November 4th, 2003

 

Can the Baldrige take you from “Good to Great”?

 

Gene Mage

 

Last week, in response to question from a CEO, this column examined whether Malcom Baldrige National Quality Award winners deliver superior stock market performance compared to the market in general.  And, as is the case in many statistical comparisons, the answer depends upon how you proscribe the problem.  Over certain time periods, the Baldrige winners outperform the S&P 500, and over other periods, Baldrige winners under perform. 

 

That same CEO also wondered out loud how the Baldrige criteria stack up against the principles outlined in Jim Collin’s best-selling book Good to Great (HarperCollins, 2001).  So here goes.

 

Collin’s ground-breaking book Good to Great describes how eleven companies transformed themselves into industry leaders after decades of mediocrity.  Today’s feature examines the first two of seven factors that distinguish Good to Great companies from the rest of the pack, and how those compare to the Baldrige Award criteria:

 

  1. “Level 5” Leaders.  Collin’s research identified a very different profile for Good to Great CEOs than that which most people see in the popular media.  The CEO’s he studied were generally quiet, competent, and self-effacing servant-leaders focused on the good of the enterprise rather than accolades or personal wealth.

    The “Leadership” criterion for the Baldrige Award focuses not on leadership character, but rather leadership actions and processes for accomplishing organizational goals.  In 2003, the Baldrige criteria place a greater emphasis on ethics, compliance, and social responsibility. 

    So if Collin’s discussion of the “Level 5” leader reads like the personal profile of an ideal CEO candidate, the Baldrige criteria read like a to-list for that CEO once he takes the job.  Either way, I see no inconsistency between the two models, but rather two perspectives on the same idea of servant-leadership.

  2. A Focus on WHO Before WHAT.  This factor is probably the clearest, most compelling case ever written for a selection-based human resource management model.  Collin’s research indicates that the first priority, and most important decisions the CEO makes, are who to hire for key executive positions.  The model focuses on hiring proven winners and individuals with the right values rather than trying to “change” the organization.  It focuses on selecting the right people based on the right criteria, and de-selecting the wrong people, even if they have long tenures, if they have not demonstrated the values and results-orientation needed for the future.

    The Baldrige model supports that approach by encouraging leaders to develop and communicate a clear statement of values.  The Baldrige Human Resource Focus criterion emphasizes Performance Management, a concept that if applied properly will de-select non-performers and misfits.

    But the overarching tone of the two models is very different.  The Baldrige Criteria describe traditional factors such as management practices, organizational systems and processes, and organizational learning.  These approaches rightly emphasize creating a work environment that maximizes the potential of employees.  Collin’s model does not contradict these approaches, but places far greater emphasis on the idea that if you get the right people in the first place, that work environment forms naturally.

    When it comes to the idea of strategic planning, the WHO before WHAT model makes its most radical departure from traditional management thinking.  The time-worn models for strategic planning focus on vision, mission, and strategic objectives.  In that model, the leader seeks to attract and motivate great people by articulating a compelling vision and plan for the future.  Collin’s research suggests just the opposite.  The companies he studied simply get the right people, and then let THEM develop a compelling vision, mission, and strategy for the future.

Want to put these ideas into action?  Try re-writing your company’s description of the ideal executive candidate to de-emphasize “show” in favor of “go”.  Then examine whether you have the right people on the bus in the right seats on the bus, or if some people need to get off at the next stop.  Then, once you have your team assembled, pull out the Baldrige criteria as a checklist for organizational excellence.

 

Next week we will take a look at how the next two factors in Jim Collin’s model stack up to the Baldrige criteria.  For more information on Jim Collins visit http://www.jimcollins.com .  For more information on the Malcom Baldrige National Quality Award, visit http://www.quality.nist.gov .

 

Got a business or leadership challenge?  Ask Syndicated Columnist Gene C. Mage at www.makingitwork.com.