Baldrige Framework and Value S

Baldrige Framework and Value System

The Criteria for Performance Excellence is a unique leadership and management tool in that it enables people to actually see the systemic nature of their organization in real time. This affords them an invaluable opportunity to improve working in the organization's systems while also working on improving the various systems and the organization as a whole. As shown in the figure below, from top to bottom, the framework is designed to present, connect, and integrate each of the basic systems.

Organizational Profile

Your Organizational Profile (top of figure) sets the context for the way your organization operates. Your organization's environment, working relationships, and strategic situation-including competitive environment, strategic challenges and advantages, and performance improvement system-serve as an overarching guide for your performance management system.

Performance System

The performance system is composed of the six Baldrige categories in the center of the figure that define your processes and the results you achieve. Leadership (category 1), Strategic Planning (category 2), and Customer Focus (category 3) represent the leadership triad. These categories are placed together to emphasize the importance of a leadership focus on strategy and customers. Senior leaders set your organizational direction and seek future opportunities for your organization. Workforce Focus (category 5), Operations Focus (category 6), and Results (category 7) represent the results triad. Your organization's workforce and key operational processes accomplish the work of the organization that yields your overall performance results.

The horizontal arrow in the center of the framework links the leadership triad to the results triad, a linkage critical to organizational success. Furthermore, the arrow indicates the central relationship between Leadership (category 1) and Results (category 7). The two-headed arrows indicate the importance of feedback in an effective performance management system. All actions point toward Results-a composite of product and process outcomes, customer-focused outcomes, workforce-focused outcomes, leadership and governance outcomes, and financial and market outcomes.

System Foundation

Measurement, Analysis, and Knowledge Management (category 4) are critical to the effective management of your organization and to a fact-based, knowledge-driven system for improving performance and competitiveness. Measurement, analysis, and knowledge management serve as a foundation for the performance management system.

Purpose of the Criteria for Performance Excellence

The Criteria have three important roles in strengthening an organization's ability to be innovative, competitive, and sustainable:

Help improve organizational performance practices, capabilities, and results.
Facilitate communication and sharing of information on best practices among organizations of all types.
Serve as a working tool for understanding and managing performance and for guiding organizational planning and opportunities for learning.

Additionally, the Baldrige Criteria provide the basis for enabling you to utilize the optional Partners in system-organizational assessments, gain outside feedback, and become eligible for the Partners in Performance Excellence Awards.

Goals of the Criteria for Performance Excellence

The Criteria are designed to help provide organizations with an integrated approach to organizational performance management, working in the systems and on the systems, resulting in:

delivery of ever-improving value to customers and stakeholders, contributing to organizationalsustainability
improvement of overall organizational effectiveness and capabilities
organizational and personal learning

Core Values and Concepts of the Criteria for Performance Excellence

The Criteria are built on a set of eleven interrelated core values and concepts. These values and concept are embedded beliefs and behaviors found in high-performing organizations. They are the foundation for integrating key performance and operational requirements within a results-oriented framework that creates a basis for action and feedback.

visionary leadership
customer-driven excellence
organizational and personal learning
valuing workforce members and partners
agility
focus on the future
managing for innovation
management by fact
societal responsibility
focus on results and creating value
systems perspective

Brief Descriptions of the Core Values and Concepts

Visionary Leadership

Senior leaders set directions and create customer focus, clear and visible organizational values, and high expectations for the workforce. The directions, values and expectations balance the needs of all stakeholders. Leaders ensure the creation of strategies, systems and methods for achieving performance excellence, stimulating innovation, building knowledge and capabilities, and ensuring organizational sustainability. The defined values and strategies guide activities and decisions. Senior leaders inspire and encourage the entire workforce to contribute, develop and learn; to be innovative; to embrace meaningful change. Senior leaders are responsible to the organization's governance body for their actions and performance. The governance body is responsible ultimately to all stakeholders for the ethics, actions and performance of the organization and its senior leaders. Senior leaders serve as role models through ethical behavior, trustworthiness, and personal involvement in planning, communicating, coaching the workforce, developing future leaders, reviewing organizational performance, and recognizing members of the workforce.

Customer-Driven Excellence

The entire workforce takes into account all product features and characteristics, and all modes of customer access and support that contribute value to customers. Such behavior leads to customer acquisition, satisfaction, preference, and loyalty; to positive referrals; ultimately, to business sustainability. Thus, customer-driven excellence has both current and future components: understanding today's customer-and marketplace-desires and anticipating future customer desires and marketplace potential.

Organizational and Personal Learning

High levels of organizational performance happen through a systematic and well-executed approach to organizational and personal learning that includes managing and sharing knowledge. Organizational learning includes both continuous improvement of existing approaches and openness to significant change or innovation leading to new goals and approaches. Learning is embedded in the way the organization operates.

Organizational learning results in enhancing value to customers through new and improved products and customer services, developing new business opportunities, developing new and improved processes or business models, reducing errors, defects, waste, and related costs, improving responsiveness and cycle time performance, increasing productivity and effectiveness in the use of all resources, and enhancing the organization's understanding of and performance in fulfilling societal responsibilities.

Valuing Workforce Members and Partners

Success depends on an engaged workforce that benefits from meaningful work, clear organizational direction and performance accountability in a safe, trusting, and cooperative environment. The successful organization capitalizes on the diverse backgrounds, knowledge, skills, creativity-and the ethics, trustworthiness and motivation of its leaders, workforce members, and partners.

The organization builds internal and external partnerships to better accomplish overall goals. Internal partnerships include labor-management cooperation, developmental opportunities, cross-training, and high-performance teams. Internal partnerships involve network relationships among work units or between employees and volunteers to improve flexibility, responsiveness, and knowledge sharing.

Agility

Success in today's ever-changing, globally competitive environment demands agility-a capacity for rapid change and flexibility. Organizations face ever-shorter cycles for the introduction of new/improved products. Nonprofit and government organizations are increasingly being asked to respond rapidly to new or emerging social and economic issues. Major improvements in response times often require new thinking and new work systems, simplification of work units and processes, or the ability for rapid changeover from one process to another. A cross-trained and empowered workforce is a vital asset in such a demanding environment.

Focus on the Future

Sustainability requires understanding the short- and longer-term factors that affect your organization and marketplace. Sustained growth and performance leadership requires a strong future orientation and a willingness to make long-term commitments to key stakeholders-customers, workforce, suppliers, partners, and stockholders; the public; and your community. A focus on the future includes developing leaders, workforce, and suppliers; accomplishing effective succession planning; creating opportunities for innovation; and anticipating societal responsibilities and concerns.

Managing for Innovation

Innovation is making meaningful change to improve products, services, programs, processes, operations, and business model to create new value for the organization's stakeholders. Innovation leads to new dimensions of performance. Innovation involves taking intelligent risks. Innovation is restricted to research and development departments; innovation is important for all operations, work systems, and work processes. The organizations is led and managed so that innovation becomes part of the learning culture. Innovation is integrated into daily work and supported by the performance improvement system. Systematic processes for innovation should reach across the entire organization. Innovation builds on the accumulated and shared knowledge of people.

Management by Fact

Organizations depend on the measurement and analysis of performance. Such measurements derive from business needs and strategy, and they provide critical data and information about key processes, outputs, and results. Performance measurement include customer, product, and process performance; comparisons of operational, market, and competitive performance; supplier, workforce, partner, cost, and financial performance; and governance and compliance outcomes. Data is segmented by markets, product lines, and workforce groups to facilitate analysis.

Societal Responsibility

Leaders stress responsibilities to the public, ethical behavior, and the need to consider societal well-being and benefit. Leaders are role models for focusing on ethics and the protection of public health, safety, and the environment. We not only meet all local, state, and federal laws and regulatory requirements, but we treat these and related requirements as opportunities to excel "beyond mere compliance." We stress ethical behavior in all stakeholder transactions and interactions. Highly ethical conduct is a requirement and is monitored by the organization's governance body.

Focus on Results and Creating Value

Performance measurements focus on key results. Results are used to create and balance value for key stakeholders-customers, workforce, stockholders, suppliers, and partners; the public; and the community. By creating value for key stakeholders, our organization builds loyalty, contributes to growing the economy, and contributes to society. To meet the sometimes conflicting and changing aims that balancing value implies strategy includes key stakeholder requirements. This helps ensure that plans and actions meet differing stakeholder needs and avoid adverse impacts on any stakeholders. The use of a balanced composite of leading and lagging performance measures offers an effective means to communicate short- and longer-term priorities, monitor actual performance, and provide a clear basis for improving results.

A Systems Perspective

The Baldrige Criteria provide a systems perspective for managing the organization and its key processes to achieve the right results while striving for performance excellence. A systems perspective provides a framework for managing your whole organization, as well as its components, to achieve success. This is the most important value that "Baldrige" has uniquely created and freely offers to leaders with the wisdom to see it.

A fast-paced and competitive globalized economic system requires a mature and agile organizational management model. There is none better than the Baldrige Criteria for Performance Excellence. Even if all you do is give yourself and your people a basic understanding of how to see your organization this way—as a community and a system—it will enable a more mature management to emerge.