Louisville MSD Blueprint 2025: Strategy and Innovation for Organizational Transformation

1. Louisville-Jefferson County MSDBlueprint 2025: Integrating Strategy and Innovation to Drive Organizational Transformation September 4, 2019

2. Louisville MSD Highlights • Wastewater, stormwater and flood protection services • Serve over 755,000 people in greater Louisville area • Own and operate • 5 wastewater treatment facilities (155 mgd) • 3200 miles of sewer pipe • 29 miles of flood wall and levees • 713 employees

3. Organizational Transformation Opportunity • 2014-18 Strategic Plan • Employed traditional top down approach • Focused around 8 strategic change initiatives • Objectives for 2019 forward • Transition to maintained excellence • Embrace innovation to foster a culture of engagement and purpose • Create a blueprint for transforming into a Utility of the Future

4. Strategic Planning Challenge Over two-thirds of large organizations are unhappy with the execution of their strategic plans. While these plans can provide a powerful vision for the future, they almost always fail to empower the organization to make this vision a reality.

5. Topics to be Covered • Engaging staff in organization-wide strategic planning • Aligning organizational performance to the strategic plan • Maintaining staff engagement throughout the strategic plan implementation • Lessons learned

6. Engaging Staff in Organizational Strategic Planning

7. Engaging StaffOur Objectives • Assess progress toward existing strategic business plan goals • Develop lessons learned from prior planning efforts • Define the context for future planning • Assess organizational change readiness • Engage MSD staff in values, vision and mission creation • Build commitment to critical success factors • Establish meaningful opportunities to maintain momentum

8. Engaging StaffOur Approach • Strategic Plan Report Card Survey • Innovation Readiness Survey • Interviews and Focus Groups • Values, Vision, Mission Workshop • Innovation Assess and Aspire Workshop

9. 2014-2018 Strategic Business Plan Report Card • Scorecard survey asked participants to assess achievement levels of existing strategic business plan • Team assessed survey results to identify potential change blockers and opportunities for improvement • 274 respondents • Union 30%, Non-Union 70% • Management 44%, Non-management 56% • Reporting hierarchy (respondent reporting as follows) • Director/Chief/Executive Directors 19.0% • Supervisor/Administrator 56.2% (non-management)

10. Innovation Readiness and Ideas Surveys • MSD staff benchmarked the existing environment of innovation using the Water Research Foundation’s Utility Innovation Framework. • Results highlighted the need to improve engagement of staff as well as a process for supporting innovation across organization. • 176 unique ideas were proposed by staff through the simple idea survey.

11. Interview & Focus Group Key Takeaways Strategic Business Plan Innovation Environment • Develop more effective communication from upper management to the front lines as well as inter-department communication • Increase availability of training to understand other departments’ roles and responsibilities • Document policies and procedures for succession planning and accountability • Execute clear and consistent communication of the value of MSD’s services to the community • Implement robust performance management to track strategic planning initiatives to completion • Implement strategic initiatives to completion and in a timely manner • Focus innovation efforts on implementing best practices • Combat challenge of staff being at full capacity with day to day responsibilities • Identify key strengths of MSD and mature into possible additional non-rate payer revenue • Leverage regionalization and community partnerships for innovation efforts • Breakdown communication barriers between “silos”

12. VVM Workshop • Engaged 50 MSD staff from major operating units in 2-part workshop • Part 1 - Values • Review survey and interview results • Discussed peer utility experience • Conducted SOAR analysis through World Café exercise • Reviewed values of industry-leading companies • Developed priorities for Values • Part 2 – Vision and Mission • Conducted breakout groups for Vision and Mission development • Conducted heat mapping and sharing sessions to identify key elements for final Vision and Mission Statements • Drafted Critical Success Factors

13. Innovation Aspiration Workshop • Engaged VVM Workshop Team in 2-part Workshop • Part 1 – Innovation Assessment • Evaluated innovation survey results • Identified strengths and opportunities • Discussed MSD’s legacy of innovation • Benchmarked innovation maturity levels • Part 2 – Innovation Aspirations • Reviewed peer utility innovation programs • Identified specific aspirations for MSD innovation through World Café • Set target maturity level • Prioritized building blocks (i.e., people, process, tools and performance measures) for program development

14. Aligning Organizational Performance to the Strategic Plan BLUEPRINT MODE

15. Blueprint for Organizational Performance Management • Organizational goals aligned with Strategic Plan elements • Identifies “outcomes” themes for organization-wide focus for FY20-FY22 • Focuses performance around both daily business activity and implementation of defined initiatives • Sets metric targets for FY20 and continuous improvement targets for the following 2 years • Division/Department goals aligned with the Organizational goals • Division and department managers outline programmatic initiatives and key outcome areas, along with completion dates and metrics, necessary to support achievement of the common mission • Increases likelihood for successful organization goal attainment • Team/Individual goals aligned with the Division/Department goals • Division and department managers outline specific team-based and individual contributor activities, along with completion dates and metrics, necessary to support achievement of the common mission • Further increases likelihood for successful organization goal attainment

16. Maintaining Staff Engagement Throughout Strategic Plan Implementation

17. Approach for Maintaining Staff Engagement • Utilize continual and multi-media communications • Onboarding • Staff meetings • Newsletters • Video spots • Align staff performance competencies and appraisal elements with strategic plan • Conduct interviews and focus groups for development of initiatives

18. Lessons Learned • Organizational transformation should begin as PART of the planning process rather than as a RESULT of planning. • Engagement requires leaders to leverage various tools and techniques to provide staff a platform through which they connect. • Innovation is a business practice that requires planning and management. • Broad engagement builds tremendous momentum and expectation for change. • Performance expectations must be tied to plan to communicate organizational commitment, prioritization with daily activities and urgency.

19. Jason Carter, PE – Strategy & Innovation Leader Arcadis Jason.carter@arcadis.com 205.253.2276 Angela Akridge, PE – Chief Strategy Officer Louisville MSD Angela.akridge@louisvillemsd.org 502.540.6136