Sector
Measuring Teacher Performance
A recent report that the Los Angeles public schools will start publishing test scores by individual teachers has touched of a storm of protest. The so-called value-added gauges are intended to provide data on how well teachers improve the test scores of their students over the course of a school year.
An academic report by the Economic Policy Institute argues that “the nonrandom assignment of students to classrooms and schools—and the wide variation in students’ experiences at home and at school—mean that teachers cannot be accurately judged against one another by their students’ test scores, even when efforts are made to control for student characteristics in statistical models.”
Although that makes a lot of sense, I understand where the push for value-added gauges comes from. As a parent, I’ve never felt that the effectiveness of my children’s teachers has been evaluated in any meaningful way. Average and incompetent teachers return, year after year, to inflict their ineptness on their students. Lacking any reportable measures of competence, they are unaccountable for their performance except as part of an aggregate school’s overall performance. Teachers need to be accountable for the quality of their work, but measuring that quality has been elusive.
The EPI report offers alternatives that rely less on test scores such as “systematic observation protocols with well-developed, research-based criteria to examine teaching,” but, as the report observes, “American public schools generally do a poor job of systematically developing and evaluating teachers.” And this is only getting worse as shrinking budgets cut funds needed for…
1Sep2010 | Steve George | 0 comments | ContinuedThe Remedy for ROA Flatlining
TThe average return on assets of U.S. companies has steadily fallen to almost one quarter of what it was in 1965, and the trend line approaches zero in 2020. ROA is a measure of how profitable a company is and how efficient management is at using its assets to generate income.
The decline in ROA has occurred despite steady improvements in labor productivity, which have occurred despite stagnant wages for the labor. As a result, businesses have been paying no more for an increasingly productive workforce, which pretty much eliminates wage control and productivity as factors in improving ROA.
So how can leaders reverse the trend?
John Hagel III and John Seely Brown address this issue in “Six Fundamental Shifts in the Way We Work” (HBR, August 17, 2010). The six shifts they mention are:
- Management practices and corporate institutions are fundamentally broken. Most have not yet figured out how to compete more successfully.
- The source of value creation is shifting from your stock of knowledge to the flow of knowledge, and most executives lag in understanding what this means for their companies.
- Management innovation is not enough: Institutional innovation, exemplified by China’s open production and design models and India’s open distribution models, are needed.
- A new kind of performance curve is emerging: The collaboration curve, which brings together participants in a carefully designed environment to make rapid leaps in performance improvement.
- Talent development is broader than training programs: People need to learn new skills and behaviors through their involvement in the work of the management system such as…
Catholic Healthcare Systems Excel
According to a Thomson Reuters study conducted for Modern Healthcare, Catholic-owned healthcare systems perform significantly better than investor-owned, for-profit systems.
The study used federally reported core quality measures along with inpatient mortality and complications rates, an inpatient safety index, 30-day mortality and readmission rates, average length of stay, and patients’ perceptions of care. A composite score across all of these measures was computed for 255 systems. The 36 Catholic systems had an average rank of 84 (lower is better), while “other church” systems came in at 121, secular not-for-profit systems scored 129, and investor-owned systems were at 182.
Eleven healthcare systems have won the Baldrige Award and all are not-for-profit. The first healthcare system to receive the Award, SSM, is a large Catholic system with 15 hospitals and two nursing homes in four states.
According to Jean Chenoweth at Thomson Reuters, “health systems owned by the Catholic Church may be the most active in setting and monitoring achievement of quality goals as well as aligning the management of hospitals within a system in achieving what they see as a mission.” That’s a good description of all 11 Baldrige healthcare winners.
You can read more about these winners by clicking on their profiles, which are two-page summaries of their organizations, or their award application summaries, which are their complete responses to the Baldrige Criteria questions:
- AtlantiCare (2009): Profile – Application Summary
- Heartland Health (2009): Profile – Application Summary
- Poudre Valley Health System (2008): Profile – Application Summary
- Mercy Health System (2007): Profile – Application Summary
- Sharp HealthCare (2007): Profile – Application Summary
- North Mississippi Medical Center (2006):…
Ready to Go Big
The results speak for themselves:
- Same store sales have grown for 24 years
- Market share has grown for 24 years
- Service speeds four times faster than competitors
- Order accuracy at least ten times better than the closest competitor
- Employee turnover half the industry average
Pal’s Sudden Service has accomplished all of this with what may be the ugliest store design in fast-food history—and it may be coming to a major thoroughfare near you. Pal’s was recently named one of Restaurant Business magazine’s “Future 50,” which are restaurant chains that have proven their concepts, are fast growing, and are getting ready to go big.
Pal’s key concept is a management system based on the Baldrige model. The restaurant chain won the Baldrige Award in 2001. It established the Business Excellence Institute to share its best practices with other organizations, and those lessons aren’t just for food service companies. More than 50 nonprofit organizations and government agencies have taken the training BEI offers, which once again demonstrates the universality of Baldrige principles. You can learn more about Pal’s BEI by clicking here.
Pal’s did its first Baldrige assessment in 1995. As I’ve seen with other organizations, the first assessment often produces profound insights, and the same was true for Pal’s. “From the founding of this company until 1995 we didn’t know what business we were in,” said Thom Crosby, the CEO at Pal’s. “We took it for granted that we were in a service industry. When we did our first assessment, we realized that we were a manufacturing concern. We bring…
29Jul2010 | Steve George | 0 comments | ContinuedThink Like Your Buyers
In the 1980s, four out of five American car buyers were loyal to the company that manufactured their brand. I remember growing up in a Chevy family and we had friends who were Ford people and we were as loyal to our car brand as we were to our religion.
In 2009, only one in five Americans was loyal to the same car brand.
In “The Manufacturer’s World Has Changed Forever” (IndustryWeek, July 14, 2010), Robert Bloom provides this contrast in customer loyalty to point out that the purchasing behavior of customers has changed, which is old news to any company that’s managed to keep its head above water the last two years, but his case study is interesting. Italy’s Fiat Auto reported a net loss of nearly two billion euros in 2002 and experts thought it would not survive. In 2008, it reported a trading profit of more than 1.1 billion euros—a three billion euro turnaround in six years.
How did Fiat Auto do it? Bloom lists several key actions:
- Terminated a failing venture with General Motors to gain full decision-making autonomy
- Eliminated an entire floor of executives to reduce costs and bureaucracy
- Cut Fiat’s product development time in half to get products to market quickly
- Reorganized and re-energized its dealer organization to assure sell-through
- Redesigned every Fiat product to create Customer Preference for the Fiat brand and products
According to Bloom, manufacturers can take several steps to compete in today’s global marketplace—and those steps coincide with Baldrige core values (in parentheses):
- Think like today’s buyer, not like yesterday’s seller…
Victory for Quality
On Wednesday, President Obama appointed Dr. Don Berwick to run Medicare and Medicaid. Just to summarize Berwick’s credentials, he’s a pediatrician, clinical professor at the Harvard Medical School, former leader and advisor on a number of government councils and task forces aimed at improving the quality of healthcare, and a former Baldrige Judge.
I wrote about Berwick’s nomination on April 19th, pointing out that the immediate past president of the American Medical Association said that he “is widely known and well respected for his visionary efforts that focus on optimizing the quality and safety of patient care.” According to USA Today, his “nomination was immediately hailed as a brilliant choice by policy experts from across the ideological spectrum.”
The Centers for Medicare and Medicaid have not had a permanent administrator since October 2006. Obama nominated the perfect person to fix this problem while addressing a much bigger one: how to deliver high-quality patient care for less. Berwick’s Baldrige and healthcare background provide an unusual systems perspective for tackling an issue that is critical to the country and to all Americans.
Kudos to Obama for finding the right person and for making the recess appointment that puts him to work.
For those keeping score of Baldrige people in high positions, we now have Berwick at Medicare and Medicaid; Terry Holliday, former superintendent of Baldrige Award-winning Iredell-Statesville Schools, now commissioner of education for Kentucky; and E. David Spong, CEO of two Boeing divisions that won the Baldrige Award, now president-elect of the American Society for Quality.
Do…
8Jul2010 | Steve George | 0 comments | ContinuedSmall Wonder
Stoner expects every one of its employees to be a leader. Before starting their jobs, new employees complete two weeks of orientation that includes shadowing every job in the company—including that of the president. They can do all that in two weeks because Stoner only has 45 employees.
Located in Quarryville, Pennsylvania, Stoner makes specialized cleaners, lubricants, and coatings, primarily for car care. In 2003, it became the smallest company to win the Baldrige Award.
“We first learned about Baldrige in 1991 through the local Lancaster County program,” said Rob Ecklin, Jr., Stoner’s president. “We started to familiarize ourselves with the criteria then.” Stoner became the first company in the county to win the award in 1995. A few years later it submitted its first Baldrige application.
“We like to learn, to challenge ourselves and to be challenged,” said Ecklin. “Only a small percentage of companies truly want to improve. We’re one of them. We get excited about performance excellence. This is not a sexy business. It’s not high tech. Not flashy. But we’ve been able to get extraordinary results from ordinary people.”
Stoner gets these results by expecting every employee to be a leader. It involves all employees in setting the direction for the company. It uses teams to flatten the organization and push accountability to the front lines. It reinforces accountability by giving every employee the authority to spend up to $1,000, without supervisor approval, to resolve customer questions or complaints promptly. As a result, Stoner’s retention rate for key customers is…
24Jun2010 | Steve George | 0 comments | Continued
