1. BPIR Best Practice Newsletter August – 2013

    August 28, 2013 by ahmed

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  2. The surprising reasons why America lost its ability to compete

    August 23, 2013 by ahmed

    The US has always been synonymous with growth and competition. It is perceived as one of the biggest superpowers, technology hubs and education centres of the world. It is also known for its development and use of new management trends and through its prestigious business schools such as Harvard rolling out an elite batch of the best management graduates every year. But when a credible report says that both of these things are just misconceptions then the ground begins to shake.

    The report called Competitiveness at The Crossroads was written by three Professors of Harvard Law School. The report shockingly reveals that US has lost its competitive edge in the world market, and the reason given behind this is even more shocking – the kind of management that is being taught and applied.

    According to the report the reason behind US companies competitiveness decline is that today’s business has become narrow-minded in its view, focused only on share prices while compromising on innovation and shared resources. The result is that US business is not as sharp as it should be and is not able to compete in the world market.

    The curriculum in the business schools sadly focuses mostly on outdated business policies and models instead of practicality and a long-term approach. Also? the customer needs to be considered as a much more important entity in the whole business system. Business leaders can no longer simply blame the government and the legislation unless they do something to change the scenario themselves. Business schools, business journals, thinkers and students alike need to think of management as a combination of art and science and not just a bunch of principles. Before things head for the worst, it is time for the US to change its management strategies, both in teaching and in practice.

    Below is an article by Steve Denning about the Competitiveness at the Crossroads study.

    Competitiveness at the Crossroads (2012) is an alarming report with far-reaching implications. Forget the U.S. budget sequester. Set aside the financial bubbles on which the economy currently rests. Pay attention to something much more fundamental: America has lost the ability to compete in the international marketplace.

    The report was written by three distinguished professors at Harvard Business School—Michael Porter, Jan Rivkin and Rosabeth Moss Kanter—as part of a competitiveness initiative begun in 2011. As Professor Porter explains, “there was a clear feeling that something different was happening in the U.S. economy—this was not just a deep recession caused by the housing mortgage crisis and so forth… something more was going on.”

    The signs of the problem had been visible for some time. Job creation had stalled around 2000. Wages had been stagnating for well over a decade ago. Worse, “virtually all the net new jobs created over the last decade were in local businesses—government, healthcare, retailing—not exposed to international competition. That was a sign that the U.S. businesses were losing the ability compete internationally.”

    Let’s ask the Harvard MBA alumni
    How had the disaster happened? To find out, the professors had the inspired idea of asking their own Harvard Business School MBA alumni. The results are surprising and, in their own way, illuminating.

    The respondents were over 6,000 people “from every sector of the economy, with heavy representation in finance and insurance, manufacturing, and professional, scientific, and technical services. Nearly a third of the 2012 respondents reported a title of chief executive, chair, president, founder, owner, managing director, managing partner, or a similar title at the very top of an organization.”

    As graduates of Harvard Business School’s MBA program, they are thus the very crème de la crème of American business, or what the study appreciatively calls “business leaders”.

    Since the essence of strategy, as Professor Porter has stressed for several decades, concerns coping with competition, those responsible for strategy—business leaders—will surely shed light on what has gone wrong with American competitiveness and how to fix it.

    The role of management in the loss of competitiveness
    In the survey, Harvard’s MBA alumni were asked how American business stacks up against its competition on a variety of issues. The quality of management is obviously one of the most important of those issues: if there are disastrous shortfalls in the ability to compete, then surely the quality of management itself—the art and science of getting things done—must have a lot to do with it. Indeed if there are widespread failures in competitiveness across the whole economy, then it is likely that we have something even more serious: a generic problem with the strategies being pursued.

    So do the business leaders see the quality of their own management as a problem?

    Not at all.

    Not only do they see management as a relative strength of American business. They see management as “strongly improving”.

    Come again?

    American business is unable to compete internationally. But management—relative to competitors—is both strong and improving?

    An odd concept of management
    What alternate universe are these business leaders living in?

    What sort of “management” is it where the quality of management is strong and improving and yet firms can’t compete internationally?

    The business leaders indicate in their responses that their high-quality management can’t compete because of government-created constraints, such as the political system, the tax code, the regulations, the legal system, K–12 education, and fiscal policy. In other words, the loss of competitiveness isn’t the business leaders’ fault: “Don’t blame us: we are not responsible!”

    Astonishingly, the report itself cites the business leaders’ view that management is strong and improving and the leaders’ own lack of perceived responsibility for causing or resolving these problems, as “good news” and indeed a “great strength” of the U.S. economy (page 6).

    The end of “can-do” management?
    How can business leaders and the competitiveness report itself be talking about management as strong and improving when firms are consistently failing to compete internationally?

    Apparently, this kind of management isn’t about the art and science of getting things done and overcoming constraints, whatever they happen to be. It isn’t the kind of enterprising “can-do” management that opened up the American continent several centuries ago, that constructed the transcontinental railroads in difficult conditions, that won several world wars, that accomplished mission impossible by landing a man on the moon only seven years after setting out to do so, and that invented the Internet and created Silicon Valley from scratch.

    High-quality management that can’t compete?
    So what sort of “management” is it?

    Here the report is helpful. The basic narrative begins in the late 1970s and the 1980s. Through globalization, it became possible and attractive for firms to do business in, to, and from far more countries. Changes in corporate governance and compensation caused U.S. managers to adopt an approach to management that focused attention on the stock price and short-term performance.

    As a result, firms invested less in shared resources such as pools of skilled labor, supplier networks, an educated populace, and the physical and technical infrastructure on which U.S. competitiveness ultimately depends.

    These management actions in turn gave rise serious social problems (loss of jobs, stagnating income, growing inequality) and eventually a decline of the public sector (an inability to fund health and pensions, or investments in “the commons” such as infrastructure, training, education, and basic research, fields that the private sector had abandoned.)

    The report thus accepts that the decline of the public sector and the failure to invest in shared resources are not root causes of the decline in competitiveness. They are the consequence of the focus on the short-term and the stock price.

    The concept of management that the leaders and the report is talking about is thus management that is high-quality if it succeeds in firms meeting their quarterly numbers and getting their stock price up, even if it means failing in the larger task of competing internationally.

    Strong innovation that can’t cope with competition?
    A similar picture emerges on the issue of innovation. The business leaders were asked what how American performance in terms of entrepreneurship and innovation stacks up against competitors. The response was again that innovation and entrepreneurship are strong and improving.

    And once again, the report hails this response as “good news” and “a strength” for the U.S. economy.

    How’s that?

    “Innovation” that can’t cope with international competition is “good news” and “a strength”?

    Economists that have studied innovation in depth question the premise that U.S. innovation is strong and improving. Thus Nobel Prize winner Edmund S. Phelps recently pointed to studies showing that in the early 1970s the rate of indigenous innovation (as measured by its estimated contribution to the rate of growth in labor productivity) dropped by about half — to around 1 percent since then, from about 2 percent before then.

    The economist Robert J. Gordon has also recently noted a marked slowdown in innovation.

    So what sort of innovation could these business leaders be talking about? When a firm is focused on short-term profits and the stock price, it’s possible that managers are innovating, but with innovations related to efficiency and cost reductions. By contrast, value adding innovations, particularly game-changing innovations, are likely to be viewed as too risky and expensive to invest in. The firm will consistently gravitate to safer cost-saving innovations, even if this approach will set the firm on a track that consistently leads to loss of global competitiveness and eventually corporate death.

    And this is what has happened. As Allen Murray writes in the Wall Street Journal, “market-leading companies have missed game-changing transformations in industry after industry—computers (mainframes to PCs), telephony (landline to mobile), photography (film to digital), stock markets (floor to online)—not because of ‘bad’ management, but because they followed the dictates of ‘good’ management.”

    Profess Phelps concludes: “A return to the productivity growth and broad economic inclusion of the past will require nothing less than a revival of the high dynamism that underpinned that performance. In the business sector, it is necessary to put an end to infighting in established companies and the shortsightedness of chief executives who know they have only a few years in which to haul in some big bonuses. There is a need for a wider embrace of the old ethos of imagination, exploration, experiment and discovery.”

    Where did the short-term focus on stock price come from?
    Why do business leaders focus on the stock price and the short-term with such disastrous consequences for management, innovation and competitiveness? Where does this thinking come from?

    The answer is close at hand. It was outlined by Harvard Business School professor, Clayton Christensen in a talk in November 2011: the thinking comes from the business schools themselves:

    “The problem lies with the business schools which are at fault. What we’ve done in America is to define profitability in terms of percentages. So if you can get the percentage up, it feels like we are more profitable. It causes us to do things to manipulate the percentage. I’ll give you a few examples.

    There is a pernicious methodology for calculating the internal rate of return on an investment. It causes you to focus on smaller and smaller wins. Because if you ever use your money for something that doesn’t pay off for years, the IRR is so crummy that people who focus on IRR focus their capital on shorter and shorter term wins.
    There’s another one called RONA—rate of return on net assets. It causes you to reduce the denominator, assets, because the fewer the assets, the higher the RONA.
    “We measure profitability by these ratios. Why do we do it? The reason the finance people have preached this almost like a gospel to the rest of us is that, if you describe profitability by a ratio, you can compare profitability in different industries. It ‘neutralizes’ the measures so that you can apply them across sectors to every firm.”

    In other words, “we have discovered the problem and it is us.” Thus behind the problem of competitiveness lies a concept of management based on short term profits and the stock price that these business leaders learned when they were MBA students at Harvard and elsewhere.

    This concept of management, that measures results in terms of short-term performance and the stock price, is still the core of what is taught in the business schools across the country today. To see it play out in detail, just read any of the “consulting casebooks” that business schools use. In case after case, the “right answer” to the business problem at hand is to go for short-term profit, and pay less attention to long-run consequences for the firm or the economy. It is this fundamental thinking that drives the business decisions that Christensen calls “just plain wrong” and that are killing U.S. competitiveness.

    Shareholder value morphs into C-suite capitalism
    Even worse, this concept of management has morphed into something else: C-suite capitalism. Thus the focus on short-term value and the stock price gained traction in the 1970s and 1980s, supposedly as a way of advancing the interests of shareholders and protecting them against the greed of self-serving managers. It was called shareholder value. But the approach had the opposite effect of what was intended. Maximizing shareholder value turned out to be the disease of which it purported to be the cure.

    In his book, Fixing the Game, Roger Martin, Dean of the Rotman School of Management at the University of Toronto, notes that between 1960 and 1980, CEO compensation per dollar of net income earned for the 365 biggest publicly traded American companies fell by 33 percent. CEOs earned more for their shareholders for steadily less and less relative compensation. By contrast, in the decade from 1980 to 1990, CEO compensation per dollar of net earnings produced doubled. From 1990 to 2000 it quadrupled.

    Since 2000, the situation has further deteriorated. According to Professor Mihir Desai, the Mizuho Financial Group Professor of Finance at Harvard Business School, over-compensation of the C-suite has produced a giant financial incentives bubble that is inexorably pushing the US economy into decline. His 2012 HBR article shows how it is having disastrous business consequences, including a serious mis-allocation of capital and talent, repeated governance crises, rising income inequality and a lack of international competitiveness.

    Fiddling with symptoms while ignoring root causes
    One might have expected that this new report on competitiveness, having identified a focus on short-term results and the stock price as a root cause of the loss in competitiveness, would explore with the business leaders whether they recognize this to be the case, and if so, what they are doing to change it.

    Instead, the focus of the conversation with the business leaders was on fixing the symptoms of the loss of competitiveness—particularly rebuilding the talent pool (through training, apprenticeship, community colleges), improving the business context (participating in initiatives like regional clusters, research, startup incubators, or political advocacy) and exploring more local sourcing of products.

    Not surprisingly, given the failure to address the root cause of the competitiveness problem, not many firms are actively pursuing these issues. Only 8 percent of respondent firms are “heavily involved”.

    In the overall scheme of things, this result is discouraging but perhaps not so important. Even if those measures were being implemented more energetically by business leaders, they wouldn’t resolve the loss of competitiveness. As Professor Porter has reminded us for several decades, if a strategy is misconceived, more talent or more research won’t help: the talent and the research will end up being wrongly directed on short-term gains, not redressing competitiveness.

    Not surprisingly, reshoring—which requires rethinking the very basis of competition—was the least-supported action by these business leaders.

    What government must do
    Consistently with the business leaders’ own viewpoint that the loss of business competitiveness is not the fault of business, the main thrust of the Harvard report on competitiveness is less about what business leaders themselves should do, and more about “the general consensus about what Washington must do”, including controlling federal spending, reforming the tax code and streamlining regulations.

    The issue here is not that the report’s recommendations for government are misguided. They are important and necessary. The issue is that they will do little to resolve the problem of competitiveness, so long as business leaders focus on the short-term and the stock price. They are contributory issues, not root causes of the problem.

    Missing in action: the customer
    Yet the most staggering aspect of the Harvard report on competitiveness is the total absence of the customer. The word “customer” never appears in the entire report. Even once. The report thus gives no recognition to another key issue underlying the loss of competitiveness: the fundamental shift in the balance of power in the marketplace from seller to buyer. This shift flows from globalization and customers’ access to reliable information on the Internet.

    The shift is critical because it short-circuits the current business focus on the short-term and the stock price: if firms don’t delight their customers with continuous innovation, their customers vanish and the firms die. Several decades ago, being just a bit more efficient than the local competitor might have been enough to get by. Not any longer. Now in order to survive, firms have to excel with their customers on a global basis.

    The only solution to the new dynamic of the customer-driven global marketplace is to adopt a different kind of management with a new corporate bottom line in which value-adding innovation is a necessity, not an option. Instead of focusing exclusively on short term gains and efficiency innovations, the very goal of the firm has to shift to delighting customers through continuous value-adding innovation.

    The only valid purpose of a firm: creating customers
    As it happens, this thinking isn’t entirely new. Back in 1973, Peter Drucker showed us the way to dealing with competitiveness, by getting back to first principles and addressing the question: why do we have private sector firms in the first place? He wrote:

    To know what a business is, we have to start with its purpose. Its purpose must be outside of the business itself. In fact, it must lie in society since business enterprise is an organ of society. There is only one value definition of business purpose: to create a customer…

    More recently, Roger Martin writes in Fixing the Game:

    We must shift the focus of companies back to the customer and away from shareholder value. The shift necessitates a fundamental change in our prevailing theory of the firm… The current theory holds that the singular goal of the corporation should be shareholder value maximization. Instead, companies should place customers at the center of the firm and focus on delighting them, while earning an acceptable return for shareholders.

    If you take care of customers, writes Martin, shareholders will be drawn along for a very nice ride. The opposite is simply not true: if you try to take care of shareholders, customers don’t benefit and, ironically, shareholders don’t get very far either. In the real market, there is opportunity to build for the long run rather than to exploit short-term opportunities, so the real market has a chance to produce sustainability and competitiveness.

    Similarly in Reorganize for Resilience, Harvard Business School professor Ranjay Gulati writes:

    Those companies built around an inside-out mind-set—those pushing out products and services to the marketplace based on a narrow viewpoint of their customers that looks at them only through the narrow lens of their products—are less resilient in turbulent times than those organized around an outside-in mind-set that starts with the marketplace, then looks to deliver creatively on market opportunities. Outside-in orientation maximizes customer value—and produces more supple organizations. Embracing an outside-in perspective—focusing on creatively delivering something of value to customers instead of obsessing over pushing your product portfolio—builds an inherent flexibility into organizations.

    A paradigm shift in management
    Achieving continuous innovation and customer delight lies outside the performance envelope of firms that are built on hierarchical bureaucracy and focused on short-term gains and the stock price. It requires a fundamentally different way of leading and managing—in effect, a paradigm shift in management. It means:

    • a shift from controlling individuals to self-organizing teams;
    • a shift from coordinating work by hierarchical bureaucracy to dynamic linking;
    • a shift from a preoccupation with economic value to an embrace of values that will grow the firm; and
    • a shift from top-down communications to horizontal conversations.

    Dealing with competitiveness thus implies a revolution in the way private sector firms are run. To be sure, improvements in the tax code and streamlining regulations will help. But “business leaders” need to start acting like business leaders and draw on the long tradition of “can-do” management on which the country was built.

    Fortunately there are many firms already showing the way. In addition to prominent instances like Whole Foods, Amazon and Salesforce, there are thousands of lesser-known firms on the same track. They have shifted the bottom line of the firm so that the very purpose of the firm is to add value to customers. Thus experimentation and innovation become an integral part of everything the firm does. Companies with this model of management have shown a consistent ability to innovate and compete internationally.

    The responsibility of business schools
    It’s not just business leaders who need to embrace the paradigm shift in management. Business schools, business journals and consulting firms must also join the revolution. In the age of customer capitalism, should it be surprising, when the customer is totally absent from the thinking of leading business schools, that competitiveness has become an issue? Business schools must stop disseminating obsolete management methods, spend less time blaming the government for the private sector’s inability to compete and instead teach management thinking that is relevant to the 21st Century.

    The crisis identified by the competitiveness report is real. The diagnosis of the problem and proposed remedies discussed in the report are not. As Professor Rivkin has said, “the ability of firms in the United States to be competitive in the world economy and to support living standards in America is in doubt.” It will continue to be in doubt unless and until business leaders and business schools deal with root causes.

    Obviously, there are brilliant thinkers in business schools who have spoken out on these root causes, including Clayton Christensen, Mihir Desai, Rakesh Khurana, Ranjay Gulati and Roger Martin. But their voices are still on the fringe of business school thinking. They are not yet centrally reflected in the business school curricula. Their thinking needs to move from the margins to the the mainstream. Courses need radical change to reflect the new business context. Research needs to focus on knowledge that is useful to the challenges facing managers today.

    One can only hope that the next report of the Competitiveness At The Crossroads initiative will be built on this new thinking and deal with the root causes of the competitiveness crisis and not merely fiddle with symptoms.

    A new world is unfolding before our eyes, with new goals and new ways of managing. The only question is whether America’s business leaders and business schools are going to be part of it.

  3. Benchmarking Schools

    August 14, 2013 by ahmed

    Today, the whole world is one global village. People chat with others sitting thousands of miles away in another country. An average mobile can do many things that were not possible on a PC few years ago. People became connected without barriers. In such a scenario, how can the educational sector remain untouched?

    One of the recent benchmarking studies that was possible through the ease of access of knowledge of other countries around the globe is benchmarking of schools. The study started with Benchmarking students’ performance from all over the world by taking a similar test of the same-aged children.

    The benchmarking project started with a pilot project conducted by the Organization for Economic Cooperation and Development in coordination with the Program for International Student Assessment (PISA), and Jon Schnur’s team at America Achieve.

    One hundred and five U.S. schools were included in this study. By registering in www.americaachieves.org schools in the US can check their performance against schools in other countries. The results were not very impressive, showing that a considerable proportion of school students in other countries have outperformed students in the U.S.

    For example, while High School students in the US are lagging behind their counterparts in the rest of the world, there are some schools that are performing better than their international counterparts.

    Benchmarking in schools is a tool that not only allows a school to know where it stands on the global scale, but most important it gives a chance to improve and to measure this improvement.

    Benchmarking enables:

    1. 1. The exchange of experiences and ideas between individual schools and teachers.
    2. 2. Education authorities to identify and learn from better performing education systems.
    3. 3. Each school to know where it stands. This is useful information for the schools, teachers, parents and pupils. .
    4. 4. Standards to be developed of expected performance levels that schools can measure and improve against.

    Below is an interesting article by Tomas Friedman in the New York Times, April 2013, about benchmarking between schools.

    There was a time when middle-class parents in America could be — and were — content to know that their kids’ public schools were better than those in the next neighborhood over. As the world has shrunk, though, the next neighborhood over is now Shanghai or Helsinki. So, last August, I wrote a column quoting Andreas Schleicher — who runs the global exam that compares how 15-year-olds in public schools around the world do in applied reading, math and science skills — as saying imagine, in a few years, that you could sign on to a Web site and see how your school compares with a similar school anywhere in the world. And then you could take this information to your superintendent and ask: “Why are we not doing as well as schools in China or Finland?”

    Well, that day has come, thanks to a successful pilot project involving 105 U.S. schools recently completed by Schleicher’s team at the Organization for Economic Cooperation and Development, which coordinates the Program for International Student Assessment, or PISA test, and Jon Schnur’s team at America Achieves, which partnered with the O.E.C.D. Starting this fall, any high school in America will be able to benchmark itself against the world’s best schools, using a new tool that schools can register for at www.americaachieves.org. It is comparable to PISA and measures how well students can apply their mastery of reading, math and science to real world problems.

    The pilot study was described in an America Achieves report entitled “Middle Class or Middle of the Pack?” that is being released Wednesday. The report compares U.S. middle-class students to their global peers of similar socioeconomic status on the 2009 PISA exams.

    The bad news is that U.S. middle-class students are badly lagging their peers globally. “Many assume that poverty in America is pulling down the overall U.S. scores,” the report said, “but when you divide each nation into socioeconomic quarters, you can see that even America’s middle-class students are falling behind not only students of comparable advantage, but also more disadvantaged students in several other countries.”

    American students in the second quarter of socioeconomic advantage — mostly higher middle class — were significantly outperformed by 24 countries in math and by 15 countries in science, the study found. In the third quarter of socioeconomic advantage — mostly lower middle class — U.S. students were significantly outperformed by peers in 31 countries or regions in math and 25 in science.

    The good news, though, said Schnur, “is that, for the first time, we have documented that there are individual U.S. schools that are literally outperforming every country in the world.”

    “BASIS Tucson North, a nonselective high school serving an economically modest middle-class student population in Arizona, outperformed the average of every country in the world in reading, math, and science,” the report said. “Three nonselective high schools in Fairfax, Va., outperformed the average of virtually every country in the world.” One of them, Woodson, outperformed every region in the world in reading, except Shanghai. But the pilot also exposed some self-deception. “One school, serving students similar to Woodson’s, lags behind 29 countries in math but received an A on its state’s accountability system based primarily on that state’s own test,” Schnur said.

    Paul Bambrick-Santoyo is managing director of North Star Academies in Newark, an Uncommon Schools network of nine low-income charter schools that took part and cracked the world’s Top 10. “We have always had state tests and SATs,” he told me, “but we never had an international metric. This was a golden opportunity to see where we stand — if we have to prepare our kids to succeed not only in this country but in a global marketplace.” He said he was particularly motivated by the fact that Shanghai’s low-income kids “could outperform” most U.S. schools, because this gave his school a real international peer for a benchmark.

    “We got 157 pages of feedback” from participating in the pilot, added Jack Dale, the superintendent of Fairfax County’s schools, which is so valuable because the PISA test exposes whether your high school students can apply their math, science and reading skills to 21st-century problems. “One of my principals said to me: ‘This is not your Virginia Standards of Learning Test.’ ”

    So what’s the secret of the best-performing schools? It’s that there is no secret. The best schools, the study found, have strong fundamentals and cultures that believe anything is possible with any student: They “work hard to choose strong teachers with good content knowledge and dedication to continuous improvement.” They are “data-driven and transparent, not only around learning outcomes, but also around soft skills like completing work on time, resilience, perseverance — and punctuality.” And they promote “the active engagement of our parents and families.”

    “If you look at all the data,” concluded Schnur, it’s clear that educational performance in the U.S. has not gone down. We’ve actually gotten a little better. The challenge is that changes in the world economy keep raising the bar for what our kids need to do to succeed. Our modest improvements are not keeping pace with this rising bar. Those who say we have failed are wrong. Those who say we are doing fine are wrong.” The truth is, America has world-beating K-12 schools. We just don’t have nearly enough.

  4. Collaborative Business Excellence Assessments

    August 4, 2013 by ahmed

    Collaborative business excellence assessments are a practical approach to identify an organisation’s strengths and opportunities for improvement in a short period of time. In summary, an expert works as a facilitator and meets with the employees that have knowledge of the organisation’s systems, processes and performance for the category being assessed. Together the organisation’s strengths and opportunities for improvement are identified.

    Collaborative assessment is not a new technique, for example COER provides a collaborative assessment – called the Benchmarking and Performance Excellence Self-assessment – through BusinessExcellenceTools.com

    Recently the Baldrige Performance Excellence Program started to offer collaborative assessments as a new service. Collaborative assessments provide a number of advantages, such as time and cost, in comparison to the traditional awards process. .
    The article below from Baldrige.com compares the traditional award assessment with collaborative assessments.

    As the Baldrige Performance Excellence Program celebrates its 25th year, it continues to evolve to meet the needs of key stakeholders. Recently, the program announced that it will offer Collaborative Assessments as a new service. The announcement states that this assessment against the Baldrige Criteria for Performance Excellence will provide timely, actionable feedback to be used immediately to improve organizational performance. While not explicitly stated, the service seems to be targeting organizations that may be new to the Baldrige Criteria.

    So you may be wondering, “What is a Collaborative Assessment?” Good question!

    The collaborative assessment is a proven method that has been used in multiple organizations worldwide. It is not a new concept; this author has been successfully implementing this approach to assessment for over 15 years. In general, it is an event-focused approach to efficiently complete an assessment in a short period of time. The approach uses the input from subject matter experts with assistance from criteria and assessment experts. The participants collaborate to identify the vital few strengths and opportunities for improvement within the organization. These strengths can be used as input to generate an application for a state or national quality award. The opportunities for improvement can be prioritized and converted into action plans for improving organizational performance.

    While this article will focus primarily on collaborative assessments using the Baldrige Criteria for Performance Excellence, the approach could be used for almost any type of business or organizational assessment, provided the purpose is for understanding of actual performance and opportunities, and not as part of a judging or certification process. The collaborative assessment process can be subject to participant bias if there is a performance goal to be evaluated as part of the assessment outcome.

    The Collaborative Assessment approach is not for all circumstances. For organizations that are applying for award recognition, the process for examiner assessment and feedback is a robust and high value approach. For organizations using the assessment primarily as an input for improvement, the Collaborative Assessment provides a solution to many of the inherent disadvantages that exist with traditional awards process assessments.

    Disadvantages of Traditional Awards Process Assessments

    1. Takes too long – For organizations that apply for the Baldrige Award, it takes five to nine months from the submission of the eligibility form until you get your feedback. If a primary purpose of applying is to get feedback, then the better part of a year is lost before beginning to take improvement actions. With the Collaborative Assessment approach, most of the work is completed within one week.
    2. Resources required – A full self-assessment requires a great deal of time, personnel and financial investment. An awards application takes even longer. Preparation of an application covering all items has been estimated at 1800 person-hours. When resources are exhausted completing the assessment and application, there may be little remaining energy or enthusiasm for the more important task of taking action to improve.
    3. Untimely for business calendar – Most awards programs, including Baldrige, are on a fixed calendar with feedback reports delivered in the Fall. The feedback report is critical for organizations that anticipate developing action plans from the opportunities for improvement. Depending upon the strategic and business planning cycles for the organization, the feedback may not be in sync with business needs. A Collaborative Assessment can be scheduled to occur any time during the year or planning cycle.
    4. Wasted time – When writing an application for award recognition, the organizational emphasis is on the strengths of the organization. In the evaluation steps of the awards process, examiner teams use their expertise to try to figure out the opportunities for improvement. It can be similar to a game of hide-and- seek. Applicants tend to embellish the approaches and deployment to present the organization in the best light possible. Poor results are often omitted from the application. In the Collaborative Assessment process, opportunities for improvement are more transparent, thus providing a more efficient process for understanding current state performance.
    5. Awards vs. improvement mindset – As noted in a recent message from Debbie Collard, immediate past chair of the Malcolm Baldrige National Quality Award Foundation, “Ninety-three award recipient organizations have been publicly acknowledged as performance excellence role models and shared their best practices so that other organizations could learn and improve.” This is one of the tremendous benefits from this program. However, when the focus of the applicant is on achieving award recognition, a competitive mindset can impact the behaviors of those involved in writing the awards application. There can be a tendency to deny real opportunities for improvement, or even to shut down the sharing of best practices between organizations. This can especially occur within organizations when organizational units begin to compete against each other for awards recognition. Oftentimes, gamesmanship shows up in applications that stretch the stated performance beyond reality. With Collaborative Assessments, the focus is shifted more towards understanding the gaps between true current performance and the desired performance.
    6. Add-on activities – Most organizations will get “volunteers” to gather the information required for an awards application. This activity may begin two or three months prior to the deadline for submission, and can distract from other work responsibilities for several hours every week. Once the application is submitted, the effort is put aside until the feedback report is received several months later. By then, many of the application findings have become forgotten or are less clear. The Collaborative Assessment compresses the effort into a much more efficient information- and data-gathering event. Action plans are developed while the information is still very fresh on everyone’s minds.
    7. Lack of follow through on feedback – The feedback received from a Baldrige assessment can be incredibly enlightening for organizations wanting to improve. Unfortunately, when the feedback is received as a part of the award process, it often does not get effectively converted into action plans for improvement. This can occur for several reasons already stated. If the primary purpose for assessing is to improve, then the awards process can totally derail this objective unless there is an exceptional tenacity for follow through. Organizations that are just starting out or struggling to move forward are especially vulnerable to this risk. Collaborative Assessments are primarily focused on knowing where to improve and putting action plans into place quickly. Therefore, the likelihood of timely follow though is increased.
    8. Activities too score oriented – There can be exceptional pressure to improve application scores without understanding the true intent of the criteria. In the awards process, the assessment score is the primary output that is used in determining award levels and recognition. Applicants are not involved in the actual scoring and sometimes lack understanding of how the scores are derived. The Collaborative Assessment process can involve the SMEs in the scoring activities so further learning and understanding can take place. The focus of scoring in a Collaborative Assessment is to provide a baseline metric from which overall improvement can be measured.
    9. Lack of senior leader engagement – The tasks of writing applications and conducting self-assessments are often delegated to non-senior leaders. This is a missed opportunity for those who are setting direction and priorities for the organization. It also can lead to a lack of acceptance upon receipt of the feedback report because senior leaders missed the chance to learn more about their organization through active involvement in the assessment and application process. A Collaborative Assessment provides good opportunity for senior leader engagement and learning.
    10. Lack of criteria understanding – The Baldrige Criteria for Performance Excellence are incredibly rich and have gone through many iterations of improvement over the past 25 years. Let’s face it – the criteria will often overwhelm applicants, especially those who are new to them. The Collaborative Assessment lessens this concern because the process and criteria experts help guide the subject matter experts to understand the purpose and intent of the criteria questions. Learning occurs about the criteria and organizational performance.

    There may be various approaches that can be applied for conducting a Collaborative Assessment. Some suggested features for an effective collaborative assessment include the following:

    Focused Event – Depending upon the size of the organization, a full assessment against the Baldrige Criteria can be completed in 3 to 5 days. Preparation for the event should include planning the event logistics and scheduling of the subject matter experts. Other activities that can be completed in advance include answering the Organizational Profile questions from the criteria, gathering existing documentation about organization processes and gathering data and reports for key organization metrics. While it is important to do a good job of planning, excessive planning and front-end work can be non-value adding and negate the benefits of the Collaborative Assessment. On the other hand, it is important that the necessary people are available for the full-time they are scheduled during the collaboration efforts. This will provide for an accurate and efficient assessment for the organization.

    Experts and SMEs – Two key groups of people are necessary for a Collaborative Assessment –people with expertise in the criteria and conducting assessments, and people who are knowledgeable about the organizational processes and performance. There are several sources for assessment experts including Baldrige examiners, state award examiners, consultants and internal resources who are skilled in the criteria and assessing. The subject matter experts (SMEs) can include all levels and functions of the organization. A good cross section is necessary to get a true picture of how the organization works and performs. The SMEs are scheduled to participate only during the parts that are most relevant to their involvement the organization. For example, you would expect senior leaders to participate in the assessment while addressing Leadership criteria questions. Human resource representatives should participate when addressing the Workforce Focus criteria questions.

    Focus group format – Assessment information is gathered in a focus group setting. For each section of the criteria, a team of SMEs is scheduled to respond to the criteria questions. For the categories 1-6 of the Baldrige Criteria, responses should address the “what” and “how” questions of the criteria, and should also address “how well” the organization can respond in terms of approach and deployment. The “how well” responses are the basis for the strengths and opportunity information gathered. For the Results category within the Baldrige Criteria, the responses address the “what” and “how” questions and again “how well” the organization is performing. The assessment experts facilitate the discussion by helping the SMEs to understanding the intent of the questions and the scoring criteria which provide a basis for “how well” the organization is performing. The assessment experts will offer their own insights based upon participant responses and knowledge of the performance excellence criteria. The Baldrige Program collaborative assessment gathers information from interviews or small focus groups of category “champions” and their teams (usually 3 – 5 people from across the organization).

    Brainstorm – During each focus group, it is best to begin the discussion by conducting a brainstorming session. The facilitator begins the conversation by explaining the specific criteria questions that the group is addressing. A recording device should be tracking responses in real-time. One technique that happens to be a personal favorite is to project the responses using an LCD projector so all the participants can see the information that is being captured. Responses are recorded on two separate lists – one for strengths and another for opportunities for improvement (OFIs). (Note that the term “weakness” is avoided.) At first, the facilitator should simply accept responses like any other brainstorming session. The facilitator may ask clarifying questions, but must refrain from judging. After the group has provided input, then the facilitator should invite discussion regarding the information collected. This is the opportunity for the facilitator to transition to a teaching/consulting mode to help the participants understanding how well the organization responds to the criteria. The facilitator will highlight some of the key strengths and OFIs from the responses, and help the group to understand where information may be missing or off base.

    Consensus around strengths and opportunities – At the end of each focus group session, the group will identify the most important strengths and OFIs from the discussion. This can be done using several methods. Multi-voting techniques or rating ballots are effective approaches for getting input from a group of people very quickly. With the Baldrige Program, examiner teams work with the category champions to decide which strengths and OFIs are relevant and important. The final decision lies with the category champions.

    Built-in site visit to verify – Information that is gathered in the focus group sessions will need to be verified or clarified. This is a very appropriate activity to include. These can be conducted in between the focus group sessions or perhaps by sending a small group out in the middle of a session if the information can be accessed easily.

    Scoring by experts – Scoring is an optional activity in a collaborative assessment. When included, it should be secondary to the identification of key strengths and opportunities. Scoring should be done by the Criteria Experts who are well trained in the scoring guidelines. The advantage of scoring is that it can provide a metric for evaluating progress over time. The scoring becomes non-value adding when energy becomes diverted from gathering assessment information to justifying the score that was provided.

    Affinitize key themes – Typically, a collaborative assessment will gather much information, including a long list of strengths and OFIs. This information needs to be synthesized, by separating the useful many from the vital few. One technique that has been proven effective is the process of affinitizing OFIs so that they are grouped into similar themes. The output of this exercise will provide a summary of the most important issues from the assessment.

    Action Planning – The final step is to prioritize the opportunities and develop action plans to close the gap between current performance and desired performance. One approach is to narrow the synthesized OFIs from the prior step to create a top twenty list, effectively prioritizing the data so the most significant opportunities are the most apparent.. The selection of the top priorities should include input from the participants and the facilitators. Senior leaders should use this input to determine the most important OFI for which the organization will take immediate action. Action plans should be created with assignments and milestones for follow-up and completion. Ideally, these action plans become integrated into the organization’s annual plans and performance management systems.

    Collaborative Assessment Advantages

    Let’s recap. For organizations that intend to use the Baldrige Criteria or similar assessment criteria for internal assessment and continuous improvement, the Collaborative Assessment process can be described as:

    Faster – most of the work is completed in a one week period.

    Less Costly – because the assessment requires little preparation and is completed so quickly, it takes less labor to complete when compared to more traditional application assessments.

    More Efficient – the collaborative assessment facilitates organizational learning about the criteria and performance, while building consensus and buy-in for the things that need to change.

    Time to Begin

    There are five key steps to follow to get started with the Collaborative Assessment as a transformational activity in your organization.

    Decide – Leadership needs to decide if an assessment is strategically important to the organization, and if so, what they hope to accomplish. If the purpose is to get started or to continue a journey to performance excellence using Baldrige or similar criteria, then a collaborative assessment may be a good fit for the organization.

    Prepare – The organization will need select experts to facilitate the assessment. The experts may come from many sources, including the Baldrige program, a State Awards program, consultants or internal experts. The experts can help the organization to schedule and plan the assessment, including the selection of key participants. The collaborative assessment that the Baldrige Program offers typically entails two months of planning ahead of the actual assessment. The primary purposes of the planning are getting clear on expectations, setting the right structure within the organization to carry out their roles, getting interviews and focus groups confirmed logistics, and getting a clear context of the organization. Much of this initial information can be gleaned from the Organizational Profile.

    Launch – For smaller organizations, the initial assessment may be for the entire entity. Larger organizations may want to begin with a subset of the overall entity, such as a location, a business unit, or major function.

    Spread – For larger organizations, the assessment can then be spread to other units and areas. All organizations should begin to schedule periodic assessments to monitor performance and identify opportunities for improvement. The follow-up assessments become a means for keeping track of progress and re-prioritizing based upon the changing needs of the organization.

    Sustain – The assessment activities and finding should be integrated into annual strategic planning and continuous improvement activities. The organization may eventually apply for award recognition if there are expected benefits to the organization.

    The ultimate purpose of collaborative assessments is to help the organization to achieve the highest level of performance possible in the eyes of their customers and key stakeholders.

  5. The Benchmark Memo August-2013

    August 3, 2013 by ahmed

    Greetings to our members,

    Click here to read the Benchmark Memo

    This month’s content includes:

    1. Employee Interviewing best practice report.
    2. Look Who’s Using Baldrige: A Focus on Southeast Asia.
    3. Cisco Systems, United States: Social Networking Builds customer loyalty.
    4. Organisational culture impacted by quality measures.
    5. 2nd International Best Practice Competition.

    Best Regards,


    Neil Crawford