Baldrige Model

In Search of Excellence

The New Zealand Business Excellence Foundation

1. OVERVIEW

“To enable New Zealand organisations to achieve and sustain proven World Class performance and results”

Mission

We provide

A range of services, advice and assistance to support NZ businesses in their Business Improvement activities, this includes - Frameworks for Business Improvement Business Assessment services Events and networking opportunities Internationally calibrated award programmes Benchmarking Training – in house and public courses Consulting services Mentoring and advisory services

New Zealand Refining CompanyLeadership New ZealandMuscular Dystrophy Association of NZNew Zealand Institute of ManagementNew Zealand Organisation for QualityAUTAuckland DHBBay of Plenty DHBCounties Manukau DHBMercy HospiceOrder of St JohnSpectrum CareFulton HoganLumleys Insurance NZ LtdHutt City CouncilLumley InsuranceEnvironment CanterburyBrookfields LawyersBartercard NZMinistry of Social DevelopmentMin. Civil Defence & Emergency MgmtDepartment of CorrectionsWaipa District CouncilMinistry of Primary IndustriesHousing New Zealand Corporation

ACCInland RevenueFuji XeroxNZ PoliceNZ Fire ServiceNZ PostNZ Trade & EnterpriseRoyal New Zealand NavyNew Zealand Aluminum SmelterAir New ZealandHousing NZ CorporationDepartment of LabourDepartment of Internal AffairsFisher & Paykel AppliancesNZ Freightways Ltd Dulux NZMeridian EnergySaint Clair Wine EstateVERO Insurance NZAuckland CouncilWintecCambridge ResthavenSport NZDept of Internal AffairsNZ Defence Force

NZBEF Membership encompasses a wide variety of organisations

The evolution of business improvement models

1. OVERVIEW

Conducting regular assessments to identify

improvement opportunities

Aligning their workforce and business processes to meet

customer requirements

Focusing on improving performance & capability across

the whole organisation

Benchmarking to prevent “reinventing the wheel”

Adopting a “continuous incremental improvement”

approach

1. OVERVIEW

What are “Best Practice” organisations doing?

Source – NZ Ministry of Economic Development

Business Improvement frameworks

1. OVERVIEW

The Baldrige Criteria for Performance Excellence (CPE) reflects the common characteristics of World Class organisations

1. OVERVIEW

Visionary leadership Customer driven excellence Organisational and personal learning Valuing employees and partners Agility Focus on the future Managing for innovation Management by fact Social responsibility Focus on results and creating value Systems perspective

The Baldrige Framework is very detailed - however there are abridged versions available for those starting the journey

2. HOW IT WORKS

An integrated Strategic

Management Framework

The International “Best Practice” Framework is a key reference framework because it is holistic, non-prescriptive and addresses the relationships between key business functions

Key relationships between criteria categories

What are your key business objectives?

How will you achieve them?

How will you track your progress?

How are you actually doing?

2. HOW IT WORKS

9

BALDRIGE ASSESSMENT FACTORS & POINTSBALDRIGE ASSESSMENT FACTORS & POINTS

How YouPerform

How you run your Organization

55%55%ProcessProcess

45%45%ResultsResults

1. Leadership2. Strategic

Planning3. Customer Focus4. Measurement

and Analysis5. Workforce

Focus6. Operations

Focus

•Process•Customer•Workforce•Leadership / Governance

•Financial/Market

Alignment between Enablers (1-6) & Outcomes (7)

2. HOW IT WORKS

Self Assessment is a key component of a Business Improvement approach

2. HOW IT WORKS

Training is

considered

effective

Performance is

monitored

effectively

Highly visible

leadership

team

Staff feel

engaged

There is a

focus on risk

management

We understand

customer needs

HIGH

MEDIUM

LOW

WHERE IS THE GREATEST NEED FOR IMPROVEMENT?

GAP

WHERE ARE WE NOW?

WHERE DO WE WANT TO BE IN THE FUTURE?

2. HOW IT WORKS

Identifying and Prioritising the Opportunities

Tracking progress – multiple applications / assessments

0

100

200

300

400

500

600

700

800

YR1 YR2 YR3 YR4 YR5 YR6 YR7 YR8 YR9 YR10

CPE

Sco

re (

rang

e of

ass

essm

ent)

Year of the BE Journey

Rate of Improvement

2. HOW IT WORKS

Alignment of awards in New Zealand

Time

REGIONAL LEVEL AWARDSeg Westpac Sponsored ATEED Awards

NZ International Business AwardsNZ Excellence in Business Support AwardsNZ Franchise AwardsNZ Health Innovation AwardsNZ Insurance AwardsNZ Tourism Awards

NZ BUSINESS EXCELLENCE AWARDGOLD

SILVER

BRONZE

WORLD CLASS

2. HOW IT WORKS

NZ BUSINESS ACHIEVEMENT AWARDS

Why do it? NZBEF survey dataKey drivers influencing the decision to adopt the CPE

0 20 40 60 80 100

Guide continuous improvement

Internationally proven to work

Desire to be ‘world class’

External measure of performance

Needed a business framework to co-ordinate a range of initiatives

Access to established Business Excellence networks

Benchmark within & across industries

External recognition & credibility

% respondents (great deal or moderate amount)

2. HOW IT WORKS

Perceived influence over time – NZBEF survey results

0 40 60 80 100 Clarity of direction

Improved Business results Greater Expertise

Voluntary involvement Organisation wide capacity

Engagement Stakeholder & customer relationships

% respondents (great deal or moderate amount)

2. HOW IT WORKS

What are the benefits

Improved Financial Results

Increased Market Share

Improved Customer Satisfaction

Increased Employee Satisfaction

Organisational awareness and alignment

Consistency of approach

3. REAPING THE REWARDS

Lean Six Sigma Value Delivery (NZ$million)

REAPING THE REWARDS

Figure 4.1-3 Tools used for the assessment & analysis of Organisational Performance



VERO - Business Process Re-engineering Process

VERO – Integrated Project Management Process


Background of industrial conflict during the 1990’s - internally focused on proposed changes to work arrangements

- workforce disconnected from management, disillusioned and demoralised - organisational reputation damage - lack of investment in organisational improvement

Business Excellence – a key platform for change - total organisational model

- enables systematic identification of opportunities for improvement - benchmarking and evaluating progress


REAPING THE REWARDS

IN SUMMARY

The fundamentals of running a successful organisation in the public, private or not for profit sector are essentially the same.

There is no better alternative than a structured, consistent, organisation-wide approach to business improvement.

Business improvement is not an “add on”, rather, it’s an essential part of running a successful organisation.

1.Shared Values: Core beliefs and attitudes that drive employee behaviours.2.Strategy: Long-term company plan. What is the long-term strategic direction of the company?3.Structure: Company hierarchy. The ways business units and departments are linked.4.System: Formal or informal procedures and processes to get things done in organizations.5.Staff: Employee is always known to be the key asset of your company. How motivated, trained and engaged are your employees?6.Style: Company management and key personnel’s management style. How problems get solved by organization leaders.7.Skills: Core competencies and capability of the company.

McKinsey 7-S Framework is made up of seven interdependent factors that determine how corporations are operating:

Operating coreThose who perform the basic work related directly to the production of products and servicesStrategic apexCharged with ensuring that the organisation serve its mission in an effective way, and also that it serve the needs of those people who control or otherwise have power over the organisationMiddle-line managersForm a chain joining the strategic apex to the operating core by the use of delegated formal authorityTechnostructureThe analysts who serve the organisation by affecting the work of others. They may design it, plan it, change it, or train the people who do it, but they do not do it themselvesSupport staffComposed of specialised units that exist to provide support to the organisation outside the operating work flow

According to Mintzberg organisations are formed of five main parts:

1. Mutual adjustment, which achieves coordination by the simple process of informal communication (as between two operating employees)

2. Direct supervision, in which coordination is achieved by having one person issue orders or instructions to several others whose work interrelates (as when a boss tells others what is to be done, one step at a time)

3. Standardization of work processes, which achieves coordination by specifying the work processes of people carrying out interrelated tasks (those standards usually being developed in the technostructure to be carried out in the operating core, as in the case of the work instructions that come out of time-and-motion studies)

4. Standardization of outputs, which achieves coordination by specifying the results of different work (again usually developed in the technostructure, as in a financial plan that specifies subunit performance targets or specifications that outline the dimensions of a product to be produced)

5. Standardization of skills (as well as knowledge), in which different work is coordinated by virtue of the related training the workers have received (as in medical specialists - say a surgeon and an anesthetist in an operating room –responding almost automatically to each other’s standardized procedures)

6. Standardization of norms, in which it is the norms infusing the work that are controlled, usually for the entire organization, so that everyone functions according to the same set of beliefs (as in a religious order)

The organizational configurations framework of Mintzberg is a model that describes six valid organizational configurations