4 | Info Mgmt
My Personal Baldrige: Measurement
Management by fact is a Baldrige core value. Organizations struggle with this to the point that the average scores for Category 4 in Baldrige applications—Measurement, Analysis, and Knowledge Management—have traditionally been lower than any other Category.
Performance measurement has improved over the last decade with the proliferation of balanced scorecards, but individuals continue to struggle with measuring performance. Part of it is a natural resistance to measurement, the fear that, if I measure my performance, somebody is going to use the results of those measures against me. That’s a justifiable concern, but it ignores the opportunity to use the results of those measures to demonstrate your value to the organization. If you are lucky enough to have a boss who understands performance measures and how the results of those measures can be used to improve and not to punish, then identifying personal performance measures can help you do your job better. If you have a boss who will beat you over the head with them, save yourself the aggravation unless you can keep your personal measures private.
Remember that it’s hard to personalize Baldrige without a little learning and effort, and the Baldrige model is not designed to prescribe an individual’s role, so we’re taking some liberties in doing so. We welcome your feedback on whether you think we’re on track.
Here are steps you can take to create a personal performance measurement system:
- Determine your areas of focus. You measure what you want to manage and improve. Start by identifying your key customers…
Get the Information You Need
Do you have the information you need to do your job? Do you have what you need to make critical decisions?
IBM asked these questions of business leaders in a business analytics and optimization study published in April 2009. One-half said they didn’t have the information required to do their jobs. One-third reported that they frequently lacked the information needed to make critical decisions.
IBM defines analytics as “the use of information to find patterns, identify new possibilities, create scenarios, make predictions, and prescribe actions.” Optimization is “a process that entails analyzing opportunities and constraints and then driving decisions about them deep into the organization.”
In August, IBM surveyed nearly 400 business leaders worldwide about how they use information and apply business intelligence. It compared top performers—top quintile based on self-reported performance relative to their peers—and lower performers in the bottom two quintiles. Twice as many top performers as lower performers had mastered three basic characteristics of information management:
- Aware. They were able to gather and use information from inside and outside the enterprise.
- Precise. They could sort through and extract the most relevant aspects of information.
- Linked. They were able to align information with business objectives and across functions.
Organizations that integrate the Baldrige model also master these basics. They have processes for selecting, collecting, aligning, and integrating data and information, and they have processes for using that data and information to do their jobs and make critical decisions. Management by fact is a Baldrige core value evident in the performance measurement systems of Baldrige Award…
28Dec2009 | Steve George | 0 comments | ContinuedCreating a Balanced Scorecard
Performance measurement improved significantly with the advent of the balanced scorecard. Before that, no matter what an organization did, it tended to emphasize one set of measures at the expense of all others. Businesses focused on financial performance. Schools targeted test scores. Government concentrated on…I have no idea.
Each set of measures was important but just part of a bigger picture, and each a lagging indicator of performance on all of the processes that produced these results.
The balanced scorecard directs leaders’ attention to how their organization operates, and how it operates determines how it will perform. A scorecard is also a powerful tool for aligning the activities of an organization with its vision, mission, goals, and objectives. Most Baldrige Award winners rely on balanced scorecards, along with their strategic plans, to focus everyone on what the organization must do to succeed.
I recently sat in on a Webinar by Stacey Barr, a performance measurement expert, in which someone asked a basic question about how you figure out what to measure. The Baldrige Criteria put it this way: How do you select data and information for tracking daily operations and overall organizational performance?
Barr suggested asking a different question. Rather than thinking about how to measure something, start with your goals and objectives. Make sure they clearly convey what you wish to achieve. Consider words you would use to describe meeting the goals and objectives such as effective, efficient, reliable, quality, engaged, systematic, and sustainable. What does it look like when the goal or…
14Dec2009 | Steve George | 0 comments | ContinuedKnowledge Management 2.0
The Baldrige Criteria ask four questions specifically about how you manage knowledge in your organization:
- How do you collect and transfer it internally?
- How do you transfer it from and to customers, suppliers, partners, and collaborators?
- How do you identify, share, and implement best practices?
- How do you assemble and transfer knowledge for use in your strategic planning process?
In his book, Enterprise 2.0: New Collaborative Tools for Your Organization’s Toughest Challenges (Harvard Business School Press, 2009), Andrew McAfee describes how organizations use emergent social software platforms to capture and share knowledge, identify and leverage expertise, generate and refine ideas, and harness the wisdom of crowds.
These platforms include wikis, Twitter, Facebook, and other software tools. In an interview (you can listen to it here), McAfee, principal research scientist at MIT’s Center for Digital Business, talks about how these tools fuel a shift in “aerating your work.” One example he uses is the U.S. intelligence community, which saw its inability to manage knowledge exposed on 9/11. Since then, the intelligence community has deployed new 2.0 tools including launching an internal Wikipedia, encouraging blogging within strict guidelines, and developing a search function to improve access to shared information.
McAfee sees two hurdles most organizations must overcome to take advantage of these new tools. First, leaders are not aware of how the tools work and how the new tools can improve internal knowledge management. Second, they’re afraid that using the tools will make it impossible to control confidential information.
McAfee tested that concern by asking a lot of organizations that are…
7Dec2009 | Steve George | 0 comments | ContinuedMisleading Data
A recent article in BusinessWeek misuses data to make its point. “The Dividends from Green Offices” (Christopher Palmeri, December 7, 2009) describes a survey of 2,000 tenants in 154 buildings in the U.S. with Energy Star labels or LEED certification. According to the article, “The survey found that employees took an average 2.9 fewer sick days each year in their environmentally sound offices than in their previous, nongreen workplaces…Some 55% of tenants also reported a rise in employee productivity in their green digs.” The article notes that “most tenants also expressed a belief that their healthier environments helped them retain their staffs and burnish their image with clients.”
Maybe I’m a skeptic, but I’m guessing that the economy may have had an impact on sick days and productivity. There may have been changes in sick leave policies. Or process improvements. Which is more likely, that fewer sick days and higher productivity result from better ventilation and more natural light or from worries about losing your job and having to do more work with fewer people?
And “most tenants expressed a belief”? Where’s the data to support that claim?
There are three statements in the article that seem more solid:
- “Sending tenants individual utility bills caused them to consume 21% less electricity on average.”
- “Green buildings were able to command higher rents” (about 10% higher).
- “Vacancy rates were lower—about 16.6%, vs. 17.2%” (although, again, this could be due to a number of factors).
None of these three statements would necessarily encourage businesses to rent space in a “green” building. However, if…
1Dec2009 | Steve George | 0 comments | ContinuedOutside-the-Box Benchmarking
Procter & Gamble’s feminine-care business unit benchmarked a gecko, flower petals, armadillos, squirrels, and anteaters. That’s way outside the box.
In “Stop Solving Your Problems” (Fast Company, November 2009), Dan and Chip Heath start with an extreme example of solving problems by looking at how others have solved them—i.e., benchmarking—and then move toward a more common example: “For instance, health-care advocates trying to reduce medical errors have learned from total-quality-management experts in the manufacturing world who obsess about ways to reduce product-defect rates.”
The Baldrige model promotes benchmarking in two significant ways:
- The Criteria ask how “you select and ensure the effective use of key comparative data and information to support operational and strategic decision making and innovation.” The Criteria define benchmarking as “identifying processes and results that represent best practices and performance for similar activities inside or outside your organization’s industry.” For P&G, “outside” meant the San Diego Zoo.
- Baldrige Award recipients share their applications online. If you want to improve any part of your management system, one of the inputs should be these applications. Choose a few from the list, read the relevant sections, and figure out if your organization could learn anything from them. If so, you’ll find contact information in the same list.
A lot of organizations throw up their hands when asked about benchmarking because none of their competitors will share. That’s not a problem when you look outside your industry…or visit the zoo.
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10 Critical Questions: Data, Information & Knowledge
You manage what you measure, which is why, for decades, leaders managed their companies’ financial performance: They reviewed financial data regularly and other types of data sporadically if at all.
Category 4 in the Baldrige Criteria asks how you measure organizational performance, which for most organizations involves some type of balanced scorecard. It asks how you analyze and review performance and how that leads to performance improvement. And it asks how you manage your information, organizational knowledge, and information technology.
As we noted, the best way to evaluate your measurement system—and your management system—is through a Baldrige assessment using the Baldrige Criteria. You can find out how to do that here.
The Criteria consist of powerful questions, rarely asked, about how an organization functions. If you cannot do a full assessment but want insight into how to improve your measurement system, here are 10 critical questions to ask and answer:
- How do you select and collect the data and information you use to track (1) daily operations and (2) overall organizational performance, and how do you align and integrate these data?
- What are your key organizational performance measures?
- How do you select and use comparative data and information to provide benchmarks for these measures and to support decision making and innovation?
- How do you review organizational performance and capabilities, including competitive performance and progress on your strategic objectives and action plans?
- What analyses do you perform to support these reviews and to ensure that the conclusions of these reviews are valid?
- How do you translate the findings from these…
