It’s Not That Simple

Posted by Harry Hertz, the Baldrige Cheermudgeon

I have recently read numerous copies of the same short blog post on different web sites. The blog post says there is one simple question to ask that will give your organization

a competitive business competitionadvantage if you act on it quickly. The question is: “What do your customers want more than anything?” While listening to customers and meeting or exceeding their desires is a key consideration in strategy, the 2015-2016 Baldrige Criteria for Performance Excellence provide a systems perspective to organizational performance leadership and strategy that cover all dimensions contributing to ongoing organizational success. So at the risk of complicating what has been put forward as a one question path to success, let me propose five additional questions to consider.

1. What is your organization’s vision?

What is your organization’s North Star? Where do your leaders envision the future of your organization will be? What is your organization striving to become?

2. How are you thinking strategically?

How are you scanning your environment to understand opportunities and threats? How are you looking for blind spots that could surprise you? How do you remain agile, so you can address technological or economic changes?

3. What are your work systems for the future?

How will you efficiently produce your products and services in the future and protect your intellectual property? What work will be done by your employees? What will you do through partnerships, outsourcing, or your supply chain?

4. How are you building organizational knowledge?

How are you capturing the knowledge of your employees and sharing it in your organization? How are you helping your employees learn and develop for the future? How are you innovating?

5. How are you assuring the resources to implement your plans?

How are you making the finances and people available to make sure you can accomplish your plans?

Is your organization set for success? Are you looking at customer desires only or are you addressing all six questions? If you would like to hear from some organizations that are addressing all six questions in role model fashion, join us at Quest for Excellence 27!

 

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How Do You Harness the Power of Benchmarking?

Posted by Dawn Marie Bailey

A few years ago, Director Emeritus Harry Hertz of the Baldrige Program wrote the short brochure “Baldrige Asks, ‘How do You Know?'” to make the case that the Baldrige Criteria for Performance Excellence can guide an organization in knowing whether it is high-performing and innovative, whether it is achieving world-class performance, and whether it is satisfying its customers and keeping its competitors at bay.

But, obviously, to answer the question you have to know what best practices and results are out there, among your competitors and among organizations in other industries. The Criteria define benchmarking as identifying processes and results that represent
best practices and performance for similar activities, inside or outside your industry. If you don’t benchmark, how will you know? But how do you make benchmarking an efficient, value-added activity and not just something else to do?

At the upcoming Quest for Excellence® conference, we’ll have an opportunity to learn how story_slide02dat “The Power of Benchmarking” with Allyson L. Young, SPHR, HR & Brand Director of Baldrige Award recipient K&N Management, whose vision is “to become world famous by delighting one guest at a time.” Her top-three tips on benchmarking:

  • Benchmarking is critical to maintaining a competitive edge. Studying best practices keeps you ahead of the game.
  • Effective benchmarking creates beneficial partnerships and networking opportunities.
  • Internally benchmarking best practices is as effective as externally benchmarking in driving continuous improvement.

KN - 2119K&N Management received the Baldrige Award in the service industry, where its Rudy’s Country Stores and Bar-B-Q Mighty Fine Burgers, Fries and Shakes, as fast-casual restaurants in the Austin, TX, area, have significantly outperformed local competitors and national chains. Within the service industry, Young offers three key ways that organizations can benefit from use of the Baldrige framework:

  • The Baldrige Framework promotes innovation, which promotes learning and continuous improvement in every part of the organization.
  • Many small businesses, especially restaurants, are family-owned-and-operated and are simply reactive to the environment. When applying the Baldrige Framework, leaders become more disciplined in terms of long-term thinking, which results in being more proactive in problem solving and continuous improvement.
  • Many business owners are concerned about their future and sustainability. The Baldrige Framework provides the guidelines for operational excellence, which results in long-term profitability and sustainability.

What else will you learn if you attend this session on harnessing the power of benchmarking?

  • How to be intentional when benchmarking. Put together a plan and then put it into action
  • How to use strategic planning to determine gaps to benchmark

To learn from this and other sessions featuring role-model Baldrige Award recipients sharing best practices, register for the Quest for Excellence, April 12-15, in Baltimore, MD.

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Community-Focused Excellence: Something New on the Horizon

Posted by Christine Schaefer

About five years ago, two former leaders of Baldrige Award-winning organizations had a friendly conversation at a backyard social event. The two American executives, who had both worked with health care organizations, discussed the need for a fundamentally new way to address the nation’s problems. In particular, they considered the challenge of improving community health and education—and the economy, too.

That conversation led to ambitious plans to cultivate an “archipelago” of high-performing, healthy communities in the United States. In each community, leaders of organizations from different sectors would work together to achieve and maintain excellence on  measures of health, education, and economic vitality (including employment). They would do so using a framework based on the Baldrige Criteria for Performance Excellence.

The initiative is now known as Communities of Excellence 2026. The story of its conception was conveyed to me recently by Stephanie Norling, the organization’s managing director. The founders were Lowell Kruse, who had led Heartland Health (PDF profile) from 1984 until 2009 when the organization received the Baldrige Award; and Richard Norling, who served at the helm of health care alliance Premier Inc. when that organization became a Baldrige Award recipient in 2006.

Kruse and Norling incorporated Communities of Excellence 2026 as a national, independent nonprofit organization in 2013. According to the organization’s foundational document, its aim is “to advance the common good by providing the roadmap for a journey to sustainable community performance excellence.”

Stephanie Norling pointed out that the name Communities of Excellence 2026 is based on the 250th anniversary of the United States’ founding as a nation. As the foundational document states, “Building on the foundation of democracy and liberty established by the nation’s founders, communities engaged with Communities of Excellence 2026 will have set America on course to again lead the world in health status, educational attainment, economic prosperity, and other key measures of community health and well-being.”

The organization envisions that participants in the initiative “will consistently be the top-performing communities in the nation and their success will meaningfully influence others across the country to strive for community performance excellence.”

COE 2026 logoNorling explained that the initiative will help communities work together across sectors and “support them to implement the framework, measure progress, define their practices and capabilities, and benchmark” their success. “We’d like to help communities develop collaborative practices to implement sustained community change,” she said.

“Communities are the level where improvements can be made most effectively,” she added, invoking an observation by Don Berwick, former administrator of the Centers for Medicare and Medicaid Services. In Berwick’s letter of support for Communities of Excellence 2026, he writes,

 

My past experience as president and CEO of the Institute for Healthcare Improvement and as administrator of the Centers for Medicare and Medicaid Services convinces me that traction for real change is best achieved at the level of the community. A smaller subset of actors lacks the leverage needed to act on the system as a whole, and larger aggregates tend too often to get stuck in political complexity. To act effectively, however, communities need the guidance of a conceptual framework, and an adapted Baldrige Criteria set hold great promise as such a framework. As a former member of the Panel of Judges for the Baldrige program, I know how deep that framework is.

Norling explained that her organization is planning three-year pilots in four settings: a small rural community, a rural region, a small urban area, and a large urban area. The first three pilot sites identified as ideal settings are Lake City, Iowa (a small rural community); northwest Missouri (an 18-county rural region); and Rochester, Minnesota (a small urban area). Selecting a large urban community is still in process.

“The idea is that at the end of the pilot phase, we will have a fully refined and tested framework,” Norling said. She stressed that the Baldrige Criteria-based framework will provide communities with a consistent approach to improving performance. The adapted framework initially focuses on health, education, and economic prosperity, but future participants in the initiative may choose to add a focus on improving performance in other sectors.

How can community leaders and others learn more about the progress of this initiative? “We’re rolling out a new website and blog,” said Norling. She encourages anyone interested in more information to contact her at snorling@communitiesofexcellence2026.org.

Editor’s Note: Baldrige Program Director Bob Fangmeyer recently accepted an invitation to join the board of directors of Communities of Excellence 2026.

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Culture Leads to Strategic Expansion and Enhanced Customer Relationships

Posted by Dawn Marie Bailey

In 1995, for the first time in its 100-year history, 2010 Baldrige Award recipient Freese and Nichols, Inc. posted a negative profit—-1.7 percent—and its morale was trending in the wrong direction.

In 1996, the engineering and architectural firm’s CEO, who sat on the board of a local 03LakeBrazosLabyrinthWeir,Wacohospital, learned about how the hospital was using the Baldrige Criteria for Performance Excellence to improve its performance and thus embracing continuous improvement (CI). In the Baldrige spirit of sharing best practices, the CEO brought the Baldrige Criteria home to his own company, and the firm quickly regained profitability and more.

That history is outlined in the recent article “Human Side: Create a Culture of Continuous Improvement” in Municipal Sewer & Water, a monthly magazine for the sanitary and water maintenance industry.

“We didn’t start out to win a Baldrige Award,” explains Robert Pence, P.E., BCEE, Freese and Nichols’ current President and CEO, who is also on the Baldrige Program Board of Overseers. “We just wanted to implement a continuous improvement management system that would measure the things we do. . . . When we found gaps between our goals and how we really were doing, CI showed us how to do root-cause analysis and take action to fix things, then go back and measure them to make sure they’re fixed.”

According to the article, results have been impressive:

  • The firm regained profitability in 1996.
  • Bookings in 2014 hit more than $96 million, compared to $20 million in 1995.
  • Employee turnover over the past 10 years has averaged less than half the industry’s national average (6 or 7 percent compared to up to 16 percent).
  • The percentage of new employees who stay for two years stands at around 88 percent.
  • In the last 15 years, client satisfaction increased to 4.73 from 4.4.

    F&N client sat

    Overall Client Satisfaction Survey Results 2002-2013

“A review of financial results during the 1970s and 1980s revealed that Freese and Nichols did well when the economy fared well and poor when it was poor,” writes the article’s author. “But ever since the company embarked on its CI journey, it performs solidly no matter how the economy performs.”

And that solid performance and CI culture continues today, leading to a strategic expansion to North Carolina and enhanced customer relationships, especially with municipal clients.

According to Mike Wayts, P.E., CFM, North Carolina Division Manager, and Cindy Milrany, Chief Financial Officer, maintaining the firm’s culture—which helped it win a Baldrige Award—during the expansion is very important and part of the firm’s strategy and grass-roots efforts.

Strategic planning and ensuring that the workforce always has growth opportunities are important to Freese and Nichols, said Milrany; “You can’t provide everything for your employees if you are not giving them what they need for growth. A new office like North Carolina provided a great opportunity.”

Wayts added, “If we’re not growing as a whole company then we’re not supplying growth potential.”

The geographic expansion has helped to offer new opportunities. Freese and Nichols has already begun the process of partnering with universities, including offering monetary support through scholarships and recruiting fairs, and supporting the local community through board support and donations to the YMCA, for example.

Wayts said what was particularly important to the firm was bringing its CI culture to North Carolina. “Some of the core things that make the company who we are and helped us win Baldrige, we’re making sure we apply in North Carolina,” he said, citing its customer service hedgehog concept, sales system, and focus on employee satisfaction as setting it apart from competitors.

Among offices, the processes and technical excellence program are the same, he said, so that new employees and long-time employees experience the same culture and can work together seamlessly across offices.

Milrany added, “We do a great job of deploying consistent processes across corporate functions and technical disciplines.” In fact, she said Freese and Nichols conducts a culture analysis every three years; “It’s almost scary how consistent our culture is across offices.”

Municipal clients also continue to be a growth area for the firm, which is offering services in North Carolina related to water and waste-water utilities, water resources, storm water, program management, and construction services.

“We really had no idea how [receiving the Baldrige Award] would open a different kind of relationship with some of our clients,” said Milrany. “We were very engaged with helping the city of Irving receive the Baldrige Award,” as well as other cities on a Baldrige journey of improvement.

Milrany said Freese and Nichols uses an integrated sales system with gold sheets for its clients: level 1 of the system means providing commodity services, up to level 5 of the  system that directs the firm to help the client improve its own organization.

“Baldrige helps us to have that level-5 relationship with a lot of our clients,” she said. “Not all of them would tell you they are on the Baldrige journey, but a lot of them would tell you we believe in CI or performance excellence, and they’ve been able to use the Criteria to enhance that journey that they’re on.”

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What Can Be Learned By Following a Thread

Posted by Dawn Marie Bailey

20268730.thcThe beauty of the systems approach in the Baldrige Excellence Framework is that it depicts the interwoven connections of an organization. In any business, service, nonprofit, school, or health care organization, decisions impact operations, which impact other decisions and operations elsewhere in the organization; this interconnectedness impacts resource use and strategy, as well as other elements of the organization, ultimately impacting its future success.

Within the Baldrige Excellence Framework, the threads of several management and leadership concepts can be followed to see how they impact or are impacted by different areas of an organization; doing this can yield quite a few insights into the importance of alignment. In some places, the Baldrige Excellence Framework is even explicit in how the concept should be used (e.g., in decision making or strategy) or where the concept might be leveraged or capitalized on as an organizational asset.

For example, let’s say you wanted to learn more about the concept “core competencies.” What are they? In what areas of a management system are they important? How do they impact other operations across the system?

Using the index (or the search function of a PDF file) in the Baldrige Excellence Framework as my guide, I can track the role of core competencies in an organization:

  • In P.1, Organizational Description, core competencies are a key organizational characteristic with a direct relationship to an organization’s mission. In fact, a note in this item explains that core competencies, an organization’s areas of greatest expertise, are central to fulfilling that mission.
  • In 1.1, Senior Leadership, core competencies are noted as a key factor in an organization’s sustainability.
  • In 1.2, Governance and Societal Responsibilities, core competencies become one way to determine areas of community support (i.e., leveraging core competencies to ensure the most appropriate use of resources).
  • In 2.1, Strategy Development, core competencies are used to make decisions on outsourcing, including which supplier and partner to choose. With a connection to work systems, core competencies are also considered when thinking about future strategy and challenges, as well as new core competencies that may be needed by the organization down the road. In this item, as elsewhere, the Criteria focus on “capitalizing” and “leveraging” core competencies—a clear indicator of their importance in making strategic decisions and a reminder that what the organization defined as its core competencies back in P.1 should be as accurate and appropriate as possible. (The organization’s leaders might find themselves reconsidering the core competencies as they complete this exercise.)
  • In 5.1, Workforce Environment, core competencies are part of work accomplishment.
  • In 5.2, Workforce Engagement, they are addressed as part of the learning and development system.
  • In 6.1, Work Processes, the enhancement of core competencies is considered in product and process performance.
  • In 7.4, Leadership and Governance Results, results for building and strengthening core competencies are requested.

Tracking the concept of core competencies throughout the Criteria really highlights their importance as part of strategy and an area of great focus for an organization. It’s clear that this concept, as well as others, is a key business attribute that impacts the entire organization’s system as a whole—not just one area of operations. This of course is part of the systems perspective of the Criteria: “With a systems perspective, you use your measures, indicators, core competencies, and organizational knowledge to build your key strategies, link these strategies with your work systems and key processes, and align your resources to improve your overall performance and your focus on customers and stakeholders.”

Other concepts that are woven throughout the Criteria include innovation, use of data and information, and change readiness.

What other key concepts might you follow as threads through the Criteria?

Posted in Baldrige Criteria, Business, Education, Health Care, Leadership, Measurement, Analysis, and Knowledge Management, Nonprofit, Operations Focus, Performance Results, Strategic Planning, Uncategorized | 2 Comments