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10 Insights into Strategic Planning
Joan Magretta wrote a guide to strategy guru Michael Porter’s work called Understanding Michael Porter. As she worked on the book, she kept a list of insights, including “that most companies think they have a strategy when they don’t,” as she noted in an article on HBR.
Here are her ten insights and how they relate to the Baldrige model:
- You gain a competitive advantage by creating unique value for customers. Customer-driven excellence is a Baldrige core value, defined as an organization’s performance and quality being judged by its customers. If customers rate your performance and quality high, you will gain a competitive advantage.
- Your strategy must also clarify what the organization will not do. The Baldrige model asks several questions about how you develop strategies that will help you prioritize your strategies.
- “Competition is about profits, not market share,” writes Magretta. You grow a company by increasing profits, not market share.
- Brilliant strategies will not lead to performance excellence unless you execute them. The Baldrige Criteria devote an entire section to strategy implementation.
- Good strategies are interconnected and build on core competencies. The Baldrige Criteria ask how your strategic objectives capitalize on your core competencies and balance short- and longer-term challenges and opportunities.
- While it’s important to be flexible, your organization must stand for and excel at something. You must have the resources and capabilities to execute the plan
- You need not predict the future to commit to a strategy.
- “Vying to be the best is an intuitive but self-destructive approach to competition,” Magretta writes.
- You need both a distinctive value proposition and…
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Baldrige Is a Continuous Improvement Program
Those leaders who decide to give Baldrige a spin often focus on the obvious step: conducting a Baldrige assessment. Some may apply for a state award or the Baldrige Award, but most do an internal assessment, which identifies strengths and opportunities for improvement. If the assessment is done right and professionally evaluated, the list of opportunities is long—much longer than any organization can address is one year. As a result, too many organizations only conduct that one assessment, thus missing their opportunity to build a world-class management system.
Baldrige Award winners integrate Baldrige by performing regular—usually annual—Baldrige assessments. The process of producing assessments and prioritizing and acting on the opportunities they reveal institutionalizes a culture of continuous improvement. It keeps everyone focused on what is most important for the organization to grow and excel. It improves the alignment of people and processes with the organization’s goals, objectives, and strategies. Best of all, it delivers results, as the award application summaries of Baldrige Award winners show.
IndustryWeek recently reported on a survey it conducted with TBM Consulting about the impact of continuous-improvement programs on three financial metrics: anticipated revenue growth, operating income growth, and cash flow over the past year. “Across the board, companies with no continuous improvement programs performed worse across all three measures,” Jill Jusko concluded here:
- More than 50% of respondents with no continuous improvement program said they expect revenue growth to be 3% or less in 2012, compared to fewer than 20% of companies with mature continuous improvement programs.
- Nearly half of…
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Improving Team Performance
When is a metric not a metric?
In “Five New Management Metrics You Need to Know,” James Slavet suggests new metrics that great teams should measure. Few are new, and even fewer could be considered metrics since they are largely unmeasurable, but being aware of them may help your team improve performance, so here they are:
- Flow State Percentage. How many hours a day team members are “in the flow”—focused on a task without interruption—divided by the number of hours they work. According to Slavet, “studies have shown that each time flow state in disrupted it takes 15 minutes to get back into flow, if you can get back at all.” Find ways to reduce interruptions and productivity will go up.
- Anxiety-Boredom Continuum. People are more productive when they are challenged without being overwhelmed, and they tend to be unproductive when they are bored. Observe team members for signs of boredom (low energy, showing up late and leaving early) or anxiety (reacting to setbacks with anger or frustration, getting sick a lot), ask them where they are on the continuum, and strike an effective balance.
- Meeting Promoter Score. At the end of each meeting, “ask the participants to each rate from 1 to 10 how effective the meeting was, with one suggestion for making the meeting better,” Slavet writes. Then act on the suggestions.
- Compound Weekly Learning Rate. The “ability to learn is like the compounding interest on an investment: after two or three years, a relentless learner stands head and shoulders above his peers,” states Slavet. One way to…
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Still Passionate about Baldrige
“There is no question that our adherence to the Baldrige performance criteria has made us a much more efficient university, and helped us weather repeated cuts in state aid without affecting educational quality,” write Charles W. Sorensen and Julie Furst-Bowe, chancellor and provost at the University of Wisconsin-Stout (article here).
UW-Stout earned the Baldrige Award in 2001. Ten years later it remains passionate about the value of integrating Baldrige. According to Sorenson and Furst-Bowe, “The most important change brought about by our Baldrige experience, which is now part of our culture, was the establishment of an inclusive planning process to ensure that, in Baldrige speak, ‘all arrows are pointing in the same direction,’ and not at cross-purposes.”
Having worked with five Baldrige Award winners, I can attest to the value of aligning processes and people with the goals, strategies, and objectives of the organization. Whether you are in business, healthcare, or education, the ability to focus all activities on shared goals dramatically improves performance and is a major reason Baldrige Award winners achieve world-class results.
Sorenson and Furst-Bowe also state that “the Baldrige model…also led to a number of important innovations, including our e-Scholar or student laptop program, our designation as Wisconsin’s polytechnic university, and our Discovery Center for applied research and economic development outreach.”
Most organizations embrace Baldrige because they want to improve quality and performance and reduce waste. Few think about being more innovative, but “managing for innovation” is a core value of the Baldrige model. As organizations understand and improve their…
3Jan2012 | Steve George | 0 comments | Continued (8 votes, average: 4.25 out of 5) Loading ...
Baldrige Expands Reach to Small Businesses
The Baldrige program is expanding its reach to small businesses through a new collaboration with the Alliance for Performance Excellence and The Alternative Board (TAB). The Alliance is a nonprofit network of national, state, and local Baldrige-based award programs. TAB provides peer advisory boards and coaching services for small business leaders.
According to a press release from the Baldrige program, the state programs will work with TAB boards across the country to help small business operators learn the Baldrige Criteria and use the Criteria to assess and improve performance.
The new effort drew praise from Terry May, president of MESA Products, a 2006 Baldrige Award recipient in the small business category. “TAB is a great resource for learning and sharing with my peers,” May said, “providing real-world, practical guidance to help me improve and grow my business. The Baldrige process, both at the state and national levels, helped me take MESA to an even higher level of performance and achieve breakthrough results. So, a partnership between local TAB boards and state Baldrige programs will be a great resource for small businesses.”
The collaboration between the Baldrige program and the Alliance is another indicator of the new relationship between the programs. Earlier this month, the Baldrige program announced new conditions that basically require organizations to earn state recognition before applying for the Baldrige Award (more here). Strengthening the relationship is an important step in maintaining the viability of the Baldrige program in the face of federal funding cuts.
29Dec2011 | Steve George | 0 comments | Continued
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Help Bootstrap My Baldrige Project
What do world-class hospitals and medical centers do differently? What can the hospitals and medical centers we use learn from them?
To answer these questions, I’ve launched a new project on Kickstarter to research and write a book called The Road to World-Class Healthcare. You can watch a video introducing the project and read a complete description of it here. The key to the book is the research: road trips to 20 to 25 world-class hospitals and medical centers across the country to interview leaders and learn about best practices.
To fund the research, I’ve posted the project on Kickstarter. A Kickstarter project succeeds by gaining backers who pledge financial support in exchange for rewards. Your reward for becoming a backer of The Road to World-Class Healthcare includes exclusive access to audio excerpts of key interviews, photos, and video of best practices. Invest more and the rewards increase. You can find the complete list of rewards here.
One of the reasons for posting this project on Kickstarter, other than to help fund the research, is to see if it can generate interest. If it meets the goal, the book will be written, and that book will appeal to mainstream publishers who expect authors to have a “platform” from which to market and sell their work. Kickstarter will help me build a platform.
Please take a couple minutes to check out the video and project description at Kickstarter here. I hope you will take a personal interest in supporting it. And, since this is a grassroots…
27Dec2011 | Steve George | 0 comments | Continued (10 votes, average: 4.30 out of 5) Loading ...
New Conditions for Baldrige Award Eligibility
The Baldrige program has announced new conditions for applying for the Baldrige Award. In addition to the existing eligibility requirements—i.e., headquartered in the U.S., in existence for at least one year, able to share information, and categorized as a business, educational institution, healthcare organization, or nonprofit—an organization must meet one of the following conditions to apply for the Baldrige Award:
- Be a previous Baldrige Award recipient
- Have received the top-tier award from a member of the Alliance for Performance Excellence within the past 5 years
- Have received a Baldrige site visit within the past five years
- Have received a combined scoring band range of 8 or better in the past five years
- Have 25% or more of its employees outside the organization’s home state
- Have no Alliance member program available for your organization
The new requirements “leverage the larger Baldrige enterprise—in particular, the state and local Baldrige-based award programs,” according to Harry Hertz, Baldrige program director. The new requirements will compel first-time applicants to use their state programs unless one is not available, which is currently true for just one state: Utah. You will find a complete list of state and local award programs here.
The change will likely strengthen the state programs while reducing the number of applicants for the Baldrige Award. Fewer applicants should help cut costs for the Baldrige program, which is necessary in 2012 and beyond because a shortsighted Congress ended federal funding for the program. As Hertz noted in his blog post, “the decision by Congress to eliminate our federal funding is causing the…
21Dec2011 | Steve George | 0 comments | Continued (11 votes, average: 4.45 out of 5) Loading ...
