4 | Info Mgmt
Knowledge 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…
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…
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.
Help grow our…
21Oct2009 | Steve George | 0 comments | Continued10 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…
Transforming Measurement
“Measurement done right can transform your organization,” writes Dr. Dean Spitzer in Transforming Performance Measurement (AMACOM, 2007). “It is my contention that there are certain performance measures and ways of measuring that can have a transformational impact on the way people in organizations view their work, their products, and their customers.”
The balanced scorecard is the most obvious example of a new way of measuring that can transform the organizations that use it. Pre-scorecard, leadership teams typically scrutinized financial performance every time they met and anything else, like quality and customer and employee satisfaction, when a big problem occurred or someone presented survey results. The balanced scorecard elevated performance in these areas to the level of financial performance by giving them equal status on the scorecard. Leaders started reviewing performance on all of these key areas during their meetings. They revised their bonus plans to include performance on non-financial measures. They communicated progress on scorecard measures throughout their organizations.
For many, the new measurement system transformed their organizations.
Spitzer believes that identifying cross-functional or “integrating measures” can have a similar impact. Measuring customer profitability rather than just sales revenue can change how people view customers and can involve many department including finance, marketing, purchasing, manufacturing, and customer service in the process of improving it. On-time delivery can have an integrative impact because of the many functions that contribute to it.
In a presentation on measurement, Spitzer noted that “transformation measurement requires…
16Oct2009 | Steve George | 0 comments | ContinuedSophisticated Information Sharing
This is one of those “big picture” issues. If your organization is large enough to have business units, divisions, or multiple locations, you are big enough to have silos of data and information. In “Stop the Profit Drain: Pull Data Across an Entire Organization” (IndustryWeek, October 9, 2009), Michael Newkirk talks about a company that has 16,000 process improvement software licenses, which has the potential to create 16,000 silos. “It nourishes an environment where thousands of engineers reinvent the wheel because all the meetings in the world can’t share best practices efficiently enough to keep that from happening,” Newkirk writes.
Such silos are not limited to manufacturing or business. The Baldrige Criteria ask how you align and integrate data and information to track daily operations and overall performance. In other words, how do you move it out of the silos and into the hands of anyone, anywhere in the organization, who could use it to improve performance?
Newkirk cites a Korean steelmaker that used Six Sigma to make incremental process improvements but sought a larger impact. “There were still large profit variables between plants and items and scrap losses were unacceptably high,” Newkirk notes. “Traditional, isolated process oriented analysis wasn’t sufficient.”
The steelmaker pulled all of its data together across plants and processes. The result? Scrap ratio cut from 15% to 1.5%, a 50% reduction in lead times for standard hot coil production, and an inventory reduction of 60%.
Newkirk…
16Oct2009 | Steve George | 0 comments | ContinuedCore Value: Management by Fact
If you were to pick one basic of performance excellence at which most organizations stink, it would have to be management by fact. I remember Curt Reimann, former head of the Baldrige program, saying that the measurement Category consistently produced the weakest responses. We think we know what’s going on, but when you look for facts to support our thinking, you often come up empty.
Peter Senge called this a “leap of abstraction.” “Leaps of abstraction occur when we move from direct observations to generalizations without testing,” he wrote in The Fifth Discipline (Broadway Business, 2006). You are making a leap of abstraction if:
- You assume you know exactly what your customers require but have never formally asked them or checked your assumptions with them
- You make the same assumptions about your employees
- You fix a problem without identifying the source of the problem or measuring the process
- You blame people for mistakes without understanding the system or measuring the process
- You develop a strategy with little knowledge of competitors, the market, risks, or internal capabilities
- You grab a popular new program in the hope that it might turn your organization around
Most leaders and managers are so used to mistaking leaps of abstraction for truth that they feel very comfortable with their view of their organization. Asked to support that view with information and data, they tell stories. Pressed for proof, they point out that it’s their job to know. Suggest that they…
17Sep2009 | Steve George | 0 comments | Continued
