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Global Insights Archive
Understanding the Revised 2007 Baldrige Criteria:
Move Quickly to Get a Jump on Your Competition
Craig A. Anderson
January 2007

In our August 2006 newsletter, which discussed our impressions from attending
the 2006 Baldrige Improvement Day, we suggested that "leading organizations
should strengthen their focus" on several key Criteria areas including better
identification of strategic challenges, outsourcing management, work systems and
process management integration, and an expanded, more holistic approach to
workforce management.

So, how was our crystal ball? Pretty darn good! The
2007 Criteria for Performance
Excellence have just been released and they contain major changes in line with
what we predicted. Categories 5 and 6 in particular have been significantly
reengineered, and the changes overall make for a much more relevant and
powerful set of Criteria. We salute the Baldrige Office on a job well done, and we
think that organizations that move aggressively to understand and meet the new
Criteria requirements will gain a significant competitive advantage in the years
ahead. Here is a summary of the key revisions in each Category; smart
organizations will move quickly to understand the underlying "why?" of each
change to find new opportunities for achieving performance excellence.

Organization Profile
While the wording here has not changed significantly, there is a powerful,
underlying current that will sweep you away if you are not careful; you must show a
clear linkage between the strategic challenges you identify in the Profile and the
strategic planning activities that you document in Category 2. The lack of
alignment between the Profile and Cat 2 has been a bugaboo of ours for a while;
now there is no place to hide: you must describe HOW you identified your key
strategic challenges (and advantages) and HOW your strategy will address them.

Category 1: Leadership
Goodbye "motivate"; hello "engage". How do your leaders engage your
workforce? The Criteria now recognize that effective leadership goes far beyond
industrial age concepts of external "motivation" to a broader, more meaningful
engagement with employees. There is now a crisper focus on leadership
execution: How are key decisions communicated? What performance measures
are used? The squishy verb "address" is now "review and achieve".
Finally, the term "role model performance leadership" is in the Criteria for the first
time.

Category 2: Strategic Planning
More clarity and crispness are evident in this Category. You are explicitly asked to
describe several key linkages: (1) How are strategic objectives linked to
"opportunities for innovation in products, services, operations, and the business
model?; (2) How are action plans linked to resources?; and (3) How are strategic
objectives and action plans linked to key human resource plans?

Category 3: Customer and Market Focus
This Category is basically unchanged. The term "voice of the customer" replaces
"listening and learning", which we see as pushing toward a broader engagement
with the customer to mirror the broader engagement with the workforce seen
earlier.

Category 4: Measurement, Analysis, and Knowledge
Management
This Category incorporates a number of changes that add precision and focus
more on "real world" challenges. How do you manage your IT infrastructure and
resources? How do you actually use data to evaluate and improve performance
throughout your organization? How do you use the results of your performance
reviews to improve key processes? How do you ensure the quality of your software
and hardware? There is also a nice linkage back to Category 2: How do you
assemble and transfer relevant knowledge...to your strategic planning process?

Category 5: Workforce Focus
Goodbye, Human Resource Focus; Hello, Workforce Focus! This Category
contains a number of excellent changes that will challenge organizations
throughout 2007. First, the confusing questions about organization and
management of work have been moved into Category 6, which is where they
should have always been. More importantly, the thinking embedded in the new
Category 5 reflects a strategic view of workforce management, going beyond tired
concepts like "motivation", "career progression", and "career development" to
focus on workforce engagement, capability, and capacity. The Criteria force
organizations to extend their thinking in new and creative ways about how to
optimize their return on their workforce investment. Look for lots of exciting new
approaches to workforce management in 2007.

Category 6: Process Management
This is yet another Category that has seen major rework. Most importantly for
users is the elimination of the confusing split between "value creation" and "key
support" processes; as elsewhere in the revised Criteria, the emphasis now is on
a more holistic view of what you are trying to achieve in this Category. But in a
more strategic sense, the most important changes relate to the alignment of core
competencies and work processes; the Criteria ask you specifically how you
determine your core competencies and how these are reflected in the design of
your work systems. You are also asked how you embed innovation into the core
design of your work processes, and how you manage your work processes (of all
types) to not only meet requirements but to improve constantly. Organizations that
have struggled in the past to "force" their process management thinking into the
Baldrige "value creation" versus "key support process" box should relish the
opportunity to expand their thinking and execution in this revised Category.

Results Categories 7.1 through 7.6
There have also been some useful revisions in the Results Categories. The at
times confusing Category 7.5, Organizational Effectiveness Outcomes, has been
replaced with Process Effectiveness Outcomes, which asks specifically how the
performance of your work systems contributes to the improvement of
organizational effectiveness. There is now a clear home in the Results Categories
for data on the effectiveness of your key processes by location as appropriate.

More clarity has also been provided for Category 7.6, as "Leadership and Social
Responsibility Outcomes" has been replaced by the straightforward "Leadership
Outcomes". Much of the required data is the same, but you are now asked
specifically for "evidence of strategic plan accomplishments." This is again in
keeping with the theme of more transparency across the leadership and planning
systems: if you say something is important to your success, show the data!

Bottom Line for You
Our bottom line assessment is that the 2007 Criteria represent a major opportunity
for visionary organizations to get a jump on competitors by rethinking fundamental
assumptions about the best way to manage people and processes. Arbitrary
distinctions have been eliminated, which makes it easier for you to fit the Criteria
to your requirements rather than to have to fit your management systems to meet
the structure of the Criteria. We look forward to a year of innovation and growth
across the Baldrige community.