So You Want to Use the Baldrige Criteria?

1. So You Want to Use the Baldrige Criteria? Prepared for TNCPE Customersby Dan Jordan 2009/2010 Criteria

2. Using the Baldrige Criteria • Organizational Profile (Level 1 Application) • Core Values • Categories(Level 2 Application) • Items and Areas to Address (Level 3 and Level 4 Applications)

3. Organizational Profile Purpose • Provides an overview of your organization • Helps to better understand • The context in which your organization operates • Key requirements for current and future business successand sustainability • The needs, opportunities and constraints placed on your organization’s performance management system

4. Organizational Profile P.1 Organizational Description • Key organizational characteristics • Key Relationships

5. Organizational Profile P.1 Organizational Description • P.1a Organizational Environment • What do you do? • Product offerings – goods and services offered • Who are you? Why do you exist? • Culture – shared set of attitudes, values • Core competencies – areas of greatest expertise • Workforce • Distinguishing traits • Requirements • Facilities and equipment • Regulatory environment – health, safety, accreditation, certification, and/or registration

6. Organizational Profile P.1 Organizational Description • P.1b Organizational Relationships • Stockholders (Governance) • Customers / stakeholders • Grouping or differentiation • Requirements • Supply chain • Suppliers, partners, collaborators • Means of communication • Role in innovation • Supply chain requirements

7. Organizational Profile P.2 Organizational Challenges • P.2a Competitive Environment • How do you know how you stack up? (Competitors) • What factors differentiate you from your competitors? • Where do you get comparative and competitive data?

8. Organizational Profile P.2 Organizational Challenges • P.2b Strategic Context • Strategic challenges • Strategic advantages • P.2c Performance Improvement System • Linked to Organizational Learning • How do you systematically improve? (Should be data based) • Linked to assessment of maturity (Look at Scoring Guidelines)

9. Strategic Advantages • Marketplace benefits exerting a decisive influence on an organization’s likelihood of success • Sources of current and future competitive success • Can come from: • Core competencies • Strategically important external resources

10. Force Field Examples Strategic Advantages Objectives Strategic Challenges Benefits Pressures Help you achieve your objectives Hinder your efforts to achieve your objectives Benefits Pressures Benefits

11. Governance • System of management and controls exercised in the stewardship of your organization • Ensures: • accountability to stakeholders, • transparency of operations, • fair treatment of all stakeholders • Includes the performance evaluation of senior leaders and members of the governance board

12. Visionary Leadership Customer-Driven Excellence Organizational & Personal Learning Valuing Workforce Members and Partners Agility Focus on the Future Managing for Innovation Management by Fact Societal Responsibility Focus on Results and Creating Value Systems Perspective Core Values

13. Visionary Leadership • Set directions • Create customer value • Create clear and visible values • Create high expectations • Personal involvement with workforce • Inspire, Motivate, Encourage • To contribute, develop and learn, be innovative • Serve as role models

14. Customer-Driven Excellence • Know what contributes value to customers • Product & service features and characteristics • Modes of customer access • Look at current and future components • How? Market surveys, focus groups, periodicals, customers of customers • Understand factors that may influence customer overall experience (face of the organization) • Recovering from defects • Features and characteristics that differentiate from competitors • Directed toward customer retention, loyalty, market share gain, and growth

15. Value • Perceived worth of a product, service, process, asset, or function relative to cost and to possible alternatives • Relative worth, utility, or importance

16. Organizational & Personal Learning • Well-executed approach – includes sharing knowledge via systematic processes • Includes continuous improvement and significant change • Embedded • Regular part of daily work • Practiced at all levels • Results in solving root cause • Build and share knowledge • Driven by opportunities to effect significant meaningful change

17. Organizational & Personal Learning • Depends on having opportunities for personal learning and developing and practicing new skills • Directed toward • Better products and services • Being a more responsive organization • Being more adaptive • Being more innovative • Being more efficient

18. Valuing Workforce Members & Partners • Valuing people means • Committing to engagement • Satisfaction • Development • Well-being • Partners (Internal and External) • Established to better accomplish overall goals • Blending of core competencies or leadership capabilities • Develop longer term objectives • Address key requirements for success • Regular communication • Approach to evaluate progress • Means for adapting to change

19. Engagement • Commitment, both emotional and intellectual, to accomplishing the work, mission, and vision of the organization • Engaged workforce find personal meaning and motivation in their work and receive positive interpersonal and workplace support

20. Agility • Capacity for rapid change and flexibility • Cycles for introduction of new / improved products and services • Vital asset: cross-trained and empowered workforce

21. Results Responsibility Knowledge Accountability Empowered Giving people the knowledge, authority and responsibility to make decisions and take actions to create desired results

22. Focus on the Future • Understanding of short- and longer-term factors that affect organization and marketplace • Requires strong future orientation • Requires willingness to make long-term commitments to key stakeholders

23. Focus on the Future • Included in planning – anticipate customer expectations, new business opportunities, workforce needs, technological development, new business models • Strategic objectives and resource allocations needed to allow for future influences

24. Focus on the Future • Includes • Developing leaders, workforce, and suppliers • Accomplishing effective succession planning • Creating opportunities for innovation • Anticipating public responsibilities and concerns

25. Managing for Innovation • Meaningful change to improve • Products, • Services, • Programs, • Processes, • Operations, and • Business model to create new value for stakeholders • Part of learning culture • Integrated into daily work • Supported by performance improvement system • Builds on accumulated knowledge of organization and its people

26. Innovation • Making meaningful change to improve products, programs, services, processes or organizational effectiveness and to create new value for stakeholders • Involves the adoption of an idea, process, technology, or product that is either new or new to its proposed application

27. Management by Fact (1) • Measurements • Derived from business need and strategy • Provide critical data and information about key processes, outputs and results • Needed for performance management • Data should be segmented to facilitate analysis

28. Management by Fact (2) • Analysis • Extract larger meaning from data and information • Uses data to determine trends, projections, and cause and effect • Supports • Planning • Review of overall performance • Improving operations • Accomplishing change management • Comparing performance with competitors’ or “best practice” benchmarks

29. Management by Fact (3) • Measures • Best represent factors that lead to improved customer, operational, financial, and critical performance • Comprehensive set tied to customer and organizational performance requirements • Provides clear basis for aligning all processes with goals

30. Performance Management • Involves consolidation of data from various sources; asking questions about, and analysis of the data; and putting the results into practice • Continuous and real-time reviews help to identify and eliminate problems before they grow. Definition of BPM from Wikipedia

31. Societal Responsibility (1) • Stresses • Responsibilities to public • Ethical behavior • The need to practice good citizenship • Leaders are role models • Protection of health, safety and environment. Includes: • Operations • Life cycle of products and services

32. Societal Responsibility (2) • Stresses conservation of resources • Planning should anticipate adverse impacts from products, distribution, transportation, use and disposal • Local, state, and federal laws and regulations treated as opportunities for improvement beyond mere compliance

33. Societal Responsibility (3) • Good citizenship • Leadership and support of publicly important purposes • Examples: • Improve education and healthcare in community • Pursue environmental excellence • Practice resource conservation • Perform community service • Improve business and industry practices • Share nonproprietary information • Influences other organizations to partnerfor these purposes

34. Ethical Behavior • How an organization ensures that all decisions, actions, and stakeholder interactions conform to moral and professional principles • Principles distinguish right from wrong

35. Focus on Results and Creating Value • Results used to create and balance value for key stakeholders • Builds loyalty • Contributes to growing the economy • Strategy explicitly should include key stakeholder requirements • Use a balanced composite of leading and lagging performance measures

36. What is Valued and Measured 3 Undesired Desired For Customer P r i o r i t i e s 2 1 Product/Service Attributes Product performance Customer specs P r o d u c t Customer Undesired Outcomes Complaints Lost orders Customer Desired Outcomes Value add (Loyalty, Referrals) Cust Satisfaction 4 Process Characteristics Customer Perspective Delivery reliability Accessibility Process Outcome Producer Undesired Outcomes to Avoid Waste Loss of customers Financial loss High turnover Producer Desired Outcomes EFO Market share Sales Product Attributes Producer Perspective Cost to produce Meets Technical specifications Ease of distribution 8 Process Characteristics Producers Perspective Variability Productivity % First Pass NPV New products For Producer 7 6 5 How What Why Balance Your Balanced Scorecard Robin Lawton, Quality Progress, March, 2002. pp.66 - 71

37. Systems Perspective (1) • Successful management of overall performance requires synthesis, alignment, and integration

38. Systems Perspective (2) • Synthesis • Looking at the organization as a whole, building on key business requirements including core competencies, strategic objectives, actions plans, and work systems

39. Systems Perspective (3) • Alignment • Key linkages between key processes • Leadership • Planning • Customer Focus • Information Management • Workforce Focus • Process Management • Results

40. Systems Perspective (4) • Integration • Individual components of performance management system operate in a fully interconnected manner and deliver anticipated results

41. Categories 1 - Leadership 2 - Strategic Planning 3 - Customer Focus 4 - Information and Knowledge Management 5 - Human Resource Focus 6 - Process Management 7 - Results

42. Items (1) 1.1 Senior Leadership 1.2 Governance and Societal Responsibility 2.1 Strategy Development 2.2 Strategy Deployment 3.1 Customer Engagement 3.2 Voice of the Customer 4.1 Measurement, Analysis, and Improvement of Organizational Performance 4.2 Management of Information, Knowledge and Information Technology

43. Items (2) 5.1 Workforce Engagement 5.2 Workforce Environment 6.1 Work Systems 6.2 Work Processes 7.1 Product and Service Outcomes 7.2 Customer-Focused Outcomes 7.3 Financial and Market Outcomes 7.4 Workforce-Focused Outcomes 7.5 Process Effectiveness Outcomes 7.6 Leadership Outcomes

44. 1 - Leadership • Senior leaders personal action guide and sustain the organization • Organization’s governance • Organization addresses ethical, legal, and societal responsibilities

45. 1.1 – Senior Leadership • For the organization • Guide • Sustain • Communication with workforce • What are you communicating? • How are you communicating? • Encourage high performance

46. High-performance Work - 1 • Work processes used to • Systematically pursue ever-higher levels of overall performance (organizational and personal) • Includes quality, productivity, innovation rate, cycle time performance • Focuses on workforce engagement

47. High-performance Work - 2 • May include empowerment of people (self-directed responsibility) • Individual and organizational skill building and learning • Learning from other organizations • Flexibility in job design and work assignments • Seeks to align or integrate organization structure, core competencies, work, jobs, workforce development and performance management.

48. 1.2 - Governance and Societal Responsibility • Governance System • Responsibilities to public • Ensure ethical behavior • Practice good citizenship

49. Guide • What does guide mean? • Direct, or influence usually to a particular end • What do you have to have in order to guide? • Vision, Road map • Share it • Make it real.

50. Sustain • Ability to address business needs • Agility and strategic management to prepare for the future • Considers: • Workforce capability (knowledge, skills, abilities and competencies) • Workforce capacity (Ability to ensure sufficient staffing levels) • Core competencies (areas of greatest expertise) • Work systems (how work of the organization is accomplished) • Resource availability – Facilities • Technology – Equipment • Knowledge