Leading the Malcolm Baldrige Way for Exceptional Results

Align Your Organization to Create Exceptional Results

 

How do leaders align and engage a workforce in the midst of uncertainty?

 

Authors Kay Kendall and Glenn Bodinson are expert Baldrige coaches. They studied more than two dozen organizations that delivered exceptional results following the Baldrige Criteria, key principles derived and championed by Malcolm Baldrige in the mid-1980s to improve productivity and competitiveness. Their research was supplemented by talking with more than fifty CEOs to gain insights on performance excellence. I recently asked them about their work and their new book, Leading the Malcolm Baldrige Way.

 

Disengaged workers have 37% higher absenteeism.

 

What do readers, who may not know Malcolm Baldrige, need to know before picking up your book? How will studying the Malcolm Baldrige Way help business leaders?

Malcolm Baldrige was a very successful businessman before Ronald Reagan tapped him to be Secretary of Commerce.  He was deeply concerned about the future of manufacturing in America.  At that time, the 80s, Japan was dominating in the automotive and electronics manufacturing industries.  Both of those industries – and others in America – were being plagued by poor quality, and consumers were making choices to go with Japanese products.  Secretary Baldrige championed an effort to establish a presidential award based on rigorous standards that would recognize manufacturing and service organizations that achieved high levels of performance.  After Baldrige’s untimely death, President Reagan decided to honor his friend with what became known as the Malcolm Baldrige National Quality Award.  Studying Leading the Malcolm Baldrige Way will help business leaders in any industry, in any situation – flourishing or in peril – learn how to align their employees to deliver exceptional results.

 

Why Engagement Matters

To those who think culture is soft, what statistics can you share that demonstrate engagement matters?

Leading the Malcolm Baldrige WayOne study showed that companies with high levels of employee engagement have five times higher shareholder returns over five years.  There is also clear evidence that engaged employees create loyal customers.  If that isn’t compelling, consider the flip-side of engagement.  Statistics from a recent article in Harvard Business Review cited, “Disengaged workers had 37% higher absenteeism, 49% more accidents, and 60% more errors and defects.  In organizations with low employee engagement scores, they experienced 18% lower productivity, 16% lower profitability, 37% lower job growth, and 65% lower share price over time.” Those are staggering costs for organizations.

 

 

Engagement is the rage these days in leadership circles, yet still many leaders don’t work on engagement. Why is this?

Honestly, we don’t understand it.  The evidence that engagement matters and impacts bottom-line results is clear.   There is also the notion that treating employees as valued assets is what leaders as decent human beings ought to do.  In the latest recession, we saw a lot of leaders with an attitude of “My employees should be grateful just to have a job.”  As the economy picked up, we saw many employees jump ship as soon as there were opportunities to work for an organization with a better culture, where they were treated as valuable contributors to the mission and vision.

 

Research: Companies with engaged workers report 6% higher profits.

 

Don’t Make Excuses

12 Principles that Guide High-Performance Organizations

Unlocking the Secrets of High-Performance

They may seem, at first glance, to have nothing in common—different industries, challenges, experiences, leaders, competition, you name it. But there is something about this group of organizations that drew attention and merited study.

And that was their performance. These businesses outperformed their competition. Consistently.

Brian MacNeice and James Bowen recently spoke with me about their research into these companies and their new book, Powerhouse: Insider accounts into the world’s top high-performance organizations. Brian and James are founders of the international Kotinos Partners consultancy. They are experts in high performance.

They outlined 12 principles that guide the organizations that outlast and outperform the competition.

 


“Engagement on its own is only a stepping stone to sustained high-performance.”

 

12 Characteristics

How did you arrive at the common characteristics of organizations achieving excellence?

Effectively these emerged gradually through the research. We studied each institution with an open mind and on its merits. Then we shortlisted, at the conclusion of our research in each case, what we thought were the fundamental drivers of that institution’s enduring outperformance. When we compared the lists we had created across several of the institutions, the common characteristics became evident.

Secondly, because our research process was quite extended, we had the opportunity to use some of the later studies to test and validate hypotheses emerging from the earlier ones.

Finally we used some of our client work, which was progressing in parallel, to further refine our thinking.

 

I often ask leadership experts whether leaders are made or born. You take on that question with regard to high-performance organizations and say that they are made, not born. What leads you to this conclusion?

Simply put, the leaders who we spoke to in the organizations we researched were consistent in articulating and reinforcing that view. Without exception they talked about how they viewed the enduring sources of their advantage as being their people and their organizations, and they each described their roles as being about setting direction and ambition and then facilitating and enabling their organizations to achieve and extend those ambitions over time.

Even more particularly, given that many of the organizations we researched could be reasonably described as “values-driven,” their leaders saw a fundamental aspect of their roles as being about defining, representing, facilitating and rewarding those values in their organizations. The Mayo Clinic, Tata, Doctors Without Borders (Médicins sans Frontières) and the US Marine Corps were particularly strong examples in this regard.

 


“Overengineered engagement initiatives can become impersonal and feel false.”

 

4 Pillars of High-Performance

Let’s talk about the four-pillars to delivering high-performance.

Copyright Brian MacNeice and James Bowen, Used by permission Copyright Brian MacNeice and James Bowen, Used by permission

Every organization knows it needs a plan. Where do most go wrong?

There are lots of ways in which organizations go wrong when it comes to planning, but for this discussion we will highlight two that we observe again and again in our work.

First, we suggest that organizations go wrong by planning on a basis of “inside-out” rather than “outside-in.” That is to say, their leaders tend to look at last year’s model and last year’s performance and identify tweaks they can make with a view to delivering incremental performance improvements next year. This model of planning tends to be short-term and tactical in nature and anchored in a historic, likely outdated, view of the world.

 


High performance organizations plan from the outside-in, not inside-out.

 

High performance organizations come at planning from the outside-in, using a much more strategic, future-oriented approach. They start by looking outside their organizations to understand how the context within which they operate is changing. Sometimes they do this by looking at their organizations through a series of discrete “lenses” – for example industry, market, customer, competitor, technology, regulatory, people – to understand (a) what dynamics they observe, (b) what opportunities and/or challenges arise as a result of these dynamics, and (c) how these dynamics might play out over the course of their planning horizon. Armed with these insights – in particular a much deeper understanding of cause-and-effect – they are better positioned to create strategies that bridge from where they are now to where they want to be over time. Relative to the first approach we discussed, plans developed this way tend to be more ambitious, radical and lower risk all at the same time.

Second we would suggest that organizations go wrong because they view planning as a task rather than as a capability. They view it as a chore to be endured once a year to fill a template, and which brings with it a significant cost in terms of time away from the frontline. Their engagement and investment in planning reflects this attitude – for them it’s about getting to the end of the process as quickly and painlessly as possible.

The approaches we observe in high performance organizations, by contrast, are more consistent with Eisenhower’s famous mantra that, “Plans are nothing, planning is everything.” They understand that their organizations, and the worlds in which they are operating, are always changing, and as such they develop planning as a dynamic, enduring competence. They operate “with their heads up,” tracking changes in their context all the time, taking on board the lessons of their experience and factoring insights into their plans on an ongoing basis. Some of these organizations have moved away from a traditional, annual model of budget-based planning towards a more continuous, iterative model of strategy development and deployment.

 


“Plans are nothing, planning is everything.” -Dwight Einsenhower

Why Employees Are Unengaged

The True Impact of Employee Engagement

 

There’s one phrase that often goes unheard in the workplace, yet has a huge impact on a company’s success: employee engagement.

Most business leaders have the mentality that they’re responsible for providing work; employees are responsible for getting it done. Under this logic, it’s up to the employees to motivate themselves day in and day out.

However, it’s practically impossible to stay motivated in an unsupportive environment (which is probably why 70% workers are disengaged from their jobs).

 

Fact: 70% of workers are disengaged from their jobs.

 

Disengagement is a defense mechanism. Employees distract themselves from what makes them unhappy (work) with other things they deem more fulfilling, like looking for new jobs, talking to friends, or watching funny cat videos.

 

“When people are emotionally invested, they want to contribute.” –Simon Sinek

 

This helpful illustration from Company Folders provides an eye-opening look at just how low employee engagement could be affecting you. (In the U.S. alone, companies could save up to $350 billion a year through increased employee engagement.)

Read on to learn what’s causing employees to disengage and how you can help them get back on track.

 

“To win in the workplace you must first win in the workplace.” –Doug Conant

 

Customer Experience Starts by Ignoring Your Customer

This is a guest post by Dr. Tracy Maylett, Ed.D.. Dr. Maylett is the Chief Executive Officer of DecisionWise, an HR management and consulting firm specializing in employee engagement. He offers an intriguing viewpoint on providing great customer experience.

Want a Great Customer Experience?

Is your organization’s success dependent upon creating an extraordinary Customer Experience? Then start by ignoring your customer. No, really.

 

“If you want a successful customer experience, start by ignoring your customer.” -Tracy Maylett

 

Throwing resources at your customer experience does not guarantee a transformative one. You can redesign stores, roll out cool new products, and engage customers on social media. You can implement every form of customer satisfaction measurement known to man. There’s nothing wrong with those steps. But without employees who care, a beautiful store is just a pretty shell. A sparkly new product is just another new release with a limited lifespan—if it even makes it out of the production room.

Without people engaged in their work, where are those cool innovations coming from? Where are the people who care about the superlative customer experience? Don’t get me started on the dangers of having jaded staffers interacting with customers on social media.

 

“Throwing resources at your customer experience does not guarantee a transformative one.” -Tracy Maylett

 

It All Begins with Your Employees

Creating a strong customer experience is like gardening: hoping and measuring won’t give you the results you want. Gardening requires tending to the components that create the desired outcome: using soil amendments, watering, and weeding. The gardener can’t do much more than that. But, assuming it’s done well, the odds of a solid harvest are high.

Growing a successful organization works in the same way. Success comes through quality products, stellar customer support, prudent financial decisions, great leadership, and employees who personally care about delivering an extraordinary customer experience. When an organization can create a top-notch Employee Experience, the likelihood of delivering a superior customer experience increases exponentially.

The opposite is also true: When employee experience is poor, the customer experience will reflect it. We call this the “Law of Congruent Experience.”

 

“When employee experience is poor, the customer experience will reflect it.” -Tracy Maylett

 

THE LAW OF CONGRUENT EXPERIENCE:

Employees will deliver a Customer Experience that matches their own experience in the organization.

5 Principles of Engagement That Will Transform Your Business

It’s All About Engagement

We’ve all seen it. Questionable decisions, made in a corporate office, are rolled out. No one questions the corporate mandate. Sure, some may grumble or may complain about the stupidity of something, but little is done. No one is listening anyway, especially to the employees who are just told to hit their numbers.

 

“Engagement is being totally present.” -Steven D. Goldstein

 

Steven Goldstein was an executive at Sears when he visited a store in Florida. His question Why Are There Snowblowers in Miami?, is now the title of his book and is a wakeup call to leaders. Engaging with employees and customers in the right way will help organizations make better decisions.

Steve has held executive positions with leading global brands including American Express (Chairman & CEO of American Express Bank), Sears (President of Sears Credit), Citigroup and others. He also has advised numerous CEOs on how to improve performance.

 

“Leaders connect by interacting authentically with employees, not by dictating to them.” -Steven D. Goldstein

 

How a Snowblower Changed Everything

The story is such a compelling example that I have to ask you to start with it. Tell us about the title of the book and how it impacted your leadership thinking.

Twenty years ago, while I was President of the Sears Credit Card business, I happened to be in Miami in February to make a speech. As I always did, I visited the local store – to have a look around, talk to employees and see what we could do for them to help improve sales. When I walked into the lawn and garden department, my eyes were immediately drawn to four shiny red snowblowers. I found a salesman and asked him, “Why are there snowblowers in Miami?”

On my flight back to Chicago, I started to think about all of the other “snowblower” stories I had come across in my career, and it struck me as a perfect metaphor for what is wrong in business. Since then, my experience in leading, advising and investing in companies convinced me that there had to be a way to attack this.

 

“Maintaining the status quo keeps you from achieving your full potential.” -Steven D. Goldstein

 

I tend to question everything.   If someone tells me, “That’s the way it’s always been done,” I will challenge that process. Because what I have found is that with many leaders, there is a gravitational bias towards the status quo. And while it’s not likely to get you into trouble, simply maintaining the status quo will keep you from achieving your full potential.

I began codifying the approaches, principles and practices I was using and realized it would be great if I could share this learning with other leaders so that they could improve the performance in their own organizations. So I began writing this book, and I thought this was the only title that made sense.

Most recently, I have been giving speeches about these principles and working with several leadership teams to teach them how to make this part of their daily diet. It is resonating extremely well.

 

“A company is only good as the people it keeps.” -Mary Kay Ash

 

Adopt an Outsider’s Perspective

How do leaders best adopt an outsider’s perspective — especially if they have been at an organization for many years?

For many leaders, this is not easy to do. If you are a consultant or a private equity investor, you look at a business as an enterprise consisting of assets that generate cash flow, which in turn generates attractive returns to shareholders. Through that aperture, you want to identify those areas where changes, improvement and new directions can be made to enhance value. You are consciously looking for those nuggets.

For many leaders, those nuggets are hiding in plain sight. Leaders must first accept that adopting an “outside in” perspective is critical to finding this gold. I’m currently Chairman of a private equity-owned company, and recently the leadership team was in a brainstorming session to explore new opportunities and approaches as well as to consider whether our existing business model needed changes. After discussing many good ideas, someone asked, “Will our PE owners be OK with this? I’m not sure they will.” My answer to him was, “They are looking to us to present them with a plan that makes sense, and if it does, they will say thank you.”

Like most things, leaders must accept the fact that their views are colored, even distorted, by their history with the company – and that this skewed perspective limits the possibilities they are able to see. They have to be willing to take the first step, as with any program that induces change. I tell leaders to take a long walk, forget everything they know about their business, come back into the building as if it were the first time and just start asking questions. While it may sound somewhat silly, it actually creates some discomfort; more importantly, it generates excitement about this exploration possibly leading them in new directions. I myself question everything: Why do we do it that way? What does that mean? What other options have you explored? Do you have the right players in each position? This “fresh eyes” approach is one of my five principles of engagement and is essential for generating any real, positive change.

 

“Don’t judge each day by the harvest you reap but by the seeds that you plant.” -Robert Louis Stevenson

 

Most connections don’t happen inside the boardroom. Why do so many leaders fail to connect with those who could fuel the company’s success?