The Baldrige Excellence Framework or the Criteria for Performance Excellence, has for the past 30 years, captured the essence of what excellent performing organisations do. It describes what it takes for an organisation to be sustainably successful in the long term. Reviewed every two years the Criteria changes are made to reflect the current business environment. The changes in the Criteria provide a useful indication of today’s business environment and what will drive the competitive advantage of leading organisations in the future.
‘Today the 2017–2018 Baldrige Excellence Framework offers organizations of all kinds the world’s most valuable, nonprescriptive guide for leadership and management that facilitates a systems approach to achieving organization-wide excellence.’, Robert Fangmeyer, Director of the Baldrige Performance Excellence Program
Whether or not you subscribe to the Baldrige framework or one of other Performance Excellence frameworks in use across 85 countries today, there are many thousands of organisations that use the Criteria to improve. Some of these organisations may be your competitors. The changes in the Criteria will be areas they will be focussing on right now to gain an edge in your market.
So, what changes have been made in the Baldrige Excellence Framework for 2017?
In making changes, the authors of the 2017-2018 Criteria for Performance Excellence, note the following:
“The Criteria must balance two important considerations. On the one hand, the Criteria need to reflect a national standard for performance excellence, educating organizations in all aspects of establishing an integrated performance manage¬ment system. On the other hand, the Criteria need to be accessible and user-friendly for a variety of organizations at varying levels of maturity.”
Two key areas
There are two key areas that underpin the Criteria revision for 2017.
The first is cybersecurity.
In a recent blog posting ‘Has the dark side captured Yahoo!’, I described Yahoo!’s security problems in which thieves stole the private information from over 1 billion user accounts. Experts describe this as the largest known breach of its kind on the Internet.
Yahoo! are not alone in not being able to keep their information systems secure. Some would say they were lucky because at least they knew their systems had been hacked. There were an estimated 300 million cyberattacks during 2015. Of those only 90 million were detected. This means 70% of cyberattacks go unnoticed. And such attacks are increasing at an annual rate of approximately 40 percent.
For businesses and organisa¬tions of all kinds, managing and reducing cyber risks to data, information, and systems have become a necessity.
The second key area is in enterprise risk management.
Who would have thought that an earthquake, could cause a tsunami big enough to destroy emergency generators that were cooling a nuclear power plant, which in turn would cause a meltdown and radiation leakage, that would cause the evacuation of the only plant in the world that made Xirallic pigments, and prevent Ford customers from buying their favourite metallic black motor vehicles. See ‘Enterprise risk management and tuxedo black’. And yet that is exactly what happened to Merck at their Onahama factory when the magnitude 9.0 Tohoku earthquake hit off the coast of Japan in March 2011.
It is essential that businesses or enterprises manage risk. The international standard ISO 31000: Risk Management—Principles and Guidelines, provides a framework from which all enterprise risks including those from events like the Tohoku earthquake may be identified, analysed, evaluated, and treated in a systematic manner.
All organisations need to take risks to be successful. Deciding which risks are intelligent and worth taking needs to be carefully considered and can mean the difference between extinction, survival, or role-model performance.
2017 Revision Criteria category changes
For those familiar with the Baldrige framework, the following summarises where changes have been made for 2017.
Category 1 (Leadership) has been re-organised, and duplication removed to clarify that senior leadership involves taking action in three key areas:
- vision and values,
- communication, and
- mission and organi¬sational performance
Category 2 (Strategy) now emphasises the importance of considering the many questions about strategy as elements of managing strategic risk in your organisation. Questions on work systems have been reorganised to assist making decisions on work processes and effective work systems.
Category 4 (Measurement, Analysis and Knowledge Management) has undergone change to improve clarity:
The area on Best Practices has been moved to item 4.2 as part of manag¬ing organizational knowledge.
Item 4.2, now renamed ‘Information and Knowledge Management’, has been reordered and realigned to focus on the quality and availability of data and information and on organisa¬tional knowledge, including the sharing of best practices.
Data and Information security and emergency availability have been moved to Operations.
Category 5 (Workforce) includes two new requirements:
- The need to ensure new workforce members fit your organizational culture
- To consider the learning and development desires of workforce members in your learning and development system
Category 6 (Operations) is where key work processes have been introduced as an overall requirement) to recognise the importance of being clear about these processes:
The risks associated with product and process design also now need to be considered.
Supply-chain management has been moved to reflect its importance as a key work process.
The 6.2 (Operational Effectiveness) item, includes how information systems are managed during both normal operations and during disasters or emergencies.
Information systems reliability, security, and cybersecurity need to be assured.
Category 7 (Results)
Item 7.1 Product and Process Results, now include results for security and cybersecurity processes and your safety system.
Items 7.2 and 7.3 have had name changes.
Item 7.4, Leadership and Governance Results, includes results for managing risk and taking intelligent risks.
Using the Criteria
There is no question about the value that any type of organisation of any size, in any industry, or at any stage of its maturity will benefit from the Criteria for Performance Excellence. For over 30 years the Criteria has provided leaders with answers to three fundamental questions;
- How can I tell if my organisation is doing as well as it could?
- How do I know?
- What should I improve or change?
The Criteria tell you WHAT. They are non-prescriptive and will not tell you HOW.
For the HOW, you need to learn what other successful organisations have done to improve, realise sustainable results, and get to the top of their chosen niche. This is best practice benchmarking, where you can learn from the best to apply even better practices to your own organisation. Best practice benchmarking saves us from starting with a ‘blank sheet of paper’, and increasingly this is available online. For example, the www.bpir.com, described as ‘the complete resource for improvement and business excellence’ provides thousands of benchmarks, best practices, tools, including networking with best practice leaders.
Before you rush off to commission your best practice benchmarking project just remember to make sure that you have assessed your organisation against the very latest 2017 – 2018 Criteria so you know that you are working on the most important area you need to fix right now for 2017.
Wishing you all the best for coming year,
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