Failure to continuously improve processes across the enterprise faster than competitors creates insidious enterprise threatening risk. Not dramatic. It might just be death by 1,000 small cuts.
The Baldrige Excellence Framework contains hundreds of process requirements in the Leadership; Strategy; Customers; Measurement, Analysis, and Knowledge Management, Workforce; and Operations process categories. For example in the 2017-2018 Baldrige Excellence Framework a requirement is– How do you develop your strategy? –
Being a recipient of the Baldrige Award is no small feat; considering the number of applications from 2001 to 2014. The number of recipients during this time period indicates only about 7% of applicants achieve award recognition. High performing Baldrige applicants typically demonstrate evidence of systematic fact-based evaluation and improvement of numerous process processes across the enterprise.
Process risk is neither about the Baldrige Framework, nor award. Baldrige just provides a convenient context to discuss process risk as well as data to gain perspective.
A healthcare company has a labor turnover rate of 20% to 40% per year, in skilled Registered Nurses, Licensed Practical Nurses and other staff, and competes for these skills with other healthcare service providers in their local area.
Which company is likely to have a more efficient and effective recruiting and hiring process; one that can make an offer the same day of an interview, or the one that takes several days to a week or longer after an interview to make an offer?
A good question is which company is more impressive to an applicant? A better question is which company has the best chance hiring high quality staff?
Recruiting, hiring, placement and retention are back-office support process, yet they can have dramatic impact on the enterprise’s ability to execute its strategy.
Since organizations are systems, they depend on effective and efficient functioning of numerous processes including those more difficult to quantify than hiring speed, such as the quality of executive decisions or expected viability of new strategic initiatives.
The underlying core values of the Baldrige Excellence Framework set the stage for understanding how to approach process risk. For example, the core values of systems perspective, delivering value and results, focus on success, learning, and management by fact underpin execution of the Baldrige Excellence Framework’s integrated management system.
In practice, of course, the situation is different. Baldrige core values may not be present. Organizations may have core competencies unique to their business such as delivering superior health care services or outstanding customer relationship building abilities.
How often do organizations cite a core competency in process design, management, and improvement? Not very often. Applicants that earn the Baldrige Award have to score high and a key contributor is demonstrable systematic process improvement that results in meaningful changes across the enterprise.
And that is where the process risk lies to enterprise sustainability lies – in the inability to systematically improve processes to high performance levels across the entire enterprise. How does your organization address process risk?
Notes: From the Baldrige web site and search – there were about 830 applications from 2001 to 2014 and 61 recipients during this same period (61/830=0.07 or 7%).
Bio:
Contact information:
Cell 703.629.6054
J.toney@att.net