Complexity is simpler than you think
Kay Kendall and Glenn Bodinson, authors of Leading the Malcolm Baldrige Way, dismiss misconceptions regarding excellence models.
Kay Kendall and Glenn Bodinson, authors of Leading the Malcolm Baldrige Way, shatter myths about excellence models such as Baldrige and EFQM.
01 excellence models are too complicated
Quite the contrary. All these models do is provide a list of processes that successful organizations have and ask about your processes for accomplishing the same important actions. It is true that there has to be some complexity to any good management model because today’s businesses compete in a very complex and competitive environment. An excellence model that is relevant to today’s businesses will reflect that complexity. But complex should not be confused with complicated. Within complexity, we see important relationships and linkages.
The Baldrige Excellence Framework (and its related European model, EFQM) provides a holistic approach for leaders to view their organizations as a system rather than a collection of siloed departments or business units. Its non-prescriptive approach means that all existing quality initiatives, such as Lean or Six Sigma, can easily be integrated under the framework. The framework provides this non-prescriptive approach in two ways. First, it begins with an organizational profile; this sets the context for the organization. The questions in the profile provoke dialog among senior leaders to understand if they are on the same page regarding how the organization operates to drive its strategy. It takes a tacit agreement on what is most important to the organization and makes it explicit. Second, the framework is comprised of questions that ask senior leaders to consider how their organizations should do things rather than dictating a specific approach. This allows executives to use the approaches that align with their organizations’ vision, mission, and values. Nothing could be simpler than alignment and execution.
02 implementing an excellence model is too expensive
There is actually very little investment that needs to be made in implementing an excellence model beyond the education senior leaders and others will need to truly understand the framework. That can be obtained through books on the subject, related conferences, or experienced consultants. Another powerful way of learning the framework is by becoming an examiner for a Baldrigeor EFQM-based award program.
The more than 50 senior leaders from over 30 Baldrige or Baldrige-based award recipients we interviewed all told us how using the Baldrige Excellence Framework improved their organizations’ performance in tangible ways. Many cited the ROI that engaging their workforce provided—reduced turnover, higher productivity, and increased customer loyalty. Employee engagement also resulted in safer workplaces.
Job growth is also a measure of ROI. The seven organizations that have won the Baldrige award twice boast a 63% median job growth compared with only 3.5% for a matched set of industries and time periods. In addition, those same seven two-time award recipients achieved a 92% median growth in revenue from the time they first won the award until winning the second time. All of those results demonstrate an inarguable ROI. In fact, we believe that not using this proven framework is likely to be very costly for organizations as they lose their competitive edge with those that do.
03 it takes years to reap the benefit from investing in an excellence model
If this were true, no one would use these approaches. Yet many do. We all know the saying, “Success is a journey, not a destination.” But each step of that journey must provide the improvement we need to grow and be more competitive.
One of the earliest benefits comes from the senior leaders completing the organizational profile, mentioned previously. Having alignment at the senior leadership team level is key to having alignment throughout the rest of the organization. Let us share an example.
The Baldrige Excellence Framework provides a holistic approach for leaders to view their organizations as a system rather than a collection of siloed departments or business units.
We were working with a large healthcare system that was applying for their state’s Baldrige-based program’s top-level award. Two of the questions at the beginning of the organizational profile were, “What are your main health care service offerings? What is the relative importance of each to your success?” Believe it or not, the senior leaders of this successful healthcare system could not agree! One, it was clear that they had never had an intentional discussion about this. Two, they did not even agree on the criteria for making the decision.
One of the executives said it would be their obstetrics and gynecology service line because of the volume of babies delivered. Another countered, “But we lose money on every delivery.” While another said, “But it’s usually the mother in a family who makes the healthcare decisions. If we give mothers a good experience when they have their babies, we are likely to have those families as customers for life.” Each of the main service lines was debated in a similar fashion.
Just think about the consequences of that lack of alignment at the top of the organization. Investment decisions, marketing decisions, staffing decisions, and more are in competition—driving the organization further from its intended vision.
Not a single executive we interviewed said that he or she wished they had delayed getting started. In fact, the prevailing comment when asked about what they would do differently was, “I wish we had started using the Baldrige Excellence Framework earlier.”
The Make in India initiative has ambitious objectives, and senior leaders of businesses could benefit from a proven framework that reflects the leading edge of validated leadership and performance practice. How will Indian businesses compete against world-class organizations if they do not know how such organizations are run. With the ROI these models provide, leaders who adopt an excellence model are more likely to attract investors who recognize their businesses’ superior performance.
The Make in India initiative has ambitious objectives, and senior leaders of businesses could benefit from a proven framework that reflects the leading edge of validated leadership and performance practice.
04 using an excellence model is impossible for large organizations
There are certainly some challenges of being a large organization and using an excellence model. One is the layers of bureaucracy to cut through to engage front-line staff. Another is when an organization is geographically dispersed. In both cases, effective communication and alignment are areas of critical importance.
However, leaders of large organizations that received Baldrige-based awards described significant advantages. One, there are few single-point dependencies on any leader. Two, there are usually well-established communication channels that can be leveraged. Three, there are typically resources internally to provide education.
The leaders of these organizations also described the benefits of using the Baldrige Excellence Framework to make their organizations even stronger. The first cited was the creation of a common language across the organizations, regardless of any geographic dispersion. The second benefit they mentioned was the alignment that resulted. Rather than having separate business units unintentionally sub-optimizing the performance of the parent organization, everyone was aimed in the same direction, creating leverage and accelerating the improvements. As Dr Rulon Stacey, former CEO of Poudre Valley Health System (a 2008 Baldrige award recipient) and Chair of the Board of Overseers for the Malcolm Baldrige National Quality Award, said, “It’s hard to get past the geography and cultural differences of how the organizations developed—this is particularly true with mergers and acquisitions. That’s why using the
Using an excellence model forced them to formalize processes such as strategic planning, voice of the customer, measurement and analysis, and even continuous improvement.
Baldrige Excellence Framework is so important in large organizations. It’s the only hope for creating alignment.”
05 using an excellence model is impossible for very small organizations
Over the history of the Baldrige program, there have been 106 distinct organizations to receive the award (seven have won it twice). Of those 106, 23 distinct award recipients have been in the small business category, and some education and healthcare award recipients could qualify as a small business with their small workforce. Three of those small business recipients have received the award twice— they found the use of the Baldrige framework to be so valuable that they continued to use it after receiving their first award and continued to improve.
As with very large organizations, very small organizations face challenges too. Resources— financial, human, and others—are often scarce. It may seem intimidating at first. In entrepreneurial, startup organizations, senior leaders are often filling multiple roles, and this structure may seem to be too much, too soon. However, leaders of very small organizations we interviewed talked about the benefits of adopting the framework. Using an excellence model forced them to formalize processes such as strategic planning, voice of the customer, measurement and analysis, and even continuous improvement. Formalizing these processes and others reduced variation, which led to improved productivity and customer satisfaction. Another benefit to very small organizations was the Baldrige Excellence Framework’s laser focus on the most import issues a business faces. Several leaders shared that this caused them to prioritize, which led to more sustainable results through a focused workforce.
Finally, very small organizations do have some advantages over larger organizations. They are typically more agile. Communication is more rapid and with less distortion than when filtered through layers. And many small organizations already have a strong culture of teamwork, so getting buy-in is easier. ■