Performance Excellence Process
Baldrige Workshops
Global Insights Archive
Early Ideas for a Competitive Edge
Craig A. Anderson
July 2007

This past week we attended the annual Baldrige Improvement Day workshop at
the Baldrige Program Office, and as always we were energized by the passion,
dedication, and skills of the volunteer Examiners who took the time to participate
(on their own dime; all travel costs are borne by attendees) in this important event.
Improvement Day is a chance for Examiners to step back from their daily
responsibilities and work collaboratively to assess all aspects of the Baldrige
program, identify opportunities for improvement, and develop recommendations
for consideration and implementation by the Baldrige program staff.

As in past years, our experience is that the Improvement Day discussions are a
useful early indicator of emerging trends and opportunities for organizations that
are using the Baldrige Performance Excellence System. Based on what we heard
this week, we think that organizations may gain competitive advantage by focusing
on several key areas that are discussed below.

Although the word "innovation" is used liberally (20+ times) in the Criteria for
Performance Excellence, the sense of the participants is that we are still not
nailing this critical concept in the Baldrige process framework. Organizations are
not required to describe their systematic processes for innovation, nor are
Examiners required to address innovation in the scoring guidelines until the 70%
to 85% bands, which is of course beyond the current reach of most organizations.
We encourage organizations that are serious about long-term excellence to look
beyond the Criteria and develop and implement clear, systematic processes for
innovation that reach across the enterprise.

Work Systems
Although there was broad agreement that the shift of work systems from Cat 5 to
Cat 6 was sound, it is clear that there is still confusion in the Criteria regarding the
proper relationship of work systems and work processes. The sense of the
participants is that work systems are a higher order concept than work processes,
encompassing and coordinating work processes across the enterprise to achieve
the aim of the overall organizational system. It is not clear, however, that this notion
of systems and processes is communicated and internalized effectively within the
Criteria, beginning with the description of Cat 6, which states that "The Process
Management Category (your organization) designs, manages,
and improves its key processes for implementing those work systems..." Do
processes implement work systems, or do work systems coordinate processes?
And by the way, are work processes the same as processes?

The message here is to ensure that your hard work on improving work processes
occurs in synch with your overall system aims and priorities; you do not want to be
fine tuning processes for products and services that do not matter to your
customers and your bottom line. Look for more explicit guidance in the Criteria in
this area in the years ahead.

Core Competencies
The dialogue around core competencies was long and vivid, and highlighted the
fact that the Criteria will need to sharpen up the distinctions between personal and
organizational competencies, and strategic and competitive advantages. By
placing the determination of core competencies squarely in Cat 6, Baldrige makes
explicit the linkage between what you are capable of doing (your core
competencies), and what you actually do (your work processes). This is great for
people who think in terms of systems, but hard for "real world" users who have
grown up to think of core competencies as something that relates specifically to
your workforce; e.g., how many thousands of organizations have conducted
"competency surveys" of their employees? These definitions will likely take several
years to shake out, but meanwhile we suggest that organizations take the view that
core competencies are but one of a number of potential strategic advantages, and
that the key to success is to base strategic planning on a frank assessment of both
competitive strengths and weaknesses.

Workforce Focus
There was widespread agreement with the general direction of recent Criteria
changes in this area, but also a recognition that Cat 5 remains a work in process,
with a need for further streamlining and perhaps a clearer distinction between the
building of the workforce culture and the nuts and bolts of actually managing and
organizing the workforce. Participants expressed the sense that Cat 5 requires a
disproportionate amount of time and work for 85 points out of 1000 in the scoring
rubric. Our view is that while Cat 5 may still be less than fully developed,
organizations should focus intensely on building clear linkages from the current Cat
5 Criteria to all key areas of the organization: simply put, in a knowledge economy
the skills, capabilities, creativity and dedication of your people are everything.
Regardless of whether these people are your own employees or are accessed
through relationships with suppliers, customers, partners, collaborators, or other
stakeholders, your challenge is to optimize this most important resource. Look
through the clutter in Cat 5 and make sure that this understanding permeates your
organization, and you will do just fine.