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1996 Baldrige Winner Continues To Grow
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We...They...Them...And Us
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1996 Baldrige Winner Continues To Grow (continued)

NFC: What happens if those goals aren't being met?
Elsesser: Our 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?
Elsesser: Not 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 clients?
Elsesser: That's 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?
Elsesser: The 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?
Elsesser: That 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.
Elsesser: Right. 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 be.
NFC: Another lesson learned was that quality and performance excellence aren't quick fixes. At what point in the process did you learn that?
Elsesser: When 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 after them.
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?
Elsesser: It's 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.
Elsesser: I've 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?
Elsesser: Every 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.