1996 Baldrige Winner Continues To Grow
Information Sharing, Dispersing Control and
High Quality Standards Keys to CRI Success
Events: Two Weeks To Dramatic Process Improvement
USBI's 'Kaizen Events' Working to Keep NASA Flying
Monitoring: There's No Place Like Home
Keep The Best-Lose The Rest
by Peter Block
by Cathy Kramer
Business News Briefs
for a Change
to the Editor
1996 Baldrige Winner Continues To Grow (continued)
NFC: What happens
if those goals aren't being met?
quarterly account reviews are for that purpose. If we're not meeting the
goals, we put together some very good brains to look for things we could
do so we could meet them. If things are going really well and goals are
being met, can we take this further, how could we do even better?
NFC: How does
this differ from a traditional MBO system?
Elsesser: It actually
gets used. My experience with MBOs is that they are developed and then they
go into a drawer somewhere. That doesn't happen here. We try to keep the
annual plan to a single page. It's not something that gathers dust in a
book somewhere. Everybody has a vested interest in making it happen.
Probably another key thing is every employee knows exactly how we're performing
on our financial measures, on our client satisfaction measures, virtually
on everything. The only thing we don't share is salary information.
NFC: What have
been the struggles with this in terms of making sure all employees have
the information they need? Has there been a dark side to it?
really. One of the things we found when we set up some of our own internal
measurements, process measures of internal things, we set them up in aggregate.
We were reporting things back on the company as a whole because we didn't
want unhealthy competition between teams.
People came back to us in short order and said this is really nice but how
do I know what I can do in my own team to fix things? How can I get better
if I've just got this global measurement? Some times we end up having to
present information in more detail or in different ways to help the understanding.
NFC: You talked
about building relationships with fewer and larger clients. How does that
impact your smaller customers? Are you careful about how you select these
correct. In the late 80's, when we looked at our client base and analyzed
it, we said we're not absolutely world class. We were good but not world
class. When we looked across all the clients they had vastly different value
to us in terms of volume and profitability. We said part of the issue here
is we are trying to be all things to all clients both big and small and
is that really very smart? So we decided then what we really wanted to do
was be in partnering kinds of relationships. Relationships where we would
have a chance to really learn a client's business well and add value. We
thought that would make them happier and we suspected that if we made them
happier it would mean even more business from them.
The little clients we had on that list originally probably only did a project
with us once a year. At the same time we focused on partnering we reorganized
into teams. So we weren't really able to serve them as well anymore because
our teams were now constructed to deal with those big clients needs.
NFC: Was that
a heated decision - a difficult one?
Elsesser: As the
person responsible for sales, it was tough! I think we all realized in our
head that it seemed like a smart thing to do. In my gut it was scary, but
we were able to see pretty quickly the benefits of working in those more
partnering kinds of relationships. It's not a change that happened overnight.
It wasn't like one day we had a hundred and forty clients and the next day
we had seventy.
NFC: I'd like
to talk a little bit about benchmarking. You selected twenty-two processes
and out of those you selected five that you were going to benchmark. How
did you select those five and once you selected them, what did you do?
way we selected initially was we did a grid where we looked at the impact
of a particular item or process on the company and the customer. We had
each member of the steering committee work on this grid, then we combined
them to come up with the five items.
Formal benchmarking has been an issue for us because of our size. It's difficult
to find a company that has an excellent process that we're interested in
benchmarking and where what they do makes sense for our business in spite
of resource differences. One of the processes that we did a more formal
benchmarking on had to do with sales targeting, correctly selecting your
best prospects for a new partnership. We actually worked with a group at
Fidelity on that particular piece and did a pretty formal walk through.
Generally, not everybody we have tried to benchmark has all of the pieces
in place. Many companies didn't have a map of their processes. Many companies
could talk to us about it but they didn't have a map. They had a lot more
resources than we do. Some of the things that they did we couldn't adopt
because they were just too expensive for us to take on. But we got some
very good concepts from them in that process.
NFC: This ties
into one of the lessons you learned from the Malcolm Baldrige National Quality
Award process- to be yourselves. How do you know what that is?
was a lesson. I think we felt some difficulty because of our size and because
of being a professional services business. For awhile we probably thought
there was something magical that we had to be and we didn't know quite what
that was. We finally came to the realization that it wasn't the key thing.
The key thing was we thought we were a very good company. We thought we
had put a lot of good things in place. We did the things we felt were right
for our business, right for our size and it was okay to be us and not aspire
to some model that wasn't us.
NFC: I thought
it was interesting that your computer system was up 97 percent of the time
and the copier is up 97 percent of the time. For many companies these would
be measures that they wouldn't necessarily think of tracking. You also measure
typos in reports.
A wrong number is a pretty serious error. There are things we think of as
fatal errors. If we had a wrong number in a critical decision point for
our client that would be a fatal error.
The fatal errors are the kinds of things we think about as blowing a study
or disappointing a client. Things such as a wrong number, a design error
in a questionnaire, an analytical error, wrong numbers in tables, wrong
numbers in reports, and programming errors are fatal errors. We also have
secondary measures of things that are not as beautiful as we'd like them
to be. They still work but they could be improved. What I mean there is
the program works, there are no big flaws in it as far as including everything
or have it work appropriately, but it might not be as efficient as it could
NFC: Another lesson
learned was that quality and performance excellence aren't quick fixes.
At what point in the process did you learn that?
we started in on the Baldrige criteria I think we learned really in year
one that we had a lot of stuff going for us but we had a long way to go.
We've never just expected things to magically happen overnight. That doesn't
mean we don't do things with some due speed. But it's not a single thing,
it's a million little things that work together to make it successful.
NFC: At times
was there a feeling of not being able to see a clear picture of the whole?
Elsesser: I think
the Baldrige framework helped us have a handle on the whole. We were especially
short on process definition, being intentional about processes and about
having internal measures of those processes. Some parts were in good shape
like customer satisfaction. We'd been measuring that for a long time before
we ever got going on the Baldrige criteria. But it helped us see the whole.
I think that was one of the great beauties of it. We realized it wasn't
a single thing, it was a lot of things that had to fit together and work
together and this helped us see where our weak spots were and really go
NFC: What kinds
of things do people argue about?
Elsesser: We are
not the kind of culture where people snap at each other or argue a lot.
Certainly, there are people who have disagreements about how things should
be done. I believe that sometimes a team could feel that a support area
has let them down, or a support area could feel that a team hasn't fulfilled
their obligation to make their lives easier.
Part of the whole process orientation means that you don't have to get into
personal disagreements. You look at the work that needs doing and the process
for getting it done and figure out what went wrong in the process. It's
not a personal issue.
NFC: Your business
has never really been in crisis. Would you have done all this if you had
been in crisis - if you were struggling to stay alive?
hard to know what you would do if you were struggling to stay alive. We've
never been in that position. We were a healthy, successful business when
we started out. Would we have had the wisdom to do all this if we were in
trouble? I don't know. But I certainly think it was important for us to
say we're a good business but we can be a better business by applying these
quality principles and using this whole system. We've done that.
The thing that was maybe visionary was that we're small and this is typically
the realm of large companies. We're a professional services business and
we're tiny, but we can do that, too. It can make us better, and boy, has
it! The client satisfaction is better, our growth has been terrific, our
profitability has been terrific, our employees are happy. We're believers.
We wish everybody would do it, or that more would do it anyway.
NFC: What's beyond
the Baldrige for CRI? That's such a mobilizing force in some respects.
talked with some of the other winners and we're all struggling a little
bit with what's next. We have a group of people that's working on strategy
where we are talking about the what's next. We have a couple of concepts
in the works there. I think in the immediate run, we're not going to stop
doing the things that have gotten us to the Baldrige win. We're not saying,
wow, we've won it and now we can stop and rest. We're still doing all the
same things, still working on getting better.
NFC: Is there
any criteria that's missing from the Malcolm Baldrige process?
time we've looked at this and the times I've gone out to speak to groups,
the thing I keep telling them is, it's got really all the elements of a
successful business system. It has everything in there. If you lined it
up against the functions in a business you'd have it all covered. On the
face of things, I'd say it's pretty complete.