INFORMATION PAPERIAARNG-SPO23 Mar 2012

SUBJECT: The Difference between Innovative Business Practices: Lean-Six-Sigma, Baldrige, and Strategic Planning

1. Below are synopses of programs and terms commonly confused and considered synonymous. They are used at state-level but the concepts and skills acquired by participating can be beneficial at any level for any individual. If personnel are interested in participating, contact the Office of Strategic Initiatives through your chain of command.

2. Lean Six-Sigma (LSS) and Continuous Process Improvement (CPI): LSS is a methodology used by all types of organizations around the world for analyzing and improving specific processes at the process execution level. Lean and Six-Sigma are actually two different methodologies, but both basically focus on analyzing the current process, coming up with improvements to it, and implementing and monitoring the new process. The Lean methodology (and specifically the Kaizen strategy) is normally executed in a short period of time (5-days) and focuses on eliminating wasted steps in and increasing the efficiency of the process. The Six-Sigma methodology takes longer (3-6 months+) because it relies heavily on identifying and measuring key measures of performance and outputs of the process, and focuses on increasing the effectiveness of the process. CPI is simply a commonly used title for a LSS program within an organization. LSS/CPI is NOT an assessment of the organization, nor a strategic planning processes. It simply helps improve processes at the process execution level.

3. Army Communities of Excellence (ACOE) and Baldrige Performance Excellence Program (BPEP): The Malcolm Baldrige National Quality Award recognizes US organizations for performance excellence in the business, health care, education, and nonprofit sectors. It’s the only formal recognition of performance excellence for both public and private organizations given by the POTUS. It’s administered by the BPEP which is managed by the National Institute of Standards & Technology, an agency of the Department of Commerce. The Baldrige National Quality Program was established by the Malcolm Baldrige National Quality Improvement Act of 1987. Baldrige served as Secretary of Commerce during the Reagan administration. In 2010 the program's name was changed to the BPEP to reflect the evolution from a focus on product, service, and customer quality to a broader, strategic focus on overall organizational quality-called performance excellence. To receive a Baldrige Award, an organization must have a role-model organizational management system that ensures continuous improvement in delivering products/ services, demonstrates efficient and effective operations, and provides a way of engaging and responding to customers and other stakeholders. ACOE is the title of the program the Army uses for its participation in the BPEP. It is managed by the Installations Management Command (IMCOM) and primary participants are Army Posts, rather than organizations like Divisions and BCTs. The Army National Guard’s ACOE program is part of the Army’s, and is for the voluntary participation by State JFHQ’s as organizations; although a few State Camps participate separate from their JFHQ’s. ACOE uses the nonprofit sector Baldrige Criteria, which is simply a series of questions an organization answers to describe what it does and how it does it in the context of 7 categories: 1) Leadership; 2) Strategic Planning; 3) Customer Focus; 4) Measurement, Analysis, and Knowledge Management; 5) Workforce Focus; 6) Operations Focus; and 7) Results. This is an all encompassing assessment of an organization and how well these 7 functions are organized and integrated together. It is NOT the same as LSS/CPI or Strategic Planning . An organization’s process improvement (LSS/CPI) efforts are asked about in a small sub-section of Category 6, and Strategic Planning is covered in Category 2.

4. Strategic Planning: Strategic Planning, as a business term not an Army doctrinal term, is less defined than any of the programs and terms described above, but it is frequently confused with them. Wikipedia defines it as “an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy. In order to determine the direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue a particular course of action. Generally, strategic planning deals with at least 1 of 3 key questions: 1) "What do we do?"; 2) “For whom do we do it?"; and 3) "How do we excel?"… this is viewed as a process for determining where an organization is going over the next year or-more typically-3 to 5 years (long term), although some extend their vision to 20 years.” A BPEP assessment will make you ask yourself about your strategic planning process in Category 2 and how it relates to the processes you describe in answering the other category questions, but the BPEP assessment itself is NOT the/a strategic planning processes.

LTC CarlsonStrategic Planning Officer

Approved by: COL Gary Freese