All Posts Tagged With: "core competencies"
The Baldrige Formula for Success
If you’re looking for a repeatable formula for success, integrate the Baldrige model. The fact that it’s been repeated by dozens of organizations of all types, each with impressive results, affirms that the management model defined by the Baldrige Criteria is a formula for success.
Bain & Co. decided that integrating Baldrige was too obvious, so it spent ten years studying more than 2,000 companies to find the formula for success. Jill Jusko lists the five principles Bain came up with in “A Repeatable Formula for Success” (IndustryWeek, March 16, 2010):
1. Know what the core of your organization is and how you’ve made it work for you. This may include four to seven assets such as brand and talent. In Baldrige terms, it means identifying your core competencies and building on them.
2. Have up to ten non-negotiable principles upon which your organization is built. Baldrige calls these your mission, vision, and values.
3. Prefer distributed leadership, which means fewer layers of management. Baldrige doesn’t prescribe distributed leadership, but it does promote empowerment and agility, which are often associated with fewer layers of management.
4. Keep information coming in from customers through a strong, closed feedback loop system. The Baldrige Criteria ask a number of questions about how you build a customer culture and how you listen to customers.
5. Keep the number of key operating measures small and be sure everyone at levels understands and believes in them. Again, Baldrige doesn’t tell you to keep the number of key measures small, but it does ask how you…
17Mar2010 | Steve George | 0 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 customer groups and markets, how you determine which customer groups and markets to pursue, how you identify and anticipate key…
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 are almost always top management’s unexamined beliefs.”
- Invest in genetic diversity. Seek diversity in the executive committee.
- Encourage debate and dialectic thinking.…
Question Your System: Operating Environment
The Baldrige Criteria pose questions that, when answered, can help you understand the strengths and weaknesses of your management system.
P.1a in the Organizational Profile asks fundamental questions about your operating environment. A few are easy to answer, such as what products and/or services you offer and how you deliver them. Others require more thought:
- What are the key characteristics of your organizational culture? You may not have thought much about this. For most organizations, culture is what happens when you’ve been around for awhile. Key characteristics others frequently mention include a focus on customers/patients/students, empowered employees with few levels of management, extensive use of teams, promoting innovation throughout the organization, valuing employee safety, and pursuing world-class quality and cycle time.
- What are your core competencies? How do they relate to your mission? Core competencies are your organization’s areas of greatest expertise that help you fulfill your mission and differentiate you from your competitors. If your core competencies don’t align with your mission, you’ve got a problem.
- What are the key factors that motivate your employees to engage in accomplishing your mission? Later, the Criteria ask how you determine these factors, so don’t just pull them out of a hat. High-performing organizations often pull their lists of key factors off employee surveys after systematically verifying that the factors addressed by the survey do, indeed, affect workforce engagement.
The Organizational Profile is the foundation upon which a Baldrige assessment is built. Everything that follows is supported by and linked to the information the Profile seeks.
You can read all of…
30Dec2009 | Steve George | 1 comment | ContinuedToyota’s Strategic Challenge
The automotive industry is a great example of what happens when a few competitors gain a strategic advantage by setting a high standard in a critical area. Toyota and Honda have been the quality leaders for more than two decades, attracting car buyers who had been Ford, General Motors, and Chrysler customers but who wanted better reliability in their vehicles. Toyota rode its quality wave to worldwide leadership in car sales, only to slip at the same time competitors’ quality matched and even surpassed it.
The Economist recently described the problems Toyota faces and how it is addressing them (“Losing Its Shine,” December 10, 2009). While the company seems to have fixed its quality issues—Toyota had 18 of the 48 leading vehicles in the recent Consumer Reports reliability study—quality is no longer a big differentiator in the automobile industry. Instead, Toyota’s “vehicles will inevitably be judged increasingly on more emotional criteria, such as styling, ride, handling, and cabin design.”
Akio Toyoda, grandson of the company’s founder and its president since June, recognizes the need for innovative design. He recently said, “I want to see Toyota build cars that are fun and exciting to drive.”
That may be a challenge. Toyota’s value proposition has been built upon quality and reliability. Its culture, defined by the Toyota Production System, completely supports that value proposition. Steering in a new direction using a system developed for a different purpose will prove difficult.
That’s the strategic challenge Toyota faces. It has set the standard for quality and reliability in its industry and…
17Dec2009 | Steve George | 1 comment | 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, and multiple goals support a single objective. (CoC)
Strategy. A way to describe a series of tactics or very specific actions…
14Dec2009 | Steve George | 0 comments | Continued10 Critical Questions: Process Management
The Baldrige Criteria describe a process model. Six of the seven Criteria Categories ask powerful questions about the key processes necessary to operate a high-performing organization. Your responses to those questions are evaluated based on the effectiveness of your approaches, how widely and consistently they are deployed, how systematically they are refined, and how well they are aligned with your organizational needs.
The Process Management Category asks how you design your work systems and how you design, manage, and improve your key work processes. The best way to evaluate how well you do this is through a Baldrige assessment using the Baldrige Criteria. You can find out how to do that here. If you cannot do a full assessment but want insight into how to improve process management, here are 10 critical questions to ask and answer:
- How do you design and innovate your overall work system (how the work of your organization is accomplished)?
- How do your work systems and key work processes (your most important internal value creation processes) relate to and capitalize on your core competencies?
- What are your key work processes?
- How do you determine the key requirements for these processes and what are they?
- How do you design and innovate your work processes to meet these requirements?
- How do you ensure that the day-to-day operation of these processes meets their key process requirements?
- What are the key performance measures and in-process measures used to control and improve these processes?
- How do you control the overall costs of your work processes and prevent defects, service…
