All Posts Tagged With: "revenue"
Baldrige and Financial Performance
Leaders looking for reasons to consider integrating Baldrige should be aware that the Baldrige model focuses on results. Whatever your organization’s goals, evaluating and improving your management system through regular Baldrige assessments will help you achieve them.
You can test the validity of that statement by looking at the results of organizations that have received the Baldrige Award. In this article, let’s consider the key financial results of a sampling of Award recipients:
- Maintained steady per-bushel costs from FY2006 to FY2008 despite 50-80% increase in energy costs, 30% increase in chemical costs, and 10% increase in maintenance costs (Cargill Corn Milling)
- Per-pupil expenditures among the lowest in North Carolina while being ranked academically in the state’s top 10 school systems (Iredell-Statesville Schools)
- Average charge $2,000 lower than that of its main competitor (Poudre Valley Health System)
- Revenue per associate approximately $4 million, nearly four times the IndustryWeek 90th percentile benchmark (PRO-TEC)
- Revenue increase from $33 million in 1989 to $847 million in 2006 (Mercy Health System)
- Increased revenue by 56% from 2001 to 2006 (Sharp HealthCare)
- Overall revenue increased from $640 million in FY2001 to over $1 billion in FY2007 (ARDEC)
- Operating margin grew from 35% in 2003 to 50% in 2006, while operating expenses remained well below those of its…
Employee Satisfaction Pays — Big Time
I’ve seen this story several places and it shows a correlation few understand. In the early 1990s, Sears was losing as much as four billion dollars a year on $50+ billion in sales. It used the employee-customer-profit chain to assert that revenue creation starts with employee attitudes and satisfaction, which affects customer satisfaction, which affects revenue and profits. It made this assertion believing the correlation to be true, and then it set out to prove it.
Nearly three-fourths of its workforce was part-time and turnover among this group was high. To understand why, Sears began surveying employees about their attitudes and satisfaction and correlating the results with customer satisfaction results and financial data. They got their proof.
According to the data, a five-point improvement on their employee attitude scale produced a 1.3% improvement in customer satisfaction, which, in turn, boosted revenue by 0.5%. On sales of $50 billion, that’s an increase of $250 million a year!
And the benefits don’t stop there. More satisfied employees work for Sears longer, which reduces turnover and lowers the costs associated with finding, hiring, and training new employees. More satisfied employees also recommend the company to family and friends, which increases sales.
In other words, Sears discovered that…
13Aug2009 | Steve George | 0 comments | Continued
