OE21 Guideline: 6.1d 

Innovation and Risk Management

Strategic Objective:

Pursue strategic opportunities that are intelligent risks

Strategic Objective:

Allocate financial and other resources to high priority opportunities

Quality Objective:

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

Approved: MM-DDD-YY

Quality Objective:


Lead: Operations Focus Team (OFT)  Support: Other focus teams


  1. Helps evaluate strategic opportunities determined to be intelligent and worthwhile risks

  2. Helps allocate financial and other resources (e.g., people, material, equipment) to prioritize and pursue strategic opportunities

  3. Provides tools for collection and analysis of categorized ideas to support innovation projects

  4. Provides for risk identification and mitigation in support of changes to products, services or programs 

  5. Provides additional tasks for Operations and Leadership Excellence Action Plans

  6. Provides suggested metrics associated with innovation and risk management projects



The organization has adopted the Baldrige Framework Item 6.1d Innovation Management, and 7.4b Strategy Implementation Results as the internal policy, including the following sub-items:


6.1d Management of Opportunities for Innovation - The organization pursues strategic opportunities determined to be intelligent risks. The organization makes financial and other resources available to pursue these opportunities and discontinues the pursuit of lower priority opportunities. 


7.4b Strategy Implementation Results - The organization tracks progress and outcomes of implementing its Strategic Action Plans. Where appropriate, the organization uses these results to build and strengthen its core competencies and to initiate new products, services, or programs that may necessitate taking intelligent risks.



Standard 6.1d Flow Diagram (Figure 6.1d-1 Innovation Management)

Inputs to 6.1d Innovation Management

  • 6.1d-OFT-S1 OE21 INNOVATOR_Problems (survey)

  • 6.1d-OFT-S2 OE21 INNOVATOR_Causes (survey)

  • 6.1d-OFT-S3 OE21 INNOVATOR_Five Whys (survey)

  • 6.1d-OFT-S4 OE21 INNOVATOR_Solutions (survey)

  • 6.1d-OFT-S5 OE21 INNOVATOR_Opportunities (survey)

  • ​6.1d-OFT-S6 Risk Manager (survey) 

Measurement and Analysis Tools and Techniques

  • 6.1d-OFT-A1 OE21 INNOVATOR_Problems Analysis (.xlsx)

  • 6.1d-OFT-A2 OE21 INNOVATOR_Causes Analysis (.xlsx)

  • 6.1d-OFT-A3 OE21 INNOVATOR_Five Whys Analysis (.xlsx)

  • 6.1d-OFT-A4 OE21 INNOVATOR_Solutions Analysis (.xlsx)

  • 6.1d-OFT-A5 OE21 INNOVATOR_Opportunities Analysis (.xlsx)

  • 6.1d-OFT-A6 Risk_Manager Analysis (.xlsx)

Outputs from 6.1d Innovation Management

  • Milestone 1 - Conduct initial INNOVATOR Assessments
    Milestone 2 - Conduct initial RISKS Assessment
    Milestone 3 -  Update Strategy Plan and Metrics

Implementation Instructions


Task 6.1d-1 - Conduct OE21 INNOVATOR ASSESSMENTS - The five (5) types of OE21 INNOVATOR Assessments are administered by all OE21 Focus Teams and facilitator. The design of the surveys and analysis tools are identical in function (formulas, style of tables, tabs) and are used to capture useful responses from the organization's responders, and/or subject matter experts. Each assessment has a specific purpose, however, they may be used in any order desired. 


The following are the five assessment groups, arranged in a logical order. 

  • 6.1d-OFT-S1 OE21 INNOVATOR_problems (survey)

  • 6.1d-OFT-A1 OE21 INNOVATOR_problems (.xlsx)

  • 6.1d-OFT-S2 OE21 INNOVATOR_causes (survey)

  • 6.1d-OFT-A2 OE21 INNOVATOR_causes (.xlsx)

  • 6.1d-OFT-S3 OE21 INNOVATOR_five whys (survey)

  • 6.1d-OFT-A3 OE21 INNOVATOR_five whys (.xlsx)

  • 6.1d-OFT-S4 OE21 INNOVATOR_solutions (survey)

  • 6.1d-OFT-A4 OE21 INNOVATOR_solutions (.xlsx)

  • 6.1d-OFT-S5 OE21 INNOVATOR_opportunities (survey)

  • 6.1d-OFT-A5 OE21 INNOVATOR_opportunities (.xlsx)

The logical flow of the first four INNOVATOR assessments is as follows:

  • Problems - What significant problems does the organization or work unit face today?

  • Causes - What are the key causes that result in these problems?

  • Five-Whys - Why do the causes occur (this is drilling down to find root causes)

  • ​​Solutions - Now that we understand causes or root causes, what are suggested solutions?


Guideline 1 - (Problems) - There may be no need to input more than one problem. The maximum is five problems. Each problem may need to undergo its own separate Causes, Five-Whys, and Solutions assessments. The Report tab narrative should address each problem.

Guideline 2 - (Causes) - There may be no need to input more than one cause. The maximum is five causes. Each cause may need to undergo its own separate Five-Whys, and Solutions surveys and analysis. If the causes provide enough information to proceed to Solutions, then there may be no need to implement the Five Whys assessment and go straight to the Solutions assessment. The Report tab narrative should address these issues. 

Guideline 3 (Five Whys) - There may be no need to input more than one "why." The maximum is five whys. The Five Whys questions must be composed in a predecessor to a successor relationship:

Why (1) did the problem or cause happen? (Answer 1)

Why (2) did Answer 1 happen? (Answer 2)

Why (3) did Answer 2 happen? (Answer 3)

Why (2) did Answer 3 happen? (Answer 4)

Why (2) did Answer 4 happen? (Answer 5)

As we proceed toward Answer 5, we should gain an understanding of the root causes of the problem. The Report tab narrative should summarize the "whys" and state that the Solutions assessment is next. 

Guideline 4 - (Solutions) - There may be no need to input more than one solution. The maximum is five solutions. The Report tab narrative should address each solution. Each solution (if approved) normally requires an Action Plan referenced in the Report tab. 

Guideline 5 - (Opportunities) - This assessment is designed to help think of new opportunities that benefit the organization and its work units. There may be no need to input more than one opportunity. The maximum is five opportunities. Each opportunity requires the input of the Advantage(s) of that opportunity. The Report tab narrative should address each opportunity. Each opportunity normally requires an Action Plan which can be referenced in the Report tab. The Opportunity Assessments are important in strategic planning and in opportunity marketing as defined in the OE21 Standard 3.2a Opportunity Marketing Guide.

Table 6.1d-1 presents implementation steps, actions, results, and references for each of these five assessments.


Table 6.1d-1 Implementation of OE21 INNOVATOR PROBLEMS Assessment


  • Table 6.1d-1 applies to all five INNOVATOR Assessments (problems, causes, five-whys, solutions, and opportunities). The flow is the same: Survey - Analysis - Report - Action Plan. The surveys and files differ only in the text; all formulas, charts, and data relationships work the same, with the exception of the Opportunities version which has no need for category formulas. 

  • All INNOVATOR assessment surveys have ten (10) questions. All INNOVATOR Analysis sheets (.xlsx) use these ten questions to present survey-collected responses, work unit or role, description (of problem, cause, why, solution or opportunity), category counts (table and bar chart), and summary statistics.

  • All INNOVATOR assessments (surveys and analysis sheets) are designed to allow a maximum of one hundred (100) responders (people who respond to surveys). It is possible to have up to  500 responders, however, very large responder groups may not add significant value. 

  • All INNOVATOR assessments (except for the Opportunities version) have the same Categories:

    • Customers/Stakeholders​

    • Employees/Contractors/Volunteers

    • Leaders/Managers

    • Machines/Equipment

    • Materials/Supplies/Facilities

    • Methods/Procedures/Measurement

    • Product/Service/Program

    • Other


  • All INNOVATOR Analysis files (.xlsx) use the same Report format/content:

    • 1 - Organization, Work Units Involved and Responses (% and count)

    • 2 - Findings or Results of Analysis

    • 3 - Additional Analysis or Observations

    • 4 - Next Steps

    • 5 - Lessons Learned 

  • All INNOVATOR Analysis files (.xlsx) have full Sorting capability. This sorting feature requires that the analyst uses an authorized password to unprotect the spreadsheet before sorting. After sorting data for analysis, the spreadsheet should be protected again. Example Sorts:

    • Sort by Work Unit​

    • Sort by Category

    • Sort by any of the ten questions in the Analysis tab

Figure 6.1d-1 is a captured screen from the OE21 INNOVATOR Problems Analysis tab.


Figure 6.1d-1 OE21 INNOVATOR Problems Analysis tab (partial view).

Other notes about the Analysis tabs of all OE21 INNOVATOR Assessments:

  • NO manual data entry is required except the REPORT tab text.

  • All data, charts, statistics on the ANALYSIS tabs use formulas that point to the SMdata that is imported from the INNOVATOR SURVEYS

  • A very useful way to introduce the OE21 INNOVATOR to a new organization is to execute the Problems assessment (6.1d-A1 and S1). Compose a question like this:


"What are the top five problems our organization faces today?"

  • Email this target survey question to a maximum of 100 responders in the organization. Note that 100 responders are the upper limit of the INNOVATOR surveys and analysis files. Try to pick the responders who have the most experience and knowledge about the organization. Ask for their response to the ten survey questions in no more than one working day. Note that if you want inputs back really fast, tell them. It takes the average responder about ten to fifteen minutes to think a bit and respond to the ten-question survey. 

What to expect - If you follow the INNOVATOR survey process, the survey has an introductory message from the CEO or President (or highest senior leader). This increases your responses.


As soon as you have sufficient responses things happen very fast:


  • It takes about 3 minutes to export the responses from the online survey into a spreadsheet file containing all inputs​


  • It takes about 1 minute to open the INNOVATOR to the SMdata tab and copy/paste the survey data into the file


  • That's it - now you will see all results in the Analysis tab (calculated)


  • It is recommended that you preview the results in an online meeting with senior leaders and managers (this is in case you need to edit out any narrative inputs that leaders are not willing to share with the organization as a whole

  • Conduct another online meeting with Focus Team members or others who are needed to compose the narrative inputs in the REPORTS tab. Then SAVE the file.

Summary. The OE21 INNOVATOR assessments are some of the most productive and useful tools in the OE21 system. Think of the OE21 INNOVATOR as "highly organized common sense."

At this point, you should implement at least the first (problem) INNOVATOR Assessment. Once this is done, the results look valid and you know how to repeat the process as you move ahead to other INNOVATOR assessments, you have reached Milestone 1. 

PROGRESS: You have reached Milestone 1 (good work). Input the status [40%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1d-2 - Conduct OE21 RISK MANAGEMENT ASSESSMENTS - Conduct OE21 Risk Management Assessment - This Assessment is administered by the OFT and facilitator. The Assessment is associated with specific risks, and includes these attributes for up to five (5) Risks:


  • Organization or Work Unit

  • Risk  Description

  • Risk Impact Area (categories)

  • Risk Start and End Dates

  • Risk Impact Rating (1-5)

  • Risk Rank Formula (color-coded)



The key tools used for the Risk Management assessment are:

  • 6.1d-OFT-S6 Risk Manager (survey)

  • 6.1d-OFT-A6 Risk Manager Analysis (.xlsx)

Table 6.1d-2 presents implementation steps, actions, results and references for this assessment.

A_6.1d Risk Management.PNG

Table 6.1d-2 Implementation of Risk Management Assessment

Figures 6.1d-2 and 6.1d-3 provide a partial view of the OE21 Risk Manager Analysis sheet (.xlsx). 

A_6.1d Risk Management LEFT.PNG

Figure 6.1d-2 Risk Manager Analysis (.xlsx) - left side

A_Risk Manager Right.PNG

Figure 6.1d-3 Risk Manager Analysis (.xlsx) - right side


  • Guideline 1 - All inputs or changes to the 6.1d-OFT-S6 Risk Manager Analysis (.xlsx) originate from the 6.1d-OFT-S6 Risk Manager (survey) which is input into the SMdata tab.

  • Guideline 2 - Risk Descriptions - are short (2 to 10 word) descriptions of the risks. Examples:

Child offender traps a victim under bench seats
Felons enter facility without ID check
Hurricanes occur frequently from August to October

Active Shooters can come into the facility easily

New Sports Center attract many of our customers

Zamboni Ice Machine fails just before customer ice shows

No lighting in parking lots scares some customers away

Key supplier costs rise to levels that decrease profits  

  • Guideline 3 - All Risks Impacts have the same list of Categories:

    • Customers/Stakeholders​

    • Employees/Contractors/Volunteers

    • Leaders/Managers

    • Machines/Equipment

    • Materials/Supplies/Facilities

    • Methods/Procedures/Measurement

    • Product/Service/Program

    • Other

  • Guideline 4 - Risk Start and End Dates are estimates for the timeframe that the risk(s) may occur. If unknown, it is best to use a wide range of dates (at least a year from start to end).

  • Guideline 5 - Risk Impact (1-5) are estimates for the impact. A Risk Impact of "5" is a very high-risk item; 1 is the lowest).


  • Guideline 6 - Risk Probability is an estimate of the probability that the risk will occur (0 to 100%). Higher probability risks are more serious than lower ones.

  • Guideline 7 - Risk Rank Formulas use the Risk Impact (1-5) ratings and the Risk Probability estimates to calculate a decimal number which is color-coded to show the extent of the risk. The higher the number the more serious is the risk. Color-codes range from very red (high risk) to green (low risk).

  • Guideline 7 - Average Risk Rank is computed from the average of all risks in the assessment. The Trend of the Average Risk Rank should be converted to a percentage and tracked as the Trend of Risks over time. The goal is to significantly reduce this value to 1.0 or lower.

PROGRESS: You have reached Milestone 2 (good work). Input the status [85%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1d-3 Integrate Analysis Action Plans into Operations Excellence Action Plan - The measurement and analysis tools (.xlsx) used in this standard may include tasks added to the (Plan) tabs, or other analysis observations that should require actions. If necessary, these new tasks should be integrated into the 6.0-OFT-P Operations Excellence Strategy Plan. This integration of new tasks may require the approval of the added tasks, labor, and non-labor resources, schedules, and revised budgets for the Operations Excellence Strategy Plan.  

Task 6.1d-4 - Select 6.1d Operations Excellence Metrics

NOTICE: If the organization has an existing Performance Measurement System (PMS), then the internal process is followed for selection, input, and review of measures associated with this OE21 standard. The following guidelines are suggested for the selection of metrics: 

Guideline 1 - Select Key Results Indicators (KRI). The KRIs are commonly called Key Performance Indicators (KPI). Examples of KRIs for 6.1d Innovation and Risk Management are as follows:

  • New Innovations Investments (% of investments in new products, services, or processes)

  • Risk Ranking Trends (% of the decrease in ranking scores 

Regular performance reviews are conducted and attended by the Operations Focus Team. 

  • Figure 6.1d-4 provides an example KRI for 6.1d OE21 Innovation

  • Figure 6.1d-5 provides an example KRD for 6.1d Risk Management

PROGRESS: You have reached Milestone 3 (good work). Input the status [100%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Trend Chart 6.1d.PNG

Figure 6.1d-4 Example KRI for 6.1d OE21 Innovations Investment

A_6.1d KRD for Risk Management.PNG

Figure 6.1d-5 Example KRD Trend Chart for 6.1d Risk Management