There are at least five myths associated with an organization embarking on a performance excellence journey.
1. Excellence models, such as the Baldrige Excellence Framework and related European model used in the European Foundation for Quality Management (EFQM), are too complicated.
2. Implementing an excellence framework is too expensive.
3. It takes years to reap the benefit from adopting an excellence framework.
4. Using an excellence framework is impossible for large organizations.
5. Using an excellence framework is impossible for very small organizations.
Excellence models are too complicated.
Quite the contrary. The Baldrige Excellence Framework (and the related EFQM model) 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 Baldrige Excellence 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 Organizational Profile provoke dialogue among senior leaders to be clear they are on the same page in how the organization operates to drive its strategy. It takes an implicit 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 more simple than alignment and execution.
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 that 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 Baldrige- or EFQM-based award program.
The more than 50 senior leaders from over 30 Baldrige or Baldrige-based award recipients we interviewed for our book all told us how using the Baldrige Excellence Framework improved their organizations’ performance in very 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.
In fact, we believe that not using this proven framework is likely to be very costly for organizations as they lose their competitive edge to those that do.
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.
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.”
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, the 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 the 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 benefit cited was the creation of a common language across the organizations, regardless of location. 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, shared, “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 Baldrige Excellence Framework is so important in large organizations. It’s the only hope for creating alignment.”
Using an excellence model is impossible for very small organizations.
Over the history of the Baldrige program, there have been 116 distinct organizations to receive the award (7 organizations have won it twice). Of those 116, 26 distinct Baldrige Award recipients have been in the small business category, and some education and health care award recipients could qualify as a small business with their small workforce. Three of those small business recipients have received the award twice. We think the fact that three small businesses 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. Resources – financial, human, and other – are often scarce. It may seem very intimidating at first. In entrepreneurial, start-up organizations, the senior leaders are often filling multiple roles, and this structure may seem to be too much, too soon. However, the leaders of very small organizations we interviewed talked about the benefits of adopting the Baldrige Excellence Framework. Using an excellence model forced them to formalize processes such as strategic planning, the 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.
This is column is based on an article by Kay Kendall and Glenn Bodinson that originally appeared in Smart Manager, March-April 2017.