Dfas Journey and our strategic direction

1. Dfas Journey and our strategic direction Richard �Gus� GustafsonPrincipal Deputy DirectorDefense Finance and Accounting Service

2. Agenda Profile & Background Achieving Results Reasons for Success Short Term Priorities Bucket List Critical Four Director�s Priorities DFAS Strategy Focus on the Future 2 Integrity - Service - Innovation

3. Profile � World�s Largest Finance and Accounting Operation 3 Integrity - Service - Innovation

4. Background 1991- 2000: A Case For Change Customer complaints Failed expectations Emphasis on consolidation and standardization A-76 Competitions criticized 4 Integrity - Service - Innovation

5. Achieving Results� 5 Integrity - Service - Innovation

6. Achieving Results� 6 Integrity - Service - Innovation

7. 7 Integrity - Service - Innovation

8. 8 Integrity - Service - Innovation

9. Project Management Center of Excellence Lean6 Culture 97 Blackbelts and 1,204 Greenbelts $125 million in savings to date Operational Centers of Excellence FMCOE Business Activity Monitoring System - Recognized by OMB as best practice! Reasons for Success 9 Integrity - Service - Innovation

10. Short Term Priorities FY 08/09 Bucket List Define and Achieve Successful Outcomes Manage Change Establish a Culture of Collaboration 10 Integrity - Service - Innovation So let�s turn to the importance of Employee Development and Crucial Conversations and how it affects you. As I told everyone during my recent All Hands meetings, I expect everyone to focus on defining and achieving successful outcomes which includes looking at what we do in our day-to-day jobs. I also expect everyone to focus on change management, which includes using creative ways to get our work done, and to focus on results. And, I expect everyone to encompass an in-depth culture of collaboration. This culture is where everyone � at every level � works together to make our organization the absolute best it can be. I want our employees to step out of their comfort zones and embrace new challenges that will increase their skills and capacities and also contribute to our larger goal of operational and organizational excellence. In this new culture, everyone is informed and engaged in the challenges that our Agency is facing. This is where you come in. I honestly believe our employees come to work every day wanting to become engaged in their work, enjoy their environment, and be productive. I believe they want to make our organization the absolute best it can be. What happens between �their wanting engagement and productivity� and �their actuality� is what you need to determine. According the OAS survey, the employees want more communication, a better work environment, and better relationships with their supervisors. The only way you can determine what they want and how they perceive their reality is by having a crucial conversation between the two of you. So I challenge you to have this crucial conversation with each of your employees so that you can help DFAS achieve these goals. I don�t know if you read this article or not, but the November 18th article from the Merit Systems Protection Board provided justification for how I believe. The Merit Board stated, �Employees who are fully engaged tend to work in offices that achieve better program results, call in sick less often and stay with their agencies longer. The report, which is based on results from a 2005 survey of nearly 37,000 employees at 24 federal agencies, found that despite dwindling resources and increased pressure to improve programs, agencies can thrive if managers connect with their employees. �Federal supervisors and managers have an important role to play in engaging employees,� said the Merit Board Chairman (Neil McPhie). �Those who are successful in engendering these attitudes will lead a more engaged workforce that will produce better outcomes for their agencies.� The survey found that about one-third of federal workers considered themselves to be fully engaged, while one-half are somewhat engaged and 17 percent are not engaged. So � bottomline � what are you going to do to engage your employees? (Pregnant pause) Please consider this thought throughout the rest of today�s program. Now it is my pleasure to introduce Mr. Dave Angel, a master certified trainer in Crucial Conversations. Dave brings more than 25 years of experience in providing strategic leadership in the areas of training, facilitation, and the development of organizational and employee competencies to the VitalSmarts Facilitator Facility. He has worked closely with leaders at Covenant Healthcare to implement Crucial Conversations training as part of a major culture change initiative occurring across the multi-hospital organization. By using the skills found in Crucial Conversations, leaders and employees who once experienced critical issues that halted productivity, addressed and resolved their problems with their teams and experienced improved results. Dave�s other notable clients include: General Electric, the American Society for Training & Development, and the Society for Human Resource Management. Dave received his Bachelor�s degree in Speech Communication from the University of Tennessee and did his graduate work in Organizational Communication at Southern Illinois University. Let�s please welcome Mr. Dave Angel. (clap) So let�s turn to the importance of Employee Development and Crucial Conversations and how it affects you. As I told everyone during my recent All Hands meetings, I expect everyone to focus on defining and achieving successful outcomes which includes looking at what we do in our day-to-day jobs. I also expect everyone to focus on change management, which includes using creative ways to get our work done, and to focus on results. And, I expect everyone to encompass an in-depth culture of collaboration. This culture is where everyone � at every level � works together to make our organization the absolute best it can be. I want our employees to step out of their comfort zones and embrace new challenges that will increase their skills and capacities and also contribute to our larger goal of operational and organizational excellence. In this new culture, everyone is informed and engaged in the challenges that our Agency is facing. This is where you come in. I honestly believe our employees come to work every day wanting to become engaged in their work, enjoy their environment, and be productive. I believe they want to make our organization the absolute best it can be. What happens between �their wanting engagement and productivity� and �their actuality� is what you need to determine. According the OAS survey, the employees want more communication, a better work environment, and better relationships with their supervisors. The only way you can determine what they want and how they perceive their reality is by having a crucial conversation between the two of you. So I challenge you to have this crucial conversation with each of your employees so that you can help DFAS achieve these goals. I don�t know if you read this article or not, but the November 18th article from the Merit Systems Protection Board provided justification for how I believe. The Merit Board stated, �Employees who are fully engaged tend to work in offices that achieve better program results, call in sick less often and stay with their agencies longer. The report, which is based on results from a 2005 survey of nearly 37,000 employees at 24 federal agencies, found that despite dwindling resources and increased pressure to improve programs, agencies can thrive if managers connect with their employees. �Federal supervisors and managers have an important role to play in engaging employees,� said the Merit Board Chairman (Neil McPhie). �Those who are successful in engendering these attitudes will lead a more engaged workforce that will produce better outcomes for their agencies.� The survey found that about one-third of federal workers considered themselves to be fully engaged, while one-half are somewhat engaged and 17 percent are not engaged. So � bottomline � what are you going to do to engage your employees? (Pregnant pause) Please consider this thought throughout the rest of today�s program. Now it is my pleasure to introduce Mr. Dave Angel, a master certified trainer in Crucial Conversations. Dave brings more than 25 years of experience in providing strategic leadership in the areas of training, facilitation, and the development of organizational and employee competencies to the VitalSmarts Facilitator Facility. He has worked closely with leaders at Covenant Healthcare to implement Crucial Conversations training as part of a major culture change initiative occurring across the multi-hospital organization. By using the skills found in Crucial Conversations, leaders and employees who once experienced critical issues that halted productivity, addressed and resolved their problems with their teams and experienced improved results. Dave�s other notable clients include: General Electric, the American Society for Training & Development, and the Society for Human Resource Management. Dave received his Bachelor�s degree in Speech Communication from the University of Tennessee and did his graduate work in Organizational Communication at Southern Illinois University. Let�s please welcome Mr. Dave Angel. (clap)

11. A Movement to Strategy Integrity - Service - Innovation

12. Senior Leadership Collaboration! Integrity - Service - Innovation 12

13. Critical Four Strategic Initiatives FY 09/10 13 Integrity - Service - Innovation So here are the four strategic initiatives that we have determined are critical to DFAS� success and moving us toward our vision state of �becoming the recognized leader in financial management and delivering first-class service and products.� We have just heard from the champions of each of these initiatives�I think we can all agree that we have selected the best people possible to head up this important endeavor. So here are the four strategic initiatives that we have determined are critical to DFAS� success and moving us toward our vision state of �becoming the recognized leader in financial management and delivering first-class service and products.� We have just heard from the champions of each of these initiatives�I think we can all agree that we have selected the best people possible to head up this important endeavor.

14. FY 2011 Priorities 14 Integrity - Service - Innovation So here are the four strategic initiatives that we have determined are critical to DFAS� success and moving us toward our vision state of �becoming the recognized leader in financial management and delivering first-class service and products.� We have just heard from the champions of each of these initiatives�I think we can all agree that we have selected the best people possible to head up this important endeavor. So here are the four strategic initiatives that we have determined are critical to DFAS� success and moving us toward our vision state of �becoming the recognized leader in financial management and delivering first-class service and products.� We have just heard from the champions of each of these initiatives�I think we can all agree that we have selected the best people possible to head up this important endeavor.

15. Strategy Refresh Purpose Re-examine vision, mission, values, goals and objectives Develop clear strategy map and themes (vice perspectives) to link strategy to operations Once mission, vision, values, goals and objectives are agreed upon, Strategic Council will ensure that the right strategic initiatives are in place to meet strategy�perform gap analysis Approach Conduct environmental scan Conduct strategic planning working sessions Refine performance measures and initiatives Monitor performance against measures Lot of Effort and Management Commitment 15 Integrity - Service - Innovation

16. 16 During the previous Forum, we were still engage in gathering feedback from Supervisory focus groups. The results of these groups provided important information that further enhanced our strategy map. Over the next several slides I�ll detail these upgrades. Next slide pleaseDuring the previous Forum, we were still engage in gathering feedback from Supervisory focus groups. The results of these groups provided important information that further enhanced our strategy map. Over the next several slides I�ll detail these upgrades. Next slide please

17. 2011�2016 Strategic Objective Definitions 17 Integrity - Service - Innovation The second side of the map includes the Objectives and descriptions. The strategic objectives are the building blocks of our agency strategy and are necessary to achieve the agency strategic results and vision. �.Let�s start on side one though and I�ll walk you through the upgradesThe second side of the map includes the Objectives and descriptions. The strategic objectives are the building blocks of our agency strategy and are necessary to achieve the agency strategic results and vision. �.Let�s start on side one though and I�ll walk you through the upgrades

18. 18 Integrity - Service - Innovation

19. DFAS Strategy and Balanced Scorecard 19 Integrity - Service - Innovation