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 development process, which encourages collecting and analyzing data and information to create an effective plan. As a result, decision makers can generate informed opinions based on their interpretation of fact-based knowledge about markets, customers, competitors, internal capabilities, and long-term needs. Rather than basing their opinions on assumptions and best guesses, they rely on data and information. The process starts with the facts.

However, I agree with Drucker that decision makers can be quick to choose a course of action without exploring their different opinions about what the facts are telling them. “Disagreement is a safeguard against being a prisoner of the organization and seeing an issue just as underlings want,” Wunker writes. He suggests soliciting opinions through anonymous questionnaires or interviews by a neutral party, pushing executives to think about the criteria for future success, and linking opinions to fact-based tests that would validate or disprove the opinion.

By integrating Baldrige, decision makers can develop a fact-based strategy development process that encourages dissent and values different perspectives.

To read more about strategy development, click on these articles:

• The First Critical Phase of Strategic Planning
• Challenge Your Assumptions
• The Most Important Question in Strategy
• Identifying Potential Blind Spots
• What Path Is Your Organization Taking?
• Identifying Game Changers
• 10 Tests to Assess Your Strategies

The power of alignment can be seen in the results Baldrige Award winners deliver, a sampling of which you can review here. These organizations prove that alignment is critical to performance excellence.

A recent study by IndustryWeek and MESA International showed the frequent disconnect between objectives and metrics throughout manufacturing companies. The chart shows that only about a third of respondents believe their objectives and metrics are well or very well aligned across their companies. In which category would your organization fall?

One of the interesting results of the survey was the discrepancy among positions of those who “always” leverage metrics to improve performance: 28% of senior leaders said they did, 35% of department heads, and 50% of team leaders or supervisors. At the “staff” level, 40% claimed they always leveraged metrics. IndustryWeek tried to explain the low figure for senior leaders as agreement with W. Edwards Deming’s caution against running a company on visible figures alone, but the survey doesn’t say anything about just using metrics to improve performance. Senior leaders who don’t leverage metrics to improve performance are missing critical information that has been proven to make their organizations—and their leadership—more successful.

To read more about performance measurement and alignment, click on these articles:

• KEYSTONE: Alignment and Integration
• Baldrige and Superior Execution
• Strategy Deployment at MEDRAD
• 10 Critical Questions: Data, Information & Knowledge
• Core Value: Management by Fact

1. 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.
2. 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.).
3. Employee Satisfaction Index. This index may include casual absenteeism, complaints/grievances, voluntary turnover, employee focus groups, overtime, and employee survey data.
4. 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 do, such as preparing budgets, attending meetings, learning about new programs, etc.; and, (c) programs – management programs such as Six Sigma, balanced scorecard, and strategic planning. The goal is to minimize administrative requirements and time spent on management programs.
5. Trust Index. The index addresses honesty and integrity and may include an outside review board’s review of major decisions and performance, audits by objective outside organizations, and the communication of clear rules to employees.
6. Aggravation Index. The index looks at how difficult it is to do business with your organization. Brown uses an airline example that includes measures of how long customer wait on hold when calling the airline, how long it takes them find needed information on the website, the number of calls that are accidentally disconnected, lost luggage, and delayed flights.
7. Supplier/Partner Index. Factors in this index include the criticality of supplier to mission, ease to work with, supplier knowledge of your organization/products/services, responsiveness, timeliness, and quality of goods/services.
8. Project Management Index. Submeasures include budget/cost performance, schedule/milestones met, quality/performance, and innovation. Brown explains how to weigh the factors to create the index.
9. Intellectual Capital Index. This goes beyond the number of hours employees are trained or the percent of individual development plans completed, which don’t tell you if employees have the skills they need for the organization to be successful. Brown provides an example of a client who has employees and their managers rate their competency levels.

To read more about balanced scorecards and measurement, click on these articles:

• Core Value: Management by Fact
• How to Develop a Balanced Scorecard
• Aligning with Strategies & Measures
• Product Performance and Process Effectiveness Results

The question leaders of organizations, business units, divisions, departments, and teams need to continually ask is: What is truly important? Baldrige can help you answer that.

One way to summarize the answer is with a Strategy Tree. In “Strategy on One Page,” Anthony Tjan presents an alignment tool that starts with the purpose of your organization’s existence and links to your results and how you will measure progress. The questions summarize the big picture by identifying and linking:

1. Mission and vision: What is your organization trying to achieve?
2. Value proposition: What do you have this is different and appealing to your target customers?
3. Customers: What are your key customer and market segments—and why?
4. Results: What are your key customer and financial metrics?

“Start with the purpose and objective of the ‘why’ and the ‘what,’ and move through the ‘who’ your business will target and ‘how’ to measure progress, and you will get better alignment, faster—which hopefully translates into better results,” writes Tjan. “Common sense, not commonly done.”

To read more about the four areas on this Strategy Tree, click on these articles:

• An Achievable Mission and Vision
• Know Your Value Proposition
• Who Are Our Customers and What Do They Require?
• How Do We Know That?

Your organization needs processes for:

• Selecting, collecting, aligning, integrating, and communicating data and information for tracking daily operations and organizational performance
• Selecting key comparative data and information and voice-of-the-customer data and information and using it to support decision making and innovation
• Ensuring that your performance measurement system can respond to rapid and/or unexpected change
• Reviewing organizational performance and capabilities, including using key performance measures and the analysis of those measures
• Sharing lessons learned and best practices identified during organizational performance reviews across the organization
• Using organizational performance reviews to project future performance and to develop priorities for continuous improvement and innovation

Best practices to consider:

• Develop a performance measurement system, the most common of which is a balanced scorecard, that defines how data and information will be selected and collected, aligns key performance measures with the organization’s mission, vision, and strategic objectives, and communicates performance throughout the organization.
• Role model organizations use comparative data and information for as many key measures as possible to provide context for their performance, helping them understand how good they are and how good they can be.
• Senior leaders and managers manage by fact, using data on key measures during organizational reviews to assess performance, make decisions, and adjust course.
• After their organizational performance reviews, senior leaders communicate performance on key measures, decisions made, and actions taken to all employees.

Common problems areas:

• No process exists for identifying key performance measures or communicating performance on them.
• Different measures are used in different parts of the organization, obstructing alignment and making it more difficult to complete action plans and achieve goals.
• The organization does not seek comparative data, which means it has no idea how well it is doing or how good it can—or should—be.
• During organizational performance reviews, senior leaders focus heavily on financial results rather than on the performance in key areas that drive financial results.

To learn more about other areas of the Baldrige model, click here.

To read more about developing a robust performance measurement system, click on these articles:

• Smart Question #2: How Do We Know That?
• Aligning with Strategies and Measures
• How to Develop a Balanced Scorecard
• Communicating Performance on Key Measures
• Transforming Measurement

A few years ago, I co-authored a white paper outlining The Three Keys to Six Sigma Success.  The paper concluded that, by focusing on the key principles of project selection, securing executive support, and executing the DMAIC method, quality practitioners could increase their overall project success rate. This is proven to be true time and again.

I know what you’re thinking: “OK, but these principles are neither ground-breaking nor new”—and you’d be correct. But what was fairly new at the time was Minitab’s process improvement software, Quality Companion. The all-in-one application supports continuous improvement activities across different levels of a quality program as well as many stages of improvement projects. By summarizing our voice of the customer research into a white paper, we were able to easily draw parallels between the keys for success and Companion’s features, tools, and forms.

Since then, Quality Companion has been updated with Lean Six Sigma support features, including Value Stream Mapping, and its user community continues to grow as does Minitab’s plans for ongoing software enhancements.

So, now you’re probably thinking: “Why is she writing about Lean and Six Sigma on a website that’s focused on Baldrige?”

Because, at their core, Lean, Six Sigma, and the Baldrige model are all systematic approaches to performance excellence. Regardless of the methodology in which you’re currently engaged, Companion can help you build on that systematic approach and improve how you manage projects. I suggest that you owe it to yourself to find out more.

Click the “See It. Improve It.” button on the right to discover why so many quality practitioners use Minitab to analyze their data and use Quality Companion for everything else.   Be sure to download a free 30-day trial of Companion, watch a few videos in the Minitab Theater, and sign up for free webinars.