OE21 Guideline: 4.1 Measurement, Analysis, and Improvement of Organizational Performance

Strategic Objective:

Strategic Objective:

Quality Objective:

Quality Objective:

Approved: DD-MMM-YY:

Responsibility:

Use measurement, analysis, and improvement to improve performance

Select, analyze, manage and improve data/information to boost results 

Approved by: (Name) Chair, Leadership Focus Team (LFT)

Lead: Leadership Focus Team (LFT-IT)  Support: All focus teams and FAC

             VALUE ADDED

VALUE ADDED: Measurement, Analysis, and Improvement of Organizational Performance

 

a. Performance Measurement

 

(1) Performance Measures - This standard defines how the organization selects and manages performance measures for tracking of data and information on daily operations, and for overall performance, including the following results provided in Baldrige Frame Item 7.0 Results:

 

  • 7.1 Product and Process Results; including product and service performance and customer service processes, process effectiveness and efficiency, emergency preparedness, and supply chain management results. (120 pts.)

 

  • 7.2 Customer-Focused Results; including customer satisfaction and engagement performance results. (80 pts.)

 

  • 7.3 Workforce-Focused Results; including workforce capability and capacity, workforce climate and satisfaction, workforce engagement and workforce development. (80 pts.)

 

  • 7.4 Leadership Governance and Societal Responsibility Results; including senior leader’s communication and engagement with workforce and customers, senior leaders governance, legal and regulatory, ethical behavior, and results for societal responsibilities and support of vital communities, and achievement of organization strategy and action plans that contain strategic objectives (80 pts.)

 

  • 7.5 Financial and Market Results; including financial and marketplace performance results. (90 pts.)

 

Note: The Baldrige Results Category 7 adds up the points from 7.1 through 7.5 to a maximum of 450 points.

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POLICY           4.1 COMMENTARY

4.1 Measurement, Analysis, and Improvement of Organizational Performance (Policy)

 

a. Performance Measurement

 

(1) Performance Measures 

 

The organization manages the measurement, analysis, and improvement of organizational performance. The organization maintains the selection, collection, alignment, and integration of data and information for tracking of data and information on daily operations and overall organizational performance, including financial and marketplace performance. The organization manages the monitoring of progress in achieving strategic objectives and action plans.

 

(2) Comparative Data

 

The organization manages the selection of comparative data and information to support fact-based decision making.

 

(3) Customer Data

 

The organization manages the selection of voice-of-the-customer and market data and information.

 

The organization manages the selection of voice-of-the-customer and market data and information (including aggregated data on complaints and, as appropriate, data and information from social media) to build a more customer-focused culture and to support fact-based decision making.

 

(4) Measurement Agility

 

The organization ensures that the performance measurement system can respond to rapid or unexpected organizational or external changes.

 

b. Performance Analysis and Review

 

The organization reviews its performance and capabilities.

 

The organization uses vital organizational performance measures, as well as comparative and customer data, in these reviews.

 

The organization performs analyses to support performance reviews and ensures that conclusions from these reviews are valid.

 

The organization and its senior leaders use performance reviews to assess organizational success, competitive performance, financial health, and progress on achieving your strategic objectives and action plans; and to respond rapidly to changing organizational needs and challenges in the operating environment, including the need for transformational change in organizational structure and work systems.

 

The organization's governance board reviews the organization’s performance and its progress on strategic objectives and action plans.

 

c. Performance Improvement

 

(1) Future Performance 

 

The organization projects future performance, using findings from performance reviews (addressed in 4.1b) and key comparative and competitive data in its projections.

 

The organization reconciles any differences between these projections and those developed for its key action plans (addressed in 2.2a).

 

(2) Continuous Improvement and Innovation 

 

The organization uses findings from performance reviews (addressed in 4.1b) to develop priorities for continuous improvement and opportunities for innovation.

 

The organization deploys these priorities and opportunities to all work units; and when appropriate, to suppliers, partners, and collaborators to ensure organizational alignment.

 

PROCESS

4.1 Flow Diagram (Figure 4.1-1 Performance Measurement Analysis Improvement 

4.1 Process Chart (Figure 4.1-2 Performance Measurement, Analysis, Improvement)

4.1 Dashboard (Figure 4.1-3 OE21 Results Excellence Dashboard)

Inputs to 4.1 Measurement Analysis Improvement of Performance

 Measurement and Analysis Tools and Techniques

  • Selection of Comparative Data (benchmarking)

  • Selection and Use of Customer Data

  • Measurement Agility

  • Focus Teams (managers focused on results)

  • Performance Reviews

  • Continuous Improvement

  • Innovation 

Outputs from 4.1 Measurement Analysis Improvement of Performance

  • Leadership Focus Team Metrics (aligned with Baldrige 7.4 and 7.5) 

  • Customer Focus Team Metrics (aligned with Baldrige 7.2)

  • Operations Focus Team Metrics (aligned with Baldrige 7.1)

  • Workforce Focus Team Metrics (aligned with Baldrige 7.3)

Case Study

  • Read the 4.1 Case Study

         

Implementation Instructions

4.1 IMPLEMENTATION INSTRUCTIONS

Key Decision: The OE21 focus team responsible for this standard should begin by deciding whether or not the OE21 standard adds value (on is non-value added) when compared to any existing standard, SOP, or process the organization uses now. The decision process is:

 

1. The focus team studies all Tasks and tools used in the OE21 standard.

2. The focus team answers the questions:

  • NON-VALUE ADDED? Does the organization currently use a standard, SOP process that is deemed as better or essentially as good as the OE21 standard? If YES, then the focus team should document that this standard is deemed as NVA, and then the focus team should proceed ahead to the next OE21 standard.

  • VALUE-ADDED? Does the organization currently use a standard, SOP process that is deemed as better or essentially as good as the OE21 standard? If NO, then the focus team should proceed ahead to complete the following OE21 Implementation instructions.

 

Note: The NVA finding will be used later in the OE21 Certification Audit process.

START IMPLEMENTATION

Note: Implementation of 4.1 is led by the LFT-IT and supported by the other focus teams (CFT, OFT, and WFT). When complete, the 4.1 outputs are reviewed and approved by the LFT (CEO, CFO, etc.)
 

4.1 Measurement, Analysis, and Improvement of Organizational Performance

 

a. Performance Measurement

Task 4.1.1 Review Initial Performance Measurement - The initial (baseline) performance measurement requires the implementation of the OE21 standard B.1 Organization Performance Assessment. The results of this assessment should be reviewed before the selection of performance measures. 

Task 4.1.2 Selection of Performance Measures - PMS Metrics List tabs aide the selection of performance measures. The PMS consists of the following Excel workbooks, each designed for its focus team. NOTICE: These instructions assume that your organization has chosen to use the OE21 Performance Measurement System files listed in this Task 4.1.2. If you are using another PMS then you should follow the instructions provided by that PMS provider. 

  • LFT_4.1_Metrics_Selection_Tables (.xlsx)​

  • LFT 7.4_7.5 PMS Leadership Excellence Metrics (xlsx)
  • CFT 7.2 PMS Customer Excellence Metrics (xlsx)

  • OFT 7.1 PMS Operations Excellence Metrics (xlsx)

  • WFT 7.3 PMS Workforce Excellence Metrics (xlsx)

Each PMS workbook includes the following tabs:

 

  • LFT 4.1 METRICS SELECTION Tables - For all Baldrige Category 7 Results, the Metrics List tab provides a more than an adequate number of suggested measures, plus the recommended frequency of collection and goals (targets).

 

  • GUIDELINES Tab - Provides definitions and guidelines for the PMS Workbook

 

  • M-TABLE - Links to twenty (20) Trend Charts/Data Logs in the PMS Workbook

 

  • RG Results Group Tabs (20) - each tab contains a trend chart and data log.

 

The Focus Teams use the guidelines provided in the Baldrige Framework Item 7.0 Results (7.1 to 7.5) along with the Metrics Lists in their PMS workbooks to help select the appropriate performance measures for use in tracking of data and information on daily operations and overall organizational performance.

  • Step 1 - Select Leadership Excellence Metrics (refer to OE21 Standards 7.4 and 7.5

  • Step 2 - Select Customer Excellence Metrics (refer to OE21 Standard 7.2)

  • Step 3 - Select Operations Excellence Metrics (refer to OE21 Standard 7.1)

  • Step 4 - Select Workforce Excellence Metrics (refer to OE21 Standard 7.3

 

  • PROGRESS: You have reached Milestone 1 (good work). Input the status [64%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 4.1.3 Selection of Comparative Data - The organization manages the selection of comparative data and information to support fact-based decision making. The benchmarking data and information process includes these steps:

 

  • Step 1 - Identify results to be compared (benchmarked)

  • Step 2 - Locate comparison (benchmarking) partners or collaborators

  • Step 3 - Collect benchmarking data

  • Step 4 - Identify gaps in performance between the organization, its partners, and collaborators

  • Step 5 - Set new strategies and goals for the organization including, products, services, programs, or processes.

 

The selection of appropriate comparative and benchmarking data and implementation of the benchmarking process is the responsibility of the focus team whose results are most affected by any gaps in performance found.

  • PROGRESS: You have reached Milestone 2 (good work). Input the status [79%] on the organization's OE21 Intranet Main page alongside the title of this standard.

 

Task 4.1.4 Review Requirements for Measurement Agility - The organization ensures that the performance measurement system can respond to rapid or unexpected organizational or external changes, including:

  • Ever-shorting cycles in need of new products or services

  • Rapid changes and flexibility in operations (design, production, delivery)

  • Disruptive events in the market, technology, economics, weather, or social and societal demands

  • Demands for shorter response times and rapid changeover to new processes

  • Opportunities for strategic partnerships or alliances

 

As these kinds of unexpected organizational external changes occur, the focus teams rapidly review and update their measures and goals (targets) as well as new benchmarks that create need to changes in the data and information collected, tracked and managed. The focus teams have unique roles in agility, including:

 

  • Leadership Focus Team - monitors strategic changes that impact financial and market performance as well as the need for new or revised strategic objectives and action plans.

 

  • Customer Focus Team - monitors changes in customer satisfaction, needs and expectations changes that impact customer and sales/revenue performance as well as the need for new or revised customer excellence action plans.

 

  • Operations Focus Team - monitors changes in design, production, delivery or support of products, services or programs that lead to changes in process management, project and administration management, supplier and supply chain management, risk and quality management as well as the need for new or revised operations excellence action plans.

 

  • Workforce Focus Team - monitors changes in workforce satisfaction, engagement, capability, capacity (new talent hires), learning and development, and performance outputs as well as the need for new or revised workforce excellence action plans.

 

  • Community Alliance Team - monitors changes in regional community leadership and organization activities and programs new initiatives, legal and regulatory community problems and issues (including weather, environment-related and people or groups), as well as the need for new or revised community excellence action plans.

 

  • PROGRESS: You have reached Milestone 3 (good work). Input the status [83%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 4.1.5 Performance Analysis and Review - The organization reviews its performance and capabilities using OE21 4.1 Policy (item b. Performance Analysis and Review). The Performance Analysis and Review process steps are as follows:

 

  • Step 1: Schedule Monthly Performance Reviews. The Leadership Focus Team (LFT) sets date/time for monthly performance reviews. Representatives from the four focus teams (LFT, CFT, OFT, WFT) are required to attend performance reviews.

 

  • Step 2: Preview KPIs before Performance Reviews. All focus teams preview their KPIs in their Performance Measurement System PMS workbooks,  to ensure that they have up to date measures, targets (goals) and action plans before the performance review.  Focus teams pay attention to KPIs with negative trends (measures trending away from target value), because these will be of high priority in the performance review.

 

  • Step 3: Conduct Performance Reviews. The LFT leads the review by inviting each team to present their KPIs and Action Plans. The LFT ensures that all teams participate in the KPI discussions. Useful lessons are learned, followed by continuous improvement and opportunities for innovation. The guidelines for Performance Reviews are as follows:

 

The sequence of focus team presentations is WFT, OFT, CFT, LFT, and CAT in that order. This sequence is designed to keep all focus team members focused on results and fully aware of the following key "cause and effect" relationships:

 

(a) If the workforce is more satisfied, capable, and performs well, then the workforce usually does a better job in operations (design, production, delivery, support of products and services);

 

(b) When operations deliver better products and services, then customers are likely to perceive a higher value, and this increases customer satisfaction and loyalty;

 

(c) Satisfied and loyal customers tend to buy more products/services; and this improves leadership results in the form of higher financial, market and sales performance.

 

(d) Effective leadership creates a higher value of the organization for all stakeholders, including workforce, suppliers, partners, key outside stakeholders or upper-level management/owners and the regional community. The Leadership Focus Team and the Governance Board (as appropriate) review the organization's' progress in the accomplishment of its Strategic Objectives and Strategy Action Plans.  

 

(e) Satisfied community leaders and alliance partners tend to create more opportunities for the organization's growth, including higher financial, market and sales performance as well as significant contributions to important community services or initiatives, including education, crime, health care, and economic initiatives.

 

Step 4: Encourage Innovation that Improves Results. As each focus team presents their KPIs and KPI Action Plans, the LFT takes every opportunity to encourage innovative ideas that help drive measures toward target values. The LFT ensures that the organization stays agile and responds rapidly to changing organizational needs and challenges in the operating environment.

 

  • PROGRESS: You have reached Milestone 4 (good work). Input the status [94%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 4.1.6 Performance Improvement

 

Step 1: Project Future Performance. During and after each performance review, the focus teams consider how performance review findings and key comparative and competitive data might be used to deploy best practices, opportunities for continuous improvement and innovative ideas throughout the organization, including suppliers, partners, and collaborators. If necessary, the LFT may initiate new Strategic Objectives to prepare for projected significant changes in the future performance of the organization. Future performance indicators should include:

 

  • PMS Trend Charts - Linear Measure Trend lines project future performance ahead of actual measures recorded each month;

 

  • Reports of changes in industry, market and technology projections;

 

  • Observations of cause-effect relationships between measures (e.g., loss of key employees drives workforce capability measures down, and creates corresponding downturns in process outputs and productivity)

 

The organization reconciles any differences between these projections and those developed for its key action plans (addressed in Guideline 2.2 Strategy Implementation).

 

Step 2: Continuous Improvement and Innovation. During and after each performance review, the focus teams consider how performance review findings lead to needed changes in continuous improvement priorities, need for innovation sessions to create better ideas and solutions, and need to update key action plans (addressed in OE21 2.2 Strategy Implementation). The Leadership Focus Team (LFT) is responsible for deploying these changes in priorities, and calls for innovation sessions using OE21-Innovator or similar brainstorming tools to other focus teams, to all affected work units and departments, and when appropriate to suppliers, partners, and collaborators to ensure organizational alignment.

  • PROGRESS: You have reached Milestone 5 (congratulations). Input the status [100%] on the organization's OE21 Intranet Main page alongside the title of this standard.