All Posts Tagged With: "performance measurement"
Baldrige and Quality Results
In earlier articles, we listed some of the world-class financial, customer, and workforce results achieved by Baldrige Award recipients. Another area where they excel is in the quality of their work processes:
- Cost savings from increased productivity and deployed innovations of $23.5 million to $27 million annually for past three years (Honeywell Federal Manufacturing & Technologies)
- Cost savings from process improvement increased from $8 million in 2005 to more than $25 million in FY2009 (Heartland Health)
- Error-free delivery rate of 99% or better from 2005 to 2008 (Cargill Corn Milling)
- In 2006, average charge $2,000 lower than that of its main competitor and $7,000 lower than the Denver metropolitan area (Poudre Valley Health System)
- Crime rate cut in half over the last ten years (City of Coral Springs)
- Achieved overall Lean/Six Sigma improvements in quality (91%), cost (70%), schedule (67%), and risk (84%) with an overall cost avoidance of $3.22 billion since 2001 (U.S. Army Armament Research, Development and Engineering Center)
- Delivered services within 3 days of customer request compared to 40 days for competitors (Boeing AS)
- Quality ratings 21% higher than closest competitor (Motorola CGISS)
- 1 error in every 3,325 transactions—and 18 seconds between placing and receiving an order compared to competitors’ 70 sec. (Pal’s Sudden Service)
To find out more about world-class performance, read:
- Baldrige and Financial Performance
- Baldrige and Customer Results
- Baldrige and Workforce Results
- 10 Critical Questions: Results
What Are Your Critical Success Factors?
The Baldrige Criteria ask: “What are the principal factors that determine your success relative to your competitors?”
With a little thought, most leadership teams can answer the question fairly easily. As with all things Baldrige, however, a quick response misses the underlying process question: How do you determine what those critical success factors (CSFs) are? Just because leaders brainstorm CSF candidates and agree on the final list doesn’t mean it’s the right list, any more than assuming you know what your customers expect is actually what they expect. You need a process for identifying your organization’s critical success factors because so much of what you do—strategic planning, performance measurement, process management—is aligned with those factors.
In “Finding your organization’s critical success factors—the missing link in performance management” (pdf), David Parmenter describes such a process whose goal is to define five to eight relatively specific CSFs. Some organizations, including some Baldrige Award recipients, use broad terms to describe their CSFs. For example, North Mississippi Medical Center (NMMC), which won the Award in 2006, has five CSFs: People, Service, Quality, Financial, and Growth. Parmenter argues that a CSF should clarify what is expected of all employees, and he gives a few examples:
- Delivering in full, on time, all the time, to our key customers
- Finding better ways to do the things we do everyday
- Maintaining a safe, happy, and healthy workplace
- Implementing innovative ideas from staff quickly
- Increasing repeat business from key customers
- Attracting quality staff to the…
10 Steps to World Class
What are the characteristics of a high-performing organization? What do they do or how do they act to distinguish themselves? What can your organization do to join their ranks?
The Baldrige model has identified the beliefs and behaviors of high-performing organizations. These 11 core values and concepts, embedded in the Baldrige Criteria and in Baldrige Award recipients, are essential to achieving performance excellence. You can find the complete list here and an explanation of each in the Criteria booklets here.
So how do you get your organization from where it is today to world-class status? Twenty years of Baldrige reveal the steps you can take to create a high-performing organization:
- Lead the transformation. It won’t happen without leaders committed to excellence, and it won’t happen without recognizing that the steps you take will transform your organization. Plan the journey, communicate the plan, measure progress, and facilitate change.
♦To learn more, read Is Baldrige Right for Your Organization, 10 Critical Questions: Senior Leadership, and An Achievable Mission and Vision; - Develop management system experts. You will need these experts to help focus resources and attention on what must happen along your journey. Take a few existing or rising stars and ask them to be Baldrige or state award examiners for at least three years. The training and experience they get will give you the internal expertise you need.
♦To learn more, read How to Become a Baldrige Expert, Make Yourself More Valuable, and The Value of…
Reinventing Education with Baldrige
In the United States, one-third of eighth graders are proficient in reading. One-third of high school students do not graduate on time. One-third of first-year college students require remediation in either math or English.
Is it any surprise that one-third of K-12 teachers approve of how their schools are run?
The figures come from a study of school performance by the U.S. Chamber of Commerce, the Center for American Progress, and Frederick M. Hess of the American Enterprise Institute. The fact that these three organizations can write a report together when they rarely agree on anything suggests that this is not just a right-wing or left-wing issue.
The study evaluated state performance in eight categories: school management; finance; staffing—hiring and evaluation; staffing—removing ineffective teachers; data; pipeline to postsecondary; technology; and state reform environment. You can see how your state did here. You can read about the methodology behind the grades here.
The report offers a blunt assessment: “Our school system needs far-reaching innovation. It is archaic and broken, a relic of a time when high school graduates could expect to live prosperous lives…And while the challenges are many—inflexible regulations, excessive bureaucracy, a dearth of fresh thinking—the bottom line is that most education institutions simply lack the tools, incentives, and opportunities to reinvent themselves in profoundly more effective ways.”
The report’s sponsors “propose a framework for change intended to address the structural problems facing our nation’s education systems.” Someone should have…
10Nov2009 | Steve George | 0 comments | ContinuedInterpreting Results
The results reported in Category 7 of a Baldrige application should show current levels of performance, trends, and comparisons. They should address what is important to your organization as described in the first six Categories and the Profile and they should include valid indicators of future performance.
Consider this chart.
It shows current levels of performance and a trend over a longer period of time than most organizations display. When performance shows this kind of variability, some organizations include a trend line to clarify the direction this measure is heading, although, in this case, the direction is pretty clear.
The “organization” in this chart happens to be Earth, with temperature data from the National Climatic Data Center. “Normal” is the average temperature from 1901 to 2000. In an article in the October 27, 2009, StarTribune (“Statisticians downplay the notion that the Earth is really cooling”), Seth Borenstein includes this chart as evidence of global warming.
Of course, in the interest of impartiality despite all evidence to the contrary, he quotes Don Easterbrook, a Western Washington University geology professor, who said, “I don’t argue with you that the 10-year average for the past 10 years is higher than the previous 10 years. We started the cooling trend after 1998.”
Actually, even after a warm 1998 we’ve continued to get warmer, as this chart shows.
As Deke Arndt, NOAA climate monitoring chief, said, “The last 10 years are the warmest 10-year period of…
27Oct2009 | Steve George | 0 comments | Continued10 Critical Questions: Data, Information & Knowledge
You manage what you measure, which is why, for decades, leaders managed their companies’ financial performance: They reviewed financial data regularly and other types of data sporadically if at all.
Category 4 in the Baldrige Criteria asks how you measure organizational performance, which for most organizations involves some type of balanced scorecard. It asks how you analyze and review performance and how that leads to performance improvement. And it asks how you manage your information, organizational knowledge, and information technology.
As we noted, the best way to evaluate your measurement system—and your management system—is through a Baldrige assessment using the Baldrige Criteria. You can find out how to do that here.
The Criteria consist of powerful questions, rarely asked, about how an organization functions. If you cannot do a full assessment but want insight into how to improve your measurement system, here are 10 critical questions to ask and answer:
- How do you select and collect the data and information you use to track (1) daily operations and (2) overall organizational performance, and how do you align and integrate these data?
- What are your key organizational performance measures?
- How do you select and use comparative data and information to provide benchmarks for these measures and to support decision making and innovation?
- How do you review organizational performance and capabilities, including competitive performance and progress on your strategic objectives and action plans?
- What analyses do you perform to support these reviews and to ensure…
