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 2013-2014_Baldrige_Criteria_Business_Nonprofit.pdf

Read the criteria Items in Category 7 (7.1 to 7.5) and the Category 7 scoring table on p.33 in the Criteria Book. 
Which of the five results areas would your organization score the highest? Provide any justification.
Which would score the lowest? Provide any justification in your response

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The ratio of the Baldrige Program’s benefits for the U.S. economy to its costs is estimated at 820 to 1. Created by Congress in 1987, the Baldrige Program (http://www.nist.gov/baldrige) is managed by the National Institute of Standards and Technology, an agency of the U.S. Department of Commerce. The program helps organizations improve their performance and succeed in the competitive global marketplace. It is the only public-private partnership and Presidential award program dedicated to improving U.S. organizations. The program administers the Presidential Malcolm Baldrige National Quality Award. In collaboration with the greater Baldrige community, we provide organizations with Baldrige Award winners serve as national • an integrated management framework; role models. • educational presentations, conferences, and workshops on proven best management practices and on using the Baldrige Criteria to improve. 93 • analysis of organizational strengths and opportunities for improvement by a team of trained experts; and 450,468 jobs , 2,213 work sites, over $74 million in revenue/budgets, and about 417 million customers served. 478 Baldrige examiners volunteered in services in 2012. State Baldrige-based examiners volunteered around services in 2012. Foundation for the Malcolm Baldrige National Quality Award The Foundation’s main objective is to raise funds to permanently endow the award program. Prominent leaders from U.S. organizations serve as foundation trustees, and a broad cross section of U.S. organizations provides financial support to the foundation. Alliance for Performance Excellence $7.3 million organizational profile leadership strategic planning customer focus measurement, analysis, and knowledge management workforce focus operations focus results • organizational self-assessment tools; 2010–2012 award applicants represent roughly Criteria $30 million in The Alliance (http://www.baldrigepe.org/alliance) is a nonprofit national network of local, state, and regional Baldrige-based programs working with organizations from all industry sectors. Alliance members offer performance improvement tools and resources at the grassroots level, giving organizations a simple and straightforward way into the Baldrige framework and thereby helping them improve their efficiency, effectiveness, and results. Alliance member programs serve as a feeder system for the national Baldrige Award. American Society for Quality The American Society for Quality (ASQ; http://www.asq.org/) assists in administering the award program under contract to the National Institute of Standards and Technology (NIST). ASQ’s vision is to make quality a global priority, an organizational imperative, and a personal ethic and, in the process, to become the community for all who seek quality concepts, technology, or tools to improve themselves and their world. For more information: www.nist.gov/baldrige | 301.975.2036 | baldrige@nist.gov T1538 2013–2014 Baldrige Performance Excellence Program manufacturing service small business nonprofit Baldrige Performance Excellence Program National Institute of Standards and Technology (NIST) • United States Department of Commerce January 2013 To order copies of this publication or obtain other Baldrige Program products and services, contact Baldrige Performance Excellence Program Administration Building, Room A600 100 Bureau Drive, Stop 1020 Gaithersburg, MD 20899-1020 Telephone: (301) 975-2036 Fax: (301) 948-3716 E-mail: baldrige@nist.gov Web: http://www.nist.gov/baldrige The Baldrige Program welcomes your comments on the Criteria and other Baldrige products and services. Please direct your comments to the address above. The Baldrige Criteria for Performance Excellence™ is an official publication of NIST under the authority of the Malcolm Baldrige National Quality Improvement Act of 1987 (Public Law 100-107; codified at 15 U.S.C. § 3711a). This publication is a work of the U.S. Government and is not subject to copyright protection in the United States under Section 105 of Title 17 of the United States Code. The U.S. Department of Commerce, as represented by NIST, holds copyright to the publication in all countries outside of the United States. MALCOLM BALDRIGE NATIONAL QUALITY AWARD and Design®, THE QUEST FOR EXCELLENCE®, BALDRIGE PERFORMANCE EXCELLENCE PROGRAM and Design®, and PERFORMANCE EXCELLENCE® are federally registered trademarks and service marks, and MALCOLM BALDRIGE NATIONAL QUALITY AWARD™, BALDRIGE CRITERIA FOR PERFORMANCE EXCELLENCE™, HEALTH CARE CRITERIA FOR PERFORMANCE EXCELLENCE™, EDUCATION CRITERIA FOR PERFORMANCE EXCELLENCE™, CRITERIA FOR PERFORMANCE EXCELLENCE™, BALDRIGE CRITERIA™, BALDRIGE 25 YEARS BUILDING AN EVEN BETTER FUTURE and Design™, and the MALCOLM BALDRIGE NATIONAL QUALITY AWARD medal and depictions or representations thereof, are trademarks and service marks of the U.S. Department of Commerce, National Institute of Standards and Technology. The unauthorized use of these trademarks and service marks is prohibited. The Malcolm Baldrige National Quality Award The Malcolm Baldrige National Quality Award, created by Public Law 100-107 in 1987, is the highest level of national recognition for performance excellence that a U.S. organization can receive. The award promotes • awareness of performance excellence as an increasingly important element in U.S. competitiveness and • the sharing of successful performance strategies and information on the benefits of using these strategies. The President of the United States traditionally presents the award. The award crystal, composed of two solid crystal prismatic forms, stands 14 inches tall. The crystal is held in a base of black anodized aluminum, with the award recipient’s name engraved on the base. A 22-karat, gold-plated medallion is captured in the front section of the crystal. The medal bears the name of the award and “The Quest for Excellence” on one side and the Presidential Seal on the other. Organizations apply for the award in one of six eligibility categories: manufacturing, service, small business, education, health care, and nonprofit. Up to 18 awards may be given annually across the six categories. For more information on the award and the application process, see http://www.nist.gov/baldrige/apply.cfm. Cover photos courtesy of Baldrige Award winners Motorola Commercial, Government & Industrial Solutions Sector, K&N Management, and PRO-TEC Coating Company. NIST, an agency of the U.S. Department of Commerce, manages the Baldrige Program. NIST has a 100-plus-year track record of serving U.S. industry, science, and the public with the mission to promote U.S. innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that enhance economic security and improve our quality of life. NIST carries out its mission in three cooperative programs, including the Baldrige Program. The other two are the NIST laboratories, conducting research that advances the nation’s technology infrastructure and is needed by U.S. industry to continually improve products and services; and the Hollings Manufacturing Extension Partnership, a nationwide network of local centers offering technical and business assistance to small manufacturers. Suggested citation: Baldrige Performance Excellence Program. 2013. 2013–2014 Criteria for Performance Excellence. Gaithersburg, MD: U.S. Department of Commerce, National Institute of Standards and Technology. http://www.nist.gov/baldrige. The Quest for Excellence® Official conference of the Malcolm Baldrige National Quality Award 25th Annual Quest for Excellence Conference and Award Ceremony April 8–10, 2013; 25th Anniversary Gala on April 7 Marriott Baltimore Waterfront, Baltimore, Maryland 26th Annual Quest for Excellence Conference and Award Ceremony April 7–9, 2014 Marriott Baltimore Waterfront, Baltimore, Maryland Each year at The Quest for Excellence, Baldrige Award recipients share their exceptional performance practices with leaders of business, education, health care, and nonprofit organizations and inspire attendees to apply the insights they gain within their own organizations. Plan to attend and learn about the recipients’ best management practices and Baldrige journeys, participate in educational presentations on the Baldrige Criteria, and network with Baldrige Award recipients and other attendees. For more information on The Quest for Excellence, see http://www.nist.gov/baldrige/qe. Contents ii About the Criteria for Performance Excellence The Baldrige Criteria empower your organization to reach your goals, improve results, and become more competitive by aligning your plans, processes, decisions, people, actions, and results. iv How to Use This Booklet You can use the material in this booklet as a reference, for self-assessment, or as the basis of an award assessment. Your experience with the Criteria will help you decide where to begin. 1 Criteria for Performance Excellence Framework and Structure The Criteria requirements are embodied in seven integrated, interconnected categories. The categories are subdivided into items and areas to address. 3 Criteria for Performance Excellence Items and Point Values 4 Criteria for Performance Excellence 4 Preface: Organizational Profile 7 1 Leadership 10 2 Strategic Planning 13 3 Customer Focus 16 4 Measurement, Analysis, and Knowledge Management 18 5 Workforce Focus 22 6 Operations Focus 24 7 Results 28 Scoring System Responses to Criteria items are scored on two evaluation dimensions: process and results. 32 Process Scoring Guidelines 33 Results Scoring Guidelines 34 How to Respond to the Criteria These guidelines explain how to respond most effectively to the Criteria item requirements. 37 Core Values and Concepts The core values and concepts are a set of embedded beliefs and behaviors found in high-performing organizations. 42 Changes from the 2011–2012 Criteria 44 Glossary of Key Terms The glossary includes definitions of terms presented in small caps in the Criteria and scoring guidelines. 52 Index of Key Terms On the Web Category and Item Commentary (http://www.nist.gov/baldrige/publications/business_nonprofit_criteria.cfm) This commentary on the Criteria provides additional examples and guidance. i About the Criteria for Performance Excellence Is your organization doing as well as it could? How do you know? What and how should your organization improve or change? In Your Organization The Baldrige Criteria for Performance Excellence empower your organization—no matter the size or industry—to reach your goals, improve results, and become more competitive by aligning your plans, processes, decisions, people, actions, and results. Using the Criteria gives you a holistic assessment of where your organization is and where it needs to be. The Criteria give you the tools you need to examine all parts of your management system and improve processes and results while keeping the whole organization in mind. The Criteria are a set of questions about seven critical aspects of managing and performing as an organization: 1. Leadership 2. Strategic planning 3. Customer focus 4. Measurement, analysis, and knowledge management 5. Workforce focus 6. Operations focus 7. Results These questions work together as a unique, integrated performance management framework. Answering the questions helps you align your resources; identify strengths and opportunities for improvement; improve communication, productivity, and effectiveness; and achieve your strategic goals. As a result, you progress toward performance excellence: • You deliver ever-improving value to your customers and stakeholders, which contributes to organizational sustainability. • You improve your organization’s overall effectiveness and capability. • Your organization improves and learns. • Your workforce members learn and grow. Nationwide The Baldrige Criteria play three roles in strengthening U.S. competitiveness: • They help improve organizational performance practices, capabilities, and results. • They facilitate communication and sharing of best practices among U.S. organizations. • They serve as a working tool for understanding and managing organizational performance, for guiding your strategic plan, and for providing opportunities to learn. My recommendation: implement the Baldrige-based Criteria into your business. No other single document can help build a long-term successful organization. —Jerry R. Rose, Corporate Vice President, Cargill, Inc. ii 2013–2014 Criteria for Performance Excellence Globally About 100 performance or business excellence programs exist around the globe; most use the Baldrige Criteria or criteria similar to Baldrige as their performance excellence models. The Baldrige Program is a member of the Global Excellence Model (GEM) Council (http://www.efqm.org/en/tabid/209/default.aspx), made up of the chief executives of national excellence models and award programs from around the world. The Criteria focus on results. The Criteria focus on your results in the key areas of products and processes, customers, workforce, leadership and governance, and finance and markets. This composite of measures ensures that your strategies are balanced—that they do not inappropriately trade off among important stakeholders, objectives, or short- and longer-term goals. The Criteria are nonprescriptive and adaptable. The Criteria do not prescribe how you should structure your organization. They do not say that your organization should or should not have departments for planning, ethics, quality, or other functions. They do not tell you to manage different units in your organization in the same way, and they let you choose the most suitable tools (e.g., Lean, Six Sigma, ISO 9000, a balanced scorecard) for facilitating your improvements. The Criteria are nonprescriptive for these reasons: They focus on common needs rather than on common procedures. This focus fosters understanding, communication, sharing, alignment, and integration while supporting innovative and diverse approaches. They focus on results, not procedures, tools, or organizational structure. The Criteria encourage you to respond with creative, adaptive, and flexible approaches, fostering incremental and major (breakthrough) improvement through innovation. The tools, techniques, systems, and organizational structure you select usually depend on factors such as your organization’s type and size, relationships, and stage of development, as well as the capabilities and responsibilities of your workforce and supply chain. These factors differ among organizations, and they are likely to change as your needs and strategies evolve. The Criteria support a systems perspective to align goals across your organization. The Criteria build alignment across your organization by making connections between and reinforcing measures derived from your organization’s processes and strategy. These measures tie directly to customer and stakeholder value and to overall performance. When you use these measures, you channel different activities in consistent directions with less need for detailed procedures, centralized decision making, or overly complex process management. Measures are therefore both a communication tool and a way to deploy consistent performance requirements. The resulting alignment ensures consistency of purpose across your organization while supporting agility, innovation, and decentralized decision making. The systems perspective is embedded in the integrated structure of the Baldrige core values and concepts (page 37); the Organizational Profile (page 4); the Criteria (page 7); the scoring guidelines (pages 32–33); and the resultsoriented, cause-effect, cross-process linkages among the Criteria items. This systems perspective requires dynamic linkages among Criteria items, particularly as your strategy and goals change over time. When you use the Criteria, feedback between your processes and your results leads to action-oriented cycles of improvement with four stages: 1. Designing and selecting effective processes, methods, and measures (approach) 2. Executing on your approach with consistency (deployment) 3. Assessing your progress and capturing new knowledge, including seeking opportunities for innovation (learning) 4. Revising your plans based on assessment findings and organizational performance, harmonizing processes and work-unit operations, and selecting better process and results measures (integration) About the Criteria iii The Criteria support goal-based diagnosis. The Criteria items and the scoring guidelines make up a two-part diagnostic (assessment) system. When you assess your organization with the Criteria, you create a profile of strengths and opportunities for improvement based on your responses to 17 performance-oriented requirements (the Criteria items) on a continuum of process and performance maturity (the scoring guidelines). In this way, assessing your organization with the Criteria leads to actions that improve performance in all areas. This useful management tool goes beyond most performance reviews and applies to a wide range of strategies, management systems, and types of organizations. See “How to Use This Booklet” to learn more about how the Criteria help you guide your organization, improve performance, and achieve sustainable results. In addition, by taking the Baldrige journey, you become part of a national effort to improve America’s performance and its competitive standing in the world. The Baldrige Criteria are here for you—and so is an incredible opportunity. Why not take advantage of that opportunity? Your employees, customers, board members, and other stakeholders—and the nation—will be better off. How to Use This Booklet Whether your organization is large or small or is in the manufacturing, service, or nonprofit sector, you can use the Baldrige Criteria for Performance Excellence for improvement. Your experience with the Criteria will help you decide where to begin. If your organization is in the education or health care sector, you should use the Education Criteria for Performance Excellence or the Health Care Criteria for Performance Excellence, respectively. See http://www.nist.gov/baldrige/publications/criteria.cfm to obtain a copy. If you are just learning about the Criteria . . . Scan the questions in the Organizational Profile (page 4), and see if you can answer them. Discussing the answers to these questions might be your first Baldrige self-assessment. Study the 11 Criteria core values and concepts (page 37). They are a set of beliefs and behaviors that are embedded in the Baldrige Criteria and are found in high-performing organizations. Consider how your organization measures up in relation to the core values. Are there any improvements you should be making? Answer the questions in the titles of the 17 Criteria items to reach a basic understanding of the Criteria and your organization’s performance. Look at the Criteria category titles, item titles, and area-to-address headings to see a simple outline of a holistic performance management system. See if you are considering all of these dimensions in establishing your leadership system and measuring performance. If you need more explanation, read the questions that follow the headings. Use the Criteria and their supporting material as a general resource on organizational performance improvement. Use the content in this booklet and online (http://nist.gov/baldrige/publications/business_nonprofit _criteria.cfm) as a source of ideas about improving your organization. The material may help you think in a different way or give you a fresh frame of reference. iv 2013–2014 Criteria for Performance Excellence Attend the Quest for Excellence® or a Baldrige regional conference. These events highlight the role-model approaches of Baldrige Award recipients, which have used the Criteria to improve performance, innovate, and achieve world-class results. Workshops on Baldrige self-assessment are often offered in conjunction with these conferences. Consider becoming a Baldrige examiner. Examiners receive valuable training and gain experience in understanding and applying the Criteria that they can use within their own organizations. See the Alliance for Performance Excellence (http://www.baldrigepe.org/alliance) for contact information for your state, local, or sector-specific program and “Become an Examiner” (http://www.nist.gov/baldrige/examiners) for information on the Malcolm Baldrige National Quality Award Board of Examiners. If you are ready to assess your organization with a Baldrige-based approach . . . Learn what your employees and senior leaders think. Try Are We Making Progress? (http://www.nist.gov/baldrige /publications/progress.cfm) and Are We Making Progress as Leaders? (http://www.nist.gov/baldrige/publications /progress_leaders.cfm). Organized by the seven Baldrige Criteria categories, these questionnaires help you check your progress on organizational goals and improve communication among your workforce members and leadership team. Identify gaps in your understanding of your organization and compare your organization with others with easyInsight: Take a First Step toward a Baldrige Self-Assessment (http://www.nist.gov/baldrige/publications /easy_insight.cfm). This assessment is based on the Organizational Profile. Complete the Organizational Profile (page 4). Have the members of your leadership team answer the questions. If you identify topics for which you have conflicting, little, or no information, you can use these topics for action planning. For many organizations, this approach serves as a first Baldrige self-assessment. Use the full set of Criteria questions as a personal guide to everything that is important in leading your organization. You may discover blind spots that you have not considered or areas where you should place additional emphasis. Review the scoring guidelines (pages 32–33). They help you assess your organizational maturity, especially when used in conjunction with “Steps toward Mature Processes” (page 30) and “From Fighting Fires to Innovation: An Analogy for Learning” (page 29). Do a self-assessment of one Criteria category in which you know you need improvement. Answer the individual questions in the category yourself or with leadership team colleagues, referring to the item notes and the Category and Item Commentary (http://www.nist.gov/baldrige/publications/business_nonprofit_criteria.cfm) to guide your thoughts. Then assess your strengths and opportunities for improvement, and develop action plans. Remember to build on your strengths as well as tackle your improvement opportunities. Be aware, though, that this kind of assessment does not reveal key linkages between your chosen category and the other Criteria items, and you may lose the systems perspective embodied in the seven integrated Criteria categories. Have your leadership team assess your organization. At a retreat, have your leadership team develop responses to the seven Criteria categories, and record the responses. Then assess your strengths and opportunities for improvement, and develop action plans. Conduct a full Baldrige self-assessment. Have your organization develop responses to the individual questions in the seven Criteria categories. 1. Identify the scope of the assessment: will it cover the entire organization, a subunit, a division, or a department? 2. Select seven champions, one for each Criteria category, to lead a team in preparing responses to the questions in the category. Have the champions write your Organizational Profile. 3. Form category teams. Have the members collect data and information to answer the questions in their respective categories, referring to the notes after each item and the Category and Item Commentary (http://www.nist.gov/baldrige/publications/business_nonprofit_criteria.cfm) as guides. How to Use This Booklet v 4. Have the teams share their answers to the Criteria questions and identify common themes and missing linkages. 5. Have each category team create and communicate an action plan for improvement based on their answers (perhaps using the Self-Analysis Worksheet, http://www.nist.gov/baldrige/publications/business_nonprofit _criteria.cfm). 6. Have the seven champions and other senior leaders build an overall action plan based on overall organizational priorities. 7. Evaluate the self-assessment process, and identify possible improvements. Involve senior leaders, champions, and teams. The teams will need to collaborate to address questions that link the categories to each other. Contact your state, local, or sector-specific Baldrige-based award program (see the Alliance for Performance Excellence, http://www.baldrigepe.org/alliance). Many programs provide networking opportunities, training, and selfassessment services in addition to an award program. Contact a Baldrige Award recipient. Organizations that receive the Baldrige Award serve as performance improvement advocates, share their strategies, and serve as role models. Many undertake ongoing self-assessments of their organizations and can share their experiences with you. See http://www.nist.gov/baldrige for a list of award recipients and their contact information. If you are ready to apply for a Baldrige-based award . . . Apply to your state, local, or sector-specific Baldrige-based award program (see the Alliance for Performance Excellence, http://www.baldrigepe.org/alliance). Even if you do not receive an award, submitting an application is an opportunity to have a team of experts examine your organization objectively and identify strengths and opportunities to improve. Use the feedback report you receive as a way to prioritize opportunities for building on strengths and addressing improvement needs. Use the feedback in your strategic planning process. Apply for the Malcolm Baldrige National Quality Award. Once you receive the top-level award from an Alliance program (or meet alternate eligibility requirements), apply for the highest level of national recognition for performance excellence that a U.S. organization can receive: the Malcolm Baldrige National Quality Award. Award applicants say that the Baldrige evaluation process is one of the best, most cost-effective, most comprehensive performance assessments you can find. They find high value in the process whether they receive the Baldrige Award or not. See http://www.nist.gov/baldrige/enter/apply.cfm for a description of the process for and benefits of applying for the Baldrige Award. In the Baldrige process, everyone is a learner. vi 2013–2014 Criteria for Performance Excellence Criteria for Performance Excellence Framework and Structure Criteria for Performance Excellence Framework: A Systems Perspective The performance system consists of the six categories in the center of the figure. These categories define your processes and the results you achieve. The center horizontal arrow shows the critical linkage between the leadership triad (categories 1, 2, and 3) and the results triad (categories 5, 6, and 7) and the central relationship between the Leadership and Results categories. The two-headed arrows show the importance of feedback in an effective performance management system. The leadership triad (Leadership, Strategic Planning, and Customer Focus) emphasizes the importance of a leadership focus on strategy and customers. Leaders set the direction and seek future opportunities for your organization. The Organizational Profile sets the context for the way your organization operates. It serves as an overarching guide for your performance management system. The results triad (Workforce Focus, Operations Focus, and Results) includes your workforcefocused processes, your key operational processes, and the performance results they yield. Organizational Profile: Environment, Relationships, and Strategic Situation 2 5 Strategic Planning Workforce Focus 1 7 Leadership Results 3 6 Customer Focus Operations Focus 4 Measurement, Analysis, and Knowledge Management The system foundation (Measurement, Analysis, and Knowledge Management) is critical to effective management and to a fact-based, knowledge-driven system for improving performance and competitiveness. Criteria Framework and Structure All actions point toward Results— a composite of product and process, customer-focused, workforcefocused, leadership and governance, and financial and market results. 1 Criteria for Performance Excellence Structure The seven Baldrige Criteria for Performance Excellence categories are subdivided into items and areas to address. Items Areas to Address There are 17 Criteria items (plus 2 in the Organizational Profile), each with a particular focus. These items are divided into three groups according to the kinds of information they ask for: Each item includes one or more areas to address (labeled a, b, c, and so on). Requirements Item requirements are expressed as questions or statements in three levels: • The Preface (Organizational Profile) asks you to define your organizational environment. • Basic requirements are expressed in the title question (e.g., “How do you obtain information from your customers?”). • Process items (categories 1–6) ask you to define your organization’s processes. • Results items (category 7) ask you to report results for your organization’s processes. • Overall requirements are the topics in the first paragraph of the shaded box (e.g., “Describe how you listen to your customers and gain information on their satisfaction, dissatisfaction, and engagement.”) See page 3 for a list of item titles and point values. Item Notes • Multiple requirements are the individual questions within each area to address. Item notes serve three purposes: (1) to clarify terms or requirements, (2) to give instructions and examples for responding, and (3) to indicate key linkages to other items. Item notes in italics pertain specifically to nonprofit organizations. Item number Item title and basic requirements Key Terms Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). Key term in small caps Item point value 7 Results (450 pts.) The Results category asks about your organization’s performance and improvement in all key areas—product and process results, customer-focused results, workforce-focused results, leadership and governance results, and financial and market results. The category asks about performance levels relative to those of competitors and other organizations with similar product offerings. 7.1 Product and Process Results: What are your product performance and process effectiveness results? (120 pts.) Overall requirements Provide data and information to answer the following questions: RESULTS Summarize your key product peRfoRmance and pRocess effectiveness and efficiency Results. Include Results for pRocesses that directly serve your customeRs and that impact your operations and supply chain. segment your Results by product offerings, customeR groups and market segments, and pRocess types and locations, as appropriate. Include appropriate comparative data. Type of information to provide in response to this item a. Customer-Focused Product and ProCess results Areas to What are your current levels and trends in key measures or indicators of the performance of products and processes that are important to and directly serve your customers? How do these results compare with the performance of your competitors and other organizations with similar offerings? address b. Work ProCess effeCtiveness results (1) ProCess effeCtiveness and Efficiency What are your current levels and trends in key measures or indicators of the operational performance of your key work and support processes, including productivity, cycle time, and other appropriate measures of process effectiveness, efficiency, and innovation? Headings summarizing ­multiple requirements Multiple requirements (2) Emergency Preparedness What are your current levels and trends in key measures or indicators of the effectiveness of your organization’s preparedness for disasters or emergencies? c. Supply-Chain Management results What are your results for key measures or indicators of the performance of your supply chain, including its contribution to enhancing your performance? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). Notes Item notes Note for nonprofit organizations 7.1. Results should provide key information for analyzing and reviewing your organizational performance (item 4.1), demonstrate use of organizational knowledge (item 4.2), and provide the operational basis for customer-focused results (item 7.2) and financial and market results (item 7.5). There is not a one-to-one correspondence between results items and Criteria categories 1–6. Results should be considered systemically, with contributions to individual results items frequently stemming from processes in more than one Criteria category. 7.1a. Product and process results should relate to the key customer requirements and expectations you identify in P.1b(2), which are based on information gathered through processes you describe in items 3.1 and 3.2. The measures or indicators should address factors that affect customer preference, such as those listed in the notes to P.1b(2) and 3.2a. 7.1a. For some nonprofit organizations, funding sources might mandate product or service performance measures. These measures should be identified and reported here. 24 2 7.1b. Results should address the key operational requirements you identify in the Organizational Profile and in items 6.1 and 6.2. 7.1b. Appropriate measures and indicators of work process effectiveness might include defect rates; rates and results of product, service, and work system innovation; results for simplification of internal jobs and job classifications; waste reduction; work layout improvements; changes in supervisory ratios; Occupational Health and Safety Administration (OSHA)-reportable incidents; response times for emergency drills or exercises; and results for work relocation or contingency exercises. 7.1c. Appropriate measures and indicators of supply-chain performance might include supplier and partner audits, just-in-time delivery, and acceptance results for externally provided products, services, and processes. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). Link to Category and Item Commentary 2013–2014 Criteria for Performance Excellence 2013–2014 Criteria for Performance Excellence Criteria for Performance Excellence Items and Point Values See pages 28–33 for the scoring system used with the Criteria items in a Baldrige assessment. P Preface: Organizational Profile P.1 Organizational Description P.2 Organizational Situation Categories and Items 1 2 3 4 Point Values Leadership 1.1 Senior Leadership 70 1.2 Governance and Societal Responsibilities 50 Strategic Planning 2.1 Strategy Development 45 2.2 Strategy Implementation 40 Customer Focus 3.1 Voice of the Customer 40 3.2 Customer Engagement 45 Measurement, Analysis, and Knowledge Management 4.1 Measurement, Analysis, and Improvement of Organizational Performance 45 4.2 Knowledge Management, Information, and Information Technology 45 5 6 7 Workforce Focus 5.1 Workforce Environment 40 5.2 Workforce Engagement 45 Operations Focus 6.1 Work Processes 45 6.2 Operational Effectiveness 40 Results 7.1 Product and Process Results 7.2 Customer-Focused Results 85 7.3 Workforce-Focused Results 85 7.4 Leadership and Governance Results 80 7.5 Financial and Market Results 80 120 85 85 90 85 85 450 120 TOTAL POINTS 1,000 3 Criteria for Performance Excellence Begin with the Organizational Profile The Organizational Profile is the most appropriate starting point for self-assessment and for writing an application. It is critically important for the following reasons: • It helps you identify gaps in key information and focus on key performance requirements and results. • You can use it as an initial self-assessment. If you identify topics for which conflicting, little, or no information is available, use these topics for action planning. • It sets the context for your responses to the Criteria requirements in categories 1–7. P Preface: Organizational Profile The Organizational Profile is a snapshot of your organization, the key influences on how it operates, and the key challenges it faces. P.1 Organizational Description: What are your key organizational characteristics? Describe your operating environment and your key relationships with customers, suppliers, partners, and stakeholders. In your response, answer the following questions: a. Organizational Environment (1) Product Offerings What are your main product offerings (see the note on the next page)? What is the relative importance of each to your success? What mechanisms do you use to deliver your products? (2) Vision and Mission What are your stated purpose, vision, values, and mission? What are your organization’s core competencies, and what is their relationship to your mission? (3) Workforce Profile What is your workforce profile? What are your workforce or employee groups and segments? What are the educational requirements for different employee groups and segments? What are the key elements that engage them in achieving your mission and vision? What are your workforce diversity and job diversity? What are your organized bargaining units? What are your organization’s special health and safety requirements? (4) Assets What are your major facilities, technologies, and equipment? (5) Regulatory Requirements What is the regulatory environment under which you operate? What are the applicable occupational health and safety regulations; accreditation, certification, or registration requirements; industry standards; and environmental, financial, and product regulations? b. Organizational Relationships (1) Organizational Structure What are your organizational structure and governance system? What are the reporting relationships among your governance board, senior leaders, and parent organization, as appropriate? (2) Customers and Stakeholders What are your key market segments, customer groups, and stakeholder groups, as appropriate? What are their key requirements and expectations of your products, customer support services, and operations? What are the differences in these requirements and expectations among market segments, customer groups, and stakeholder groups? (3) Suppliers and Partners What are your key types of suppliers, partners, and collaborators? What role do they play in your work systems, especially in producing and delivering your key products and customer support services? What role do they play in enhancing your competitiveness? What are your key mechanisms for communicating with suppliers, partners, and collaborators? What role, if any, do these organizations play in contributing and implementing innovations in your organization? What are your key supply-chain requirements? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). 4 2013–2014 Criteria for Performance Excellence Notes P. Your responses to the Organizational Profile questions are very important. They set the context for understanding your organization and how it operates. Your responses to all other questions in the Baldrige Criteria should relate to the organizational context you describe in this Profile. Your responses to the Organizational Profile questions thus allow you to tailor your responses to all other questions to your organization’s uniqueness. P.1a(1). “Product offerings” and “products” are the goods and services you offer in the marketplace. Mechanisms for delivering products to your end-use customers might be direct or might be indirect, through dealers, distributors, collaborators, or channel partners. Nonprofit organizations might refer to their product offerings as programs, projects, or services. P.1a(2). “Core competencies” are your organization’s areas of greatest expertise. They are those strategically important capabilities that are central to fulfilling your mission or provide an advantage in your marketplace or service environment. Core competencies are frequently challenging for competitors or suppliers and partners to imitate and frequently preserve your competitive advantage. P.1a(3). Workforce or employee groups and segments (including organized bargaining units) might be based on the type of employment or contract reporting relationship, location, tour of duty, work environment, use of certain family-friendly policies, or other factors. P.1a(3). Organizations that also rely on volunteers to accomplish their work should include volunteers as part of their workforce. P.1a(5). Industry standards might include industrywide codes of conduct and policy guidance. In the Criteria, “industry” refers to the sector in which you operate. For nonprofit organizations, this sector might be charitable organizations, professional associations and societies, religious organizations, or government entities—or a subsector of one of these. Depending on the regions in which you operate, Preface: Organizational Profile environmental regulations might include greenhouse gas emissions, carbon regulations and trading, and energy efficiency. P.1b(1). For some nonprofit organizations, governance and reporting relationships might include relationships with major funding sources, such as granting agencies or foundations. P.1b(2). Customers include the users and potential users of your products. For some nonprofit organizations, customers might include members, taxpayers, citizens, recipients, clients, and beneficiaries, and market segments might be referred to as constituencies. P.1b(2). Customer groups might be based on common expectations, behaviors, preferences, or profiles. Within a group, there may be customer segments based on differences and commonalities. You might subdivide your market into market segments based on product lines or features, distribution channels, business volume, geography, or other factors that you use to define a market segment. P.1b(2). The requirements of your customer groups and market segments might include on-time delivery, low defect levels, safety, security, ongoing price reductions, leveraging of technology, rapid response, after-sales service, and multilingual services. The requirements of your stakeholder groups might include socially responsible behavior and community service. For some nonprofit organizations, these requirements might also include administrative cost reductions, at-home services, and rapid response to emergencies. P.1b(3). Communication mechanisms should be two-way and use understandable language, and they might involve in-person contact, e-mail, the World Wide Web, or the telephone. For many organizations, these mechanisms may change as marketplace, customer, or stakeholder requirements change. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). 5 P.2 Organizational Situation: What is your organization’s strategic situation? Describe your competitive environment, your key strategic challenges and advantages, and your system for performance improvement. In your response, include answers to the following questions: a. Competitive Environment (1) Competitive Position What is your competitive position? What are your relative size and growth in your industry or the markets you serve? How many and what types of competitors do you have? (2) Competitiveness Changes What key changes, if any, are affecting your competitive situation, including changes that create opportunities for innovation and collaboration, as appropriate? (3) Comparative Data What key sources of comparative and competitive data are available from within your industry? What key sources of comparative data are available from outside your industry? What limitations, if any, affect your ability to obtain or use these data? b. Strategic Context What are your key strategic challenges and advantages in the areas of business, operations, societal responsibilities, and workforce? c. Performance Improvement System What are the key elements of your performance improvement system, including your processes for evaluation and improvement of key organizational projects and processes? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). Notes P.2a. Like for-profit businesses, nonprofit organizations are frequently in a highly competitive environment. Nonprofit organizations must often compete with other organizations and alternative sources of similar services to secure financial and volunteer resources, membership, visibility in appropriate communities, and media attention. P.2b. Strategic challenges and advantages might relate to technology, products, finances, your operations, your parent organization’s capabilities, your customers and markets, your industry, globalization, climate change, your value chain, and people. Strategic advantages might include differentiators such as price leadership, design services, innovation rate, geographic proximity, accessibility, and warranty and product options. For some nonprofit organizations, differentiators might also include relative influence with decision makers, ratio of administrative costs to programmatic contributions, reputation for program or service delivery, and wait times for service. P.2c. The Baldrige Scoring System (page 28) uses performance improvement through learning and integration as a dimension in assessing the maturity of organizational approaches and their deployment. This question is intended to set an overall context for your approach to performance improvement. The approach you use should be related to your organization’s needs. Approaches that are compatible with the overarching systems approach provided by the Baldrige framework might include implementing a Lean Enterprise System, applying Six Sigma methodology, using Plan-Do-Check-Act (PDCA) methodology, using standards from the International Organization for Standardization (ISO; e.g., 9000 or 14000), using decision science, or employing other improvement tools. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). P.2b. Throughout the Criteria, “business” refers to a nonprofit organization’s main mission area or enterprise activity. 6 2013–2014 Criteria for Performance Excellence 1 Leadership (120 pts.) The Leadership category asks how senior leaders’ personal actions guide and sustain your organization. It also asks about your organization’s governance system; how your organization fulfills its legal, ethical, and societal responsibilities; and how it supports its key communities. 1.1 Senior Leadership: How do your senior leaders lead? (70 pts.) P R O C ESS Describe how senior leaders’ personal actions guide and sustain your organization. Describe how senior leaders create an environment for customer engagement, innovation, and high performance. Describe how senior leaders communicate with your workforce and key customers. In your response, include answers to the following questions: a. Vision, Values, and Mission (1) Vision and Values How do senior leaders set your organization’s vision and values? How do senior leaders deploy the vision and values through your leadership system, to the workforce, to key suppliers and partners, and to customers and other stakeholders, as appropriate? How do senior leaders’ actions reflect a commitment to those values? (2) Promoting Legal and Ethical Behavior How do senior leaders’ actions demonstrate their commitment to legal and ethical behavior? How do they promote an organizational environment that requires it? (3) Creating a Sustainable Organization How do senior leaders create a sustainable organization? How do they • create an environment for the achievement of your mission, improvement of organizational performance, performance leadership, and organizational and personal learning; • create a workforce culture that delivers a consistently positive customer experience and fosters customer engagement; • create an environment for innovation and intelligent risk taking, achievement of your strategic objectives, and organizational agility; and • participate in succession planning and the development of future organizational leaders? b. Communication and Organizational Performance (1) Communication How do senior leaders communicate with and engage the entire workforce and key customers? How do they encourage frank, two-way communication, including effective use of social media? How do they communicate key decisions? How do they take an active role in motivating the workforce, including participation in reward and recognition programs, to reinforce high performance and a customer and business focus? (2) Focus on Action How do senior leaders create a focus on action that will achieve the organization’s objectives, improve its performance, enable innovation and intelligent risk taking, and attain its vision? How do senior leaders identify needed actions? In setting expectations for organizational performance, how do senior leaders include a focus on creating and balancing value for customers and other stakeholders? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). Notes 1.1. Your organizational performance results should be reported in items 7.1–7.5. 1.1a(1). Your organization’s vision should set the context for the strategic objectives and action plans you describe in items 2.1 and 2.2. 1.1a(3). A sustainable organization is capable of addressing current business needs and, through agility and strategic management, is capable of preparing successfully for its future business, market, and operating environment. Both 1 Leadership external and internal factors should be considered. In the context of sustainability, the concept of innovation and taking intelligent risks includes both technological and organizational innovation to help the organization succeed in the future. A sustainable organization also ensures a safe and secure environment for its workforce and other key stakeholders. A sustainable organization is capable of addressing risks and opportunities arising from environmental considerations and climate change. 7 1.1a(3). Contributions to the sustainability of environmental, social, and economic systems beyond those of the workforce and immediate stakeholders are considered as part of an organization’s societal responsibilities (item 1.2). 1.1b(2). Senior leaders’ focus on action considers your strategy, workforce, work systems, and assets. It includes taking intelligent risks and implementing innovations and ongoing improvements in productivity that may be achieved by eliminating waste or reducing cycle time; it might use techniques such as PDCA, Six Sigma, and Lean. It also includes the actions needed to achieve your strategic objectives (see 2.2a[1]). 1.1b(1). Use of social media may include delivering periodic messages through internal and external Web sites, tweets, blogging, and customer and workforce electronic forums, as well as monitoring external Web sites and blogs and responding, when appropriate. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). 1.1b(1). Nonprofit organizations that rely on volunteers to accomplish their work should also discuss efforts to communicate with and engage the volunteer workforce. 1.2 Governance and Societal Responsibilities: How do you govern and fulfill your societal responsibilities? (50 pts.) In your response, include answers to the following questions: a. Organizational Governance (1) Governance System How does your organization review and achieve the following key aspects of its governance system? • Accountability for the management’s actions • Fiscal accountability • Transparency in operations, selection of governance board members, and disclosure policies for those members, as appropriate • Independence and effectiveness of internal and external audits • Protection of stakeholder and stockholder interests, as appropriate • Succession planning for senior leaders (2) Performance Evaluation How do you evaluate the performance of your senior leaders, including the chief executive? How do you use these performance evaluations in determining executive compensation? How do you evaluate your governance board members’ performance, as appropriate? How do your senior leaders and governance board use these performance evaluations to advance their development and improve both their own effectiveness as leaders and that of your board and leadership system, as appropriate? b. Legal and Ethical Behavior (1) Legal and Regulatory Behavior How do you address any adverse impacts of your products and operations on society? How do you anticipate public concerns with your current and future products and operations? How do you prepare for these impacts and concerns proactively, including through conservation of natural resources and effective supply-chain management processes, as appropriate? What are your key compliance processes, measures, and goals for meeting and surpassing regulatory and legal requirements, as appropriate? What are your key processes, measures, and goals for addressing risks associated with your products and operations? (2) Ethical Behavior How do you promote and ensure ethical behavior in all interactions? What are your key processes and measures or indicators for enabling and monitoring ethical behavior in your governance structure, throughout your organization, and in interactions with your workforce, customers, partners, suppliers, and other stakeholders? How do you monitor and respond to breaches of ethical behavior? c. Societal Responsibilities and Support of Key Communities (1) Societal Well-Being How do you consider societal well-being and benefit as part of your strategy and daily operations? How do you contribute to the well-being of your environmental, social, and economic systems? (2) Community Support How do you actively support and strengthen your key communities? What are your key communities? How do you identify them and determine areas for organizational involvement, including areas that leverage your core competencies? How do your senior leaders, in concert with your workforce, contribute to improving these communities? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). 8 2013–2014 Criteria for Performance Excellence PROC ESS Describe your organization’s approach to responsible governance and leadership improvement. Describe how you ensure legal and ethical behavior, fulfill your societal responsibilities, and support your key communities. Notes 1.2. Societal responsibilities in areas critical to your ongoing marketplace success should also be addressed in Strategy Development (item 2.1) and Operations Focus (category 6). Key results should be reported as Leadership and Governance Results (item 7.4). Examples are results related to regulatory and legal requirements (including the results of mandated financial audits); reductions in environmental impacts through the use of “green” technology, resourceconserving activities, reduction of carbon footprint, or other means; or improvements in social impacts, such as the global use of enlightened labor practices. 1.2. The health and safety of your workforce are not addressed in this item; you should address these workforce factors in items 5.1 and 6.2. 1.2a(1). Transparency in the operations of your governance system should include your internal controls on governance processes. For some privately held businesses and nonprofit organizations, an external advisory board may provide some or all governance board functions. For nonprofit organizations that serve as stewards of public funds, stewardship of those funds and transparency in operations are areas of emphasis. 1.2a(2). The evaluation of leaders’ performance might be supported by peer reviews, formal performance management reviews, and formal or informal feedback from and surveys of the workforce and other stakeholders. For some privately held businesses and nonprofit and government organizations, external advisory boards might evaluate the performance of senior leaders and the governance board. 1 Leadership 1.2b(1). Nonprofit organizations should report, as appropriate, how they meet and surpass the regulatory and legal requirements and standards that govern fundraising and lobbying. 1.2b(2). Measures or indicators of ethical behavior might include the percentage of independent board members, measures of relationships with stockholder and nonstockholder constituencies, instances of ethical conduct or compliance breaches and responses to them, survey results showing workforce perceptions of organizational ethics, ethics hotline use, and results of ethics reviews and audits. They might also include evidence that policies, workforce training, and monitoring systems for conflicts of interest and proper use of funds are in place. 1.2c. Areas of societal contributions and community support might include your efforts to improve the environment (e.g., collaboration to conserve the environment or natural resources); strengthen local community services, education, and health; and improve the practices of trade, business, or professional associations. 1.2c. Some charitable organizations may contribute to society and support their key communities totally through missionrelated activities. In such cases, it is appropriate to respond with any “extra efforts” through which you support these communities. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). 9 2 Strategic Planning (85 pts.) The Strategic Planning category asks how your organization develops strategic objectives and action plans, implements them, changes them if circumstances require, and measures progress. 2.1 Strategy Development: How do you develop your strategy? (45 pts.) In your response, include answers to the following questions: a. Strategy Development Process (1) Strategic Planning Process How do you conduct your strategic planning? What are the key process steps? Who are the key participants? What are your short- and longer-term planning horizons? How does your strategic planning process address these planning horizons? How does your strategic planning process address the need for organizational agility and operational flexibility? (2) Innovation How do you create an environment that supports innovation? How do you identify strategic opportunities? How do you decide which strategic opportunities are intelligent risks for pursuing? What are your key strategic opportunities? (3) Strategy Considerations How do you collect and analyze relevant data and develop information on these key elements as part of your strategic planning process? • Your strategic challenges and strategic advantages • Risks to your organization’s sustainability • Potential blind spots in your strategic planning process and information • Your ability to execute the strategic plan (4) Work Systems and Core Competencies What are your key work systems? How do you make work system decisions? How do you decide which key processes will be accomplished by external suppliers and partners? How do those decisions consider your core competencies and the core competencies of potential suppliers and partners? How do you determine future organizational core competencies? b. Strategic Objectives (1) Key Strategic Objectives What are your organization’s key strategic objectives and your timetable for achieving them? What are your most important goals for these strategic objectives? What key changes, if any, are planned in your products, your customers and markets, your suppliers and partners, and your operations? (2) Strategic Objective Considerations How do your strategic objectives • address your strategic challenges and leverage your core competencies, strategic advantages, and strategic opportunities; • balance the short- and longer-term time horizons; and • consider and balance the needs of all key stakeholders? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). 10 2013–2014 Criteria for Performance Excellence P R O C ESS Describe how your organization establishes a strategy to address its strategic challenges and leverage its strategic advantages and strategic opportunities. Describe how your organization makes key work system decisions. Summarize your organization’s key work systems and its key strategic objectives and their related goals. Notes 2.1. This item deals with your overall organizational strategy, which might include changes in product offerings and customer engagement processes. However, you should describe the product design and customer engagement strategies in items 3.2 and 6.1, as appropriate. 2.1. “Strategy development” refers to your organization’s approach to preparing for the future. In developing your strategy, you might use various types of forecasts, projections, options, scenarios, knowledge (see 4.2a for relevant organizational knowledge), analyses, or other approaches to envisioning the future in order to make decisions and allocate resources. Strategy development might involve key suppliers, distributors, partners, and customers. For some nonprofit organizations, strategy development might involve organizations providing similar services or drawing from the same donor population or volunteer workforce. 2.1. The term “strategy” should be interpreted broadly. Strategy might be built around or lead to any or all of the following: new products; redefinition of key customer groups or market segments; new core competencies; revenue growth via various approaches, including acquisitions, grants, and endowments; divestitures; new partnerships and alliances; and new employee or volunteer relationships. Strategy might be directed toward becoming a preferred supplier, a local supplier in each of your major customers’ or partners’ markets, a low-cost producer, a market innovator, or a provider of a high-end or customized product or service. It might also be directed toward meeting a community or public need. 2.1a(2). Strategic opportunities arise from outside-the-box thinking, brainstorming, capitalizing on serendipity, research and innovation processes, nonlinear extrapolation of current conditions, and other approaches to imagining a different future. The generation of ideas that lead to strategic opportunities benefits from an environment that encourages nondirected, free thought. Choosing which strategic opportunities to pursue involves considering relative risk, financial and otherwise, and then making intelligent choices (“intelligent risks”). 2.1a(3). Data and information might relate to customer and market requirements, expectations, and opportunities; your core competencies; the competitive environment and your performance now and in the future relative to competitors and comparable organizations; your product life cycle; 2 Strategic Planning technological and other key innovations or changes that might affect your products and services and the way you operate, as well as the rate of innovation; workforce and other resource needs; your ability to capitalize on diversity; opportunities to redirect resources to higher-priority products, services, or areas; financial, societal, ethical, regulatory, technological, security, and other potential risks and opportunities; your ability to prevent and respond to emergencies, including natural or other disasters; changes in the local, national, or global economy; requirements for and strengths and weaknesses of your partners and supply chain; changes in your parent organization; and other factors unique to your organization. 2.1a(3). Your strategic planning should address your ability to mobilize the necessary resources and knowledge to execute the strategic plan. It should also address your ability to execute contingency plans or, if circumstances require, a shift in plans and rapid execution of new or changed plans. 2.1a(4). Decisions about work systems are strategic. These decisions involve protecting intellectual property and capitalizing on core competencies. Decisions about your work systems affect organizational design and structure, size, locations, profitability, and sustainability. In the most basic view of an organization, for example, the organization might define three generic work systems: one that addresses production of the product or service, one that engages the customer, and one that comprises systems that support production and customer engagement. 2.1b(1). Strategic objectives might address rapid response, customization, co-location with major customers or partners, workforce capability and capacity, specific joint ventures, virtual manufacturing, rapid or market-changing innovation, ISO quality or environmental systems registration, societal responsibility actions or leadership, social media and Web-based supplier and customer relationship management, and product and service quality enhancements. Responses should focus on your specific challenges, advantages, and opportunities—those most important to your ongoing success and to strengthening your overall performance. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). 11 2.2 Strategy Implementation: How do you implement your strategy? (40 pts.) In your response, include answers to the following questions: a. Action Plan Development and Deployment (1) Action Plan Development How do you develop your action plans? What are your key short- and longer-term action plans, and what is their relationship to your strategic objectives? (2) Action Plan Implementation How do you deploy your action plans throughout the organization to your workforce and to key suppliers and partners, as appropriate, to ensure that you achieve your key strategic objectives? How do you ensure that you can sustain the key outcomes of your action plans? (3) Resource Allocation How do you ensure that financial and other resources are available to support the achievement of your action plans while you meet current obligations? How do you allocate these resources to support the plans? How do you manage the financial and other risks associated with the plans to ensure your financial viability? (4) Workforce Plans What are your key workforce plans to support your short- and longer-term strategic objectives and action plans? How do the plans address potential impacts on your workforce members and any potential changes in workforce capability and capacity needs? (5) Performance Measures What key performance measures or indicators do you use to track the achievement and effectiveness of your action plans? How do you ensure that your overall action plan measurement system reinforces organizational alignment? (6) Action Plan Modification How do you establish and implement modified action plans if circumstances require a shift in plans and rapid execution of new plans? b. Performance Projections For the key performance measures or indicators identified in 2.2a(5), what are your performance projections for your short- and your longer-term planning horizons? How does your projected performance on these measures or indicators compare with the projected performance of your competitors or comparable organizations and with key benchmarks, as appropriate? If there are gaps in performance against your competitors or comparable organizations, how will you address them? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). Notes 2.2. The development and deployment of your strategy and action plans are closely linked to other Criteria items. The following are examples of key linkages: • Item 1.1: how your senior leaders set and communicate organizational direction • Category 3: how you gather customer and market knowledge as input to your strategy and action plans and to use in deploying action plans • Category 4: how you measure and analyze data and manage knowledge to support key information needs, support the development of strategy, provide an effective basis for performance measurements, and track progress on achieving strategic objectives and action plans • Category 5: how you meet workforce capability and capacity needs, determine needs and design your workforce development and learning system, and 12 implement workforce-related changes resulting from action plans • Category 6: how you address changes to your work processes resulting from action plans • Item 7.1: specific accomplishments relative to your organizational strategy and action plans 2.2b. Measures and indicators of projected performance might include those for changes resulting from new ventures; organizational acquisitions or mergers; new value creation; market entry and shifts; new legislative mandates, legal requirements, or industry standards; and significant anticipated innovations in products and technology. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). 2013–2014 Criteria for Performance Excellence PR O C ESS Describe how you convert your strategic objectives into action plans. Summarize your action plans, how you deploy them, and your key measures or indicators of progress. Project your future performance on these measures or indicators relative to key comparisons. 3 Customer Focus (85 pts.) The Customer Focus category asks how your organization engages its customers for long-term marketplace success, including how your organization listens to the voice of the customer, builds customer relationships, and uses customer information to improve and to identify opportunities for innovation. 3.1 Voice of the Customer: How do you obtain information from your customers? (40 pts.) P R O C ESS Describe how you listen to your customers and gain information on their satisfaction, dissatisfaction, and engagement. In your response, include answers to the following questions: a. Customer Listening (1) Listening to Current Customers How do you listen to, interact with, and observe customers to obtain actionable information? How do your listening methods vary for different customers, customer groups, or market segments? How do you use social media and Web-based technologies to listen to customers, as appropriate? How do your listening methods vary across the customer life cycle? How do you seek immediate and actionable feedback from customers on the quality of products, customer support, and transactions? (2) Listening to Potential Customers How do you listen to former customers, potential customers, and competitors’ customers to obtain actionable information and to obtain feedback on your products, customer support, and transactions, as appropriate? b. Determination of Customer Satisfaction and Engagement (1) Satisfaction and Engagement How do you determine customer satisfaction and engagement? How do your determination methods differ among your customer groups and market segments, as appropriate? How do your measurements capture actionable information to use in exceeding your customers’ expectations and securing your customers’ engagement for the long term? (2) Satisfaction Relative to Competitors How do you obtain information on your customers’ satisfaction relative to their satisfaction with your competitors? How do you obtain information on your customers’ satisfaction relative to the satisfaction of customers of other organizations that provide similar products or relative to industry benchmarks, as appropriate? (3) Dissatisfaction How do you determine customer dissatisfaction? How do your measurements capture actionable information to use in meeting your customers’ requirements and exceeding their expectations in the future? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). Notes 3.1. The “voice of the customer” refers to your process for capturing customer-related information. Voice-of-thecustomer processes are intended to be proactive and continuously innovative so that they capture stated, unstated, and anticipated customer requirements, expectations, and desires. The goal is customer engagement. In listening to the voice of the customer, you might gather and integrate various types of customer data, such as survey data, focus group findings, blog comments and data from other social media, warranty data, marketing and sales information, and complaint data that affect customers’ purchasing and engagement decisions. 3.1. For additional considerations on the products and business of nonprofit organizations, see the notes to P.1a(1) and P.2b. 3 Customer Focus 3.1a(1). Social media and Web-based technologies are a growing mode of gaining insight into how customers perceive all aspects of your involvement with them. Use of social media may include monitoring comments on blogs you moderate and in social media outlets you do not control, such as wikis, online forums, and other blogs. 3.1a(1). The customer life cycle begins in the product concept or pre-sale period and continues through all stages of your involvement with the customer. These stages might include relationship building, the active business relationship, and an exit strategy, as appropriate. 3.1b. You might use any or all of the following to determine customer satisfaction and dissatisfaction: surveys, formal and informal feedback, customer account histories, complaints, field reports, win/loss analysis, customer referral 13 rates, and transaction completion rates. You might gather information on the Web, through personal contact or a third party, or by mail. Determining customer dissatisfaction should be seen as more than reviewing low customer satisfaction scores. Dissatisfaction should be independently determined to identify root causes and enable a systematic remedy to avoid future dissatisfaction. other organizations that deliver similar products in a noncompetitive marketplace, or comparisons obtained through trade or other organizations. Determining relative customer satisfaction may also involve determining why customers chose your competitors over you. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). 3.1b(2). Determining relative customer satisfaction may involve comparisons with competitors, comparisons with 3.2 Customer Engagement: How do you serve customers’ needs to engage them and build relationships? (45 pts.) In your response, include answers to the following questions: a. Product Offerings and Customer Support (1) Product Offerings How do you determine customer and market requirements for product offerings and services? How do you identify and adapt product offerings to meet the requirements and exceed the expectations of your customer groups and market segments (identified in the Organizational Profile)? How do you identify and adapt product offerings to enter new markets, to attract new customers, and to create opportunities to expand relationships with current customers, as appropriate? (2) Customer Support How do you enable customers to seek information and support? How do you enable them to conduct business with you and give feedback on your products and customer support? What are your key means of customer support, including your key communication mechanisms? How do they vary for different customers, customer groups, or market segments? How do you determine your customers’ key support requirements? How do you ensure that these requirements are deployed to all people and processes involved in customer support? (3) Customer Segmentation How do you use information on customers, markets, and product offerings to identify current and anticipate future customer groups and market segments? How do you consider competitors’ customers and other potential customers and markets in this segmentation? How do you determine which customers, customer groups, and market segments to emphasize and pursue for business growth? b. Building Customer Relationships (1) Relationship Management How do you market, build, and manage relationships with customers to • acquire customers and build market share; • retain customers, meet their requirements, and exceed their expectations in each stage of the customer life cycle; and • increase their engagement with you? How do you leverage social media to enhance customer engagement and relationships with your organization? (2) Complaint Management How do you manage customer complaints? How do you ensure that complaints are resolved promptly and effectively? How does your management of customer complaints enable you to recover your customers’ confidence and enhance their satisfaction and engagement? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). 14 2013–2014 Criteria for Performance Excellence P R O C ESS Describe how you determine product offerings and communication mechanisms to support your customers. Describe how you build customer relationships. Notes 3.2. “Customer engagement” refers to your customers’ investment in or commitment to your brand and product offerings. Characteristics of engaged customers include retention and loyalty, willingness to make an effort to do business—and increase their business—with you, and willingness to actively advocate for and recommend your brand and product offerings. 3.2a. “Product offerings” and “products” refer to the goods and services that you offer in the marketplace. In identifying product offerings, you should consider all the important characteristics of products and services and their performance throughout their full life cycle and the full consumption chain. The focus should be on features that affect customer preference and loyalty—for example, features that differentiate your products from competing offerings or other organizations’ services. Those features might include price, reliability, value, delivery, timeliness, product ­customization, ease of use, requirements for the use 3 Customer Focus and disposal of hazardous materials, customer or technical support, and the sales relationship. Key product features might also take into account how transactions occur and factors such as the privacy and security of customer data. Your results on performance relative to key product features should be reported in item 7.1, and those for customer perceptions and actions (outcomes) should be reported in item 7.2. 3.2a(2). The goal of customer support is to make your organization easy to do business with and responsive to your customers’ expectations. 3.2b. Building customer relationships might include developing partnerships or alliances with customers. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). 15 4 Measurement, Analysis, and Knowledge Management (90 pts.) The Measurement, Analysis, and Knowledge Management category asks how your organization selects, gathers, analyzes, manages, and improves its data, information, and knowledge assets; how it learns; and how it manages information technology. The category also asks how your organization uses review findings to improve its performance. 4.1  Measurement, Analysis, and Improvement of Organizational Performance: How do you measure, analyze, and then improve organizational performance? (45 pts.) In your response, include answers to the following questions: a. Performance Measurement (1) Performance Measures How do you select, collect, align, and integrate data and information to use in tracking daily operations and overall organizational performance, including progress on achieving strategic objectives and action plans? What are your key organizational performance measures, including key short-term and longer-term financial measures? How frequently do you track these measures? how do you use these data and information to support organizational decision making, continuous improvement, and innovation? (2) Comparative Data How do you select and ensure the effective use of key comparative data and information to support operational and strategic decision making and innovation? (3) Customer Data How do you select and ensure the effective use of voice-of-the-customer and market data and information (including aggregated data on complaints) to build a more customer-focused culture and to support operational and strategic decision making and innovation? How do you use data and information gathered through social media, as appropriate? (4) Measurement Agility How do you ensure that your performance measurement system can respond to rapid or unexpected organizational or external changes? b. Performance Analysis and Review How do you review organizational performance and capabilities? How do you use your key organizational performance measures in these reviews? What analyses do you perform to support these reviews and ensure that conclusions are valid? How do your organization and its senior leaders use these reviews to assess organizational success, competitive performance, financial health, and progress on achieving your strategic objectives and action plans? How do your organization and its senior leaders use these reviews to assess your ability to respond rapidly to changing organizational needs and challenges in your operating environment? How does your governance board review the organization’s performance and its progress on strategic objectives and action plans, if appropriate? c. Performance Improvement (1) Best Practices How do you identify organizational units or operations that are high performing? How do you identify their best practices for sharing? (2) Future Performance How do you use performance review findings (addressed in 4.1b) and key comparative and competitive data in projecting future performance? How do you reconcile any differences between these projections of future performance and performance projections developed for your key action plans (addressed in 2.2b)? (3) Continuous Improvement and Innovation How do you use performance review findings (addressed in 4.1b) to develop priorities for continuous improvement and opportunities for innovation? How do you deploy these priorities and opportunities to work group and functional-level operations throughout your organization? When appropriate, how do you deploy the priorities and opportunities to your suppliers, partners, and collaborators to ensure organizational alignment? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). 16 2013–2014 Criteria for Performance Excellence P R O C ESS Describe how you measure, analyze, review, and improve organizational performance by using data and information at all levels and in all parts of your organization. Describe how your organization uses comparative and customer data to support decision making. Notes by performance measures reported throughout your Criteria item responses, and they should be guided by the strategic objectives and action plans you identify in items 2.1 and 2.2. The reviews might also be informed by internal or external Baldrige assessments. 4.1. The results of organizational performance analysis and review should inform the strategic planning you describe in category 2. 4.1. Your organizational performance results should be reported in items 7.1–7.5. 4.1b. Performance analysis includes examining performance trends; organizational, industry, and technology projections; and comparisons, cause-effect relationships, and correlations. This analysis should support your performance reviews, help determine root causes, and help set priorities for resource use. Accordingly, such analysis draws on all types of data: product performance, customer-related, financial and market, operational, and competitive. The analysis should also draw on publicly mandated measures, when appropriate. 4.1a. Data and information from performance measurement should be used to support fact-based decisions that set and align organizational directions and resource use at the work unit, key process, department, and organization levels. 4.1a(2). Comparative data and information are obtained by benchmarking and by seeking competitive comparisons. Benchmarking is identifying processes and results that represent best practices and performance for similar activities, inside or outside your industry. Competitive comparisons relate your performance to that of competitors and other organizations providing similar products and services. One source of this information might be social media or the Web. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). 4.1b. Organizational performance reviews should be informed by organizational performance measurement and 4.2 Knowledge Management, Information, and Information Technology: How do you manage your organizational knowledge assets, information, and information technology? (45 pts.) In your response, include answers to the following questions: a. Organizational Knowledge (1) Knowledge Management • • • • How do you collect and transfer workforce knowledge; transfer relevant knowledge from and to customers, suppliers, partners, and collaborators; share and implement best practices; and assemble and transfer relevant knowledge for use in your innovation and strategic planning processes? (2) Organizational Learning How do you use your knowledge and resources to embed learning in the way your organization operates? b. Data, Information, and Information Technology (1) Data and Information Properties How do you manage your organizational data and information to ensure their accuracy, their integrity and reliability, their timeliness, and their security and confidentiality? (2) Data and Information Availability How do you make needed data and information available in a user-friendly format to your workforce, suppliers, partners, collaborators, and customers, as appropriate? (3) Hardware and Software Properties How do you ensure that hardware and software are reliable, secure, and user-friendly? (4) Emergency Availability In the event of an emergency, how do you ensure that hardware and software systems and data and information continue to be available to effectively serve customers and business needs? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). Note 4.2b(2). Access to data and information might be via electronic or other means. 4 Measurement, Analysis, and Knowledge Management For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). 17 PROC ESS Describe how your organization manages and grows its knowledge assets and learns. Describe how you ensure the quality and availability of the data, information, software, and hardware needed by your workforce, suppliers, partners, collaborators, and customers. 5 Workforce Focus (85 pts.) The Workforce Focus category asks how your organization assesses workforce capability and capacity needs and builds a workforce environment conducive to high performance. The category also asks how your organization engages, manages, and develops your workforce to utilize its full potential in alignment with your organization’s overall mission, strategy, and action plans. 5.1 Workforce Environment: How do you build an effective and supportive workforce environment? (40 pts.) In your response, include answers to the following questions: a. Workforce Capability and Capacity (1) Capability and Capacity How do you assess your workforce capability and capacity needs, including the skills, competencies, certifications, and staffing levels you need? (2) New Workforce Members How do you recruit, hire, place, and retain new workforce members? How do you ensure that your workforce represents the diverse ideas, cultures, and thinking of your hiring and customer community? (3) Work Accomplishment How do you organize and manage your workforce to • accomplish your organization’s work, • capitalize on your organization’s core competencies, • reinforce a customer and business focus, and • exceed performance expectations? (4) Workforce Change Management How do you prepare your workforce for changing capability and capacity needs? How have these needs, including staffing levels, changed over time? How do you manage your workforce, its needs, and your needs to ensure continuity, prevent workforce reductions, and minimize the impact of such reductions, if they become necessary? How do you prepare for and manage periods of workforce growth? b. Workforce Climate (1) Workplace Environment How do you address workplace environmental factors to ensure and improve workforce health and security and workplace accessibility? What are your performance measures and improvement goals for each of these workforce factors? For your different workplace environments, what significant differences are there in these factors and their performance measures or targets? (2) Workforce Benefits and Policies How do you support your workforce via services, benefits, and policies? How do you tailor these to the needs of a diverse workforce and different workforce groups and segments? What key benefits do you offer your workforce? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). 18 2013–2014 Criteria for Performance Excellence P R O C ESS Describe how you manage workforce capability and capacity to accomplish your organization’s work. Describe how you maintain a supportive and secure work climate. Notes 5.1. “Workforce” refers to the people actively involved in accomplishing your organization’s work. It includes permanent, temporary, and part-time personnel, as well as any contract employees you supervise. It includes team leaders, supervisors, and managers at all levels. People supervised by a contractor should be addressed in categories 2 and 6 as part of your larger work system strategy and your internal work processes. For organizations that also rely on volunteers, “workforce” includes these volunteers. 5.1a. “Workforce capability” refers to your organization’s ability to carry out its work processes through its people’s knowledge, skills, abilities, and competencies. Capability may include the ability to build and sustain relationships with customers; innovate and transition to new technologies; develop new products, services, and work processes; and meet changing business, market, and regulatory demands. “Workforce capacity” refers to your organization’s ability to ensure sufficient staffing levels to carry out its work processes and successfully deliver products to customers, including the ability to meet seasonal or varying demand levels. 5 Workforce Focus 5.1a. Your assessment of workforce capability and capacity needs should consider not only current needs but also future requirements based on the strategic objectives and action plans you identify in category 2. 5.1a(2). This requirement refers only to new workforce members. The retention of existing workforce members is considered in item 5.2, Workforce Engagement. 5.1a(4). Preparing your workforce for changing capability and capacity needs might include training, education, frequent communication, consideration of workforce employment and employability, career counseling, and outplacement and other services. 5.1b(1). Workplace accessibility maximizes productivity by eliminating barriers that can prevent people with disabilities from working to their potential. A fully inclusive workplace is physically, technologically, and attitudinally accessible. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). 19 5.2 Workforce Engagement: How do you engage your workforce to achieve organizational and personal success? (45 pts.) In your response, include answers to the following questions: a. Workforce Performance (1) Elements of Engagement How do you determine the key elements that affect workforce engagement? How do you determine these elements for different workforce groups and segments? (2) Organizational Culture How do you foster an organizational culture that is characterized by open communication, high-performance work, and an engaged workforce? How do you ensure that your organizational culture benefits from the diverse ideas, cultures, and thinking of your workforce? (3) Performance Management How does your workforce performance management system support high performance and workforce engagement? How does it consider workforce compensation, reward, recognition, and incentive practices? How does it reinforce intelligent risk taking to achieve innovation, reinforce a customer and business focus, and reinforce achievement of your action plans? b. Assessment of Workforce Engagement (1) Assessment of Engagement How do you assess workforce engagement? What formal and informal assessment methods and measures do you use to determine workforce engagement, including satisfaction? How do these methods and measures differ across workforce groups and segments? How do you use other indicators, such as workforce retention, absenteeism, grievances, safety, and productivity, to assess and improve workforce engagement? (2) Correlation with Business Results How do you relate findings from your assessment of workforce engagement to key business results reported in category 7 to identify opportunities for improvement in both workforce engagement and business results? c. Workforce and Leader Development (1) Learning and Development System How does your learning and development system support the organization’s needs and the personal development of your workforce members, managers, and leaders? How does the system • address your organization’s core competencies, strategic challenges, and achievement of its short-term and long-term action plans; • support organizational performance improvement and innovation; • support ethics and ethical business practices; • improve customer focus; • ensure the transfer of knowledge from departing or retiring workforce members; and • ensure the reinforcement of new knowledge and skills on the job? (2) Effectiveness of Learning and Development How do you evaluate the effectiveness and efficiency of your learning and development system? (3) Career Progression How do you manage effective career progression for your workforce members? How do you carry out effective succession planning for management and leadership positions? Terms in small caps are defined in the Glossary of Key Terms (pages 44–51). 20 2013–2014 Criteria for Performance Excellence PR O C ESS Describe how you develop workforce members, managers, and leaders to achieve high performance, including how you engage them in improvement and innovation. Notes 5.2. “Elements that affect workforce engagement” refer to the drivers of workforce members’ commitment, both emotional and intellectual, to accomplishing the organization’s work, mission, and vision. 5.2a(2), 5.2a(3). Understanding the characteristics of highperformance work environments, in which people do their utmost for their customers’ benefit and the organization’s success, is key to understanding and building an engaged workforce. These characteristics are described in detail in the definition of high-performance work (page 46). 5.2a(3). Compensation, recognition, and related reward and incentive practices include promotions and bonuses that might be based on performance, skills acquired, and other factors. Recognition can include monetary and nonmonetary, formal and informal, and individual and group mechanisms. In some government organizations, compensation systems are set by law or regulation; therefore, reward and recognition systems must use other options. 5 Workforce Focus 5.2b(2). In identifying improvement opportunities, you might draw on the workforce-focused results you report in item 7.3. You might also address workforce-related opportunities based on their impact on the results you report in other category 7 items. 5.2c. Your response should include how you address any unique considerations for workforce development, learning, and career progression that stem from your organization. Your response should also consider the breadth of development opportunities you might offer, including education, training, coaching, mentoring, and work-related experiences. For additional guidance on this item, see the Category and Item Commentary (http://www.nist.gov/baldrige /publications/business_nonprofit_criteria.cfm). 21 6 Operations Focus (85 pts.) The Operations Focus category asks how your organization designs, manages, and improves its products and work processes and improves operational effectiveness to deliver customer value and achieve organizational success and sustainability. 6.1 Work Processes: How do you design, manage, and improve your key products and work processes? (45 pts.) In your response, include answers to the following questions: a. Product and Process Design (1) Design Concepts How do you design your products and work processes to meet all key requirements? How do you incorporate new technology, organizational knowledge, product excellence, and the potential need for agility into these products and processes? (2) Product and Process Requirements How do you determine key product requirements? How do you determine key work process requirements? What are your organization’s key work processes? What are the key requirements for these work processes? b. Process Management (1) Process Implementation How does your day-to-day operation of work processes ensure that they meet key process requirements? What key performance measures or indicators and in-process measures do you use to control and improve your work processes? How do these measures relate to end-product quality and performance? (2) Support Processes How do you determine your key support processes? What are your key support processes? How does your day-to-day operation of these processes ensure that they meet k...
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