All Posts Tagged With: "management system"
Learning from the Ritz
The Ritz-Carlton hotel chain has won two Baldrige Awards because of the quality of its management system. A key element of that system is how well it trains and empowers its hotel workers to satisfy and delight customers. Any employee can spend up to $2,000 on his or her own to improve a customers’ experience. Would you trust your employees with that responsibility?
Now an unlikely company has brought in trainers from the Ritz to show their dealers how to create a consistent sales experience and create loyal customers. The company? Cadillac.
According to an article in Bloomberg Businessweek, “Cadillac has copied Ritz’s pocket-sized ‘Credo’ cards, which explain how customers should be treated.” Cadillac service managers now have greater flexibility to “wow” customers. One dealer in the Chicago area gave employees $300 to $500 in “wow” money, which may be an iffy proposition if the employees haven’t been trained in how to dole out that money responsibly. The last I heard, new employees at the Ritz receive more than 250 hours of training in their first year of work, and a good part of that training is in customer service. Without the training, the “wow” money may just become, “Wow, look at all the money we wasted.”
It’s all about the culture and the management system. Companies that try to emulate one chunk of a world-class system without having the culture and the other key elements of the system in place may see short-term improvement, but it won’t last. The system will absorb…
21Jun2010 | Steve George | 0 comments | ContinuedBureaucracy Detector Test
As a native Iowan, I’m proud to pass along the Bureaucracy Detector Test, developed by Iowa’s Department of Management to expose performance gaps in state government. It turns out that, with a few wording changes, you can apply the test to any organization. Here’s the test:
Bureaucracy Detector Test
Rate the following on a scale of 1 (not at all) to 7 (often):
- ____ To what extent do agencies in your jurisdiction feel accountable for following rules, regulations, and procedures prescribed in law or policy?
- ____ To what extent do agencies in your jurisdiction feel accountable for producing measurable outcomes for people?
- ____ To what extent to agencies in your jurisdiction encounter rules or procedures that impair their ability to perform?
- ____ To what extent are agencies in your jurisdiction allowed to interpret the application of a rule or law themselves, as opposed to having someone in another agency responsible for enforcing the rule or law make the interpretation?
- ____ To what extent do agencies in your jurisdiction spend time or money to comply with rules, laws, or reporting requirements that they feel are a waste of time?
- ____ To what extent do the people in agencies responsible for enforcing administrative rules and regulations understand the work in a frontline agency and what is important to the success of the frontline agency in meeting the needs of those that agency serves?
Scoring
For the odd numbered questions, enter the sum of the three numbers here: ____. For the even numbered questions add the three numbers, subtract the total from 21,…
25Mar2010 | Steve George | 0 comments | ContinuedMaking Change Happen
This is a guest article by Arnie Weimerksirch. If you want to contribute an article to Baldrige.com, check out the guidelines here.
Change is difficult. In our personal lives we struggle to break bad habits, eat a healthier diet, or get more exercise. In spite of our good intentions, we often fail.
Organizations also find it difficult to change: Studies show that almost 85% of change initiatives fail. Even when faced with a crisis, many organizations are not able to make the changes necessary to survive. As W. Edwards Deming said, “Survival is not mandatory; it is purely optional.”
In 2004, on the 50th anniversary of the Fortune 500 list, only 71 of the original 500 remained on the list. Not all of them failed, of course, but the majority did. And they failed because they were not able to change with the times.
Why is change so difficult and what is the answer? One of the main reasons transformation initiatives fail is our love of management fads. In her book, Fad Surfing in the Boardroom, Eileen Shapiro defines fad surfing as “the practice of riding the crest of the latest management panacea and then paddling out again just in time to ride the next one; always absorbing for managers and lucrative for consultants; frequently disastrous for organizations.”
New management theories are constantly developed by “gurus” and published in prestigious journals. Recent examples include the boundaryless organization, job sculpting, reengineering, and, yes, Six Sigma. Most of these new management theories turn out to be nothing more…
8Feb2010 | admin | 0 comments | ContinuedThe Next Generation Collaborative Enterprise
When you’re doing Baldrige, it’s easy to get immersed in fixing the problems with your management system, which is good as long as you also keep looking outside your organization to see if adopting a new system should get as much attention as improving the old one.
For example, Padmasree Warrior wrote on Cisco’s blog (click here) about the Next Generation Collaborative Enterprise (NGCE), which is a very different type of management system. Here’s how she describes it:
Priorities are set by clusters of experts that make decisions. Decisions are communicated real-time through social media applications. Work is shared on a secure collaboration technology platform. Individuals are able to apply themselves to the work based on their skills and availability, regardless of their geographic location. Expertise outside the Enterprise is included ‘on-demand’ to bring necessary knowledge to bear. Funding is directed based on milestones. Direct accountability is embedded into the social network. Finally, organizational functions become less relevant and ‘Re-orgs’ become obsolete. Leadership is defined as the ability to influence, envision, and execute―rather than the authority to command and control.
Despite its innovative design, NGCEs must still address the components of a management system addressed by the Baldrige Criteria, which Warrior lists as “strategy and planning, delivering value to customers and partners, human capital, innovation and design, manufacturing and distribution, marketing, and messaging.”
28Jan2010 | Steve George | 0 comments | ContinuedThe Case Against Incentives
The tenth of W. Edwards Deming’s 14 points is to “eliminate slogans, exhortations, and targets for the workforce asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.” In other words, incentive pay is bad.
In “The Dark Side of Incentives” (BusinessWeek, November 12, 2009), Barry Schwartz concurs: “The inescapable flaw in incentives, as 35 years of research shows, is that they get you exactly what you pay for, but it never turns out to be what you want.”
You need look no further than the incentive practices of our large banks to see the truth in these statements. Pay bonuses for short-term results without any regulator on how those results are achieved and you will get the results you want, but at what cost?
Deming reminds us that low quality and low productivity—in fact, 80-90% of all problems an organization faces—are problems with the system. Since management controls the management system, 80-90% of all problems are management problems that the workforce is not in a position to resolve.
Not only are incentives an ineffective substitute for leadership, but they also negatively affect how people make decisions. Incentives tend to remove the moral dimension from decision-making. Without a financial incentive, people consider their responsibilities to their team or department or organization. With a financial incentive, people ask what’s in it for them.
16Nov2009 | Steve George | 0 comments | ContinuedWhat Management Sites Do You Like?
(Other than Baldrige.com, of course.)
I scour the Internet daily to find sites that illuminate the Baldrige model or any element in it. Harvard Business and Fast Company are two favorites. Occasionally, I find interesting posts or articles on other sites, but the pickings tend to be slim.
Most organizational systems-related sites (there’s just not an easy way to say that) are selling something. That doesn’t mean they don’t have valuable information to offer, but it’s usually presented in the context of the company’s products or services. Sites that aren’t selling something tend to be narrowly focused on one element of a management system, i.e., leadership or human resources or customer relationships, and on the nitty-gritty of those elements rather than the big picture.
I’m looking for the systems perspective laid out by the Baldrige Criteria and captured in the categories on Baldrige.com. If you have an organizational systems-related site to recommend, or a site that focuses on one part of that system with a big-picture perspective, please share its Web address by submitting it in a comment at the end of this article or emailing it to me here. Tell me why you like it.
It may even make our soon-to-be-updated Blogroll.
13Nov2009 | Steve George | 0 comments | ContinuedManagement System Innovation
Where should you promote innovation first?
The authors of a recent McKinsey article, “Innovation: What’s Your Score?” argue for a new way to measure innovation to get an innovation performance score. Although developing such a measure may take more time than most companies want to spend, the authors’ research revealed four insights that were true for all industries:
- Strong innovators do consistently well, mostly by outperforming the markets they are already in rather an entering or creating new ones.
- Top innovators continue to outperform their competitors during the tough times. Their agility—a Baldrige core value—helps them cope with the challenges.
- There may be an optimum level of innovation. The lowest innovation performance always suffers but the highest isn’t always rewarded proportional to its position.
- Business model innovation, as opposed to product and process innovation, “seems to be necessary for superior innovation impact.” They define business model innovation as “the creation of substantial new value for customers and the firm by creatively changing one or more dimensions of the business system.”
That’s what the Baldrige process is all about: understanding what is valuable to customers and transforming your management system to deliver it. As this research shows, building an innovative management system turns out to be at least as important as creating a new product or service or improving a production or delivery process.
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