According to the Monfort College of Business at the University of Northern Colorado, organizations that decide to systematically improve their management systems can and should work on alignment right from the start. In a presentation at the twelfth Quest for Excellence this year, Monfort emphasized four dimensions that need to be aligned right away:

• Stakeholder needs and relationships
• Organization structures and systems to address those needs
• Performance measures to track performance and progress
• Strategic goals and objectives

You can view the slides in the presentation by visiting Monfort’s Web site here. The presentation is relevant to any type of organization because the concepts, like the Baldrige model, are applicable to all organizations.

The sixth slide in the PDF presentation shows how Montfort defined a student-centered process framework, identifying key stakeholders and their needs and relationships on one slide. The next two slides overlay Monfort’s management control system to show who is responsible for meeting these needs.

Like many organizations, Monfort uses a color-coded stoplight system to show progress on key performance indicators. Slide 11 places the 20 KPIs and the supporting performance indicators on the process framework to show how performance measures align with the framework, color-coded to also show current performance on each indicator. The next slide lists Monfort’s five strategic objectives and shows how they align with the KPIs and the process framework.

According to the Web site, “the first step is to identify the details for all four components and then identify the gaps and misalignments and then work on filling the gaps and aligning the components. The slides demonstrate how this can be done.

To read more about alignment, click on these articles:

• KEYSTONE: Alignment and Integration
• Effective Strategic Initiatives
• Aligning Individual Performance with Your Mission and Vision
• Backdoor Access to World-Class Performance
• 5 Added Values of the Baldrige Process

IBM asked these questions of business leaders in a business analytics and optimization study published in April 2009. One-half said they didn’t have the information required to do their jobs. One-third reported that they frequently lacked the information needed to make critical decisions.

IBM defines analytics as “the use of information to find patterns, identify new possibilities, create scenarios, make predictions, and prescribe actions.” Optimization is “a process that entails analyzing opportunities and constraints and then driving decisions about them deep into the organization.”

In August, IBM surveyed nearly 400 business leaders worldwide about how they use information and apply business intelligence. It compared top performers—top quintile based on self-reported performance relative to their peers—and lower performers in the bottom two quintiles. Twice as many top performers as lower performers had mastered three basic characteristics of information management:

• Aware. They were able to gather and use information from inside and outside the enterprise.
• Precise. They could sort through and extract the most relevant aspects of information.
• Linked. They were able to align information with business objectives and across functions.

Organizations that integrate the Baldrige model also master these basics. They have processes for selecting, collecting, aligning, and integrating data and information, and they have processes for using that data and information to do their jobs and make critical decisions. Management by fact is a Baldrige core value evident in the performance measurement systems of Baldrige Award recipients.

Such systems also differentiated high performers from low performers in the IBM survey. “Top performers took a sophisticated approach to governing organizational information three times more often” than low performers. As IBM concluded, “The most sophisticated had strong management systems in place.”

Your organization can develop a strong, world-class management system by integrating the Baldrige model. To read the report in the IBM survey, click here (pdf). To find out more about performance measurement and integrating the Baldrige model, check out:

• Creating a Balanced Scorecard
• 10 Critical Questions: Data, Information, & Knowledge
• Transforming Measurement
• 10 Questions to Ask about Everything You Do
• How to Integrate Baldrige
• 10 Steps to World Class

Before you can write a Baldrige or state award application, you must gather the information you need to answer the Criteria questions. That means interviewing internal subject matter experts about the six process categories and one results category in the Criteria. One way to prepare subject matter experts for these interviews is to reassure them that you will be discussing how they do what they do. A Baldrige assessment is, after all, a snapshot of how your organization operates.

Another step in the preparation is to describe the scope of the information you will be looking for by sharing 10 process questions that we should all be able to answer about the work we do:

1. What is your approach to _(the area you are focusing on)_?
2. How do you determine customer and stakeholder requirements for it?
3. How systematic is your process?
4. How do you deploy it to all units that should be using it?
5. How is it aligned with your organization’s mission, vision, and goals?
6. How is it innovative, transformational, or a role model for similar processes?
7. How do you use data and information to evaluate and improve the process?
8. How do you compare your performance on key process measures to that of other organizations?
9. How do you review performance and use these reviews to improve your processes?
10. How do you share refinements and innovations with other relevant work units and processes in your organization?

Every organization, business unit, work unit, division, department, team, and individual can improve performance by asking and answering these questions about everything they do. The answers will reveal opportunities for improvement that can help you build a world-class management system.

To learn more about using Baldrige to improve your organization, read:

• Is Baldrige Right for Your Organization?
• How to Integrate Baldrige
• 10 Steps to an Effective Baldrige Assessment
• 10 Tips for Answering Criteria Questions
• Applying for the 2010 Baldrige Award

In 1994, the average score for the business units was 330 points. That average increased every year through 1999 when it reached 550 points. In 1994, Honeywell’s operating profit rate was 7%. That rate also increased through 1999 when it reached 13%.

These and other data showed a strong correlation between HQV score and profitability. You see the same correlation when you examine the applications of Baldrige Award recipients. The applications, which you can find here, include results in six key areas. If you look at when an organization started its Baldrige journey and compare that to the trends in its results, you quickly notice the correlation between integrating Baldrige and improving performance.

This chart shows the typical path an organization takes as it integrates the Baldrige model. Most organizations score 250 to 350 points on their first assessment or application. By addressing the low-hanging fruit this first evaluation exposes, an organization can quickly improve during the next couple years.

At 500 points, your management system is becoming a competitive advantage. Earning half the possible points on a Baldrige application may not seem noteworthy, but it means you’re twice as good as almost everyone else. You have effective, systematic, and well-deployed approaches in place for all areas of your management system. You systematically evaluate and improve these key processes, which are aligned with what your organization needs to accomplish. Most results show positive trends and good current performance and hold up well when compared to competitors or other benchmarks.

Baldrige Award recipients typically score around 700 points. They’re good at everything and great at a few things, for which they become role models the rest of us can learn from. They move from 500 points to 700 points by improving processes, strengthening alignment, and integrating their approaches to achieve strategic and operational goals.

By correlating Baldrige scores and performance on financial, customer, quality, employee, and other key metrics, you will not only track the pace of improvement in your organization, but you will also show the measurable benefits of the journey.

To find out more about the Baldrige journey, read:

• Is Baldrige Right for Your Organization
• 10 Steps to World Class
• How to Integrate Baldrige
• The Baldrige Criteria
• 10 Steps to an Effective Baldrige Assessment

The Baldrige model has identified the beliefs and behaviors of high-performing organizations. These 11 core values and concepts, embedded in the Baldrige Criteria and in Baldrige Award recipients, are essential to achieving performance excellence. You can find the complete list here and an explanation of each in the Criteria booklets here.

So how do you get your organization from where it is today to world-class status? Twenty years of Baldrige reveal the steps you can take to create a high-performing organization:

1. Lead the transformation. It won’t happen without leaders committed to excellence, and it won’t happen without recognizing that the steps you take will transform your organization. Plan the journey, communicate the plan, measure progress, and facilitate change.
   ♦To learn more, read Is Baldrige Right for Your Organization, 10 Critical Questions: Senior Leadership, and An Achievable Mission and Vision;
2. Develop management system experts. You will need these experts to help focus resources and attention on what must happen along your journey. Take a few existing or rising stars and ask them to be Baldrige or state award examiners for at least three years. The training and experience they get will give you the internal expertise you need.
   ♦To learn more, read How to Become a Baldrige Expert, Make Yourself More Valuable, and The Value of Baldrige Expertise.
3. Promote curiosity. No organization can change if it is content with the way things are. Learning organizations challenge the status quo. They seek a better way. And they recognize and reward people at all levels of the organization who take responsibility for improving performance.
   ♦To learn more, read Climbing the Corporate Lattice and Employee Development and 10,000 Hours of Practice.
4. Demand process thinking. All work is process. You cannot prolong your journey to world-class by constantly putting out fires or blaming employees for systemic problems. Ask how you do what you do, identify the steps, and manage and improve the process.
   ♦To learn more, read 10 Critical Questions: Process Management, Identifying Key Work Processes, 5 Powerful Process Questions, and Process Management: Work System Design.
5. Compare with the best. You need context to know if what you are doing is the best course and what you are achieving is truly world-class. Benchmark key processes and key results with those of high-performing organizations. Hold your organization to the highest standards and implement plans that will help you join them.
   ♦To learn more, read Outside-the-Box Benchmarking, Health System Benchmarks, and Comparative Data for Manufacturers,
6. Assess and apply. The only way to keep attention focused on improving your management system is to assess and improve it using the Baldrige Criteria. Many Baldrige Award recipients submitted applications for state awards and/or the Baldrige Award annually for several years before winning the Award—and many continue to do assessments after they won. Start with a self-assessment or by applying for a state award. Use the feedback to prioritize and address your biggest gaps. Repeat the process annually and you will improve.
   ♦To learn more, read Is Baldrige Right for Your Organization?, 10 Steps to an Effective Baldrige Assessment, and New to Baldrige?
7. Drive continuous improvement. Use data and information to identify opportunities for improvement and have action planning and problem solving processes in place to address them. Build refinement steps into every process to make sure the process is systematically improved.
   ♦To learn more, read Blessed with OFIs and 10 Critical Questions: Process Management.
8. Align and integrate. Use your strategic planning and performance measurement systems to align what you do with what you want to achieve. Harmonize plans, processes, information, resource decisions, actions, results, and analyses to support your organization’s goals.
   ♦To learn more, read Alignment and Integration and Know Thyself—and Act Accordingly.
9. Innovate. High-performing organizations are good at everything and great at a few things. To be good at everything you need a culture of innovation that touches all processes. To be great at a few things, you need formal approaches to developing breakthrough approaches in those areas critical to your success.
   ♦To learn more, read 3 Systematic Innovation Processes and Making Innovation Part of Your Culture.
10. Sustain the gains. The first nine steps are a lot of work if you’re going to slack off as soon as you get to the top. To sustain the journey, identify the factors that must be in place and managed to remain world-class and then develop and implement processes to address them.
    ♦To learn more, read 4 Parts of True Sustainability, Identifying Capabilities Your Organization Needs, and Planning for the Longer-Term.

High-performing organizations have integrated Baldrige by integrating these ten steps into the way they operate. Their success is available to any organization committed to being the best.

I will be posting pages on each of these five keystones. You can look for links to them in the “Pages” column on the home page. As with all posts and pages, I welcome your feedback.

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