All Posts Tagged With: "performance excellence"
Find Your Blue Ocean
This is a guest article by Brian Lassiter. If you want to contribute an article to Baldrige.com, check out the guidelines here.
In a recent talk, Bill Mills, CEO of Executive Group, claimed that “organizations are perfectly designed to get the results they are getting.” I think that’s a compelling thought. If you’re struggling right now, blame it not on the economy but on your business model—one that may not be appropriate for today’s environment. Bill’s premise—and I completely agree—is that success is largely due to an organization’s strategic positioning in the marketplace: being at the right place at the right time to capitalize on a market need, to create value for a set of buyers, and to benefit from the flow of resources (money).
But Bill goes on to claim that strategic positioning may only be part of the equation: Success is also based on an organization’s ability to create a business model that fully capitalizes on that market need. In other words, just being at the right place at the right time doesn’t ensure success.
Enter the notion of a “blue ocean strategy.” In their book by that name, W. Chan Kim and Renee Mauborgne ask readers to imagine a market universe composed of two sorts of oceans: red oceans and blue oceans. Red oceans represent all industries in existence today; it is the known market…
25Jan2010 | Brian Lassiter | 2 comments | ContinuedWhere to Play and How to Win
What makes a good strategy? According to Roger Martin, Dean of the Rotman School of Management at the University of Toronto and author of The Design of Business, it is two fundamental, reinforcing choices: where and on what basis you will compete.
In “Why Most CEOs Are Bad at Strategy” (Harvard Business Review, January 6, 2010), Martin argues that most executives and strategy consultants are good at strategic analysis but not at strategy, which requires creative insight. “Strategy is a creative act,” he writes, “and the way to produce good strategy is to go beyond basic analysis to creatively integrate your choices concerning where you play and how you propose to win.”
The Baldrige Criteria ask a number of questions to guide your strategic choices including:
- How do you identify potential blind spots in your planning?
- How do you address long-term sustainability?
- How do you determine your strategic challenges and advantages and your core competencies?
- How do your strategic objectives address them?
- How do your strategic objectives address your opportunities for innovation?
The focus of the Criteria leans more toward analysis than creative insight. That’s not to say that Baldrige Award recipients haven’t excelled at figuring out where to play and how to win, but integrating these choices creatively to plan the most promising course of action is not something the Criteria specifically request. The Customer Focus category comes…
21Jan2010 | Steve George | 0 comments | ContinuedGreat or Just Lucky?
We study the steps taken by high-performing organizations to understand what they do well and how we can make our organizations better. That may be our first mistake.
A provocative report by Deloitte claims that the best practices of “great companies” may be more instructive as fable than fact. In “A Random Search for Excellence,” available here, Michael E. Raynor, Mumtaz Ahmed, and Andrew D. Henderson argue that success studies such as Good to Great, Built to Last, and In Search of Excellence are just as likely to be studying lucky companies as good ones.
“It’s only too likely that whatever benefit practitioners have realized has been distressingly haphazard, the consequence of a form of placebo effect (you expect it to help, so you perceive that it does, quite independently of any true causal connection), a Hawthorne effect (the mere act of focusing on something you were neglecting improves performance regardless of what motivated the increased attention), or luck (even a broken clock is right twice a day).”
The report backs up this assertion with detailed analysis of more than 230,000 firm-year observations using a “regression algorithm to create an ROA value stripped of everything but firm-level, or management, effect.” You’ll have to read the report to understand what that means, and even then it’s a struggle.
In the end, the authors don’t suggest that…
13Jan2010 | Steve George | 0 comments | ContinuedThe Best-Performing CEOs in the World
Whenever you see a list like this, you know that “best-performing” means best stock performance. As an article on the latest ranking by Harvard Business Review notes, “shareholder return is not the only measure of performance, and it omits contributions companies make to a wide group of stakeholders. But it is the fundamental scorecard for CEOs of public companies. And it’s the same scorecard for everyone.”
So it’s “best-performing” in a very limited sense that makes it possible for the authors to create a list claiming that these are the best-performing CEOs in the world as long as you look only at shareholder return which, according to the authors, is but one measure of performance. If you still think such a list has any value, you can find the list here and the article explaining it here.
One interesting observation from the survey is that insiders who become CEOs tend to do better than outsiders, ranking, on average, 57 places higher than outsiders in the full list.
The authors also created a list of CEOs whose companies performed well after they left. I would think this is a good indicator that the CEOs had helped develop sound management systems that would support continued performance beyond changes in leadership.
Only four of the top 10 are Americans. James Houghton of Corning came in at #8. I…
29Dec2009 | Steve George | 0 comments | ContinuedWhat Matters Now
Author and blogger Seth Godin got 70 big thinkers to share an idea to consider in the year ahead. Each contributor chose a word and then described why it is important. Godin compiled them in a free e-book called What Matters Now, available here.
My favorite Baldrige-related words, with excerpts from their explanations, are:
- Vision. “Vision is the lifeblood of any organization. It is what keeps it moving forward.” Michael Hyatt, CEO, Thomas Nelson Publishers
- Excellence. Tom Peters lists the 19 E’s of Excellence including execution, empowerment, engaged, and encompassing.
- Unsustainability. “We really need to focus on raising the costs of the unsustainable systems that represent the unsustainable status quo” like failed educational systems, obesity-producing systems, energy systems, transportation systems, and health care systems. Alan M. Webber, co-founding editor of Fast Company magazine
- Autonomy. “If we want engagement, and the mediocrity-busting results it produces, we have to make sure people have autonomy over the four most important aspects of their work” – task, time, technique, and team. Daniel H. Pink, author of A Whole New Mind.
- Power. “Stop waiting around for bosses and companies to get better and complaining about how you are treated,” wrote Jeffrey Pfeffer, professor at Stanford Business School. “Build the skills—and use them—that will permit you to create the environment in which you want to live.”
- Productivity. “Don’t worry too much about getting things…
Weapons and Performance Excellence
In the last three years, five healthcare organizations have won the Baldrige Award. Over the same span, three organizations that design, manufacture, and/or distribute weapons have also won the Award. Since there have only been 13 winners, that’s a significant number.
- The U.S. Army Armament Research, Development and Engineering Center develops 90% of the Army’s armaments and ammunition.
- Honeywell Federal Manufacturing & Technologies manages a plant that supplies 85% of the non-nuclear parts that go into a typical nuclear weapon.
- MidwayUSA offers shooting, reloading, gunsmithing, and hunting products from more than 700 vendors.
I can think of a lot of industries I would rather see leading the Baldrige charge. Airlines, insurance companies, banks, and schools come to mind. The performance of the weapons industry certainly reflects the priorities of American culture and politics, but that doesn’t make it any less disturbing. I don’t think the fact that we are becoming more efficient at killing things is any cause for celebration.
What do you think?
11Dec2009 | Steve George | 0 comments | ContinuedTracking Your Baldrige Journey
In the 1990s, Honeywell created an internal award program, based on Baldrige, called the Honeywell Quality Value (HQV). Each year, business units submitted HQV applications. Internal examiners evaluated the applications to identify strengths, opportunities for improvement, and scores. Honeywell tracked the scores. After a few cycles, they graphed the scores to see if there was a correlation with key financial measures.
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,…
4Dec2009 | Steve George | 0 comments | Continued
