav New York City Department of Corrections Commissioner weekly update PRELIMINARY 10/06/2014 CONFIDENTIAL AND PROPRIETARY Any use oi this malarial without speci?c permission oi McKinsey a. Company is strictly prohibited 17179000 Contents Activities to-date Confldentlal and Proprietary Pre-declslonal document Distribution of this document Is not authorized without the express written consent of New York City Department of Corrections NULL 94900018 W?l$?3 WV 9L 9 095510? is? P1990915 WJISHB WV CE 9 ?0211.1!? Doll-"1d 9179000 Key messages - The Organizational Health Index is a ~20-30 minute tool to measure health across an employee base. It yields 4 types of actionable outputs vital to understanding and repairing large, complex organizations: - Overall perception of health outcomes Speci?c management practices that are and that are opportunities for improvement, enabling clear focus on gaps within accountability. the breakdown could be due either to lack of role clarity or a lack of personal ownership or a feeling of no consequences for not doing a job the survey output will pinpoint what the speci?c issue is) Demographic breakdowns by location. role, and tenure, in order to highlight differences between groups and help develop tailored interventions health much lower in specific facilities or specific practices much lower for speci?c roles) - Priority practices. Given D00 is an execution focused organization, a tailored intervention plan can be developed, focusing on the areas that will contribute the most to increased organizational health priority practices will likely focus on areas like knowledge sharing, employee involvement, talent development and personal ownership) We have developed an approac! taillore! to measurlng !e organlzalonal Ioal! - Con?dential and Proprietary Pre-decisional document I 0 Distribution of this document is not authorized without the express written consent of New York City Department of Corrections 9179000 Redacted 1179000 We evaluate health along 2 dimensions: outcomes and practices . "Outcomes" describe the results which an organization has ultimately achieved (?how effective is the organization?") - Sample question for accountability: ?Employees in our organization feel trusted to do their jobs we] Coordirratio and contrc Account? ability Innovahon External . . 3 I ?i . orrentatrcn Culture and Climate Top quartile I 2nd quartile I 3rd quartile Bottom quartile Management practices . ?Management practices" describe what managers at an organization do in order to achieve their goals what actions does the organization take to drive accountability?) Sample question for accountability: "The organization provides coaching to under- performers to help them improve their results? 48 Personal ownership Clear objectives Role clarity Conseque- nce mgmt. SOURCE: McKinsey Organization Practice Con?dential and Proprietary Pre-decielonal document Distribution of this document Is not authorized without the express written consent of New York City Department of Corrections I 2 8179000 Redacted 6179000 Redacted 099000 The Organizational Health Survey takes ~20 min to complete and is designed to measure an organization across the 9 dimensions of health - The OHI has ~100 questions and takes ~20-30 minutes to complete - The survey can be applied at all levels of an organization, with the largest sample of 120,000 employees per survey . The survey is easy to administer with web and paper? based options - With 2+ million respondents from ~800+ organizations to date, the enables robust benchmarking to comparable organizations SOURCE: McKinsey Organization Practice Confidential and Proprietary Pre-docisional document Distribution of this document is not authorized without the express written consent of New York City Department of Corrections I 5 Redacted Redacted 999000 Redacted 1799000 Redacted Redacted 999000 Redacted ?99000 Redacted 899000 Redacted Redacted Redacted L99000 Appendix - detailed case study Con?dential and Proprietary Pre-decieionai document Distribution of this document is not authorized without the express written consent of New York City Department of Corrections [18 Z99000 Operational performance transformation: Mining site pressed to increase productivity I Mining site of a global chemical manufacturer faced increasing energy costs, increased international competition and stricter environmental regulations I ~450 employees distributed in an area greater than 5 times the size of Manhattan (strip mining) I team asked to design transformation program with focus on cost reduction and improving maintenance productivity I 9 months later, another mining site of client was shut down due to the dispute over environmental permits, which led to increased pressure to drive productivity elsewhere I Given the situation transformation expanded to focus on driving additional production SOURCE: MCKinseV Organization Practice Con?dential and Proprietary Pre-decislonal document 17 Distribution of this document is not authorized without the express written consent of New York Clty Department of Corrections 999000 We conducted a comprehensive organization diagnostic, integrating qualitative inputs with the CHI survey results Organizational heaHh diagnostic OHI Survey across all employees. Given challenging context?, both online and paper-based surveys used to ensure maximum accessibility. Achieved high response rate after three weeks of survey in the ?eld Focus groups held separately for Supervisors and Planners from all departments (total 23 people) Interviews conducted with a representative sample of Site Leadership, Superintendents, Assistant Superintendents, and Support Services (total 24) Conducted observations to develop ?Day in the life of' for production supervisors and ?eld supervisors Integrated qualitative findings with survey results to develop implications for client Results delivery Ac?on planning McKinsey Organization P730509 Con?dential and Proprietary Pre-decislona! document Distribution of this document Is not authorized without the express consent of New York City Department of Corrections Mirror workshop format used with ?ndings presented in poster form, allowing individuals to walk through and develop their own perspectives to discuss with the group Site management selected the top 3-4 priorities based on workshop discussion and action teams formed Site?wide communication meetings held with all hourly employees to review synopsis of survey results and invite participation in action teams I13 1799000 Redacted 999000 Redacted Redacted ?99000 Digging into question level results yielded additional insights; speci?cally on role clarity and performance contracts Selected questions Percent of positive responses Possible Possible Hourly underlying Salaried underlying n=309 mindsets n=88 mindsets Interview Jobs in Site A are "0t 6'93; designed to have clear a Wt l0 objectives and expectations accountabilities for results ?People don't know what their objectives Site A sets performance are - we don?t have 02 goals for individuals that I don't know metrics tied 1? 3113 are challenging what good I'm challenged - Management 2 really is z: regularly Targets are regularly 3 updated to ensure managers and employees need a better are challenged division of labor Site incentive and we?re very good at 2:3 recognition systems ?ghting ?res but we 3 promote health competition 38 need to plan. We among employees dont don't know have no plans or 8 know how how I compare objectives.? 2, 3 compare - Shift Supervisor 3 Results are made 39 5 internally transparent to create pressure to perform SOURCE Organization Practice Con?dential and Proprietary Pre-decisional document 22 Distribution of this document is not authorized without the express written consent of New York City Department of Corrections 899000 We identified four core initiatives to improve health and drive performance Initiative Role expectations and accountability Performance management and continuous improvement Supervisor effectiveness Site engagement Issues to address Expectations and goals not aligned across site, leading to unclear roles responsibilities and competing objectives Key drivers of performance not transparent to all employees, leading to limited discussion on how to improve Field supervisors have a broad span of responsibility that may prevent them from ful?lling expectations to full degree Supervisor expectations not de?ned (focused on ?re~?ghting more than clear objectives) Frontline does not feel motivated through regular engagement with management and communication Activities targeted at issues Develop consistent and aligned metrics targets across all levels of the organization to drive operational excellence De?ne role accountabilities for key roles against metrics targets (see p.9 in appendix) Build transparent performance management through root~cause problem-solving during key meeting and metric tracking (see p. 11 in appendix) Evaluate supervisor roles and responsibilities and determine optimal resources required to manage Create ?standard work day" and expectations for supervisors (see p.12 in appendix) Develop supervisor capability-building program Multiple avenues for communication that allow for reaching a broad audience Create informal recognition mechanisms (eg. hard-hat stickers. etc) SOURCE: McKinsey Organization Practice Con?dential and Proprietary Pre-declslonal document I23 Distribution of this document is not authorized without the express written consent of New York City Department of Corrections 699000 To increase role clarity we designed new role descriptions and linked to performance metrics Role description: miner Supervisor Key accountabilities - Micro-mine plan for each miner - Coach miner operators and oilers on daily performance expectations - Manage miner asset and immediately surrounding areas Tons moved per miner Swing rates per miner miner uptime - Others TBD Organization level - Reports to site Production Assistant Superintendent - Manages 3-4 miners and associated miner operators and oilers (total of 6-8 direct reports) - \?sit each miner twice per shift to: Responsibilities coach miner operator on micro-mine planning (cut management and conditions. strip-and-mine options) identify key issues - review performance metrics and targets to set clear expectations and identify underlying issues Provide updates on strip-and-mine Options and expectations to Coordinator on a regular basis throughout the day Identify required timing for pit moves and report to Assistant Superintendent Identify and prioritize equipment repair and grading needs and submit Work Orders/Requests Handle all permits and LOTO related to the miner itself Handle all HR issues for miner operators and oilers (time? cards. overtime. call-outs, discipline, etc) Track and record miner up/down-time in MOIS Conduct safety and housekeeping audits of miners and immediate area Conduct other audits required at the miner and surrounding areas SOURCE: McKinsey Organization Practice Con?dential and Proprietary Pre-decislonal document Distribution of this document is not authorized without the express written consent of New York City Department of Corrections 24 To integrate and standardize this new way of work, we created standard performance meetings, grounded in metrics linked to site goals Cadence of performance meetings Site leadership - Daily production 2 "199?"9 Plant and ?eld .3 - Weekly?step back? 0 meeting - Production review Standard agenda 2 9, - strategy - Plant Front line 0 Safety .5 review - Field 7 . 5? - Maintenance "grade Front I'm? perfor- . a Performance 3: the day? mance dialogues wuth - Yesterday swarms? . Today - Safety index, incidents Safety . Tomorrow . Producttons, grade - Plant . . . Product recovery 9 Action item revrew . KWh/ton - Plant grade 0 Recognition 8 Wrench time Plant Uptlme . '5 - Cost/ton F'e'd 0 General Information a Miner uptime Miner rate :2 Schedule compliance Maintenance Work order feedback - OT, man-hours McKinsey Organization praC?ce Confidential and Proprietary Pre-decisional document 25 Distribution of this document is not authorized without the express written consent of New York City Department of Corrections To improve supervisors effectiveness we created ideal Breaks/driving I Field time supervisor ?standard work day? Meetings El Of?ce miner supervisor ?standard day" 05:30 Shift change meeting 06:30 site production meeting 07:00 Ema I Morning check-in with each miner (46 minutes) 07.30 I Review metrics from previous shift 5 minutes . I Discuss plan for the day across the site 5 minutes 0315 I Drive I I Micro-mine pianning 15-20 minutes 08:45 mine:- #2 Cut management 0930 I Drive I - Strip-and-mine options . . - Pit planning 10100 ?3 I Any issues 5 minutes 10:45 ITJrive I I Sitewide messages/communiqu?s 5 minutes ms 1 - 3083313913379": gininutes 12:00 Lunch/miscellaneous e? 13:00 13:30 Drive 1 Grade the day with each miner (30 minutes) 14:00 I Changes in micro-mine plan 5 minutes . I 008 review 5 minutes 14.30 15.00 I Review of key metrics 15 minutes I Expectations for next shift and 5 minutes 15130 anticipated issues 16:00 it .- I Report to coordinator Driving 16:30 [_Driv 17:00 F?i?ca admin - shift notes, MOIS. HR 17:30 Shift change meetng 18:00 [Home SOURCE: McKinsey organization Practice Con?dential and Proprietary Pre-decisional document Distribution of this document is not authorized without the express written consent of New York City Department of Corrections 26 219000 Integrated efforts drove positive performance impact . Productivity increased by 50% between 2009 and 2011 with additional value created of $350 MM ~$180 MM in annual run rate savings Operational . New roles in our ?eld operations: site coordinators, miner supervisors, supervisors - Clear expectations of nearly every role, including role speci?c metrics that are reinforced with daily dialogues - Wrench time1 increased from a baseline of 22% to 45% - Employee engagement up by 20% SOURCE: MCKinseY Organization Prawce Con?dential and Proprietary Pre-decisional document Distribution of this document is not authorized without the express written consent of New York City Department of Corrections I27