Performance Excellence Process
Baldrige Workshops
Global Insights Archive
2006 Improvement Day:
Continuous Improvement in Practice
by Craig A. Anderson
August 2006

This past Wednesday (July 26) was the annual Improvement Day for the Baldrige
National Quality Award Program. Almost 40 Examiners from around the country
came to Gaithersburg, MD, on their own dime to participate in this rigorous
self-assessment of all aspects of the Baldrige Program, from the wording and
content of the Criteria to the process of training and developing Examiners.
Everything is "on the table" and the collective experience of the participants makes
for a terrific learning opportunity for all. Further, in addition to the direct input from
the participants, comments have been solicited online prior to the event from the
entire Examiner community; these comments are distributed and carefully
reviewed during the day.

Improvement Day is an important event. Why? Because this process illustrates the
most important advantage of the Baldrige Performance Excellence system--the
fact that the system is an open source platform that is fully responsive to the needs
and requirements of its users. Think about that for a minute; the Criteria for
Performance Excellence are NOT dreamed up in some academic ivory tower to
sell some books, but they are a living manifestation of Excellence as defined by
practitioners on the front lines of organizations worldwide. The Criteria are
rigorous, tested in practice, yet non-prescriptive--organizations implement
Baldrige to fit with their unique environment, challenges, capabilities, etc.

OK, so what does it all mean? Where will the "leading edge of validated
management practice" advance during the next year? We do not have a crystal
ball, but we think that leading organizations should strengthen their focus on the
following key areas:

Identification of Strategic Challenges
The Baldrige Criteria have increasingly stressed the need for an organization to
have a clear line of sight between its strategic challenges, strategy, operations,
and results.The Criteria specifically seek out evidence of alignment, learning,
integration, and linkages of your activities in different parts of your organization.
The value of this alignment, however, depends on the clear and accurate
identification of the most important strategic challenges facing an organization. A
frustration among Examiners is that many organizations do not do a good job of
showing how they have identified their strategic challenges in the first place.
Expect this frustration to be translated into sharper requirements for organizations
to demonstrate the process they use to identify strategic challenges. The bottom
line: better clarity around strategic challenges will be good for everyone.

Outsourcing Management
We recently read about the amazing results Procter and Gamble has achieved by
augmenting the work of its 1000-person internal research and development
organization with a global R&D sourcing framework that essentially taps the
knowledge of thousands of additional researchers around the world. This is what it
is like to manage in a boundary-less environment, or, as Tom Friedman calls it, a
"flat earth". Expect to see the Baldrige Criteria specifically target these types of
issues, asking organizations how they develop, implement, and measure the
results of outsourcing strategies. What decision making processes are in place?
How do organizations capture and learn from the results of their outsourcing
decisions? The roots of innovation will often lead outside of the traditional
organization; expect the Baldrige Criteria to follow suit.

Process Management
Related to the previous issue, expect to see the confusing split between "value
creation" and "support" processes in Category 6 resolved in the next set of
Criteria. As Earned Value Analysis (EVA) and other methodologies point out,
value can be created in multiple parts of the organization. Although a distinction
can be made between processes that touch external customers and processes
that only impact internal workunits, Baldrige-class organizations tend to use
standard process management and improvement methods for all major work
processes, regardless of how they are defined. Also, as part of the redesign of
Category 6, expect to see part of the Criteria around "work systems" currently in
Category 5 to be brought into Category 6; it is increasingly hard in knowledge
based organizations to distinguish between the design of a work process and the
organization and management of the people and jobs that are involved in the work

Human Resource Focus vs. Workforce Management
In keeping with the "flat earth" themes addressed above, expect to see some
reengineering in Category 5, Human Resource Focus. The current perception
seems to be that many applicants view this Category too narrowly, as "something
the HR department does", rather than a more robust, holistic view of the workforce
and its capabilities, internal and external. Other drivers for change in Category 5
include (1) the possibility of work systems Criteria moving to Category 6, (2) a
general desire to consolidate Category 5 into two Items to be consistent with the
other process Categories, and (3) a recognition that learning and development in
knowledge-based organizations is broader than the "butts in seats" emphasis of
traditional training and development efforts.

All in all, it appears that the 2006 Improvement Day has once again fulfilled its
purpose as serving as a catalyst to keep the Baldrige Performance Excellence
system at the leading edge of validated management practice. A lot of work lies
ahead to bring these improvements to fruition, but it is clear that the organizations
that have committed themselves to working with the Baldrige Criteria will continue
to set the pace for performance excellence in the years ahead.