Synopsis of Malcolm Baldrige National Quality Award - Assignment Example

A Balanced Scorecard Report to CEOs (Student Name) (Institutional Affiliation) Management (Instructor) April 20, 2013 TABLE OF CONTENTS Contents……………………………………………………………………………………Page 1.0 Background, method and objectives……………………………………………………3 1.1.0Introduction of Balanced Scorecard…………………………………………………...3 1.2 Advantages of Balanced Scorecard…………………………………………………...…5 2.0 A Synopsis of Malcolm Baldrige National Quality Award……………………………..6 3.0 The criteria of the Malcolm Baldrige excellence performance for Healthcare Sector…..7 3.1 Organizational Leadership……………………………………..………………...7 3.2 Market and Customer Focus…………………………………..………………....9 3.3 Strategic Planning…………………………………………….……………….....9 3.4 Knowledge, analysis, and measurement management……………..…………....10 3.5 Process management………………………………………………..……………10 3.6 Focus on Human Resource………………………………………………..……..11 3.7 Business Results…………………………………………………………….….. 11 4.0 The Merits of the Award Process……………………………………………….………..11 4.1 The Disadvantages of Baldrige Criteria……………………………………………….…12 5.0 Recommendations…………………………………………………………………….….13 6.0 Conclusion…………………………………………………………………………….….14 7.0 References…………………………………………………………………………….….16 BALANCED SCORECARD REPORT TO CEOs 1.0 Background, method and objectives The (MBNQA) Malcolm Baldrige National Quality Award offers a criteria package for organizational quality improvement and assessment, which has been utilized by thousands of educational, healthcare and business organizations over a long time. This report offers insights to a group of Chief Executive Officers (CEOs) heading different healthcare organizations who are responsible for directing administrative and clinical operations, budget control and resource allocation on how balanced scorecard, especially the MBNQA could benefit various organizations and sectors. The report focuses on establishing an objective framework for assessing how the CEOs can optimize their organizational efficiency and enhance customer/patient relations through integrating a balanced scorecard in their management process. 1.1 Introduction of Balanced Scorecard How can an organization become successful? Organization which have an outlined strategic and a core business plan to fulfill the objectives of their customers are inclined to be the industry leaders. The solution to organization growth and success lies in its ability to decode the organizational strategy to operational processes and its capability to evaluate achievement and performance of its strategic goals. According to Senge (2009) leaders and managers in an organization provide bridges between communicating organization’s strategic mission and objectives to the employees. Workers of an organization are on the vanguard of the company representing the organization’s values to customers, hence are in a vital spot to make negative or positive impacts on the satisfaction and perceptions of the customers. For organization to be successful is must have the ability to communicate its organizational strategy through their workers so as to achieve customer satisfaction and objectives. The BSC (Balanced Scorecard) represents a system for organizational strategy communication and outlining phases of success based on TQM (Total Quality Management) values proposed by Edward Deming. Both TQM and BSC define initiatives to enhance outcomes, processes and quality. However, the Balance Scorecard improves the effectiveness of the Total Quality Management fundamentals by outlining tangible conduits and defining internal process vital for strategic success. In addition, BSC does not simply underline that to remain competitive; an organization has to focus on customer satisfaction and quality (Kaplan & Norton, 2001). Upon the establishment of the strategic pathway, leaders and managers then have to apply performance evaluation techniques to assess whether the organization is achieving its strategic objective and meeting the objectives of the customers as outlined in the Balanced Scorecard. A key measurement technique that can be applied to assess achievement levels of the outlined target is usually the feedback survey. Edwards Deming, determined the mother of TQM, restored the industrial base of Japan following the World War II by concentrating on transforming the traditional management paradigms (Walton, 2006). As opposed to focusing on the mass quantity, the attention changed to generating quality services and products, and by adopting statistical system controls to get rid of waste. A part from enhancing production quality and efficiency, Deming also promoted the engagement of employees in the process of decision making, the eradication of defects and discovery of weak points. The Total Quality Management coiled by Deming ended in his book “Out of the Crisis”, and his concept ultimately invigorated the American industry, and the Total Quality Management he proposed has now become a new prototype, utilized by organizations as the basis of enhancing strategic position (Kreitner & Kinicki, 2004). Doctors David Norton and Robert Kaplan originally developed the concept of Balanced Scorecard in the beginning of 1990s, to be applied as management instrument to remedy performance assessment setbacks and measure intangible assets (Kaplan & Norton, 2001). The principles of Total Quality Management are integrated into the Balance Scorecard via internal organizational processes. Problems to measure intangible assets could not sufficiently be reflected using the traditional measurement tools within the financial reports that concentrate on earlier performance. The Balanced Scorecard works an enabling instrument to assess these decisively comprising intangible assets and work as a strategy framework for organizational objectives (Deming, 1986). The emphasis of a Balanced Scorecard entails four interconnected perspectives and they include: internal process, customer or mission, financial and growth and learning. In the case of not for profit organizations, for instance health service organizations, the concepts of financial, growth and learning, as well as internal processes are enabling course of actions toward achieving a strategic outcome, that of attaining the expectations within the customer/mission perspective. The intangible assets for instance, employee motivation, competencies, and skills, databases capabilities, responsive and efficient operational procedures, information technologies, innovation in solutions, services and products, and elements of supportive management for example, policy advocacy and management are hard to quantify (Hutton, 2010). However, they are fundamental aspects of these enabling perspectives. Balanced Scorecard works a process of decoding such intangible assets to quantifiable solid building blocks. In order for the organization to be successful and progress, organization have implemented the Balanced Scorecard concepts, integrated them within their organizational management processes and systems, and created measurement techniques to evaluate strategic performance goals. According to (Kaplan & Norton (2001) some of the major companies for example, CIGNA and Casualty Insurance, Brown and Root Energy Services, AT & T and Mobile implemented and adopted the Balanced Scorecard within their strategic plan. Adopting the Balanced Scorecard enabled these organizations to manage, communicate and clarify strategy. 1.2 Advantages of Balanced Scorecard The balanced scorecard works as the fundamental organizing structure for processes of management of: compensation, team and individual goal setting, planning and budgeting, resource allocation, and strategic learning and feedback. Enhancing these processes greatly advanced their industrial positioning through outlining the needs of customers, advancing customer relationships as well as customer satisfaction with services and products, increased income via product improvement and cost reduction, better application of investments and assets, and enhanced corporate outlook. CIGNA Property and Casualty for instance, was on the verge of financial crisis in 1993, when they adopted the balanced scorecard for their management planning. Later, in two years time, the company recorded a profit of $60 million and expanded its share value to by $60 per unit share (Walton, 2006). These results indicate that the balanced scorecard can be a powerful instrument in accomplishing organizational objectives, examining if the company has attained its customer missions through its services and products while at the same time tackling financial strategic outcomes (which is a central focus for-profit organizations). The other advantage of the balanced scorecard is that it does not only enable an organization to assess its strategies, but also it concurrently provide workers with a tangible system to measure and understand their operational input in organizational objective. Albeit these initial outcomes comprised of industrial organizational entities, the healthcare segment, unique as it may be, can also gain from organizational success and effectiveness by taking insights through adoption of balanced scorecard, from other industries other than healthcare (Brown, 2009). According to Walton (2006) the primary outcome of healthcare organizations is the achievement of its organizational customer objectives. Yet, the aspects of how the perspectives interconnect to attain an eventual result, whether it’s a customer objective or a financial objective remain the same; that is the intangible assets remain fundamental elements of the process. Therefore, the ability to quantify intangible assets is an essential element of assessing organizational strategy in health-service as much as non-health service companies. As long as the organizational objectives, values, vision, mission, performance targets and indicators have been mapped and defined, instruments to quantify this performance has to be established and executed. The balanced scorecard offers the framework of corporate strategy. Instruments for example corporate survey which gives feedback can thus be applied to evaluate and assess the effectiveness of the outlines strategies through the adoption of a balanced scorecard. Strategic corporate surveys emphasize on matters critical to the organizational success, quantify progress toward attaining strategic goals, offer communication to workers, manage organizational improvement and change, and create data to the balanced scorecard for rewarding and evaluating management. A mixture of a balanced scorecard with organizational strategic surveys can help leaders by adequately evaluating the effectiveness of the approaches of communicating policy advocacy, management as well as problem solving. A part from highlighting areas of apprehension, organizational strategic surveys enables leaders and manages to importune feedback from employees and obtain valuable information for successful management and leadership methods. 2.0 A Synopsis of Malcolm Baldrige National Quality Award: The Malcolm Baldrige National Quality Improvement Act accented into law of the United States in 1987, resulted to the establishment of the Malcolm Baldrige National Quality Award the following year. The core objective of this renowned competitive honor is to enhance productivity and quality in the United States through developing criteria and guidelines, which can be utilized by corporations to assess their own quality advancement endeavors. This priceless Award is issued by the president of the United States to healthcare organizations, manufacturing business and services, and educational organizations which apply and adjudicated to be stupendous in seven aspects comprising, 1) strategic planning, 2) leadership, 3) market and customer focus, 4) human resources emphasis, 5) knowledge, analysis and measurement management, 6) results and 7) process management (Baldrige National Quality Program, 2005). This Award managed and designed by NIST (National Institute of Standards and Technology), which is a non-regulatory organ within the Department of Commerce Technology Administration. NIST promotes and develops technology, standards and measurements to improve productivity, enhance trade, and advance life quality. NIST was determined by the United States Congress manage and design the Award scheme due to its task in assisting the U.S corporations compete, its repute as an neutral third party, and its internationally-renowned capability in quality assurance and control (Blazey, 2010). NIST is assisted by the American Society for Quality in the documentation of awards, application assessment process, information transfer and publicity. Awards have been issued to applicants (business organizations) since 1989. The criteria for education and healthcare were established in 1999, and the first award to be issued for this category was done in 2002. The criteria of Baldrige have been applied successfully by the Veterans Health Administration being a structure for Kizer Grant Quality Achievement. On the same note, 37 states within the United States issue quality awards applying the Baldrige criteria (Kreitner & Kinicki, 2004). 3. The criteria of the Malcolm Baldrige excellence performance for Healthcare Sector Because of the national focus on enhancing the safety and quality of healthcare today, healthcare organizations promote structures of evaluations which will improve and identify organizational performance results, capabilities, and practices. The Baldrige Healthcare criteria are established to assist institutions utilize an integrated model to management of organizational performance which yields in: Provision of continuously-improving value to patients as well as other customers, resulting to improved quality of healthcare Personal and organizational learning Enhancement of the overall organizational capabilities and effectiveness as a provider of healthcare Criteria Definition Healthcare’s specific items 3.1Leadership Assesses how senior Healthcare managers steer the corporation and how the corporations handles duty to the people as well as how it is conducts good citizenship 3.1.1 Organizational Leadership 3.1.2 Public citizenship and responsibility How your senior executives are steering your corporation, comprising the way they assess organizational performance? How is your corporation handling its public responsibilities, carry out good citizenship, and add in to the community health? 3.2 Market and Customer Focus Assesses how the Healthcare organization determines the expectation and requirements of markets and customers, establishes customer relations , and retains, satisfies and acquires customers 3.2.1 customer/patient and knowledge of healthcare How is your corporation determining preferences, expectations, and requirements of customers/patients and market to enable relevance continuation of the health services you provide, and establish new opportunities for healthcare services. 3.3Strategic Planning Assesses how the corporation outlines strategic goals and how it established core action plans 3.3.1 development of strategy How is your corporation determines its strategic goals, comprising improving its performance compared to other corporations offering same services (healthcare) and is general performance as a provider of healthcare services 3.4 Knowledge, analysis and measurement management Assesses the Healthcare management, valuable use improvement, analysis and use of information and data to support central healthcare process and the performance management process of the organization 3.4.1 information management 3.4.2 analysis and measurement of the performance of the organization How is your organizations ensuring the availability and quality of the needed information and data for customers/patients, suppliers/partners, and employees? How is your corporation offering effective management process for improving, aligning, analyzing and measuring performance as a provider of healthcare services in all parts and levels of your corporation? 3.5 Process management Assesses elements of core healthcare delivery and support systems are improved, managed and designed 3.5.1 support processes 3.5.2 Business processes 5.5.3 the process of healthcare service How is your corporation handling its core procedures, which support your employees and daily operations in providing healthcare services How your corporation is handles its core processes which make the organization to succeed and growth? How is your corporation managing central processes for healthcare service delivery and design? 3.6 Focus on Human Resource Assesses how the healthcare organization allows its employees to establish their whole potential and the employees are aligned with the objectives of the organization 3.6.1 Employee development, training and education 3.6.2 Wok Processes How is your corporation’s training and education support the accomplishment of your major goals, comprising development of employee capabilities, skills and knowledge and contributing to greater performance? How do your corporation’s jobs and works, career progression, compensation and associated workforce practices enable and motivate the organization and all employees to attain great performance? 3.7 Business Results: assesses the healthcares improvement and performance within the core business fields: social and governance responsibility, operational performance, partner and supplier performance, human resources, marketplace and financial performance, and customer satisfaction. The criteria also assess how the healthcare organization performs in comparison to its rivals. 4.0 The Merits of the Award Process According (Baldrige National Quality Program, 2005) the application of Baldrige criteria is informative in a number of levels. To begin with, the Baldrige process is robust; as opposed to the traditional performance assessment processes it can invoke all the criteria. The regularity in which particular criteria (organizational leadership, healthcare service systems and work process) were established emphasizes the significance of these fields within the microsystem work. A profound comprehension of the process and design of the work are vital for great performance such as leadership. The Baldrige criteria and success co-occurrences can offer ideas for organizational processes wanting to enhance their performance (or to comprehend the present performance level). For instance, a corporation seeking to understand better work processes on the Baldrige process would find it essential to know that whereas the highly common co-concurrences with characteristics of success as with the employee focus, also there were common co-occurrences with leadership, process improvement, information technology, information, interdependence as well as customer focus. This assists to elucidate elements of the organizational processes, which have to be tackled while defining its work. For analysis and measurements of the performance of an organization, the performance outcomes was the highly common co-occurrence as it would be highly expected, however information technology and information and process improvement were also commonly coded, indicating the significance of technology analysis and measurements, and the need to comprehend systems to effectively analyze and measure performance. Fascinatingly, some Baldrige criteria commonly co-occurred with roughly all the characteristics of success. Work processes is some of the most common co-occurrences in categories 9 and 10 shows that mutual work models and the acknowledgment of what inspires employees are critical in all aspects. An understanding on how emphasis on process, effective leadership and work design are crucial for greater performance; enhancement in any aspect has to be determined by work within these fields (Hutton, 2010). In point form, below are some of the benefits of the Malcolm Baldrige National Quality Award; It highlights the significance of leadership The strategic significance of analyzing and scanning business setting The significance of considering all aspects of the organization The need to utilize organizational knowledge, indicators and measures to monitor and identity KPIs (key performance Indicators) The value of establishing focus on employees and customers/patients The system for deployment and approach of enhancement action strategies The significance of organizational configuration toward outlined priorities Baldrige is an organizational instrument that enables systematic direction and alignment by way of an incorporated performance management process It offers a reputable model and world class guide for the success of organization comprising financial analysis and finally, It fosters and enables improved customer and employee satisfaction 4.1 The Disadvantages of Baldrige Criteria A recurring and central theme established regarding the issue of resources and time needed to adopt the Baldrige Criteria to its totality. Organizations which have implemented it concur that these are concerns, but maintained that it of great value to undertake the necessary steps to fulfill its implementation since eventually it would save effort and time. It seems that Baldrige system enhances organizational effectiveness after a long period of time (Hutton, 2010). Subordinates and senior leaders have to buy into or accept this systematic process early in the transformation to facilitate the organizational culture to acclimatize to this process. According to our findings from organizations that have implemented it, the entire implementation of this systematic approach could take between six and seven years. It is possible with this kind of process that lack of organizational commitment and patience can impede implementation. The other important consideration would be need for top executives to establish a detailed proactive strategy for adoption and decline to hurry the organizational impetuous in this process. In points, there are the major disadvantages This process is complicated Significant resources and time are needed to start the process of implementation and adaptation of the Baldrige criteria Top executive might have misgiving regarding long-run commitment to processes thinking. It requires evaluation and review of all the organizational system or structure, which could consume a lot of precious resources and time. The system might not guarantee monetary success, 5.0 Recommendations Leadership should start with a vision, which inspires hope, alongside a mission, which translates hope into realism. Leaders have to determine the organizational mission, develop the vision and outline cultural values upon which the organizational strategy is developed. The Malcolm Baldrige National Quality Award criteria have queries, which will identity the values, mission and vision of the organization. It is vital that the organizational vision not only support what is best for the organization but also what is best for the society, customers, collaborators, partners, suppliers, stakeholders, local communities, and employees as a whole. Emphasized on these categories, ethical CEOs need to inculcate long-run focus, inspire pride and be people oriented among the workforce. Conversely, CEOs who are ethically neutral have are self-centered, have short-run outlook and usually inspire confusion and fear. A short-run vision reveals what Deming termed as “deadly disease” referring to attention on short-run profits originating from several CEOs imagining they are only in the business of making money as opposed to services and products. CEOs must develop the values required to realize the mission of the organization and develop behavior codes while entrench such behavior into the organizational culture. The list of recommendations is: Senior executive should decide in good time within this process of the corporation wishes to attain intended success as outlined by formed Baldrige Award winning corporations. This report recommends that the CEOs devise list of core reasons why they need to consider Baldrige in order to articulate fully that information to the managers. All members of the team have to understand why this process is vital and the steps needed in its course. Senior executives should establish who would be champions, charged with promoting this course. Long-run sustainability for implementing Baldrige asks that everybody understand the depth and length of the commitment needed for complete implementation. CEOs have to make sure that quality management core concepts are understood, and Baldrige made the main ingredient as opposed to stand-alone matter, or probably just another system. A Baldrige criterion needs the organization of priorities and daily. Senior executives should acknowledge the potential for leadership at various contexts and ways. The first-level workforce could have significant effect on the Baldrige’s implementation success. CEOs should consider others who may help in the implementation. Colleagues, first-level employees, senior leaders, and peers must be part of the process. Leaders should be in a position to explain the Baldrige system and communicate its potential disadvantages, considerations and benefits whilst understanding adoption even at the team or department level. 6.0 Conclusion The Baldrige system criteria selection has to be predicated with the knowledge that senior management is responsible for setting the example and sustaining the course. Perseverance, patient and training are critical. Making the decision whether to implement and adopt the Criteria has never been a quick or easy process. The benefits and demerits have to be carefully weighed, since the final decision to carry on will need a huge degree of accountability and responsibility. Such a systems-based method is what offers the Criteria its aligning and coordinating nature, and is also crucial for its adaptability and wide appeal. The criteria focus on the essentials, and basic for organizational excellence. The criteria have been internationally implemented, and applied in a number of instances as the foundation for other quality national awards. The objective of the Award criteria is to recognize and highlight such organizations which are excellent in effective management processes. The criterion is a rigorous comprehensive process for evaluating organizational performance improvement. The process is established on what are possibly the superlatives questions to ask concerning organizational performance, and is the stupendous model, which the CEOs can utilize to anchor improvement within their various organizations. Finally, the goal of the criteria is to enhance value to patients/customers and general performance for owners, shareholders as well as other stakeholders at large. The purpose it to establish a distinct edge for the U.S organizations at a time of growing international competitiveness. References Baldrige National Quality Program. (2005). History of the Malcolm Baldrige National Quality Award (Electronic version). National Institute of Standards and Technology (NIST). Retrieved April 21, 2005, from http://baldrige.nist. gov/History.htm. Blazey, M. L. (2010). Insights to performance excellence 2003: An inside look at the 2003 Baldrige Award Criteria. Milwaukee, WI: American Society for Quality. Brown, M. G. (2009). Baldrige Award winning quality: How to interpret the Malcolm Baldrige Award Criteria (14th ed.). Milwaukee, WI: American Society for Quality (ASQ) ix-xviii. Deming, W. E. (1986). Out of the crisis. Cambridge, MA: MIT. Drucker, P. F. (2011). Management. NY: Harper Business Hutton, D. W. (2010). From Baldrige to the bottom line: A road map for organizational change and improvement. Milwaukee, WS: American Society for Quality, 2-83. Kaplan, R., & Norton, D. (2001). The Balanced Scorecard: translating strategy into Success. Harvard Business School Press, Boston, MA. Kreitner, R. & Kinicki, A. (2004). Organizational behavior (6th ed.). Boston, MA: McGraw Hill Irwin, 1-695. Senge, P. M. (2009). The fi fth discipline: The art & practice of the learning organization. NY: Doubleday, 5-11 Walton, M. (2006). The Deming Management Method. NY: Perigee Books Read More