The Organization You Want

What information do you need to build the organization you want?

We’ve been answering that question now for one year with nearly 370 articles on all aspects of a world-class management system. Our guide for what to address is the Baldrige model defined by the Baldrige Criteria and used to determine Baldrige Award winners. No other management model in the world has been as thoroughly tested, refined, and deployed.

The goal of any management system is to produce the results you want your organization to achieve. Ideally, those results align with your organization’s mission and vision. In world-class organizations, results are multi-dimensional and not just profits for a business or test results for a school. The Baldrige Criteria identify six areas where excellent results are necessary for long-term success.

The rest of the Baldrige Criteria address the development and deployment of the systematic processes needed to achieve world-class results. The Baldrige model is a process model: It asks how you do what you do more than 130 times.

Process has four dimensions:

• The approach you use to get something done
• Consistent deployment of the approach to all relevant areas of the organization
• Refining the approach through cycles of learning
• The integration of your approach with the rest of your management system

Questions about your processes are organized in six Categories: leadership, strategic planning, customer focus, measurement, workforce focus, and process management. Everything you do to run your organization fits into one or more of these Categories.

The articles on Baldrige.com explore the Categories, as you can see by clicking on one of the…

The Best Way to Measure Company Performance

OK, I stole the title. John Hagel III, John Seely Brown, and Lang Davison posted on this very topic on the Harvard Business Review today. And then they spent the entire time dissing return on equity and touting return on assets in its place.

Hello? I understand the whole “business-exists-to-make-a-profit-and-nothing-else-really-matters” position, but are ROA or ROE really the best ways to measure company performance? I thought the balanced scorecard came along because our obsession with financial performance wasn’t working. Apparently, a lot of folks can’t stop obsessing.

Case in point: HuffPost Business. If you visited its home page today you would find articles on Goldman Sachs, predatory lending, Hank Paulson, the Treasury Department, AIG’s bonus cutbacks, robber barons, financial crisis, financial innovation, bank bailouts, Federal Reserve, credit card blacklists, financial reform, economic oracles, Citigroup, China, more on the Federal Reserve, home sales, jobs bill, dollar vs. euro, Greece bailout, still more Federal Reserve, etc. About the only articles on the home page that weren’t about money were about health care and fast cars.

It shouldn’t be HuffPost Business; it should be HuffPost Finance. And they’re far from alone. Pick any random site that purports to tell you what’s happening in the business world and you’ll find that 90% of their articles revolve around finance. The same is true for most business magazines.

This is how the Baldrige Criteria, which define performance excellence, measures company performance:

• What are your product performance results?
• What are your customer-focused performance results?
• What are your financial and marketplace performance results?
• What are your…

Engaging Customers in a Digital Age

In a recent survey of businesses in the UK, mainland Europe, and the U.S., 62% of respondents agreed that differentiating their value proposition by customer service rather than by product was essential or very important (click here for the article). In fact, as customers, 74% said they were likely or very likely to buy more from a company as a result of service excellence that goes beyond expectations.

The Baldrige Criteria ask how you engage customers to serve their needs and build relationships. Engaged customers are loyal, do more business with you, and recommend your products and services to others, which is why more and more companies are taking steps to develop “very satisfied”—as opposed to merely “satisfied”—customers.

One obstacle to engaging customers, according to Pegasystems, which commissioned the survey, is the constraints imposed by legacy Customer Relationship Management (CRM) platforms. Only 43% of respondents can provide a consistent customer experience across all delivery channels. Part of the problem can be traced to the digital divide: legacy CRM systems don’t have the flexibility to adapt to differing requirements and can’t deliver a high-quality customer response to all customers.

I’m reminded of a story Michael Dell tells in Behind the Cloud by Marc Benioff and Carlye Adler. Benioff had told Dell about an internal networking technology they were using at salesforce.com to create a feedback loop with their customers. Dell adapted the technology to create IdeaStorm, an online community forum that Dell uses to engage customers and elicit and act on their ideas. To date, Dell…

What Happened to Business Books?

If you’re looking for the latest book to help you run your business better, you might as well call off the search. What passes for bestselling “business books” these days has nothing to do with improving performance.

Just look at the top ten on the latest New York Times hardcover business bestseller list. Superfreakonimics leads the list (it’s about economic thinking applied to everything, like economic thinking has served us so well) followed by Outliers, which I really enjoyed but which is more about the expectations we have of people than a business book. Three books focus on the financial crisis and two address personal finances. Of the remaining three, one covers Israel’s economy, another traces Google’s short history, and the last one tells you how you can use the Web to create a business.

Okay, maybe that last one has something to do with how to run a business—if you’re an entrepreneur on the Internet.

BusinessWeek recently regaled us with a story of the year’s best business books and, you guessed it, the first four chronicle the financial meltdown. None of the other books mentioned in the article comes any closer to providing business wisdom.

The business book category has long been a catch-all for anything businesses and business personalities do—more than what they should be doing to build great companies—and a reflection of Corporate America’s fascination with all things financial. It’s not the best way to learn how to run a better business.

That’s why Web sites like Baldrige.com are so valuable. Where else are you going…