All Posts Tagged With: "financial"
Baldrige and the Financial Crisis
There’s a good reason no big financial institution has ever won the Baldrige Award: Their applications would be fatally flawed.
In fact, it’s too bad every financial institution doesn’t have to submit a Baldrige application because their responses to the following Criteria questions (verified with a site visit just to keep them honest) would expose the dangerous and destructive practices that caused the financial crisis:
- What are your key strategic challenges and advantages associated with organizational sustainability?
- How do senior leaders personally promote an organizational environment that fosters, requires, and results in legal and ethical behavior?
- How do senior leaders create a sustainable organization?
- How do senior leaders include a focus on creating and balancing value for customers and other stakeholders in their organizational performance expectations?
- How does your organization review and achieve accountability for management’s actions, fiscal accountability, transparency, and protection of stakeholder and stockholder interests?
- How do you evaluate the performance of your senior leaders and the members of your governance board?
- How do you address any adverse impacts on society of your products and operations?
- How does your organization promote and assure ethical behavior in all your interactions?
- How do you consider societal well-being and benefit as part of your strategy and daily operations?
- How do you ensure that strategic planning addresses long-term sustainability?
- What are your key current findings and trends in key measures or indicators of governance and fiscal accountability?
- What are your results for key measures or indicators of ethical behavior and…
Baldrige and Financial Performance
Leaders looking for reasons to consider integrating Baldrige should be aware that the Baldrige model focuses on results. Whatever your organization’s goals, evaluating and improving your management system through regular Baldrige assessments will help you achieve them.
You can test the validity of that statement by looking at the results of organizations that have received the Baldrige Award. In this article, let’s consider the key financial results of a sampling of Award recipients:
- Maintained steady per-bushel costs from FY2006 to FY2008 despite 50-80% increase in energy costs, 30% increase in chemical costs, and 10% increase in maintenance costs (Cargill Corn Milling)
- Per-pupil expenditures among the lowest in North Carolina while being ranked academically in the state’s top 10 school systems (Iredell-Statesville Schools)
- Average charge $2,000 lower than that of its main competitor (Poudre Valley Health System)
- Revenue per associate approximately $4 million, nearly four times the IndustryWeek 90th percentile benchmark (PRO-TEC)
- Revenue increase from $33 million in 1989 to $847 million in 2006 (Mercy Health System)
- Increased revenue by 56% from 2001 to 2006 (Sharp HealthCare)
- Overall revenue increased from $640 million in FY2001 to over $1 billion in FY2007 (ARDEC)
- Operating margin grew from 35% in 2003 to 50% in 2006, while operating expenses remained well below those of its largest competitor (Premier)
- Sales increased 93% from 2000 to 2006, with total revenues nearly doubling (MESA Products, Inc.)
- Care-based cost management saved more than $11 million in last six years (North Mississippi Medical Center)
- Since receiving its first…
