All Posts Tagged With: "core competencies"
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…
Baldrige Model: How do you build an effective and supportive workforce environment?
Item 5.1 in the Baldrige Criteria asks key questions about how you create a supportive work environment. The following processes, best practices, and problem areas look at critical issues in this part of the Baldrige model.
Your organization needs processes for:
- Assessing workforce capability and capacity needs and preparing employees for changing needs
- Recruiting, hiring, placing, and retaining new employees
- Organizing and managing your workforce to accomplish work, capitalize on your core competencies, reinforce a customer and business focus, exceed performance expectations, and address your strategic challenges and action plans
- Managing your workforce to ensure continuity, prepare for growth, and prevent layoffs or minimize their impact if they become necessary
- Creating a healthy, safe, and secure work environment
- Supporting employees through policies, services, and benefits
Best practices to consider:
- The organization has developed a workforce plan that identifies its current capability and capacity and anticipates future needs based on different scenarios.
- The hiring process focuses on choosing people who fit the organization and providing training and support to ensure that they are retained.
- The workforce is organized and managed to benefit from diversity (gender, age, race, etc.).
- Strategic leadership, careful planning, and a commitment to employee well-being enables the organization to ramp up during times of rapid growth and find new opportunities when the market slows without destabilizing the workforce.
- The organization has identified and tracks performance on key measures of workforce health, safety, and security.
- The policies, services, and benefits the organization provides are tailored to the needs employees and support employee engagement and satisfaction.
Common problems areas:
- The organization does not have a clear…
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 | Continued
