2 | Planning
Developing Agility on 3 Fronts
Agility is a Baldrige core value, described in the Criteria booklet as “a capacity for rapid change and flexibility.” In “Competing through organizational agility” (McKinsey Quarterly, December 2009), Don Sull, professor of management practices at the London Business School, identifies three types of agility: strategic, portfolio, and operational. He found these types in the companies he studied in the world’s most turbulent geographical and product markets including China, Brazil, European fast fashion, and financial services. “In turbulent markets,” he writes, “overreliance on a single type of agility can be dangerous.”
Strategic agility means spotting and seizing game-changing opportunities. It requires an effective combination of patience (waiting for the right time to strike) and boldness (acting when that time arises). From a Baldrige perspective, it also requires a focus on the future to anticipate changes that require a new direction and a strategic planning process that makes rapid change possible.
Portfolio agility is the capacity to shift resources quickly and effectively out of less promising areas and into more attractive ones. It requires processes to reallocate management talent and cash across units to take advantage of emerging opportunities. From a Baldrige perspective, the ability to shift resources begins with performance review processes that help leaders identify changing needs and challenges and action planning processes to establish and modify plans to meet them.
Operational agility involves exploiting opportunities within a focused business model. According to Sull, it can be developed by…
11Feb2010 | Steve George | 0 comments | ContinuedFind Your Blue Ocean
This is a guest article by Brian Lassiter. If you want to contribute an article to Baldrige.com, check out the guidelines here.
In a recent talk, Bill Mills, CEO of Executive Group, claimed that “organizations are perfectly designed to get the results they are getting.” I think that’s a compelling thought. If you’re struggling right now, blame it not on the economy but on your business model—one that may not be appropriate for today’s environment. Bill’s premise—and I completely agree—is that success is largely due to an organization’s strategic positioning in the marketplace: being at the right place at the right time to capitalize on a market need, to create value for a set of buyers, and to benefit from the flow of resources (money).
But Bill goes on to claim that strategic positioning may only be part of the equation: Success is also based on an organization’s ability to create a business model that fully capitalizes on that market need. In other words, just being at the right place at the right time doesn’t ensure success.
Enter the notion of a “blue ocean strategy.” In their book by that name, W. Chan Kim and Renee Mauborgne ask readers to imagine a market universe composed of two sorts of oceans: red oceans and blue oceans. Red oceans represent all industries in existence today; it is the known market space where industry boundaries are defined and accepted and competitive…
25Jan2010 | Brian Lassiter | 2 comments | ContinuedWhere to Play and How to Win
What makes a good strategy? According to Roger Martin, Dean of the Rotman School of Management at the University of Toronto and author of The Design of Business, it is two fundamental, reinforcing choices: where and on what basis you will compete.
In “Why Most CEOs Are Bad at Strategy” (Harvard Business Review, January 6, 2010), Martin argues that most executives and strategy consultants are good at strategic analysis but not at strategy, which requires creative insight. “Strategy is a creative act,” he writes, “and the way to produce good strategy is to go beyond basic analysis to creatively integrate your choices concerning where you play and how you propose to win.”
The Baldrige Criteria ask a number of questions to guide your strategic choices including:
- How do you identify potential blind spots in your planning?
- How do you address long-term sustainability?
- How do you determine your strategic challenges and advantages and your core competencies?
- How do your strategic objectives address them?
- How do your strategic objectives address your opportunities for innovation?
The focus of the Criteria leans more toward analysis than creative insight. That’s not to say that Baldrige Award recipients haven’t excelled at figuring out where to play and how to win, but integrating these choices creatively to plan the most promising course of action is not something the Criteria specifically request. The Customer Focus category comes close with questions about how you identify current and future…
21Jan2010 | Steve George | 0 comments | ContinuedMaking Your Organization Adaptable
Last week, Alan Alda spent an hour on “The Human Spark” on PBS exploring why modern man survived and Neanderthals did not. The likely answer? Adaptablity—and it’s still the key to survival.
“There’s probably no organizational attribute that’s more important today than adaptability,” writes Gary Hamel, author and the world’s leading expert on business strategy, according to Fortune magazine. “In our topsy turvy world, every organization is teetering on the brink of irrelevance, and unless it can change as fast as change itself, it will soon tumble off the ledge.”
Baldrige organizations promote adaptability by valuing agility, a focus on the future, and a systems perspective. They constantly and systematically renew themselves by questioning what markets to serve and what the customers in their markets require, how to make their processes more efficient, and how to engage their employees in change and innovation. Rather than reacting to change, they deploy processes that help them adapt and grow.
In “Outrunning Change—the CliffsNotes Version” on WSJ Blogs (October 21, 2009, click on Part 1 here and Part 2 here), Hamel shares his thoughts on how to build a highly adaptable company:
Anticipation
- Face up to strategy decay.
- Learn from the fringe. “The future will sneak up on you unless you go out looking for it.”
- Rehearse alternate futures. Think through the implications of trends and how you will react.
Intellectual Flexibility
- Regard every belief as a hypothesis. “The biggest barriers to strategic renewal…
How to Deploy Your Strategic Plan
Iredell-Statesville Schools won the Baldrige Award in 2008. In its application, available here (pdf), it demonstrates the alignment of its success factors, strategic goals, action plans, HR training and development, leading indicators, and results. It does this through the table shown below.
Each of the district’s 17 strategic goals is assigned an owner who is responsible for a district improvement plan that addresses the goal. Action plans that support the improvement plan are then developed within the owner’s department.
The owner reports on progress on the plan quarterly to senior leadership using the key measures listed in the table below and a rubric aligned to the factors by which Baldrige evaluates a process: approach, deployment, learning, and integration.
I-SS has more than 100 leading indicators for monitoring performance on short-term action plans that it tracks monthly. According to the application, “Each action plan is integrated with a PDSA approach, so that each plan must have three evaluation measures that measure completion and fidelity to the overall approach of the PDSA and an evaluation measure that impacts the overall goal.”
To see how all of this helps I-SS achieve its strategic goals, read its Baldrige Award-winning application summary (pdf).
Anticipating Disruptive Change
I have a friend who has invested in several alternative energy companies. He even runs a few. I thought about him when I read an article in the most recent Time magazine.
Titled “Tech Pioneers Who Will Change Your Life,” the article introduces eight innovators and their innovations. Three specifically target alternative energy:
- Bloom Energy has made an efficient, affordable fuel cell that could allow villages, businesses, and residents to produce their own power rather than relying on centralized power, a big deal in areas of the world that lack an energy infrastructure.
- VNL serves the same need with a low-cost, voice-only, solar-powered mobile telephone base station, a big deal when a quarter of the world’s population has no electricity.
- Boston-Power is developing the next-generation lithium-ion battery, a big deal for everything from portable computing to electric vehicles.
These are disruptive technologies. If you are involved in alternative energy and fail to see the impact of these technologies, your investment of time and money may be lost, and your business may not survive.
The Baldrige Criteria try to prepare you for this. They ask about key changes taking place that affect your competitive situation and key strategic challenges that affect your organization’s sustainability. In the strategic planning category, the Criteria ask how your strategic planning addresses early indications of major shifts in technology, markets, products, customer preferences, competition, or the regulatory environment.
In my experience, organizations tend to take…
21Dec2009 | Steve George | 0 comments | ContinuedStrategic Planning Definitions
On his Church of the Customer blog, Ben McConnell defined common strategic planning terms that often confuse people. I’ve sprinkled in the Baldrige definitions of related terms to provide a guide to the language of strategic planning, with CoC for Ben’s definition and BC for a definition from the Baldrige Criteria.
Mission. The overall function of an organization. It answers the question, “What are we attempting to accomplish?” (BC)
Vision. The desired future state of your organization—where it’s headed, what it intends to be, or how it wishes to be perceived in the future. (BC)
Values. The guiding principles and behaviors that embody how your organization and its people are expected to operate. (BC)
Core Competencies. Your organization’s areas of greatest expertise, those strategically important capabilities that are central to fulfilling your mission or provide an advantage in your marketplace. (BC)
Strategic Challenges. Those pressures that exert a decisive influence on your organization’s likelihood of future success. (BC)
Strategic Advantages. Those marketplace benefits that exert a decisive influence on your organization’s likelihood of future success. (BC)
Objective. A high-level achievement, like “improve customer loyalty” or “grow market share.” Objectives sit at the top of the strategic plan, and an ideal plan has no more than a handful of them. (CoC) The Baldrige Criteria refer to these as strategic objectives.
Goal. Anything that’s measured such as revenue, customer satisfaction, productivity, and quality. Goals determine how you fulfill an objective,…
14Dec2009 | Steve George | 0 comments | Continued
