Posted by Harry Hertz, the Baldrige Cheermudgeon
I recently read an HBR blog entitled, “How Aligned Is Your Organization?” The authors attributed a lack of internal organizational alignment to four reasons. The last, and I thought very important one, was that activity is mistaken for progress. Measurement of activity rather than progress is a common problem in organizations. Frequently, it starts with a desire to measure and manage by fact, and the easiest measures to begin with are activity measures. Activity measurement is not wrong, if you are measuring the right activities. In this blog post, I want to explore activity measurement and the achievement of progress.
Activity is undertaken with the intent of producing results. And the direct results of activity are generally easy to measure (e.g., widgets produced, calls answered, time spent). Activity alone generally relates to operations and the results generally answer a question that begins with “What did you do?” You may have made twice as many widgets in half the time. You may have answered twice as many calls in only 120% of the time it previously took to answer half that number of calls. However, what you did may not yield results that relate to progress. Activity alone does not get at progress.
In the Baldrige Excellence Framework, Results are scored on four factors. The first three are: levels, trends, and comparisons. You can measure all three of these factors for the activities described above and be very proud of your accomplishments. So what is missing?
What if all the widgets were defective? What if all the calls answered did not resolve the callers’ issues? “Positive” activity, but no progress. The activities were measures of output, but not outcomes. The outcomes, which are measures of progress, were negative. Furthermore, the widgets may not have had the features that customers want. And with the heavy focus on widget production, the company may have missed that a replacement product was coming from another industry (e.g. digital imaging and ink replacing film and processing chemicals).
All the customer calls you answered may have been due to poor guidance your organization provided at the start, requiring the need for further information.
The activity measures perfectly answered the “What did you do?” question, but did not address the important questions of how well you did it, why you did it, and how important those activities are. To answer those questions we need more information about organizational context, strategy, leadership vision, and customer desires or needs. We need a systems perspective. We need an integrated set of questions and not just questions about level of activity, no matter how positive that activity’s results may be. The activity you are measuring may not even be an important activity to measure. The Baldrige Excellence Framework provides this systems perspective, through an integrated set of questions that cause thought about key organizational linkages.
So how do quality improvement tools fit into this whole equation? They fit in very well, if applied to the right processes. Otherwise we could spend time on PDCA cycles or having Kaizen blitzes on unimportant processes, wasting people’s time and organizational resources, both of which are precious. These tools display their great value when applied to important problems. They need to be used with the good of the organization in mind, with a focus on processes that contribute to progress. We can then link the activity measures to not only output, but to the outcomes that will sustain the organization going forward.
Finally, let me return to Baldrige Results factors. As stated previously, three are: levels, trends, and comparisons. The fourth and vital factor is integration. Are you measuring the results that are important to customers, strategy, financial success, and employee loyalty? And to emphasize the importance of integration, it is the only results factor that is also used as a scoring factor for processes. It is the measure of an aligned and integrated organization. It is the measure of systems thinking on the part of the organization. It is what moves our organizations from activity measurement, to measuring the right activities, to measuring critical outcomes, to achieving progress.
How is your organization performing on its integration factors?