The question: How do you solve the top CEO challenge identified by The Conference Board for the last five years?

That challenge is superior execution. According to an article by Accenture in June 2011, available here: “As companies resume the quest for profitable growth and high performance in the upturn, they can no longer afford to ignore the role of process in delivering value to their customers.”

The Baldrige model is a process model. Six of the seven categories in the model ask how you do what you do and what you do to manage and improve those processes, and the seventh category asks for the results of your processes. Companies that integrate the Baldrige model have identified their key processes, understand their value streams, align work with strategy, focus on what is truly important for success, and continually improve their processes. They use Baldrige to achieve what Accenture believes is a four-step journey to process management:

1. Link strategy with execution. The Baldrige model demands alignment of processes with stakeholder requirements, action plans with strategies and objectives, and strategies with the company’s mission and vision. If you want first-hand experience with the power of alignment, read the application summary of a Baldrige Award winner.
2. Eliminate unnecessary complexity. One of the benefits of evaluating your management system using the Baldrige model is that it reveals unnecessary complexity, exposing issues for senior leaders to prioritize and address.
3. Transform in the right way. Senior leaders often face too many problems and too many options to feel confident about the right path forward. A Baldrige assessment identifies the most significant opportunities for improvement, using criteria considered the world-class standard, that senior leaders can tackle to move their companies in the right direction.
4. Sustain process improvement. This includes developing “a formalized process capability in the workforce,” according to Accenture, and “an appropriate structure to guide employees’ efforts.” Companies that integrate Baldrige become process focused, with approaches that produce long-term process capability through the Baldrige structure, which guides not just employees’ efforts but those of managers and senior leaders as well.

As the authors conclude, “Turning processes into drivers of long-term competitive advantage will require a combination of determination, discipline, and dedication. For most companies, it will also involve radical culture changes that few will find painless. The rewards, however, in terms of effectiveness, efficiency, and predictability, will be well worth the effort.”

To read more about the rewards of integrating Baldrige, click here.

To read more about how to integrate the Baldrige model, click on these articles:

• How to Integrate Baldrige
• Baldrige Model Item by Item
• 10 Steps to World Class
• Baldrige Consulting

It’s an approach Honeywell took in the mid-1990s with measurable results. As the average scores of its internal Baldrige assessments improved, so did its operating profit.

Tata companies has also internalized the Baldrige process, which is managed by Tata Quality Management Services (TQMS). The description of the Tata process from its Web site sounds exactly like the Baldrige application process:

Through TBEM, TQMS helps Tata companies gain insights on their strengths and their opportunities for improvement. This is managed through an annual process of applications and assessments. Each company writes an application wherein it describes, in the context of the TBEM matrix, what it does and how it does it. This submission is then gauged by trained assessors who study the application, visit the company and interact with its people. The assessors map out the strengths and improvement opportunities existing in the company before providing their feedback to its leadership team.

TQMS trains and certifies assessors, who are selected from across the group, and it designs and administers an assessment apparatus that helps them evaluate different Tata companies. The contact point person in each company is the “corporate quality head,” nominated by the CEO as the business excellence process owner. Typically, each company has a network of business excellence people from a variety of functions and locations.

The commitment a company makes when it signs the Brand Equity and Business Promotion contract compels it to attain explicit business excellence scores over specific time periods. A result-driven scoring mechanism enables the company to track its progress over time and ensure that it keeps improving. There is also an annually administered, group-wide recognition system for companies that exceed a certain score, thereby reflecting excellence, industry leadership and consistent improvement.

Implicit in the TQMS approach is the belief that its wide-ranging methodology will enable Tata companies to become exemplars—on business as well as ethical parameters—in their respective spheres.

You can learn more about Tata’s stellar approach here.

JJ Irani, chairman of Tata Quality Management Services, was given a mandate by Tata’s chairman in 1994 to institutionalize quality in the Tata group. In an interview on the Tata Web site, Irani was asked how quality pays. He replied: “Quality must be in the DNA of an organization; it must be inherent in all activities of a company and its employees. Without quality, an organization cannot survive and there cannot be any advancement for employees or surpluses for the organization.”

Tata has adopted the Baldrige model and application/assessment process as the means to institutionalize quality for the past 18 years. It is a role model for how even the largest organizations can achieve and sustain excellent performance.

To learn more about how to integrate the Baldrige model, click on these articles:

• 10 Steps to World Class
• How to Integrate Baldrige
• Baldrige Core Values
• Baldrige Model Item by Item
• Baldrige Gets Results

The state programs provide excellent local support for organizations that are integrating the Baldrige model. Like the national program, organizations submit applications based on the Baldrige Criteria that are evaluated by trained examiners. Unlike the national program, state programs typically offer levels of awards that range from recognition for starting the journey to a gold-level award similar to the Baldrige Award. State programs often provide training and support to help organizations at all stages of the journey.

Many Baldrige Award winners started with their state programs, identifying and addressing opportunities for improvement until they received their states’ highest awards, at which point they applied for the Baldrige Award. In that way, state programs are like a baseball farm system, providing more personal and hands-on instruction and guidance to prepare organizations for the national stage.

Despite the valuable service they provide, state award programs struggle to stay in business: It wasn’t that long ago that 42 states offered Baldrige-related programs. The marketing difficulties of the national program extend to the state programs, each of which must fend for itself within the business and economic climate of the area it serves.

One example of a thriving state program is the Quality Texas Foundation (QTF), which recently announced an agreement with the Dubai Quality Group “to promote the principles of quality and excellence through training, organizational assessments, and the exchange of information,” according to AMEinfo.com, and to “explore ways that would benefit the shared vision of the two parties.” As QTF CEO Bill Denney explained, “This new relationship is another important milestone for Quality Texas Foundation, particularly in our campaign to strengthen our network of national and international allies to help us better serve our customers.”

Every state program exists to help the organizations in its state improve performance. Check out the Alliance Web site here to find out if your state offers a Baldrige-related program and, if it does, to visit your state program’s site to learn more about how it can help your organization improve.

To read more about the value of state programs, click on these articles:

• Baldrige Benefits the U.S.
• “America Needs Baldrige”
• Baldrige State Program Site Redesigned
• Organizational Improvement Training
• First Steps on the Baldrige Journey

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 and behaviors found in high-performing organizations. If your organization shares these values—or wishes to demonstrate them—it would benefit from integrating the Baldrige model. The core values are visionary leadership, customer-driven excellence, organizational and personal learning, valuing workforce members and partners, agility, focus on the future, managing for innovation, management by fact, societal responsibility, focus on results and creating value, and systems perspective.

How do organizations use the Criteria?

Organizations that wish to integrate the Baldrige model assess the performance of their management systems by answering the questions in the Baldrige Criteria. This can be done as a self-assessment or as an application for a state award, the Baldrige Award, or international award programs. You can find out more about state and local award programs here, the Baldrige Award here, and international programs here.

How is a Baldrige assessment or application scored?

Responses to the Criteria questions are evaluated to determine the quality of the process or the results being described. The first six categories in the Baldrige Criteria ask about processes while the seventh focuses on the results of those processes. Processes are evaluated on four factors: approach, deployment, learning, and integration. Results are also evaluated on four factors: levels, trends, comparisons, and integration.

How can I find out more about the Baldrige Criteria?

The best sources of information about the Criteria are the booklets that contain the Criteria questions and descriptions, explanations of the core values, scoring guidelines, and more. You can find links to the 2011-2012 Criteria here.

To see how organizations respond to the Criteria questions, read the award application summaries of Baldrige Award recipients. Although the Criteria from previous years may differ slightly from the current Criteria, the Award winners’ responses demonstrate the quality of their processes and results and provide expert guidance on how to answer the Criteria questions. Just click on the “award application summary” links on the list of previous winners here.

To read more about the Baldrige model and Criteria, click on these articles:

• Baldrige Gets Results
• How to Integrate Baldrige
• Baldrige Core Values
• Learn from the Best: Application Summaries
• Scoring a Baldrige Application
• 10 Tips for Answering Criteria Questions

• Why aren’t we performing better?
• What are our biggest opportunities to improve?
• How can we prepare the organization to compete in the future?
• How good are we, really?

You can answer these questions and more with a Baldrige assessment. With an assessment, you ask and answer more than 130 questions about all aspects of your management system, about how you do what you do. The result is a comprehensive snapshot of your organization at a moment in time that reveals the strengths upon which you can build and the opportunities for improvement that can make your organization perform better.

A Baldrige assessment typically takes more than three months. If you do it internally, it usually involves one or two people full-time or a half-dozen or more part-time. If you hire a Baldrige expert to do the assessment, it can cost $50,000 or more. In my experience, both the time and money commitments are smart investments because of the bottom-line benefits of a Baldrige assessment including:

• Getting a clear and complete picture of your management system
• Identifying your organization’s strengths and opportunities for improvement
• Comparing your organization’s performance to world-class standards
• Using the assessment and evaluation to get consensus on priorities and next steps
• Involving leaders and managers in a systematic approach to improving performance
• Focusing the organization on what it must do to excel

While these benefits appeal to most leaders, not every organization wants to commit the time or money for a full-blown Baldrige assessment. For those organizations, we offer Baldrige feedback in 30 days for less than $10,000. You can find out more by clicking on the black box at the top right of this page.

As 2011 approaches, you can use a Baldrige assessment to figure out what you need to address in the new year and how you can make 2011 better than 2010. The purpose of a Baldrige assessment is to improve performance by improving results. To do that, you need to know where to look to find the greatest opportunities.

A Baldrige assessment is a proven tool for finding those opportunities and explaining why they matter in the context of your organization’s management system, mission and vision, industry and marketplace, and goals and strategies for the future.

To learn more about getting Baldrige feedback in 30 days, click here.

To read more about Baldrige assessments, click on these articles:

• America Needs Baldrige
• A Baldrige Leader
• Baldrige Gets Results
• 10 Steps to an Effective Baldrige Assessment
• What Differentiates Baldrige Award Winners (Part 2) (Part 3)

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 space where industry boundaries are defined and accepted and competitive rules are generally known. Blue oceans represent all the industries not in existence today. Basically, this is the unknown—or at least untouched—market space.

“In blue oceans, competition is irrelevant because the rules of the game are waiting to be set,” they write. As a result, companies can set prices where the market will bear them without having to consider competitive offerings (at least not at the outset). Growth and profit are enhanced, according to Kim and Mauborgne, when organizations swim in blue oceans instead of red. Southwest Airlines, Cirque du Soleil, and Apple come to mind.

The authors suggest six principles for creating blue ocean strategies:

1. Reconstruct market boundaries. By redefining how you define “market,” you open up potential blue oceans.
2. Focus on the big picture, not the numbers. Create strategic plans that are less about numbers and jargon and more about a vision for future success.
3. Reach beyond existing demand. “Aggregate demand, not by focusing on differences that separate customers but by building on the powerful commonalities across non-customers to maximize the size of the blue ocean.”
4. Get the strategic sequence right. Follow a process that allows you to move from buyer utility to pricing to cost structure to market adoption to implementation.
5. Overcome key organizational hurdles. Build leadership to manage the new business model.
6. Build execution into strategy. Integrate a blue ocean culture for sustained performance and constant evolution.

How do you implement these principles? Increase value for customers and drive costs down for the company. The difference from traditional economics is that blue ocean strategies require changing the business model rather than just the product or service. Think Southwest. It didn’t just change the core product (your flight): It changed virtually everything else in the business model that surrounded that product.

Brian S. Lassiter

President, Minnesota Council for Quality

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 close with questions about how you identify current and future customer groups and markets, how you determine which customer groups and markets to pursue, how you identify and anticipate key customer requirements and expectations, and how you use this information to improve marketing and identify opportunities for innovation.

Still, as Martin suggests, it’s important to focus all of these strategic and customer processes on where you play and how you propose to win, or how you propose to excel if your organization is a school, nonprofit, or government agency. That’s a leadership development and strategic planning issue. “A good strategy is the product of the creative combination of two disparate logics rather than a single linear analytical logic flow,” writes Martin, “but CEOs and ‘strategists’ are seldom conditioned to become skilled at the requisite creative combination.”

To read more about strategic planning, click on the following articles:

• Anticipating Disruptive Change
• What Are Your Critical Success Factors?
• Identifying Capabilities Your Organization Needs
• Know Thyself—and Act Accordingly