All Posts Tagged With: "management by fact"
Which Comes First: Facts or Opinions?
The Baldrige model supports fact-based decisions. Management by fact is one of 11 Baldrige core values. One of the seven categories in the Baldrige Criteria focuses on measurement and analysis. Measurement—“how do you know?”—is woven into questions throughout the other five “process” categories, and the results of your key measures are reported in the seventh category.
Here’s what management guru Peter Drucker wrote on the topic: “Executives who make effective decisions know that one does not start with facts. One starts with opinions.”
I disagree.
According to Drucker, which Stephen Wunker addresses in his post on the HBR Blog Network here, if leaders do not make their opinions clear, they will simply find the facts that confirm what they believe. The problem is that the opinions and the confirmatory facts push the organization in one direction without considering other courses of action. Wunker writes, “Decision makers may have a general sense of stakeholders’ opinions, but in their eagerness to act and to avoid controversy they do not probe to understand these perspectives fully. Rather, they quickly make a decision and then marshal facts to support it.”
In the Baldrige model, the process of understanding opinions and perspectives fully would be part of the strategy…
7Nov2011 | Steve George | 0 comments | Continued9 Indices for Your Balanced Scorecard
As the Baldrige program works on its own balanced scorecard (more here), Mark Graham Brown, a Baldrige expert who also happens to be a measurement expert, recently wrote about how leaders are populating their scorecards with more indices to provide more meaningful measurement. The indices consist of three to five submeasures. In his article in BusinessFinance, available here, he lists “the nine most useful and creative performance measures I have seen in government and business organizations over the last few years”:
- Communication Effectiveness Index. The frequency and media used to communicate important messages is worth 30-40% and the effectiveness of the communication is worth 60-70% of the index.
- Customer Relationships Index. The index includes two major components: customer attractiveness (based on such factors as profit margin, volume of business, timely payment, ease to work with, and history/partnering with suppliers) and customer relationship (i.e., number of years working together, products purchased, knowledge of customer’s business and needs, etc.).
- Employee Satisfaction Index. This index may include casual absenteeism, complaints/grievances, voluntary turnover, employee focus groups, overtime, and employee survey data.
- Distraction Index. Employees record hours worked each week, sorted into three categories: (a) job – tasks that are directly part of doing your job; (b) administration – activities you need to…
How Do We Know That?
Which of these scenarios is more common in your organization?
- Options are debated based on what people think about a problem or issue and how they think it should be handled; or,
- Options are debated based on reliable data and information that illuminate the nature and causes of the problem or issue and point to possible solutions.
Most people act as if “1” is really “2”: My assumptions are based on experience and they’re as good as facts. They’re wrong. Guessing that you know what’s going on is not the same as actually knowing what’s going on, and the only way to know what’s going on is to collect and analyze relevant data and information. That’s the purpose of a compelling question that needs to be asked during these discussions: How do we know that?
If you work in an office where assumptions pass as facts, you have a terrific opportunity to differentiate yourself from the crowd and establish yourself as a thoughtful leader—no matter what position you hold. Start by looking for answers to the question: How do we know that? Pay attention to the problems and issues that your work group or department is facing. Keep track of what’s aggravating your boss.…
1Dec2010 | Steve George | 0 comments | ContinuedClose That Open Door
Cy Wakeman has a thought-provoking post on FastCompany that pleads: “Please Kill the Open Door Policy, the Drama Is Killing Us” (November 17, 2010). Every Baldrige Award winner I can think of touts its open door policy. In fact, I can’t think of the last organization I worked with that didn’t have an open door policy. Wakeman thinks it’s a waste of time.
“The practice of the open door has proven to be disastrous,” she writes, noting that it “produces few if any real changes in the organization and often hijacks resources that could be focused on real issues.” Her reasoning is that employees use the open door “to report concerns about others, to tattle, to report their analysis and judgment of coworkers, to provide leaders with a list of things they’d like to see changed in their reality, or even to provide leaders with an evaluation of the leaders’ strengths, weaknesses, and development needs.”
Wakeman believes that, rather than using an open door to hope for change, leaders should “close the door and start developing your people.” Don’t wait for employees to come to you: Schedule time with each employee to talk about their challenges, development needs, and opportunities. Don’t encourage them…
22Nov2010 | Steve George | 0 comments | ContinuedReality Check in Japan
Making assumptions about the world around us is human nature. We have a sense for how the world operates and we interpret information and events based on our experiences and expectations. Peter Senge, author of The Fifth Discipline, calls these assumptions “leaps of abstraction.”
We make leaps of abstraction at work all the time. We assume we know what our customers require, what engages our employees, the source of a problem, and our marketplace and competitors. Because our assumptions may not, in truth, reflect reality, acting on them can cause all sorts of problems, and learning the truth through sound data and information can challenge our most dearly held beliefs.
This is what happened recently in Japan. Japan has a reputation for producing many of the world’s oldest people due, it has long claimed, to superior diet and a commitment to the elderly. It assumed it excelled in this area—until police found the body of one of the country’s centenarians, a man believed to be 111, who had been dead for more than thirty years.
The shocking discovery challenged a long-held belief, prompting officials to verify the status of the other centenarians in the country. According to an article in the New York…
16Aug2010 | Steve George | 0 comments | ContinuedWhat Differentiates Baldrige Award Winners
Part 1 of 3
Over the last twenty years working with dozens of organizations on Baldrige assessments and with five Baldrige Award winners, I’ve identified seven characteristics that differentiate organizations with sound management systems from those without. Here are the first two:
1. They think process. All work is process. The process flows through people: those who supply it on the front end, those who use those materials to produce products or services, and those customers who receive the products or services.
Companies don’t naturally think process, often because their structures prevent it. They organize around functions—finance, human resources, operations, administration, etc.—but processes, especially those processes critical to a company’s success, are not bound by functions. They are cross-functional. Mediocre companies manage their functions but not their processes. When problems occur, they blame them on departments or work units or, if their “culture of blameology” is really mature, on specific individuals. W. Edwards Deming believed that less than 4% of the problems any company faces can be attributed to individual employees. Leaders blame people when they should be blaming—and managing—the process.
2. They act on data. At Medrad, the world’s leading manufacturer of disposable medical imaging products, the mantra is: “How do we know that?” No…
26Jul2010 | Steve George | 0 comments | ContinuedHow to Develop a Balanced Scorecard
Organizations that want to get a better handle on how they are doing in the areas most important to their success often decide to develop a Balanced Scorecard. Here are four typical stages of development.
Stage 1: Enlightenment. Senior executives need to believe that the path to solid, long-term success requires knowledge of: (a) customer requirements and how to meet them; (b) employee requirements in order to reduce turnover, improve processes, and provide better service; and (c) operational processes and costs to discover how to become faster and more flexible. With this realization, leaders seek measurements that will tell them how the company is doing in each of these areas. Better yet, they want a measurement system that shows the connection between these vital areas. They are enlightened. The need for a Balanced Scorecard grows.
Stage 2: Identification. The organization initiates a system-wide effort to identify existing measures and to create needed measures where none exist. It begins to track performance on these measures, to report progress to employees, and to reward them for meeting performance goals.
Stage 3: Refinement. The reaction to the measurements, progress, reports, and rewards suggests that people respond to what is measured. This leads to greater refinement of…
11May2010 | Steve George | 0 comments | Continued
