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Winners Need Not Apply
You needn’t jump through hoops for a Malcolm Baldrige National Quality Award to improve your performance. Just follow the criteria.
Fast Focus
- The Baldrige Award is the only formal recognition for performance excellence given by the president.
- The Baldrige Criteria for Performance Excellence will change your thought process and help you act strategically.
- To receive a Baldrige Award, management must ensure continuous improvement in its products or services.
Have you ever had a really good tool that just plain works and is perfect for the job?
Whether you’re a woodworker who appreciates a great miter saw or a cook who has the ideal frying pan, you realize that someone out there understood what you needed.
You don’t realize this about a product or a service by looking at it on paper or spying it on a shelf. You discover it when you watch it perform. That’s the essence of the Malcolm Baldrige National Quality Award.
As we begin a new year, now is your chance to wipe the slate clean, consider the criteria that made companies like Ritz-Carlton and FedEx past winners, and apply this criteria for operational excellence to your firm. You need not make an Olympian effort to create the performance excellence standards that will guide your organization forward regardless of the market.
You might think, “Sure, I resolved to be a better manager, but my business is no different than it was last year. Except, perhaps, that I’m now closer to the dreaded headwinds that I knew my company would face in 2010.”
Well, having met with so many agency owners during 2009, I know those feelings only too well. I also believe not many of us have changed the way we do business. We’ve made incremental changes, and some have gone beyond this and are standing tall in the face of the blowing economic gale. But fundamental changes? I’m afraid not.
Let’s challenge your thought processes. You can dramatically change how you approach business and reposition your company for success. You might not agree with my approach, but let me show you what truly works.
WHAT’S A BALDRIGE?
The Baldrige Award, created under President Ronald Reagan, was named for his Secretary of Commerce, who served from 1981 until his death in 1987. It’s the only formal recognition for performance excellence given by the president. Some of our country’s best companies (and many you have never heard of) have received the award over the years. To get it, they’ve survived a rigorous application process that compares their work to the Baldrige Criteria for Performance Excellence.
I have some experience with that process. In fact, I’ve approached it from three different viewpoints: as an employee, as a consultant and as an owner. I assisted in the development of the Baldrige application processes as an employee for KPMG, advised a client who was submitting an application and, as an owner, have incorporated certain aspects of the Baldrige criteria for the companies I own.
I don’t expect you to submit a Baldrige application. But if achieving sustainable results in today’s insurance market is a challenge (to say the least), then I can say with confidence that the Baldrige criteria will change your thought process and help you act strategically. It will also help you align your processes and your resources and engage your workforce and your clients.
To receive a Baldrige Award, an organization must have a role-model organizational management system that ensures continuous improvement in the delivery of its products or services, demonstrates efficient and effective operations, and provides a way to engage and respond to customers and other stakeholders.
I’ve found the Baldrige process to be a good way to gauge your company’s effectiveness. You can learn important lessons to incorporate into your business and boost your success, regardless of which way the economic winds are blowing. The Baldrige process is about delivering to the marketplace a high-performing, high-integrity organization.
PERFORMANCE ELEMENTS
The 2009-2010 Baldrige Criteria for Performance Excellence lay out a blueprint that you can use in your business planning. They are embodied in seven categories:
- Leadership
- Strategic Planning
- Customer and Market Focus
- Measurement, Analysis, and Knowledge Management
- Workforce Focus
- Process Management
- Results
You might be thinking, “We already do all these things, so this isn’t going to help me.” But consider the criteria in greater detail. The Baldrige framework requires you to start with an organizational profile, including an assessment of your company’s environment, key working relationships and strategic challenges and advantages. These serve as a guide for an organizational performance management system.
Next, assess the seven criteria. You will realize how difficult it is to align the criteria to successfully implement your workplace processes. However, that set of questions will give you a framework from which your company can measure its effectiveness and move forward.
Leadership
- This category assesses senior leadership. It seeks to establish how management’s actions guide the organization and how leaders communicate with the workforce and encourage high performance. Significant items to address include mission, vision, values, communication and organizational performance.
- Other key aspects are governance and social responsibility: How does your company ensure legal and ethical behavior and fulfill its commitment to the community?
Strategic Planning
- How your company addresses its strategic challenges and leverages its strategic advantages will go a long way toward its overall success. This category asks for a detailed analysis of your strategic planning process.
- Strategy deployment measures how your company converts its strategic objectives into action plans. It also looks at how action plans are deployed and identifies the key action plan performance measurements.
Customer and Market Focus
- Customer engagement revolves around how your company determines product offerings and mechanisms to support customers’ use of your products and services and how you build a customer-focused culture.
- A section called “voice of the customer” deals with how you listen to your customers and measure customer satisfaction. It also looks at how your customer information is used to improve your marketplace success.
Measurement, Analysis and Knowledge Management
- This category, which focuses on improving organizational performance, assesses how you measure, review and improve performance through the use of data and information at all levels of your organization.
- Managing information, knowledge and information technology relates to how you ensure the quality and availability of needed data, software and hardware for your workforce, suppliers, partners and customers.
Workforce Focus
- A workforce engagement section asks you to describe how your company engages and compensates your workforce to achieve high performance. It’s critical to understanding how employees, including leaders, are developed to achieve high performance. Finally, it measures how you assess workforce engagement and use the results to achieve higher performance.
- Workforce environment looks at how your company manages the ability of your employees to accomplish the company’s goals and how you maintain a safe and supportive work climate.
Process Management
- This category focuses on how your organization designs its work systems and determines its key processes to deliver optimum value to each customer. It measures how the company achieves success and prepares for potential emergencies.
Results
There are a number of outcomes sought by these criteria.
- Product outcomes analyze your key product/service performance results by customer and market segments. Comparative data is also critical.
- Customer-focused outcomes analyze the level of customer satisfaction and engagement. Once again, segmentation is critical to analyzing this data.
- Financial and market outcomes measure your organization’s key financial and marketplace performance results by market segments and customer groups. Comparative data relating to market and competition is important.
- Workforce-focused outcomes evaluate your key results for workforce engagement and workplace environment.
- Process effectiveness outcomes summarize your company’s key operational results that contribute to improving organizational effectiveness, including your company’s readiness for emergencies.
- Leadership outcomes assess your key governance and senior leadership results, including evidence of strategic plan accomplishments, fiscal accountability, legal compliance, ethical behavior, societal responsibility and support of key communities.
Do you want to tackle some of these issues by applying the Baldrige criteria to your firm? The first step is a 24-question assessment known as the Baldrige Organizational Profile. This will give you a snapshot of your firm, your key operational influences and the key challenges you face. It walks you through your company’s operating environment and helps you identify key relationships with customers, suppliers, partners and stakeholders. Then, it wants you to identify organizational challenges, such as your competitive environment, key strategic issues and advantages, and your system for performance improvement.
Just working through this self-assessment can accomplish three major steps:
- It provides a starting point for understanding where your firm currently stands;
- It helps you identify potential gaps in key information and focus on key performance requirements and results;
- It identifies topics for which conflicting, little or no information is available. These topics can be used to start your action planning.
Not every firm should set out to prepare a Baldrige application, but every firm should assign a leadership team to review the Baldrige criteria and see how you can incorporate these standards to improve your organization. Your starting point is the website www.baldrige.nist.gov.
As you navigate through this process, your firm’s key strengths will rise to the top. If you have a strong, top-tier firm, your success will be obvious. If, however, you find your firm a bit wanting, you will identify key opportunities for improvement. These will help you accelerate your journey toward performance excellence. You won’t have your head in the sand, and better yet—your competitors won’t be kicking sand in your face. What I hope will happen is you get one step closer to creating that “gotta have it” service that puts a smile on the faces of your customers.
Robert Lieblein is a contributing writer and managing partner of Hales & Co. |
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