Part 1 of 3

Over the last twenty years working with dozens of organizations on Baldrige assessments and with five Baldrige Award winners, I’ve identified seven characteristics that differentiate organizations with sound management systems from those without. Here are the first two:

1. They think process. All work is process. The process flows through people: those who supply it on the front end, those who use those materials to produce products or services, and those customers who receive the products or services.

Companies don’t naturally think process, often because their structures prevent it. They organize around functions—finance, human resources, operations, administration, etc.—but processes, especially those processes critical to a company’s success, are not bound by functions. They are cross-functional. Mediocre companies manage their functions but not their processes. When problems occur, they blame them on departments or work units or, if their “culture of blameology” is really mature, on specific individuals. W. Edwards Deming believed that less than 4% of the problems any company faces can be attributed to individual employees. Leaders blame people when they should be blaming—and managing—the process.

2. They act on data. At Medrad, the world’s leading manufacturer of disposable medical imaging products, the mantra is: “How do we know that?” No assumptions. No best guesses. No unsupported claims. No slack for office or position. If you lack accurate, reliable, and timely data to define a problem, propose a solution, improve a process, develop a plan, serve a customer, review performance, or do any other task that depends on sound data for success, you cannot proceed. You manage by fact or you fail.

Companies like to think they rely on data to make decisions, but an assessment of their performance measurement systems will likely prove them wrong. Most do a fine job of measuring financial performance but that’s about it. They may have customer and employee satisfaction survey results once a year. Product or service quality measures. A few other random measures and little else. That’s not a measurement system. A measurement system includes indicators of performance for every area critical to the company’s success. It includes in-process and end-of-process measures. It shows trends and compares your performance to that of your competitors, industry best, or world-class benchmarks. Leading a company with anything less is like flying a plane without gauges.

To read more about how to assess your management system using the Baldrige Criteria, click on these articles:

• What Differentiates Baldrige Award Winners (Part 2)
• What Differentiates Baldrige Award Winners (Part 3)
• The Baldrige Criteria
• 10 Steps to an Effective Baldrige Assessment
• Learn from the Best: Application Summaries
• 80 Critical Questions

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