Ethics, transparency and customer-focused excellence, says Al Faber, are the cornerstones of the Baldrige Excellence Framework, the continuous improvement model that has been adopted by the Tata group. The president and chief executive of the Baldrige Foundation, the institution that promotes the framework with corporations around the world, is certain these two values remain at the heart of any programme that desires organisational business excellence.
A retired colonel of the United States Army, Mr Faber has been heading the Baldrige Foundation since 2014. In this interview with Christabelle Noronha, he speaks about the intricacies of the Baldrige Excellence Framework and how it has evolved to address the challenge in a world where political, social and economic churn is constant and everywhere. Edited excerpts:
Tata is the single largest user of the Baldrige framework in the world and has become the benchmark for every large organisation that follows the model. Decades of learning and integration, and commitment to the Baldrige framework as a professional development tool, have set Tata apart from businesses that simply use it for process improvement.
Tata leaders at every level become immersed in the framework and this drives commitment across the group ecosystem. Tata companies draw on one another’s successes and I witnessed this first-hand during the 2016 Tata Business Excellence Convention in New Delhi. The collaboration and synchronisation of business excellence practices across the Tata group was very impressive.
Having an aligned and system-wide approach to process and measurement is particularly important for organisations as diversified as Tata. The Tata Business Excellence Group helps drive performance and collaboration across the group and the Tata Business Excellence Model (TBEM) enables Tata companies to achieve global benchmarks.
In the latest version of the Baldrige framework, there is a greater emphasis on enterprise risk management. In an age of political and social disruption, organisations need greater agility and flexibility. Intelligent risk management will require organisations such as Tata to make decisions on when and how risks should be taken and managed.
Tata faces unique challenges in risk management but it also has unique strengths. Balancing the level of risk worth taking with the sustainability of the business and the opportunity for innovation is a complex and dynamic challenge. Tata’s years of experience using the Baldrige framework and the depth to which it is deployed within the organisation, gives the group a competitive advantage when it comes to risk management.
What has remained constant over the past two decades is Tata’s steadfast commitment to the Baldrige framework and its value in helping deliver results. This commitment has strengthened the relationship between the Baldrige Foundation and the Tata group. The more I learn about Tata and TBEM, the more I am convinced that it is the most valuable relationship the foundation has with a corporate partner.
While automation can increase speed, efficiency and quality as well as reduce costs, it is dangerous for leaders to rely on it as a substitute for good processes. Too often, organisations view digitalisation as the reason to shift their focus from continuous improvement to technology. This is flawed thinking. Leaders need to remember that automation only works if we understand the process we are automating.
Taking the time to ensure we are automating processes that add value for our customers as well as our organisation is critical. Including digital transformation in strategy is equally important. Determining which processes are the most cost-beneficial and have the biggest productivity impact on the organisation matters. Surveys show that, before they begin automating, leaders have to consider their organisations holistically, with a firm understanding of core competencies, key work systems and what needs to happen to achieve their vision.
The scope of the Malcolm Baldrige National Quality Improvement Act has been expanded, with cybersecurity falling within its purview in 2017. In the digital era, which are the other areas to which the act should be extended?
The digital era, in a larger context, speaks to the information age. Two areas of importance are artificial intelligence (AI) and science, technology, engineering and mathematics (STEM) education.
As computers begin to educate themselves and become self-aware, controlling the rapid developments that follow will demand strategies and processes with a systems perspective, all tied to ethical leadership. The Baldrige approach can bring order to what may seem like chaos in the era of AI.
The Baldrige cybersecurity framework is a self-assessment tool that enables organisations to better understand the effectiveness of their cybersecurity risk management efforts. Like the Baldrige framework, it asks the right questions.
Just as cybersecurity evolved as a separate approach (or deep dive) in an area which already exists in the Baldrige framework, so too can STEM education. In this new era of technology, our education systems and workforce development strategies demand a deeper dive into ‘how’ we are developing the workforce of tomorrow in schools, colleges, and universities.
Chief executives around the globe are expressing concern that high-tech jobs are going unfilled due to a lack of qualified, trained workers. This is a gap in our education system and one that Baldrige can help close by developing a criteria for measurement, and a process for identifying and sharing best practices.
Can I mention two? There are 11 core values of the Baldrige framework and, while each is important for its own reasons, two have always stood out to me: ethics and transparency, and customer-focused excellence. Without ethics and transparency, from leadership down, we have nothing. I think that value speaks for itself.
Customers are the ultimate judge of performance and quality. The value that you contribute to your customer drives his or her behaviour, and that results in customer acquisition, satisfaction, preference, loyalty, referrals and, ultimately, the sustainability of your business.
Baldrige asks the right questions about customers. The goal is customer retention, satisfaction, loyalty and market share gain and growth. All organisations have customers; understanding who your customers are and what they expect from you is vital.
This is an easy one. The answer is that it resides with everyone and it starts at the top. There is a reason why the first category in the Baldrige framework is leadership. Leaders must provide vision and the moral compass through values. While directive and transactional leadership can achieve high performance, transformational leadership — which is what the framework focuses on — sustains high performance and creates a world-class organisation.
That is a great question. The framework addresses governance in multiple places, with good reason. For governance to be effective, it must be more than slogans on a wall or policies and procedures. Members of the board need to be role models. They need to stand up and ensure implementation of the key components that the framework emphasises.
That question can be answered through the study of the framework’s strategy category. The ability to link top strategies with plans and, further down, to actions, has been described by Baldrige recipients as the most important thing they have accomplished. As one recipient recently said, “The real power is alignment from top to bottom and bottom to top.”
That’s easier said than done. Well-developed strategic plans need to be deployed. Once the organisation has its mission, vision and values as well as strategic goals in place, divisions, departments and individuals need to have plans with measures that align. This needs to be process-driven.
Tata’s own Tinplate Company of India has a robust ‘mother of all charts’ that outlines key stakeholders and their requirements. It’s a role-model best practice that has been highlighted in books and studied around the world.
Every organisation is different. Feedback from Baldrige award recipients indicates that the very first OFIs that should be attacked are those associated with leadership and strategic planning. Strategy would be second. In recent years, several Baldrige recipients have been asked what they would do differently if they could go through the journey again. A predominantly large number of these winners said that they would align the organisation, top to bottom, more quickly. Everything goes a lot faster and easier when the team pulls in the same direction.
I think it is the fact that it truly is a holistic framework. It is non-prescriptive. It asks the right questions. It doesn’t tell you what to do; it asks how you do it. And how means process. The word is used more than 200 times throughout the framework and every time it appears it is asking for a process. Other performance excellence models tend to focus on isolated processes and process improvement. Most organisations don’t even have their key work processes fully defined. Baldrige asks you to do that.
My greatest personal learning is a personal commitment to life-long learning, or “personal continuous improvement”. If we demand that of the organisations we lead and work with, we must demand it of ourselves.
If we value intellectual curiosity, we must continuously scan the environment for new ideas even when they may have nothing to do with our business. Everything in life is interconnected. With this in mind, watching the organisations I have led or worked with grow and become role models is always the most rewarding. This would include the professional development of the next generation of leaders I have worked with. You feel a tremendous sense of pride when you create an empowering environment for others to succeed.