Posted by Harry Hertz, the Baldrige Cheermudgeon
Even the best organizations are imperfect. High-performing organizations strive for six sigma performance, but that is striving for 3.4 defects per million opportunities. So even this holy grail still admits to and even strives for achieving a degree of imperfection.
In this blog post, I would like to address imperfection at a different level, the level of organizational imperfection. Let me start with a simple illustration of the existence of these imperfections on a broad scale. Consider the Baldrige survey tool, Are We Making Progress?, a 40-statement employee (and leadership) perception survey based on the Baldrige Excellence Framework. The statement, “My organization removes things that get in the way of progress” generally has one of the lowest levels of agreement among the 40 statements for both employees and leaders. Frequently, some of the barriers can be easily identified through dialog and some “imperfections” can be fairly easily removed. The interesting point is that both employees and leaders are aware of these imperfections, yet only after a simple survey do they see the benefit to dialog and to addressing the imperfections.
But what about big picture “imperfections” or “opportunities” that organizations frequently miss. In the book, Creative Confidence, IDEO’s David and Tom Kelly recount the story of the GE MRI that was great for doctors and hospitals, but when the design engineer went to see pediatric imaging in a hospital he discovered the machine was so scary to kids that they frequently had to be sedated. With that ultimate customer knowledge, it was easy to redesign the casing to look like a pirate ship or space adventure (and even create a script to go with it for machine operators).
The problem for organizations is that they are often blind to opportunities or even simple fixes on an operational base, and agile too late or at a minimum later than they should be on a strategic base. We are stuck in an old paradigm of plan, execute for a fixed period of time, and only then evaluate and improve.
A Baldrige core value is organizational learning and agility. Agility requires a capacity for rapid change in strategy and for flexibility in operations. Organizational learning requires both continuous improvement of existing approaches and innovation creating new and different approaches. These concepts are embedded in the Baldrige Criteria for Performance Excellence and many of the criteria questions aid you in achieving agility in strategy and operations.
So, what are some of the practices that organizations can embed in their planning and operations to identify “opportunities” and “imperfections” and become more agile? Here are a few for you to consider:
- a mechanism for continuously scanning the external environment for new technologies, and potential changes in regulation and the external business environment
- continuously looking for strategic opportunities that could lead to innovation on an ongoing basis
- having a defined process for seeking blind spots as part of strategy development
- constantly listening to customers through visits, observation, surveys, social media, and lost customer analysis
- engaging in two-way conversation and empowering employees
- benchmarking organizations that can offer you opportunities to learn
- building agility steps into planning and operations processes
- managing your organizational knowledge for purposes of learning and cross-functional integration
In a Forbes blog several years ago, Greg Satell stated that businesses are run much like an orchestra, with a conductor leading a pre-arranged program. Yet today, organizations need to be more like a jazz band with a sense of direction, empowerment (improvisation), and an expectation of failures along the way.
One final thought, enterprise risk management is all about managing imperfections and opportunities. The term is well chosen. It is risk management, not risk avoidance. All successful organizations must take intelligent risks to manage their imperfections and opportunities and build long-term sustainability.
May your year be characterized and rewarded by intelligent risks!