All Posts Tagged With: "management system"
Four Brutal Truths
Milliken & Co. won a Baldrige Award in 1989, the second year the Award was given. A multinational group of textile and chemical companies, Milliken has continued to improve over the last two decades, using its Baldrige experience as a springboard for industry leadership and role model best practices.
It customized the Toyota Production System to its own culture and operations and applied the scientific method to new initiatives, using PDCA to experiment, test, and improve. It succeeds “in the face of four brutal truths that often derail organization improvements, preventing innovation and sustainable excellence,” according to Laurie Haughey, Milliken’s director of education services and marketing (article here):
- The majority of performance-improvement programs fail. Milliken looked to Japan and the process controls taught by W. Edwards Deming to develop a sustainable management system. “More than 100 management employees made four exploratory trips to visit leaders of Japan’s best companies…to learn and adopt performance systems,” writes Haughey.
- Organizations will founder unless they cultivate the trusting environment needed to perform honest self-analysis. First, Milliken adopted zero-based thinking: Its objective is zero, not some acceptable level of failure. Second, it uses value-stream mapping to identify the eight forms of manufacturing waste. Third, it encourages workers to expose problems and search for root causes.
- Organizations often count the wrong things. “Rather than focusing solely on bottom-line numbers,” Haughey writes, “organizations should consider a more holistic approach in measuring corporate success.” In Milliken’s case, the foundation of its performance system is safety. Every meeting starts with a safety review. Hourly employees own…
Smart Question #1: What’s the Process?
(This excerpt is from The Baldrige Edge, an e-Guide from Baldrige.com. You can learn more about the guide by clicking on the black-and-red box on the right.)
Over the past 22 years, I’ve helped more than 50 organizations evaluate their management systems using Baldrige. While every question in the Baldrige Criteria is important, you can distill them into three smart questions that, when used daily, will set you apart from your peers while providing a proven, effective path to fixing most problems.
The first smart question is: What’s the process?
We’ve all sat in meetings called to solve problems. Too often, the first order of business is figuring out who screwed up. If you work in such an environment, what I call a “culture of blameology,” you’ve learned to keep your head down and your excuses ready.
You’re not going to change that culture all by yourself but you can shine a light on the real culprit deserving the blame: the process.
All work is process. Dictionary.com defines process as “a systematic series of actions directed to some end.” The steps you take to get something done are steps in a process. The actions you take every day are part of one or more processes. A process may exist entirely in your work group or department (functional) or you may have a chunk of a process that spans several departments (cross-functional). Many of our major processes have names like product design, teaching math, surgery, accounts payable, supply chain management, drivers’ license renewal, and customer service.
All work…
31Jan2011 | Steve George | 1 comment | ContinuedBaldrige FAQs: The Baldrige Criteria
What are the Baldrige Criteria?
The Baldrige Criteria define a management model focused on performance excellence. By answering more than 250 Criteria questions, organizations get a comprehensive snapshot of their management systems that they can use to identify strengths and opportunities for improvement. There are three versions of the Baldrige Criteria, one for businesses and nonprofits, one for healthcare, and one for education. You can view the 2011-2012 Criteria online here.
Who develops the Criteria?
The Baldrige Performance Excellence Program is responsible for the Baldrige Criteria, which are revised and published every two years. The Baldrige Program solicits input from Award applicants, members of the Board of Examiners, and others to update the Criteria.
What do the Criteria address?
The Baldrige Criteria are organized into an Organizational Profile and seven categories: Leadership; Strategic Planning; Customer Focus; Measurement, Analysis, and Knowledge Management; Workforce Focus; Operations Focus; and Results. Each category is divided into Items, and each Item is further divided into Areas to Address that pose the questions to be answered.
For example, the Leadership category has two Items: Senior Leadership and Governance and Social Responsibility. The Senior Leadership Item has two Areas to Address: Vision, Values, and Mission and Communication and Organizational Performance. Each Area groups questions by subject. For example, the Vision, Mission, and Values area groups questions into three subjects: Vision and Values, Promoting Legal and Ethical Behavior, and Creating a Sustainable Organization.
What do the Criteria value?
The Baldrige Criteria are built on a set of interrelated core values and concepts, which are embedded beliefs…
30Dec2010 | Steve George | 0 comments | ContinuedA Baldrige Award Winner’s Health Pyramid
The Baldrige model values a systems perspective. One of the most impressive system perspectives I’ve seen was shared by Heartland Health, a 2009 Baldrige Award winner, in its award application summary. It’s called the Health Pyramid.
There’s a lot going on in this diagram and it all relates to how Heartland Health (HH) serves the health care needs of its communities.
The “tip of the iceberg” shows the diseases that most healthcare organization in the U.S. spend all of their time and money treating. HH provides this care through the Heartland Regional Medical Center (HRMC), a 353-bed tertiary care hospital, and Heartland Clinic (HC), a group of 107 physicians.
The causes of death from these diseases, human behaviors such as tobacco use, poor diet, and inactivity, are less visible but more important to actually preventing disease. HH promotes health and provides disease management and insurance to individuals and companies that need coverage through its Community Health Improvement Services (CHIS) and through HRMC, HC, and the Heartland Foundation (HF).
The drivers of these behavioral choices are the root causes of poor health. According to HH’s application, the Heartland Foundation “empowers youth, adults, and organizations to build better, healthier, and more livable communities and does so by creating dialogue, funding innovative collaboratives, and sponsoring initiatives promoting and enhancing the community.”
All three levels of the Health Pyramid support Heartland Health’s Vision, which is shown in the top left corner with key words—best, safest, healthy, and productive—aligned with the levels. Each level also aligns with a Heartland Health…
16Nov2010 | Steve George | 0 comments | ContinuedBaldrige.com: 400+ Articles on Improving Performance
Baldrige.com now offers more than 400 articles about the elements of a management system that can help you achieve performance excellence. The articles are grouped by Baldrige category in the bar below the masthead at the top of this page. Under the “Baldrige” heading, you can read about the Baldrige process, Criteria, and quality award programs, while you can find information specific to business, education, government, healthcare, and nonprofits under the “Sector” heading.
Baldrige.com now averages more than 200 visits a day from 170 unique visitors. Each visitor views more than five pages and very few—just 1.3%—leave after looking at one page. That’s called “bounce rate,” and ours if very low.
We’re getting visitors from all parts of the globe: 118 countries to be exact. More than half come from the United States, with the next most from India, Australia, United Kingdom, Philippines, Canada, and New Zealand. New Zealand has been a Baldrige hotspot for years.
The purpose of Baldrige.com is to provide the information you need to build the organization you want. I spend a lot of time checking out related Web sites and I can tell you that no other site focuses on how to improve your management system like Baldrige.com does. In fact, you can assign most information on the Internet that has to do with work life into three buckets: personal, personality, and financial.
- Personal posts focus on what you can do to improve your own career.
- Personality posts tell the stories of workplace celebrities, which are usually company founders and…
The Lean/Baldrige Connection
Like the Baldrige model, lean started in the manufacturing world but has spread to all types of organizations. Several Baldrige Award winners have implemented lean because it helps them create more value for their customers with fewer resources. Like Baldrige, lean (1) is process-oriented, focusing, in lean’s case, on the value streams that produce products and services for customers; (2) improves quality and cycle time; and, (3) provides a competitive advantage for those organizations that institutionalize it.
In “Lean Confusion” (IndustryWeek, August 18, 2010), Jill Jusko traces the growth of lean in manufacturing, noting that 90 of the 100 IndustryWeek Best Plants from 2005 to 2009 demonstrated significant or complete implementation of lean. “Those same plants reported median 30% reductions in manufacturing cycle times over the past three years, median scrap reductions of 33%, and median productivity improvements of 24%,” according to Jusko.
But lean, like Baldrige, is about far more than quality and cycle time improvements: They are transformative systems, changing the cultures of the organizations that implement them. They help shape strategy, redefine measurement, and engage employees in the process.
Jusko describes an automotive industry supplier, Autoliv, as an example of the human side of lean. Last year at its Ogden, Utah, plant, “managers received 63 implemented ideas per person.” Most suggestion systems are lucky to garner one or two ideas per person per year, and not all of those are implemented. Imagine how good your processes could become if everyone who worked on them initiated more than one improvement every week!
An organization…
18Aug2010 | Steve George | 0 comments | ContinuedThe Remedy for ROA Flatlining
TThe average return on assets of U.S. companies has steadily fallen to almost one quarter of what it was in 1965, and the trend line approaches zero in 2020. ROA is a measure of how profitable a company is and how efficient management is at using its assets to generate income.
The decline in ROA has occurred despite steady improvements in labor productivity, which have occurred despite stagnant wages for the labor. As a result, businesses have been paying no more for an increasingly productive workforce, which pretty much eliminates wage control and productivity as factors in improving ROA.
So how can leaders reverse the trend?
John Hagel III and John Seely Brown address this issue in “Six Fundamental Shifts in the Way We Work” (HBR, August 17, 2010). The six shifts they mention are:
- Management practices and corporate institutions are fundamentally broken. Most have not yet figured out how to compete more successfully.
- The source of value creation is shifting from your stock of knowledge to the flow of knowledge, and most executives lag in understanding what this means for their companies.
- Management innovation is not enough: Institutional innovation, exemplified by China’s open production and design models and India’s open distribution models, are needed.
- A new kind of performance curve is emerging: The collaboration curve, which brings together participants in a carefully designed environment to make rapid leaps in performance improvement.
- Talent development is broader than training programs: People need to learn new skills and behaviors through their involvement in the work of the management system such as…
