The Journal Of Innovative Management

Transcription

volume nine • No. 2
Winter 2003/2004
Improving the way
organizations run
through participative
planning and management.
GOAL/QPC
12 B Manor Parkway, Suite 3
Salem, NH 03079-2841
MOTOROLA CGISS: 2002 M ALCOLM BALDRIGE NATIONAL QUALITY AWARD
By Jenny Donelan
Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 7
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CLARKE AMERICAN CHECKS: 2001 MALCOLM BALDRIGE NATIONAL QUALITY AWARD
By Cathy Kingery
Case Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 43
BALDRIGE 2003: FIVE CATEGORIES; SEVEN WINNERS
News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 74
Gary D. Floss
Minneapolis,Minnesota
Carol Galizia
Executive Vice President
Detroit Edison Credit
Union
Detroit,Michigan
Lois H. Bronstein
Marketing Research
Programs Manager
DuPont Company
Wilmington,Delaware
Michael J. Burtha
Executive Director,Knowledge
Netwokr ing WW
Johnson & Johnson
New Brunswick, New Jersey
Jesus Gallegos-Hernandez
Superintendent
ICA Construccion
Unidad Plateros, Mexico
Lois M. Gold
Vice President,
Service Delivery
MetLife
New York, New York
Dana F. Ruberto
HR Strategy
GSK – GlaxoSmithKline
Research Triangle Pa rk ,N o rt h
Carolina
Helmut Schlicksupp, Ph.D.
Innovationsberatung
Heidelberg,Germany
Larry R. Smith
Quality and Reliability Manager
Full Size Pickup and Utility Vehicles
Ford Motor Company
Dearborn,Michigan
Thomas Splitgerber, D.D.S.
San Diego, California
Loren G. Carlson
Chairman
CEO Roundtable
Boston,Massachusetts
Jerry E. Hewett
Administrato,r
Transitional Services
Florida Dept. of Corrections
Tallahassee, Florida
Terry Stevens
Manager
Organization Development
and Training
Busch Gardens
Tampa,Florida
Bruce F. Carmichael,Sc.D.
Associate Dean for Resources
& Management
Yale School of Nursing
New Haven,Connecticut
John J. Ireland
Corp.VP & President, Specialty
Paper Products Div.
Nashua Corporation
Merrimack, New Hampshire
Tom Sullivan
President
Cleary College
Ann Arbor, Michigan
Vivian E. Christian
Business Management Officer
USAMC Logistics Support
Redstone Arsenal,Alabama
Thomas J. Kling
Quality Performance Associate
The Dow Chemical Company
Midland,Michigan
Tina Sung
President
American Society of Training
& Development
Alexandria,Virginia
Patricia A.Clark
Quality Manager
American Bankers Association
Washington,DC
Glenn L. Laffel,M.D.,Ph.D.
Senior Vice President for
Medical Affairs
Preferred Health Systems, LLC
Bethesda,Maryland
Bill Tucker
Vice Chancellor, Planning
and Development
Dallas County Community
College District
Dallas,Texas
Linda M. Doherty, Ph.D.
Directo,rStrategic Planning and
Analysis Office of theAssistant
Secretary of the Navy
Manpower and Reserve Affairs
Washington,DC
Leanne Drake
Enterprise Process Integration
Boeing
Huntington Beach, California
Donald Eggleston, Jr.
Directo,rOrganizational Development
SSM Healthcare
St.Louis,Missouri
Al Endre s ,P h . D.
Dir.,Ct.rfor Innovation and
Knowledge Management
University of Tampa
Tampa,Florida
Susan West Engelkemeyer, Ph.D.
Director of Quality;
Assistant
Professor of Management
Babson College
Wellesley, Massachusetts
Rose Lindsey
Administrator
Quality, Accreditation, and Medical
Management
Baptist Memorial Health Care
Memphis,Tennessee
Martin D. Merry, M.D.
Senior Advisor for Medical
Affairs,
N.H.Hosp.Assn.;
Assoc. Prof. of Health Mgmt. &
Policy, Univ. of N.H.
Exeter, New Hampshire
Valeriana Moeller
President
Columbus State Community
College
Columbus,Ohio
William L. Montgomery, Ph.D.
President
The Montgomery Consulting
Group
Doylestown, Pennsylvania
Donald R. Randall
CQI Manager
Lawrence Livermore National Lab
Livermore, California
John Wallner
Directo,rManufacturing Engineering
Tektronix
Beaverton,Oregon
L .C a role Wharton,Ed.D.
Director
Office of Planning,
Management and Budget
Smithsonian Institution
Washington,DC
Larry Winegrad
Quality Manager
Solar Turbines
San Diego, California
Professor Dr. Klaus J. Zink
Chair, Industrial Management
and Human Factors
University of Kaiserslautern
Kaiserslautern,Germany
is a peer-reviewed quarterly journal for experienced practitioners of quality management
and continuous improvement systems. The purpose is to facilitate increased learning and
innovation by providing people with cross-discipline information about organization transformation through participative planning, problem solving, and innovation. It is written
to help leaders, managers, and workers to:
✒ Cope with the growing need to integrate quality management,systems applications, and
creativity and innovation into their organization dynamics
✒ Integrate academic thought with real-world applications
✒ Cope with learning time pressures by using an article format that enables faster reading and
improved initial learning
✒ Facilitate a sense of community as readers see how people from various organizational settings
and sectors face and solve what are essentially common leadership and managerial problems
✒ Achieve performance excellence throughout the organization.
The Journal of Inno
vative Management publishes articles that fall into the following matrix of categories:
✒ Case studies, applied research,tools,news & views
✒ Organizational transformation; participative planning, problem solving, and innovation; process
design,management, and improvement
✒ Private sector, public sector, and nonprofit organization settings
✒ Leading-edge and experience-based information,generally 1–3 years old.
Reader Services
The Journal of Inno
vative Management
(ISSN: 1081-0714) is published quarterly by
GOAL/QPC
Bob King, Publisher
Laurence R. Smith,Editor-in-Chief
Jenny Donelan, Editor/Writer
Cathy Kingery, Editor/Writer
Daniel Picard, Editor/Writer
Janet Ireland, Graphic Designer
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Thinking about quality...of life
Laurence R. Smith, Editor
e-mail: lsmith@goalqpc.com
Organizations Achieve High Quality
by Thoughtful Cooperation
A
paradox in society is that the economic system is
structured in such a way that producers of goods
and services are pressured to compete with each
other, often in gladiator-like fashion, while to compete successfully they have to cooperate with each other. The trick
is knowing whom to compete with (along with when and
how), and whom to cooperate with (along with when and
how). A common desire in all of this is that each participant is seeking to gain some value.
A major goal in the whole process, of course, is the
need for both individuals and their organizations to make
money and produce a profit on an ongoing basis.
In this quest, the most important value of programs
like the Malcolm Baldrige National Quality Program or the
European Foundation for Quality Model lies in the broadbased participative thinking and thought processes that
emerge as the Criteria for Performance Excellence.
The Criteria provide an architecture and an infrastructure for the creation of a value-enabling process in an organization. And if you ask what the Criteria are, you’ll find
that they are nothing more than a collection of thoughts
that are designed to develop cooperation in providing value
to certain people. They are what a varied group of management practitioners, working cooperatively, thinks is needed
to have an outstanding organization. To actually achieve
this performance excellence requires the willingness of people
in an organization to agree with that collective thinking,
followed by a disciplined willingness to carry it out. That’s
what enables organizational excellence, together with good
products being created and marketed at optimal prices.
It’s important to fully understand this idea of discipline, for it goes far beyond just sticking to some agenda.
We tend to lose track of the root-derivation of words, and
it’s useful to recall that the words “discipline” and “disciple”
both come from the same Latin root, discipulus, meaning
pupil. The point is that to follow a discipline implies that
one has to be an advocate for that practice, and be carefully
and constantly learning all the time, which is what it takes
to be a successful leader and manager in today’s world.
We regularly publish articles on Baldrige-winning organizations, and this issue of the Journal contains the stories of two organizations that took the Baldrige route to
Journal of Innovative Management
performance excellence, and scored high enough on their application and subsequent site visit to warrant an award. They
are Clarke American Checks and Motorola Commercial, Government, and Industrial Solutions Sector (CGISS).
The Baldrige program is a public-private partnership,
now in its sixteenth year, established by an act of Congress. It
is administered by the U. S. Department of Commerce through
the National Institute of Standards and Technology. The Baldrige
Criteria for Performance Excellence have evolved substantially
over the years.
When Clarke American Checks talks about their tenyear journey to achieve performance excellence, they say that
the Baldrige framework has become their business model. They
talk about how an unrelenting focus on their partners and
customers serves to distinguish them as the value provider of
their products and services. They say that their culture thrives
because they are values-based and have a team-oriented environment that is totally aligned with their vision and goals. They
emphasize the importance of making decisions based on measuring the right things and having the right data, and that
their associates want that data so that they know that they are
making progress. They emphasize learning from the past and
reviewing lessons learned every time a process cycle repeats.
Motorola’s commercial, government, and industrial solutions sector has a vision to be the world’s most trusted integrator of innovative communication and information solutions for the public sector and for other enterprises with mission-critical communications needs.
Motorola, like all other applicants, found that a major
benefit of following the Baldrige process was getting a fair and
independent analysis of what they were doing well and where
they needed to improve. They noted that management has to
continually ensure that everybody has the right information,
at the right time, at the right place to make the best choices to
sucessfuly compete in today’s global marketplace, and the
Baldrige Criteria helped them to create processes to do that.
Motorola CGISS employees said they also enjoyed the
ability to learn from others, saying that the Baldrige Criteria
are based on beliefs and behaviors found in high-performing
organizations, updated by the best practices and best experiences of leading-edge companies on an ongoing basis.
Winter 2003/2004
CASE STUDY
Motorola CGISS: 2002 Malcolm Baldrige National Quality Award
7
Motorola CGISS:
2002 Malcolm Baldrige
National Quality Award
By Jenny Donelan, Writer/Editor
This article was developed from presentations by Motorola representatives at the Malcolm Baldrige National Quality
Award Program’s Quest for Excellence XV Conference, March 30—April 3, 2003, Washington, DC. The program is
run by the U.S. Department of Commerce, through the National Institute of Standards and Technology (NIST).
Organization Overview
Introduction
CGISS stands for Commercial, Government and Industrial Solutions Sector.
Motorola CGISS says it is the leading worldwide supplier of two-way radio communications including radio networks, systems, products, and services, as well as
integrated communications and information technology solutions. CGISS is a major
sector of Motorola that reports to the office of the chairman.
The CGISS vision is to be the trusted integrator and leading provider of
innovative communication and information solutions for the public sector and for
business-critical enterprise customers. This vision is primarily focused on
customers: It drives the company’s strategy, technology development, and operational performance.
CGISS vision is to be
a trusted integrator
and leading provider
The words trusted and leading are very important to Motorola. They serve as a
lighthouse to direct the business. Motorola celebrated its 75th anniversary in 2003,
and CGISS is Motorola’s preeminent and oldest sector.
More than 14,000 CGISS associates create almost $4 billion in annual sales to
more than twenty-seven million users of the company’s products in 170 countries.
CGISS has 7100 points of presence worldwide. Its employees invent, develop,
manufacture, sell, service, and maintain mission-critical communications and
information solutions. These are complete solutions that include the handset as well
as the network infrastructure and the millions of lines of software code that are
designed to make it all work instantly—and flawlessly—every time.
Respect and integrity
are foundation values
CGISS has two values that serve as foundations and that guide how the
company runs its business and how its people behave every day. These values are
constant respect for people and uncompromising integrity in everything the company
and its employees do. These values have served the company well for seventy-five
years and are expected to serve it well into the future.
© 2004 by GOAL/QPC
Winter 2003/2004
CASE STUDY
8
A heritage of innovation
Motorola’s heritage of innovation and leadership starts with the first portable
two-way radio in the early 1940s, the first pager in 1964, the first police radio in a
car in 1967, and the first portable cell phone in 1983. Today the company also has
totally integrated wireless voice and data products, consumer two-way radios for the
family, and its latest set of communication tools—digital private radios for missioncritical communications.
Worldwide customer
base
Motorola segments its customers into four regional groups—North America,
Latin America, Europe/Middle East/Africa, and Asia—and then further divides
them into government, which includes fire, police, and other government entities;
and enterprise customers such as transportation, manufacturing, utilities, hospitals,
and so forth. The company says it is best known in the government markets, stating
that if anyone were to ask a public safety or fire official who they would trust for
mission-critical communications, their answer would be Motorola.
A sampling of customers from the four regions of the world includes the FBI;
the cities of New York, Chicago, and Los Angeles; the Colombia National Police; the
London Underground; Shanghai Police; Korean National Police; and the Singapore
Mass Rapid Transit. Motorola partners with these customers to develop standards
and new ideas in order to meet and exceed their expectations.
Key factors for success
According to Motorola, the company focuses on many factors that are critical
to its success. Foremost among these are customer intimacy, marketplace excellence,
and technology supremacy.
Customer intimacy
Motorola thrives on building strong professional and personal relationships
with its customers. It works closely with them at the association level, such as the
Association of Police Communications Officers, the International Association of Fire
Chiefs, the Congressional Fire Services Institute, the National Organization of Black
Law Enforcement Officers, and the Women Chief Fire Officers. Motorola personnel
serve on their boards and host discussions with the company’s development engineers about their operations and their needs. Motorola also sponsors several honorary awards for police and fire officers. The company has worked closely with many
of these organizations for decades—for more than sixty-one years with the International Association of Chiefs of Police.
One of Motorola’s goals is to stay with its customers over the life cycle of their
networks, not just from a product or system perspective, but from a business
relationship point of view.
Marketplace excellence
Motorola is probably best-known for its cell phones and semiconductors.
Financial pages tend to include very little about CGISS—primarily, says the company, because there are no easily comparable businesses to which analysts can refer.
CASE STUDY
Marketplace excellence,
continued
Technology supremacy
9
CGISS has outstanding market strength and performance. The company claims it is
number one in the world in customer satisfaction at over 90%, and number one in
the world in market share—two to four times over the nearest competitor.
Motorola’s third critical success factor is technology supremacy. The company’s
mission statement commits it to making customers successful. Motorola has 640
digital systems in operation in sixty-five countries, and more than 100 analog
systems worldwide. It is the only company that makes these kinds of products to the
different technology standards around the world—in Europe, the United States,
Latin America, and Asia. That makes Motorola’s business complex to manage but it
also gives it a substantial, global, competitive advantage. Motorola works with its
customers to develop technology that it can bring to the marketplace first, and bring
in terms of mission-critical solutions.
Leadership
Leadership introduction
Question 1.1.a.1 of the Baldrige Criteria reads:
“How do senior leaders set and deploy organizational values, short- and longerterm directions, and performance expectations, including a focus on creating and balancing value for customers and other stakeholders?”
Performance excellence
scorecard
At Motorola CGISS, the answer involves leadership. Almost every meeting
starts with the company’s performance excellence scorecard, which is used at all
levels throughout the organiFigure 1. Performance Excellence
zation. Figure 1 shows two
Scorecard.
major sections and four
Strategic Direction Performance Measurement
columns. Columns 1 and 2
Vision
Business
Business
Current
focus on strategic direction;
Processes
Results
Year
Initiatives
Columns 3 and 4 focus on
Strategic
performance measurements.
Objectives
Column 1 includes the vision
statement, and also strategic
objectives, which are where executives want the business to be over time. Column 2
has the strategic initiatives for the current year and Column 3 covers the business
processes. The first six Baldrige Criteria operate in Column 3 of Figure 1. And in
Column 4 Motorola uses the seventh Baldrige Criterion, which incorporates business results.
According to CGISS, the performance excellence scorecard looks simple, but
developing it, aligning it up and down through the organization, going from
strategic directions to processes to results, and creating the measurements to track
performance and progress, is difficult (though important) work.
Winter 2003/2004
CASE STUDY
10
Aligning the organization
It is vital at Motorola to align the entire organization with regard to scorecard
objectives. This process starts with the vision statement, then input from stakeholders to help form the strategy and to create the initiatives for the scorecard. Goals are
then cascaded and inched down through the organization. What this means is that
every part of the organization has a similar scorecard, but with different goals and
objectives, all linking together. It’s one way Motorola ensures that the whole is
greater than the sum of the parts. The company aligns its goals to those of its people
through personal commitment, and at the end of the year uses the scorecard and
personal commitment as the basis for rewards and recognition. If the business does
well, and the person does well, everyone wins.
Personal commitment
process
To make all this linkage happen, the company’s mantra is communicate,
communicate, and communicate to stay focused on the input, the output, the feedback with the stakeholders, and especially with its people. Motorola’s personal
commitment process aligns each employee’s goals and activities, including personal
development plans, toward achievement of business objectives.
The personal commitment process includes regular coaching and review
sessions and a structured dialog. Personal commitment is internalized to mean
“What are you personally committing to in order to contribute to the company’s
success?” Surveys with Motorola employees show a strong response to the question
of whether they can see a link between their goals and objectives and those of the
organization.
Aligning company goals
and personal
commitment
How does Motorola assess, set and deploy, and communicate its values,
directions, and expectations? It defines its stakeholders and through several different
approaches, assesses their needs, desires, and expectations. The company builds these
needs and their expectations into the scorecards and the personal commitment goals.
Goals and initiatives are set and developed through the performance excellence
scorecard, tightly aligned with the personal commitments of each of the associates.
Motola CGISS’s business results form the basis of the reward and recognition given
to the individual, and the communication link is closed with the same stakeholders,
at the bottom and at the top.
Senior leaders monitor
progress on a scheduled
basis
Senior leaders review organizational performance and capabilities as well as
progress toward short- and long-term goals. On a monthly basis, they review
customer and business performance—that is, how orders and sales are progressing,
and they look at monthly financial performance. On a quarterly basis they do
operational reviews of financial quality, technology development, people, and other
items. They look at strategy review and update it and focus on ethics. Every six
months they review people plans and technology development, and on an as-needed
basis, they look at special topics or key areas where follow up is required.
CASE STUDY
11
Compass internet system
Supporting these reviews is Motorola’s dashboard metric system called Compass, which is a fully developed internet library and sharing system that permeates
almost every facet of the business. Compass allows the company to look at top-level
results and then click down two three or more levels for additional detail.
Leadership challenge
The leadership challenge at Motorola CGISS involves setting priorities,
balancing everything that should be done, steering the course, and reviewing
operations in order to achieve outstanding results. The scorecards, personal commitments, processes, and Compass system are tools. Making them an integrated piece of
the fabric throughout the organization so that they are part of the company’s
“DNA” requires both discipline and staying power.
Performance Excellence
journey
Motorola CGISS started its Performance Excellence journey in 1999, when
key personnel began assessing the business by the Baldrige Criteria. Executives
identified gaps and began to close them. They continued the journey in 2000 and
2001, improving processes and results, closing gaps, and getting better. Motorola
CGISS applied for the award in 2001, but did not earn a site visit. The company
applied again in 2002, taking only nine business days to write the application.
According to the company, Motorola CGISS did not apply for the Baldrige
Award with the idea of winning, but because it wanted to get the evaluation of the
Baldrige examiners—CEOs, CFOs, and COOs trained in Baldrige who are capable
people in their own professions. The examiners’ final write-up was about 50 pages
long and cited over 100 strengths and approximately 40 areas for improvement.
People with vision give
CGISS its advantage
According to Motorola CGISS, what allowed the company to pull together
everything were its people. The company refers to them as “our unfair competitive
advantage,” and what makes CGISS truly special. The company had faith and
conviction that if its leadership could align its people to the business goals and to its
stakeholders, and in so doing create best-in-class processes, then CGISS would
achieve outstanding business results, exceed stakeholders’ expectations, and collectively win.
Strategic Planning
Strategic planning
follows timeline
The overall strategy development process at Motorola CGISS follows a calendar timeline. In the first quarter of the year, the company evaluates its current-year
strategy. As planners are refining and implementing that strategy, they begin to
create a long-range strategy. This happens around the middle of the year. The longrange plan is a financial strategy that encompasses a bottoms-up estimation of what
the company thinks its business is going to be, both top- and bottom line, for the
next calendar year as well as for the next three years. It encompasses the portfolio
strategy, and also the resource allocation for engineering, marketing, and sales. The
Winter 2003/2004
CASE STUDY
Strategic planning
follows timeline, continued
12
long-range plan should give company executives a good view of what the business is
going to be like.
Around the third quarter, as company executives are refining and implementing their strategy and building the long-range plan, they are also communicating
and implementing their strategy for the next year and locking down the plan for the
subsequent year. At the end of the year they look back at their strategy of record and
how they executed it, but also at the overall process and how they can refine and
improve it.
Key questions for
strategy development
The Baldrige Criteria ask how a company’s strategy development process
ensures that key questions have been addressed. These questions include how the
company gathers input from customers, how it factors in the environment and the
competition, and how it addresess macro-environmental trends as well as technology
threats and opportunities.
Addressing customer
and market needs
It is critical to the strategy process to make sure that Motorola CGISS understand its customers’ needs, their satisfaction levels, and their future needs. The
company has a number of ways of gathering that input. Some of the valuable ones
are users’ groups and focus groups. CGISS also reaches out to customers, testing
concepts with them and asking them about their future needs.
CGISS uses market input that comes from different regions closer to its
customers and that take into account the competitive environment there. The
company also has product operations or portfolio management teams that are doing
surveys and generating some of these opportunities with customers. This is another
valuable source of input. CGISS also tracks its market size and market share on a
quarterly basis. Part of that comes out of the long-range plan where it not only sizes
what its business can be but what it thinks the market is, and what it thinks its
competitors are getting out of the market, and factors that in to generate its market
share.
Business opportunities
feed strategy
development
Last, CGISS uses business intelligence not only about its customers and
markets but also its competition. This involves a process called M-Gates. This is a
process of defining or creating opportunities. In the early gates of the M-Gate
process, CGISS strategists size market opportunities, and then take those opportunities continually down through the development of product opportunities and
launching products to market. All the knowledge that is factored into building those
business cases and opportunities is fed into the strategy development process.
How strategy addresses
competitive environment
CGISS has a number of ways of gathering input about what’s going on in the
marketplace and what its competitors’ strategies are. Customer inputs are especially
valuable sources of competitive information. CGISS also does a lot of market
CASE STUDY
13
How strategy addresses
competitive
environment, continued
analysis, including World Wide Web and competitive analyses. CGISS is a company
that sees a lot of requests for proposal and bid-response business and those processes
provide it with valuable input on how competitors are bidding, what kinds of
features they offer, and what kinds of services they’re bundling.
Competitive radar screen
CGISS also leverages its corporate Motorola labs and venture capital investments as sources of competitive information. It takes all this data and feeds it into its
business intelligence process and into its internet-based “Compass” database. That
information is then shared around the world, using the concept of a competitive
radar screen.
Each quadrant of the radar screen has a different vector representing where the
competition is coming from, whether from a subscriber radio or a systems integration company, or whatever angles they may be coming from, and as they get closer to
the center of the CGISS bulls eye, to the sweet spot where the company thinks it
belongs in the market, strategists then do a deep dive and analyze that competitor
across all facets of its business. CGISS makes sure it understands what that
company’s strategies are, and have been, and will be—as well as what its own strategies—both proactive and responsive—are with regard to that threat or opportunity.
How technology affects
strategic planning
CGISS is a technology-led business, so it’s very important for it to have a broad
view of what’s going on in the technology landscape. CGISS uses a number of inputs
for that process to ensure that it is aware of what’s going on in the industry, and is
staying ahead of opportunities.
Customer and market input is a valuable source of what’s going on in the
technology landscape. The company also has technology strategists who execute
broader scans—beyond CGISS’s traditional business and technology—and search for
what might be the next wave that will either disrupt the company’s opportunities or
create new ones for it. These strategists execute patent and technology scans. And
engineers help CGISS with a lot of its competitive intelligence, and in understanding
competitive products and ensuring that the company has the right strategies to
manage its business.
Once CGISS has collected all these inputs, the technology team prioritizes
resources and creates projects that address any need to understand more about a
particular product or technology or other threat. The team develops its own project
plans that then feed their strategy development process.
Evaluating strengths
and weaknesses
It’s important for the company to understand the strengths and weaknesses of
its operational capabilities. Strategists break these down into key production and
delivery processes, key business processes, and key support processes. Supplier and
partner support are part of key production processes. The M-Gates process is an
example of a key business process, and global customer care is a key support process.
Winter 2003/2004
CASE STUDY
14
Evaluating strengths
and weaknesses, continued
Each of these processes has an owner, and these process owners then provide
inputs to the strategy development process by performing a strength, weakness,
opportunity, and threat analysis on their own. They then proceed saying, “We have
an opportunity for improvement in this process, and here’s what our action plan
would be and here are the resources required to do it, and so forth.”
Strategy deployment
and scorecards
So how is all this deployed once a strategy is in place? The company focuses on
three- to five-year objectives as well as its mission and vision statements. Objectives
are essentially focused on stakeholders and on the financial, customer market, and
business objectives. Current-year initiatives are what company strategists believe are
needed to move the ball on long-term objectives—this involves a twelve- to eighteen-month view. Then the focus is on results—the process goals as well as the
business and financial and market goals. Strategists make sure they have addressed
the key stakeholders, and that there is alignment.
Once a strategy is in place, goals are then cascaded all the way from the
corporate performance excellence scorecard down through the sector, and through
the functional groups as well as the supporting functions. Alignment is ensured with
the use of grids, which are essentially spreadsheets. For example, five goals exist in
the current-year initiatives of the sector scorecard. Company strategists ensure that
connectivity exists and that each of the functional groups underneath the sector will
have representation with one or more goals linking back to every one of their goals
on the sector scorecard. According to the company, this is an important part of the
scorecard development process.
Strategy and the personal
commitment process
A unique factor that the company believes is the real power behind this whole
process is the linkage of those sector group and function scorecards to each of the
14,000-plus associates inside CGISS in a personal commitment process. Essentially,
each individual has a dialog with his or her manager in the first quarter of each year
that ensures each individual knows what his or her goals are and how those goals
link to the sector group or function scorecard.
Putting strategy
into action
How is all this actualized? The company first finalizes or refines its strategy and
action plans in the third quarter, then translates those in the fourth quarter through
resource allocation. This is a process that is run by the sector senior staff, who
allocate budget and lock down solution road maps and allocate engineering resources
to say what products will be developed in the long-range time period of three years.
Capital must be allocated to each of the businesses. Once this is done, scorecards are
deployed and communicated throughout the organization in the fourth quarter.
Communicating progress
and strategy
Motorola CGISS communicates thoroughly to make sure every associate
understands the strategy and the directions, as well as what actions are needed to get
CASE STUDY
Communicating progress
and strategy, continued
15
there. That personal commitment goal setting happens in the first quarter. That
strategy is then managed and deployed through personal commitment dialogs,
which are checkpoints in the second and third quarter, as well through a summary at
the end of the year. The company also uses presentations and feedback and dialog
with the regions to make sure that its strategies continue to be the right ones, that its
action plans are going to address needs, and that the company will meet its longerterm objectives.
As far as communication goes, CGISS continues to communicate with associates through town-hall meetings and by making sure they understand where the
company is going and how it’s doing on objectives and initiatives. Scorecard objectives and business results are maintained on the Compass site, where everyone has
the ability to check-in to see what is happening and what is going right or wrong.
Measuring success from
a strategy perspective
How is success measured in the strategy process? Financial results are one
method, and the company has achieved benchmark results in all of its financials over
the last three years. Customer satisfaction is a key element of the company’s strategy,
as is maintaining that high customer satisfaction that drives loyalty. And maintaining
market share is a key to measuring the success of strategy.
Opportunities
for improvement
The Baldrige examiners cited opportunities for improvement in Motorola
CGISS’s strategy development and deployment process. One of those opportunities
involved deployment from the sector down to the group down to the function. The
company needs to make sure that when its global marketing and sales group sets a
goal that it has alignment with the functional groups of the development group as
well as the supply chain group. In other words, CGISSs needs horizontal as well as
vertical alignment of goals and objectives.
Action planning in the current year is very good, as are explanations of how
progress to those current year initiatives is measured and monitored. But the company lacks a systematic approach to the longer-term objectives or to tracking
progress to longer-term goals over time.
Customer and Market Focus
Customer focus central
to CGISS culture
CGISS is spread out all over the world, and as might be imagined, the needs of
its customers worldwide are very different. Therefore customer and market focus—
listening to customers and turning that knowledge into products—is a very important part of the culture. At CGISS there is a culture of continuous improvement and
constant renewal to ensure a total commitment to customer satisfaction at all cycles
and that quality processes are incorporated to make sure the company delivers on its
commitments.
CGISS has customer relationships that span more than sixty years—almost the
Winter 2003/2004
CASE STUDY
Customer focus central
to CGISS culture,
continued
16
same length of time the company has been in business. CGISS put its first police car
radios in cruisers in 1967 and reports that the customer who bought the first radio
system for police is still its customer today. This is not by accident, notes CGISS,
but through a lot of hard work and planning, and through anticipating customers’
needs, and using processes that enable it to have the right products for customers.
CGISS market is diverse
In order to explain the customer and marketing processes at CGISS, it’s
necessary to describe the organization a bit more. As previously noted, it operates in
four regions and has 7100 points of presence, either through direct sales people or
indirect channels. The company focuses on serving specific customer groups like
public safety, but also industrial accounts such as petrochemical companies and large
commercial accounts like FedEx and GM. Its challenge is meeting all these customers’ needs in diverse parts of the world that have different standards and different
requirements for products. One size does not fit all.
Four processes essential
to earning customer
confidence
Motorola CGISS has external processes such as users’ groups and industry
associations with which it works very closely. It also has focus groups and beta site
testing, and these kinds of things give it customer intimacy. And it has internal
processes such as global customer care centers that run 24/7 and operate in whatever
languages customers require. And the company has something called a market and
planning process that is an important part of the way it functions. These robust
processes are used to build the lifelong customer relationships that are important to
CGISS.
There are four basic standalone processes that interrelate:
• Market and Product Planning (also called M-Gates)
• Customer Listening
• Global Customer Care
• Customer Satisfaction
The market and product planning process, M-Gates, involves getting customer
input and finding out about the market in order to drive the development of
solutions and products to fulfill customers’ needs. For customer listening, the second
process, CGISS has a diverse set of formal and informal listening techniques that
build relationships and lead to repeat business and, most important for the company,
positive referrals. The third process, the global customer care system, ensures that
issues are discovered, and trends analyzed so the company can proactively learn
about and resolve problems—in many cases before customers even know there is a
problem. The fourth process involves customer satisfaction metrics that are tracked
at every cycle of a customer relationship. CGISS customers tend to go through a presale phase, a sale phase, and a post-sale phase. They use its products and systems for
a time and then they go through the phases again. Each one of those phases is
critically important from a customer satisfaction standpoint.
CASE STUDY
Meeting customers’ needs
with a value proposition
17
As mentioned earlier, CGISS customers are diverse and have diverse needs.
One way the company meets those needs is by managing its value proposition,
which is very important. CGISS knows that customers’ needs are always changing,
so it maintains a forward-looking value proposition by analyzing where it is today
and where it wants to be in the future with these customers. It constantly looks at
the lifelong value of its customers and in turn, lifelong value is generated by the
company having a lifelong value proposition for them.
The organization determines where there are gaps and then puts plans into
place to make sure it fills those gaps. CGISS personnel know that customer and
market needs change all the time, and therefore they monitor those changes regularly: weekly through briefing reports, monthly through operations reviews, and
quarterly and annually through assessments.
Strategic marketing
process
The CGISS strategic marketing process was discussed earlier. It is all about
determining expectations and identifying new opportunities to serve customers.
Information comes from existing customers and customers of competitors. Data is
analyzed from regional sales and marketing teams, and from the customer surveys
that are done continuously, and especially from focus groups and users’ groups. And
the company gets information from its customer satisfaction surveys or its internal
customer care process.
The information is then integrated with the sector business plans. Market
input is gathered regularly and used as input into strategy from quarterly market
share metrics and environmental scans from our quarterly regional reviews. The
market and product planning or M-Gate process links with strategy to identify highvalue market segments and new solution requirements. It also allows input from new
acquisitions and new business opportunities that the company might try to enter.
Marketing and product
planning: the M-Gates
process
Here is a brief description of the market and product planning or M-Gates
process and how CGISS uses it to attain customer intimacy through determining
customers’ needs. There are fifteen processes referred to as gates. The overall process
starts at Gate 15 and works its way down to the end of product life, which is Gate 0.
They are called gates because you cannot pass through one until you satisfy all its
requirements. The challenge is to go through the gates as quickly as possible.
The first five gates are focused on getting direct market and customer input to
develop business cases and make fact-based portfolio management decisions—a
rigorous process. Input from these gates is then fed into the system, and product
development phases of the M-Gates processes. This ensures that valuable engineering development resources are managed appropriately.
After product development there’s a focused effort from launching the product
into the market or to specific customers and managing it all the way to the end of
life. At all phases, customer input is solicited and market conditions are analyzed to
Winter 2003/2004
CASE STUDY
18
Marketing and product
planning: the M-Gates
process, continued
ensure the company remains committed to developing products that are driven from
current and future customer requirements. Many of these M-Gates are going at any
given time, and personnel can stop the M-Gates process at any point if, say, conditions or customers’ needs have changed.
Listening and learning
Listening and learning techniques are used across all parts of Motorola. At
CGISS, employees are committed to listening to customers in all aspects of our
business to ensure that their needs are linked to the company’s strategy and also to
the development of new markets and new products, which means linked to product
launches for successful implementation.
Motorola CGISS employs a diverse set of formal and informal listening
approaches that build relationships and lead to repeat business and positive referrals.
Employees simply listen to customers at every possible opportunity. In fact, some of
the listening methods used today have been in place for fifteen to sixteen years with
user groups and indus- Figure 2. Listening and Learning
try associations. In
Knowledge Used Across Processes.
Process Strategy Portfolio Project Launch PrePostFigure 2, if the boxes
Defin.
Sales
Sales
are colored, that
Research
indicates where there is Intelligence
User groups
a listening link. Many
Know. mgmt.
Cus. satis.
of the boxes are white,
Cus. care
because not all the
Acct. mgmt.
listening methods are
used across all processes, but every single process is touched at some point with
customer and market focus.
How listening processes
evolve through user
groups
The company needs to ensure that its listening processes continue to be
beneficial and robust over time. One example of this is how the culture of continuous evaluation and improvement has evolved with user groups over the past fifteen
years. Over time, CGISS has improved on the quality of the input that it gets from
them, and this evolution has occurred through actively managing the output of the
meetings for usable results.
Motorola CGISS actually creates these user groups. Some company personnel
were concerned, initially, about getting customers in a room with other customers,
but the results, according to the company, have been positive for many, many years.
The results from these user groups are evaluated through satisfaction surveys on an
ongoing basis and the continuous evaluation and improvement has earned customer
loyalty that is benchmarked.
Maintaining customer
loyalty
How else does the company maintain customer loyalty throughout the cycles
that they go through? According to CGISS, it has proven that managing the cusJournal of Innovative Management
CASE STUDY
19
Maintaining customer
loyalty, continued
tomer for the long term will lead to customer retention and loyalty. It’s all about
understanding what the customer wants, delivering it to customers where and when
they need the solution, and then providing a means to track issues proactively
throughout the lifelong relationship. By the way, measuring customer satisfaction is
critical not only after the sale is made but during the initial presales effort, and
deployment of the product or the system.
Global customer care
process
Motorola manages the customer life cycle through its global customer care,
and through its market and planning process, M-Gates, which have been described.
Now let’s focus on the global customer care process, which CGISS uses to listen to
and resolve customer issues proactively to ensure satisfaction for the long-term.
In the pre- and post-sale processes, the company makes sure it has lots of
different ways for customers to stay in touch. They are encouraged to do so. CGISS
uses its sales staffs—both the direct channels and the indirect channel partners. It
uses faxes, telephones, e-mails, Motorola Online. The main goal is to solve customer
problems based on the first point of contact. That is usually the quickest way of
solving a problem. However, if it is not resolved at first contact it goes into the
global customer care call center process for resolution. At that time the issue is input
into the clarifying database for analysis, tracking, and clocking of resolutions.
The system is working well, according to the company, which says 90% of
nontechnical issues are resolved on the very same day the problem is put into the
system and 70% of technical issues are resolved the same day as well.
Systemic issues take longer. Workers track them, and use analytical techniques
for customer issue prioritization and regional comparisons. CGISS assumes that if
something happens in Shanghai, it’s probably going to happen in Chicago, too, or
else in Europe. So the company uses that information, gets it out to customers, and
makes changes even before the problems occur. At all times the management of the
call center is tracked to ensure that continuous improvement is being monitored—
things like the speed of answering the phone, and the availability and quality of the
answers that customers get.
Tracking customer
satisfaction
Customer satisfaction tracking is critical to ensure loyalty and should be done
continuously, at every point where the company touches the customer. Starting in
1990 CGISS launched its formal customer satisfaction surveys. The company
wanted to move from an anecdotal to a fact-based phase. In 1994 it made that
process global. Then it took the next step and linked senior management’s incentive
pay plans to specific satisfaction goals to ensure that everyone was focusing on
resolving the most important customer issues. In 1998 the company began the
performance excellence process and made further refinements by linking satisfaction
goals to the performance excellence scorecards.
Every meeting and every review inside Motorola starts with customer satisfacWinter 2003/2004
CASE STUDY
20
Tracking customer
satisfaction, continued
tion reviews and quality. In that way every employee’s compensation is also linked to
customer satisfaction.
Benchmarked customer
satisfaction results
How is all this working? Motorola CGISS has continuously achieved best-inclass customer satisfaction results, and as a result has extremely loyal customers. This
is backed up by research from ARI and Griggs/Anderson/Gartner, for example,
reporting that between 85% and 95% of customers are satisfied or very satisfied.
CGISS has just completed its 2003 results, and both scores have increased and
continue to be at benchmark levels. More important, the company believes the best
record of satisfaction is when customers recommend it to others. In 2000 and 2001,
more than 85% of customers recommended the Motorola brand and CGISS to
other customers.
Customer recognition
is greatest measure of
success
The focus on understanding the market and learning from the customer makes
great business sense, according to Motorola CGISS. In fact, the company believes it
makes great business sense to have a lifelong customer culture, and to be committed
to performance excellence and continuous listening and learning and to tie all that
together. In the company’s opinion, the most important business result is recognition from our customers.
Information and Analysis
Key reasons for
information and analysis
success
Here’s a high-level overview of what CGISS thinks are its keys to success in
terms of how it uses information and analysis in driving business operations.
Manage by fact from the President on down. As a result of its twenty- to twentyfive-year history of pursuit of Six Sigma, the company has developed a strong culture
of fact-based decision making. This process permeates the entire organization.
Whether it’s how it deals with global issues at the most senior levels of the business,
or how it copes with problems on the factory floor, you’ll find a fairly common
methodology of defining problems, measuring them, collecting information, doing
analysis, then making decisions based on fact. The company believes this culture of
fact-based decision making was a significant contributor to its high score in the
Baldrige information and analysis area.
Use a balanced scorecard with personal commitment to align goals to individuals.
CGISS has institutionalized the use of a balanced scorecard for aligning its strategy,
vision, objectives, goals, and results. These are tied together throughout the organization, starting at the corporation. Motorola corporate ties to the CGISS scorecard,
then scorecards are cascaded through the organization down to the individual level.
End-to-end integrated information systems support business operations and provide
facts for the decision process. CGISS has a mature set of business applications that
supports its operations. The company focuses on end-to-end integration of processes—and calls itself very process oriented. But there is a good balance of focus on
CASE STUDY
21
Key reasons for
information and analysis
success, continued
process and information technology, and welding the two together to deliver significant new business capabilities.
Performance excellence
and balanced scorecards
Although the balanced scorecard process has only been in use and truly
embraced by the company since 1999, there is a legacy at Motorola CGISS of over
twenty years of continuous improvement driven by metrics and data. Much of that
legacy was the result of the drive toward Six Sigma quality in factories. But as time
moved forward, company principals realized there was more to it than that.
Use the “Compass” Knowledge Repository to integrate information and data and to
communicate across the sector. The Compass Knowledge Repository is the foundation
for everything that is known at CGISS and indeed everything that is known across
Motorola.
The performance excellence process that CGISS now uses ensures that all
communities are served, from the customers, corporation, sector, and groups, right
down to individual employees. It also allows CGISS to have alignment and a line of
sight for its goals, from the top down, the bottom up, and across all levels of the
organization. It is much more than a factory process. The metrics and measures are
structured into this alignment, with customer satisfaction surveys, business results,
and metrics at various organizational levels down to the individual with the personal
commitment process.
Information management systems are structured much the same way, with the
Motorola Online portal used for customer orders and feedback, corporate standards
and common practices, and support throughout the organization. This alignment of
goals was one of the strengths recognized by the Baldrige examiners. It also ensures
standardization and consistency throughout CGISS worldwide.
Two performance
measurement systems
at CGISS
There is a distinction between some of the metrics used at CGISS. The
performance measurement system allows the company to integrate and categorize
information into two distinct types of metrics.
The first are performance measurement metrics that monitor the health of the
organization and are used to indicate whether or not it is on track toward meeting its
objectives. They are high level, yet broad in scope, and shared throughout the
organization via the scorecards and the Compass Knowledge Repository system.
These measurements are set and reviewed by group and sector staff levels. Some
examples of these are revenue and sales goals, on-time delivery, project status, and
pretax profits.
Next are the operational metrics. These are indicators that are identified and
tracked locally at each division, factory, design center, or other business unit level.
They are the measures that are used to take the pulse of the organization’s processes
and whether or not the processes are in control. Examples include customer problem
resolution times, cost of quality, hiring and attrition, and personal commitment. A
Winter 2003/2004
CASE STUDY
22
Two performance
measurement systems
at CGISS continued
key benefit of the direct alignment of these measures with scorecard goals is that it
allows rapid decision making to take place at all levels of management on a day-today basis.
Scorecard development
process occurs through
the organization
The scorecard development process consists of several phases that are timebound and integrated with business needs and strategies. It starts with those goals
that are derived from all stakeholders’ needs. Personnel then construct goals that
support business strategies, technology advances, and market trends. Then they
integrate those that support corporate, group, and division levels. Next they define
their strategies and objectives and current year initiatives, and align them with the
business processes and expected results.
These goals are then reviewed by the sector-expanded staff, approved, then
summarized to a scorecard. But the process just begins here. Each functional or
support group then reviews the CGISS scorecard, and develops its own scorecard to
support it. The sector group goals are defined and aligned, objectives specific to the
group are added, and approval is obtained—usually after review by the sector
president. This ensures the critical top-down, bottom-up alignment.
That’s not the end of the process, either. It continues at the division level,
where objectives specific to the division are added, and alignment and sector goals
are checked. The review and approval process at this stage is from the group general
manager, and his staff. Once this occurs, an incentive pay package is then developed
that ties these key goals from our scorecard back to our pay-for-performance plan.
Then these goals are aligned with each employee. Through the personal
commitment process, each employee develops and commits to his or her own goals
and objectives, shows how they link and align to the division, group, or sector goals,
and how they individually can impact business results for the sector.
This process provides an excellent mechanism for ensuring a standardized
consistent application across all groups, divisions, and employees within CGISS.
Performance
Measurement Council
Like any good process, developing scorecards, aligning goals, and measuring
progress requires appropriate control and there are always opportunities to improve
it. This is where the CGISS Performance Measurement Council comes in, which
ensures that cross-functional scorecards have been aligned for optimal performance,
that the monitoring system will provide necessary feedback, and that measurements
are the right ones to drive the desired results. The council consists of finance,
strategy, and quality directors from all group and sector functions.
The Council meets on a periodic basis—multiple times over the month when
the scorecard development process is happening in the fourth quarter, and at least
quarterly during the year. In these meetings, trends and performance are reviewed, as
well as changes in strategies, business needs, and customer requirements.
CASE STUDY
Goals and measurements
are analyzed in
operations reviews
23
All goals and measurements are reviewed on a quarterly basis within the sector,
and with corporate management. The forum for this is a series of operations reviews,
in which functional groups report on their performance against the goals, and
provide action plans for continuous improvement or recovery activities.
From here, organizational level analyses are conducted that identify cause-andeffect relationships across functional areas and work teams that impact or contribute
to the sector’s business results. Based on these analyses, the sector management team
agrees on the action plans for the functional groups—either problem recovery or
continuous improvement. In addition to the sector-level analysis, each functional
group repeats this process for their own organizational goals, resulting in a series of
linked analyses and action plans that allow a roll-up and drill-down analysis of
performance at any level in the sector.
Use of feedback vital to
continuous improvement
According to the company, it is vitally important to utilize the feedback
received in order to continuously improve. Throughout the year the assessments
made of progress along the business excellence continuum have provided CGISS
with “golden nuggets” of information that are needed to drive toward even better
business results.
Five components to data
analysis and integrity
There are five major components that enable CGISS to be successful in
providing capabilities to its business and providing reliable information:
• Standards. A sort of bedrock for activities at Motorola is a complete set of
standards that define basically what must be done and how it must be done.
• Governance. A governance process is put in place that ensures alignment of
information technology with the changing needs of the business.
• Process expertise and integration. There is a very strong focus on process at
CGISS, and a major part of what is done in information technology operations
is to work closely with the process experts and create new capabilities for
CGISS.
• Serving all stakeholders. For example, one member of the CGISS team supports
business operations of CGISS, but is also a member of the corporate CIO staff
of Motorola. Between these two responsibilities at CGISS and Motorola
Corporation, this individual serves all the stakeholders of both CGISS and the
company.
• Internet. The “secret sauce” with which all of these components are glued
together is the internet.
Standards are the
foundation at CGISS
Standards are the foundation of what is done and how it is done at CGISS.
There are two types of standards that are important. There is a foundation of
standards of internal control that ensure the reliability and integrity of both our
business process and our information systems. These are clear and prescriptive on
Winter 2003/2004
CASE STUDY
Standards are the
foundation at CGISS,
continued
Information technology
standards
24
what must be done and they map very well to the Baldrige Criteria. Second is that
on the process side there are clear and defined standard operating procedures, which
gives the company a map of how it wants the business to operate, and that it uses as
a template to develop its information systems.
The second two sets of standards are more on the information technology side.
Part of the Baldrige Criteria asks companies to ensure the security and reliability of
information, and at Motorola there is a comprehensive set of information security
standards that are very clear on both what the company must accomplish as it
implements information systems and then, in many cases, how it accomplishes
them. So anything to do with information reliability, security, and protection is all
clearly laid out in the company’s information standards. These are collaboratively
developed by all of the Motorola information technology and business operations—
not just CGISS, but Motorola-wide.
Then finally within the operation, the SEI—Software Engineering Institute—
capability maturity model is used to develop the processes by which the team goes
about doing its job and supporting the information needs of CGISS. So they start
out with a foundation of standards that tells them what they must do, and then
processes that tell them how to do it.
Governance groups make
decisions
The company’s strong governance allows it to take input from customers,
employees, and other stakeholders, and make the right decisions about where it is
going to invest business resources to deliver the maximum return for the operation.
This is a big issue that a lot of technology organizations face as they try to ensure the
investments they’re making are bringing real business value. The way CGISS manages it is by a high-level partitioning of responsibility for decision-making. And there
is a hierarchy of governance bodies that have a clear scope of responsibility and
decision-making across CGISS.
At the highest level is the IT board of directors, which consists of general
managers from the various CGISS business operations around the world. This group
helps prioritize and define where the company will make investments. It also makes
decisions that involve strategic change initiatives. These are major new initiatives,
either new businesses or new opportunities for improving business performance.
At the beginning of each year CGISS prioritizes and divide resources according
to whether they’re going to be applied to major new areas of opportunity, discretionary enhancements, or simple break/fix maintenance of systems. Each functional
organization within CGISS has a governance committee called a change advisory
council. Change advisory councils help prioritize how CGISS deploys its resources
in support of continuous improvement initiatives, or in some cases, non-discretionary actions the company needs to take such as supporting changes in legal requirements or acquisitions or divestitures of parts of CGISS.
CASE STUDY
Process expertise
and integration along
the supply chain
25
A rich set of information systems supports the end-to-end business processes
throughout an entire customer life cycle. One example involves the company’s
supply chain operations. From a process point of view, the supply chain starts with
customers on one side and suppliers on the other. The whole function of the supply
chain is to convert raw materials into goods that end customers will use.
In terms of performance measures that are important in the supply chain,
CGISS looks at factors such as cycle time, quality, and inventory, and these are goals
used to drive the information investments made in support of the supply chain.
The company has made major investments in deploying an internet-based
system that ties it to customers called Motorola Online. CGISS does about $1.5
billion in business on the internet today in fifteen languages and twelve currencies.
With its internal operations, CGISS has a strategy of using integrated commercial off-the-shelf software packages to provide support for the business processes.
Everything starts out at the bottom with financial systems and runs up through
manufacturing, distribution, sales, and marketing. Just about everything that CGISS
does runs on the same commercial suite of business applications. This gives it a very
tight integration of processes and information systems, and also makes the information available across the sector in support of both the processes as well as supporting
decisions.
Finally, on the supply side is another suite of internet tools CGISS uses to
manage interactions with suppliers. It does this on behalf of the entire corporation,
not just CGISS.
Internet and Compass
Knowledge Repository
What glues all this together, as mentioned earlier, is the internet. CGISS
deployed a global peer-to-peer network in the late ’80s and early ’90s, so it was into
the Web space very early. Today if you were in CGISS, just about anything that
you’d do, whether you were working as an employee, supplier, customer, or shareholder, the way you would do business is with internet systems. As an employee, the
two most important tools you have are your Web browser and e-mail. Anything that
you do in CGISS, you do that way.
The Compass Knowledge Repository is a Motorola-wide system. It includes
about 55,000 users worldwide in Motorola and about 9000 users in CGISS. Compass is a combination of an internet information repository and workflow manager,
and the company glues a lot of processes together in Compass. Compass is also
integrated to many transaction systems. The place you go for information, almost
real-time information, about how your business operation is running, or knowledge
possessed in CGISS, is Compass.
Motorola Online
and supplier support
CGISS transacts between a third and a half of business using Motorola Online,
which has allowed it to significantly improve cycle time and customer satisfaction.
Not only does the company transact business online but it delivers a lot of informaWinter 2003/2004
CASE STUDY
26
Motorola Online
and supplier support
tion online—customers can come there and submit work requests. Channel partners
come to Motorola Online to deal with things such as warranties that they do on the
company’s behalf. So everything on the customer-facing side comes through
Motorola Online. Unless, of course, the customer wants to talk to a real person.
Then they can pick up the phone. Motorola CGISS has a full set of call centers
around the world on an integrated call center application.
Opportunities
for improvement
CGISS’s continuous improvement initiative this year is to enhance its process
for selecting and using benchmark information. The other area for improvement
concerns the Compass Knowledge Repository, which is doubling in information
about every four months. The Baldrige examiners identified a need to strengthen the
processes that is used to ensure freshness and ownership of information. Within the
company’s information technology organizations, it has started putting in automated
processes for content management, content classification, and managing ownership
and freshness of information.
Human Resources
Evolution of HR at CGISS
The CGISS HR organization has evolved from the traditional personnel office
of the 1980s to its current state, in which it operates like any other CGISS organization, using the performance excellence business model. Human Resources has
transitioned from being the owner of employee problems to being a true business
partner. It evolved into a role of consultant-to-management, and now helps managers handle employee issues on their own. Today the HR organization is designed to
support two roles: strategic business partner and voice of the employee.
HR service delivery
model
CGISS HR has built an internal framework that aligns its three focus areas:
strategic partner, HR lines of service, and HR operations excellence. The lines of
service include such functions as staffing, employee relations, and leadership supply,
where, for example, it has applied continuous improvement methodology to ensure
that the company has a sufficient number of potential leaders in the CGISS pipeline,
and that the company is providing them with the appropriate opportunities to grow.
CGISS HR partners with its businesses to make sure that HR initiatives for a given
year truly support the business goals. The operations excellence piece assures excellence within its own function.
To reaffirm its role as a strategic business partner, CGISS HR associates are
active participants at the business strategy planning table, where they identify the
implications of the business strategy to determine where people in HR can make the
biggest impact.
To ensure that HR is measuring its success, it uses the same strategic approach
that its business uses. For a given project, the organization lists the strategic intent, a
CASE STUDY
27
HR service delivery
model, continued
qualitative description, a measurement, project milestones, and any issues that
human resources personnel may foresee.
Performance
management evolution
How does HR measure employee performance? The employee performance
management system has evolved from a top-down traditional approach, moving
through various types of check-the-box ratings and narrative methods before
transitioning to a process wherein the employee, through quarterly dialogs, begins to
play a key role in the assessment process. At this time the manager also moves from a
policing role to more that of a coach. The group has also begun to include behaviors,
not just goals, in assessing individual performance. All this has evolved into the
personal commitment system in use today.
This framework provides employees with the opportunity to discuss, and to
receive and solicit feedback throughout the year. It begins at the planning stage,
where goals are set based on the needs of the business as well as on individual
development for the employee. The process then moves through two checkpoints,
where process-to-goals is checked, and also any key work-partner feedback. The last
stage is the summary discussion, which is really a snapshot of the goals and behaviors
of the employee for the entire year.
As part of the continuous improvement process for performance management,
Motorola introduced relative performance assessment or RPA at the end of 2001, in
order to evaluate employees on their goals and behaviors as compared to others in
similar jobs and grades. Adding RPA has allowed the company to move to the
philosophy of differential investment, rewarding the employees who are doing the
most to make the business successful.
Employee surveys indicate that since 2000, when personal commitment was
introduced, employees have had a better idea of how the business scorecard links to
their individual goals.
Human resources portal
Another process improvement success story for CGISS human resources is the
integrated systems approach for many of its processes. “My HR Portal” was introduced last year to all employees. Through a simple log-in screen, you can access
virtually all the HR information that affects you. By accessing the Rewards Link, for
example, you can find out the formula used to calculate your incentive payout. If
you’re a manager, you can use the portal to link to the rewards planning system,
where managers plan for merit increases, stock allocations, and incentive payouts for
their employees.
Pulse surveys measure
employee satisfaction
CGISS has a long-standing history of implementing both formal and informal
processes to enhance and support employee satisfaction. After several years of
administering surveys separately at the location level, human resources has evolved
to a survey methodology called Pulse that measures the performance of the business
around the factors of satisfaction, well-being, and motivation. Pulse was first adminWinter 2003/2004
CASE STUDY
Pulse surveys measure
employee satisfaction,
continued
28
istered globally in 2000, and translated into twelve languages. The human resources
department resurveyed last year, and enhancements included comparisons to
benchmark data, as
Figure 3. CGISS Pulse Employee
well as a consistent
Survey Results.
methodology to
analyze the data, and
Most favorable items
% favorable
develop action plans at
I have a clear idea of what is expected of me 89%
Supervisor flexible with personal/family
86%
multiple levels, and
82%
Supervisor treats me with respect
across our four
I am proud to be a Motorola employee
78%
regions. Figure 3
Top improvements since 2000
shows a sampling of
Pulse results from last
66 % up 22%
Understanding of division scorecard
Goals
linked
to
division
scorecard
72%
up 20%
year categorized by the
My goals are clear and impact the business
77%
up 13%
most favorable items,
including those areas
where the organization has improved the most since it last surveyed in 2000.
Given the turmoil that corporate America has experienced over the last few
years, CGISS HR is extremely proud of these results and looks forward to even
better ones next year when it resurveys.
HR ensures a supply
of leaders for the future
Two important HR-related process areas are leadership and learning. CGISS
has decades of experience in thoughtful and impactful succession planning and
leadership development. It calls this the organizational management development
and review.
However, in 1999, the organization did extensive benchmarking in this area
and began what it calls the leadership supply initiative, to ensure that it had the right
leaders in the right place at the right time for the success of the company as a whole.
Within CGISS, the human resources department capitalized on the work of the
corporation by forming its own office of leadership to ensure a quality outcome
from the corporate efforts and to design and drive supplemental programs for both
middle management and director-level talent. During the past two years, in addition
to deploying all leadership supply processes for executives, CGISS HR has deployed
what it calls the leadership planning pipeline process, an evolution in the assessment
and development of mid-level management talent for future senior leadership
positions. Included in this four-part process is leadership assessment, a career
planning component, a business development institute, and extensive interaction
with senior-level leaders.
The CGISS office of leadership focuses on two levels of management. The first
is executive or VP talent, as well as talent immediately below the VP level. The
second is mid-level managers or talent in the leadership planning pipeline who are
likely to take on leadership roles within the next five years.
CASE STUDY
Leadership supply
and pipeline planning
process
29
The following elements belong to the leadership supply process and the
leadership planning pipeline process:
• Calibration—Identify the top talent.
• Leveraged positions—positions most impactful to the business are determined.
• Talent management meetings—HR manages both talent and positions.
• Talent moves—this subprocess ensures that the best talent is moved into the
leveraged positions.
• 270 degree assessment—a databased assessment and development and planning
tool that is electronically administered to all of the executives.
• Formal development—where opportunities to develop business acumen and
drive the new leadership model are required curricula in addition to the
customized development experiences that are designed.
• Rewards—focusing on differentiating rewards for performance and completion
of an annual rewards audit.
The leadership planning pipeline process for mid-level management or
director positions uses similar elements. There are two main enhancements:
• The 360 degree assessment—a databased assessment and management tool that
includes feedback from the leader’s peer group. In addition, a business simulation is run, a personality profile is established, and a three-hour career experiences behavioral interview is completed.
• Career roadmaps—destination executive-leveraged positions are created for each
individual, and a completed roadmap includes the talent’s past positions, and a
plan for their future roles.
Future plans for
enhancing leadership
supply
In 2003 the CGISS office of leadership will bring further maturity to its
succession-planning methods as it more fully defines the criteria for leveraged
positions at CGISS, assesses leadership supply pipeline talent against the criteria
quantitatively, then creates unique development plans for those best positioned for
future success.
Key results for leadership
supply
Key results measures for leadership supply include retention of the top 20% of
the most effective executive talent. In 2001 and in 2002 the organization achieved
100% retention. It also aims for transition of the least effective, or the bottom 10%
of talent at the executive level. In both 2001 and 2002 it was able to transition most
of the least performing talent into new roles where they were much more successful.
The balance were transitioned out of the company.
Rewarding and
challenging leadershipbound employees
With respect to metrics, CGISS also focuses on differential investment for its
talent: ensuring that those who perform the most effectively get the most rewards,
and the greatest opportunities for ongoing development. Additionally the company
Winter 2003/2004
CASE STUDY
Rewarding and
challenging leadershipbound employees,
continued
Learning processes
at CGISS
30
seeks to rotate talent because it believes, and research supports, that the best way to
develop leaders is to continually challenge them with bigger or different responsibilities. In 2002, Motorola CGISS moved more than 50% of its leadership supply
pipeline talent into new or more challenging roles to accelerate their growth and
development.
Let’s now move from the leadership process to the process of learning. CGISS
utilizes the performance excellence framework and its strategic planning processes to
translate key business capabilities into core skills and competencies for employees.
The learning community maintains a range of curricula that are aligned to these core
business capabilities.
Portfolio managers and solution fulfillment specialists partner with the CGISS
learning community to identify, deliver, and maintain training programs that address
these key development areas for CGISS. These portfolios, along with the CGISS
learning priorities, are incorporated into our performance management system using
learning skill guides, which align specific curricula according to job families, functions, groups, and regions of the world. Employees can refer to these skill guides and
identify training opportunities tailored to their own individual development needs,
which they then record electronically in their personal commitment plan as their
unique training plan of record. These plans are routinely reviewed and agreed on by
both the employee and the supervisor.
CGISS utilizes nontraditional learning
methods
In order to meet the needs of the business’s diverse and geographically dispersed employee population, CGISS continues to deploy learning in a variety of
nontraditional delivery formats, including web-based, CD-ROM, and blended
offerings. In 2002 the company had already exceeded the 2003 e-learning usage
trend benchmark, as determined by The American Society for Training and Development. E-learning has become increasingly important when the subject matter
relates to the very latest trends in technology and business. In many cases the pace of
change in these areas is so great that employee education needs are better met by
some alternative methods of learning rather than formal classroom training.
One successful example is what the company calls the Learning Link Live
program, developed by CGISS for its sales associates. The program blends streaming
media and simple conference call technology to bring subject matter experts and
salespeople together to discuss key topics related to CGISS. The Q&A sessions are
recorded and made available via the corporate internet for additional participants
who are not able to participate in the live session.
CGISS is also increasing its utilization of blended learning. In 2003 it will be
rolling out sector learning priorities, one in which it uses technology called Digital
Six Sigma that uses a blended approach of online and asynchronous self-study
supplemented by synchronous online Q&A sessions.
CASE STUDY
Employee learning
results are measured
in two ways
31
The standard CGISS course evaluation system is implemented across the
globe, and provides HR with two types of evaluation measures across the majority of
course deliveries. The system collects data on both classroom-based and e-learning
training, from which reports can be run to indicate the effectiveness of the courses
across a number of levels.
CGISS looks at participant assessment, which measures the employee’s reaction
immediately following a training event. As well as collecting basic reaction data from
participants, the survey also collects data that indicates the participant’s level of
motivation, and perception of how well they will be able to apply the skills and
knowledge to their job.
The second standard course evaluation measurement is administered sixty to
ninety days following a training event. This measure, which involves perception of
training impact to job, evaluates the perceived relevance of this training and the
employee’s ability to transfer the newly learned skills and knowledge covered in the
training course to their specific job. The survey is administered electronically using
e-mail and captures data that provides HR with an understanding of how well
participants have been able to apply the skills and the knowledge in the course of
their day-to-day job tasks.
In instances where the company has a specific business need, CGISS HR has
developed custom measurement tools and approaches that provide it with specific
information relating to business impact and the return on investment.
HR’s opportunities
for growth in future
From feedback by the Baldrige examiners, CGISS HR understands that its
areas of opportunity are the deployment and maturity of global HR effectiveness
measures and the improvement of employee satisfaction measures through greater
emphasis on employee development. In response to the first challenge, it has incorporated into the HR landscape a goal to evaluate and improve operations, lines of
service, and customer intimacy. To close the gap on the second opportunity, employee development has been included as a goal on the business scorecard.
Process Management
Process framework
at CGISS
Here is the methodology for how CGISS attacks process within the organization. There are three types of processes. First are the production processes in the
manufacturing and supply chain. These apply to how CGISS goes about creating
products and services for its customers. Next are the business processes, which range
from advanced development and research to sales and marketing. And last are the
support processes. They are the glue that holds everything together. If these are not
in order, all the business processes and production processes will fall apart.
A key area of process management at CGISS is the aforementioned New
Product Intro or M-Gates process. Employees at CGISS live it and breathe it every
day, across all aspects of the sector.
Winter 2003/2004
CASE STUDY
History of new product
development
32
The journey at CGISS in new product development began in 1992, when the
company started its first deployment of a new process. In 1999, it created the
Motorola M-Gates process, and what it did was take a cross-functional team of
engineering people, marketing people, and business planners throughout the
corporation, and got them together with a charter that said, go out across the
corporation, and to external benchmarks as well, and find what you think are the
best practices for doing product development. Then come back and create a framework that can be used within CGISS and the entire Motorola organization for doing
product development.
These people were sponsored by the senior vice presidents of engineering, so
the project had senior sponsorship all the way up to the CEO’s office. These employees were asked to spend roughly six months coming up with best practices and
return with a framework that could be used across the corporation for product and
service development.
The M-Gates Process
Figure 4 represents what these people came up with: M-Gates. It consists of
fifteen gates broken into five phases. On the left-hand side is the Business Case
Figure 4. New Product Intro: the M-Gates Process
Business Case
Development
Portfolio
Planning
Project
Definition
Implementation
Launch and
Closeout
Gate 15
Idea
accepted
Gate 12
Portfolio
accepted
Gate 10
Project
initiation
Gate 6
Design
readiness
Gate 2
Volume
deployment
Gate 14
Concept
accepted
Gate 11
Solution
lockdown
Gate 9
System req.
definition
Gate 5
System test
readiness
Gate 1
Retirement
plan approved
Gate 8
System req.
allocated
Gate 4
Ready for
field test
Gate 0
End of life
Gate 13
Solution
accepted
Gate 3
Gate 7
Contract book Controlled
introduction
definition
Development phase. Employees get an idea from somewhere, put some meat on it,
and take it through Gate 13, where it is confronted with this question: Is this worth
pursuing?
As that idea comes out of the Business Case Development phase, it goes into
Portfolio Planning, where the main goal is to take that idea not all by itself—because
any idea by itself might be a good idea—but across the strategic portfolio view as
well. Process management planners ask, “Does this mesh with where we want to go
CASE STUDY
The M-Gates Process,
continued
33
as an organization?” If it does, the company needs to make sure it is not piling
another project into the portfolio that can’t be staffed. Gate 11 is one of the key
gates, where planners actually come back and say, “Yes, the idea fits within our
portfolio, with where we’re going as a strategy, and we can staff it.”
The Project Definition phase is where the team is staffed and then puts the
meat on the bones. Members put all the technology together, finish the marketing
requirements and, as they get down through Gate 7, come up with something called
the contract book. In that contract book is a baseline schedule for all the various
functional teams: the engineering, marketing, business, manufacturing, and distribution teams. There can be as many as twenty-five functional teams represented on one
of the projects, across all aspects of the sector. Each of those tweny-five teams that is
at Gate 7 signs onto the contract book, and each resource manager for a functional
area says, “Yes, I can support this project, with the resources I need, in this scope,
and I can deliver it on time, no questions asked. I’m in for the long haul.”
Then the project reaches the Implementation Phase, when those twenty-five or
so teams go off and do their work. They create service manuals, documentation,
software, hardware, and everything that makes a product successful.
Finally, in the Launch Phase, is the decision point in which it is determined
the company is really ready to go to market with the product. Has everything agreed
to in the contract book been done? Are all the features and all the support mechanisms there? Is CGISS ready to put the product into the marketplace and can it
sustain the product and give its customers good quality? And finally, there is the
end-of-life plan. CGISS knows that this product is only going to live in the marketplace for two years, for example, and then it will be cancelled and followed by the
next generation.
Data and decisions
behind each M-Gate
If you were a cross-functional team member, you could click down through
the operations behind each one of these M-Gates, finding all the various tasks and
deliverables, and the many pages of documents that define all the inputs, outputs,
entrance criteria, quality goals, etc. that you would follow.
Sometimes a very hard decision takes place: Should the company proceed with
this project? Kill it? Send it back? Or if teams haven’t completed all the requirements
of the gates, they go back a few gates and come back in a month or two.
Supports for
M-Gates process
The process management teams at CGISS have learned a great deal over the
past four years. The first is what’s made M-Gates successful for the organization is
the use of dedicated program managers—people who do the job forty hours a week.
They are independent and don’t report in through the engineering organization—
instead they report to the General Manager of the organization, so they can report
things as they see them and not be worried about being influenced by either the
engineering managers or the functional managers.
Winter 2003/2004
CASE STUDY
Supports for M-Gates
process, continued
34
Second, there is an executive review board that oversees the program. Very
early on, at M-Gate 11, it is established who the key stakeholders are—usually the
vice presidents from the various functional organizations such as engineering,
marketing, sales, etc. Getting senior managers involved early on in the process
ensures that they become part of the project.
M-Gate 11, one of the key parts of the program, is where everyone signs up
and allocates engineering resources, manufacturing resources, etc. Without this kind
of throttle point—the balanced portfolio view—the process can be choked later on.
Another important point is that factors change throughout a product life span.
Customers change their minds, markets change, new technologies come into play.
The process must have a mechanism for dealing with the fluidity in the world, and
so a robust change-control process is a necessity.
Lessons learned
At each of these key breakpoints at M-Gates 11, 7, and 3, CGISS personnel
step back and consider what lessons they have learned, and how they can apply those
to the next project, and into the existing project.
Common metrics and
tools help international
communication
A common language of metrics, program management tools, and risk management tools is something that CGISS process management executives would encourage everyone to use in their projects. In this particular organization at CGISS there
are twelve design centers worldwide that range from Panang, Malaysia, to Plantation, Florida. The company is worldwide, and in order to work on its projects, it
needs a common language—not just English, but the common language of program
management, schedule tools, risk charts, and metrics. What this does is allow these
project teams in various locations to spend time working on projects as opposed to
trying to interpret data and communicate.
Ensuring quality is key
Process management executives at CGISS note that it is vital to make sure a
process has mechanisms for ensuring quality. If you don’t, they say, you can make all
your dates, and you can get your product or your service out the door, but you will
still consume a tremendous number of resources post-shipment trying to fix the
situation. What this does is erode a company’s ability to put new products in the
marketplace. Customers get very upset, and employee morale goes down. Companies end up in a kind of death spiral of trying to fix things instead of putting new
products into the market.
Three quality assurance
procedures
Here are examples of three procedures CGISS has used over the years to help
assure quality. The first is called Ship Acceptance 2000. This is a checklist process
that was added to M-Gates in the year 2000. It is a very large checklist (affectionately called the “done, done list” that each functional team uses to ensure that
they’ve got all the T’s crossed, and the I’s dotted. The organization had been finding
CASE STUDY
Three quality assurance
procedures, continued
35
that an engineering team or a functional team would come to the end of a project
and say they were done, but when questioned, would admit they’d forgotten a
service manual or still had a few little things left to do. This was coined the “done,
but” stage. Ship Acceptance 2000 ensures that each of the teams is truly “done,
done.” So when you say you’re ready to go to market, absolutely everything that you
need and your customers need to be successful has been covered.
The accelerated life test is another quality assurance procedure in which
CGISS team members put products in a “shake and bake” chamber where they
change the temperature, the humidity, and so forth. In a few months they can
ascertain what the products are going to look and behave like in a few years.
The final procedure involves going into the field environments. CGISS
operatives go into customer locations and try out products with their customers.
Business results
Ten years ago, according to the company, CGISS basically doubled the production times we’d promise with regard to order fulfillment. If it promised something in 100 days, it would take the company 200. By applying all the new processes
and metrics, the company has been able to get slippage down to what it thinks is
world-class, and basically make its dates.
Schedule sharing
and hubbing in
manufacturing processes
Schedule sharing is a useful manufacturing processes that CGISS employs. It’s
an electronic mechanism in which the company connects with all its suppliers.
CGISS puts into a fifty-two-week forecast what it thinks it’s going to need, and then
its suppliers come back and tell it what they can do. Through this very secure
electronic connection CGISS can work with its suppliers now on a fifty-two-week
basis of supply vs. demand.
On the “hubbing” side, CGISS suppliers maintain a stock based on the
information they receive from schedule sharing. They can now maintain an inventory, called a hub, which is basically a warehouse that’s managed by a third party that
is contractually agreed to by CGISS and its suppliers. Hubbing allows everyone to
maintain inventory in a just-in-time environment, based upon the electronic
schedule sharing. CGISS can build things very quickly now. Based upon schedule
sharing and the hubbing, from the time an order hits our factory, it can make a
product in fewer than two days.
Customers visit staging
areas
CGISS has two large integration centers or staging facilities—one in
Schaumburg, Illinois, and one in Berlin, Germany. The company prefabricates
everything in the staging area, cuts all the cables to length, provides standard
documentation, and tests it out. Customers come into the location and do a witness
test at the center. According to CGISS, customers love this, and they love coming
into the staging facilities. Managers believe these procedures have gone a long way
toward improving customer satisfaction.
Winter 2003/2004
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36
Customers visit staging
areas, continued
Ten years ago CGISS would ship out boxes of equipment and cables, and the
field people would have to try to put all of it together. Folks at CGISS thought
they’d extend the manufacturing process into this integration area and turn it into
something that could be measured and improved, and have Six Sigma information
applied to it. The results, according to the company, have been tremendous. Cycle
time has gone down significantly, and there are fewer defects. One of the major
defects that used to occur were cables that went bad in the field. CGISS would
blame it on the hardware or the software when it was a simple connector problem.
Since then, on-time delivery has gone up dramatically over the last five years.
Value of Baldrige
assessment
One of the benefits of having the Baldrige assessment is that companies
discover areas where they can improve. The first for the process management area of
Motorola CGISS is that it can do better on some of our supplier on-time delivery in
the manufacturing processes. Better linkage is needed at some of the lower M-Gates
between the service and support people, and the portfolio planning people. And
then finally, the organization needs to refine its business processes to address the
quality of some of its outsourced vendors.
Lessons Learned
Introduction
The following are the Top 10 lessons that Motorola CGISS learned in implementing performance excellence and in pursuing the Malcolm Baldrige National
Quality Award.
Lesson #10
Organization-wide deployment. For a performance excellence process to be
truly effective, it’s critical that the entire organization be involved. You can’t relegate
it to a single organizational department. This effort and all that goes with it has to
become part of the everyday language of your team. It’s got to become the fabric of
the organization. CGISS found that the scorecard process became a very powerful
tool once it began to flow through the entire organization right to the individual.
The company continues to see the enormous power that’s generated when every
individual can see themselves and their contributions reflected in the scorecards of
their organization and how their efforts really benefit the various stakeholders.
Lesson #9
The benefits of cross-functional teamwork. At Motorola in general and at
CGISS in particular, there is a strong legacy of teamwork. This comes from the
company’s history of responding to emergency-related mission-critical communications needs in times of crisis. Regardless of the organizational structure that’s used in
the specific business, cross-functional teamwork is essential in identifying and
resolving performance issues and roadblocks. Managing the challenges that fall in
those white spaces between functional or matrix groups is the key to optimum
CASE STUDY
37
Lesson #9, continued
performance. The performance excellence framework itself facilitates this collaboration. As you look at how you collect information and how you analyze and use that
information, the various groups and functions are forced to work together to
understand the why as well as the how of the key processes.
Lesson #8
Consistent communications and information. CGISS took great pains to
establish very clear communication with all of its employees and associates in
preparing for the site visit. It’s very important that every employee understands the
business and their role in it, why that role is critical, and how it will benefit the
various stakeholders. You must get across very clearly that you’re trying to portray
what you actually do in your day-to-day business.
During the site visit, an examiner visiting one of the CGISS distribution
centers stopped at random and asked an employee on the packing line what she
thought about the process. The fact that this employee understood what the company was doing, why it was doing it, and was able to reply with intensity, and with
passion, about what her role was, was one of the highlights of the entire examination, according to company officials. The last important takeaway in this lesson is
this: Before you can communicate to an examination team what you do, you must
first be able to explain it to your own people in succinct, crisp terms.
Lesson #7
Learning and leveraging best practices. CGISS considered this entire process
from beginning to end as a huge learning opportunity across the organization. If
your company is similar to it, you have very dedicated, talented people focused
deeply in their own specific areas of expertise. The performance excellence framework forces them to come out of these silos and facilitates learning between the
different teams. It enables a team to understand what other teams within the same
organization do, and what their best practices are. In their preparations, CGISS
personnel learned some new and insightful things about how to be even better. For
example, the requirement to use external benchmarking to validate that one’s results
are actually best-in-class was a reminder to continue to look outward. And taking a
structured view of all the processes as they’re implemented and developing additional
plans to improve them, often in real time, allows significant value added.
Lesson #6
Focus on what you actually do. There’s a great temptation prior to the examination to “study for the test,” so to speak. This is a key risk. In the preparation
process, you’ll undoubtedly come up with new ideas or better approaches in the
weeks running up to the visit. These examiners are very intelligent, very skilled, very
capable, and they’re excellent at testing the consistency of what you say. Furthermore, the real value of this kind of an assessment is in the feedback and improvement suggestions. This value can only be realized if the feedback is based on your
actual operational processes, not what you’d like the examiners to think they are.
Winter 2003/2004
CASE STUDY
38
Lesson #5
Focusing on linkages. You may have noted some common threads here in
Lessons Learned. In fact, you can’t effectively leverage the benefits of performance
excellence by merely staying within the categories. Categories are inextricably linked
to each other. For example, information and analysis coupled with process management can be seen as an essential underpinning to strategy, to human resources focus,
or to customer and market focus. These linkages are the additional value-added
elements in the journey.
Lesson #4
The importance of demonstrated results. When the journey started in 1999,
the company considered itself pretty good at what it did. It had processes covering
most of its functional areas. CGISS’s performance exceeded some of its competitors.
The main difference between its initial assessment and the final site visit was that in
those three years those processes had become fully institutionalized and were yielding
best-in-class business results. It’s not sufficient to have best-in-class processes without
results, and it’s not sufficient just to have excellent results without the consistency
that a best-in-class process framework provides.
Lesson #3
Pride. This is the human element. The very essence of being the recipient of
the Malcolm Baldrige National Quality Award is that of a shared victory, and this is
shared by every individual in the organization. There’s tremendous value inherent in
this—the great amount of work that it involves gives one a kind of esprit de corps
that results in a great deal of pride across the organization.
Lesson #2
Leadership commitment. The captain of the ship must clearly establish the
need, set the direction, and align the compass for this voyage of continuous improvement. He or she must demonstrate a strong, highly visible commitment to the
process that is consistently reinforced by the entire leadership team.
In a very busy organization, any kind of continuous improvement process runs
the risk of being relegated as important, yet not urgent, and thus receives second
priority. CGISS managed to find a way not to allow this to happen.
Lesson #1
Continuous dissatisfaction and passion for continuous improvement. According to company executives, the biggest asset that the CGISS organization has is that
it maintains, and almost cultivates, a constructive dissatisfaction with its current
state of performance, and that this drives employees to have a passion for continuous
improvement. There is energy in wherever you are, making what you are doing seem
not good enough. CGISS has established benchmark performances both within the
company and across the industry in most major quality and operational metrics. Yet
its strongest asset is the fact that it does not consider this performance acceptable.
The company view is that receiving the Baldrige award has raised the bar in terms of
the expectations of its customers and other stakeholders.
CASE STUDY
Why performance
excellence?
39
Journey to Performance Excellence
Why performance excellence? It seems like a lot of hard work, and yes, it is.
Today’s business environment has introduced many challenges. Businesses must
ensure that people in the organization understand where they are going and what
they have to do. It is an enormous task to ensure that everybody has the right
information, at the right time, at the right place, to make the best choices to successfully compete in today’s global market.
Here are some data that Motorola executives came across in external
benchmarking of some large companies outside Motorola. Eighty percent of employees could not find information when they needed it, or could not translate that
information into what they needed in the course of their work. In parallel with that,
data suggests that probably, conservatively, every 1100 days there’s twice as much
information coming at these employees. So there are challenges like the need for
speed in quality decision-making, and there are challenges like change.
In order to meet these daunting challenges, CGISS has to take a systems
approach to its business. Pursuing performance excellence challenges the company to
look at the business as a whole—the linkages and the interdependencies. This puts
in place a foundation for integrating key business requirements within a resultsorientated framework. It demands relentless commitment to continuous improvement and value creation.
Another reason for pursuing performance excellence is the ability to learn from
others. The Baldrige Criteria are based on beliefs and behaviors found in highperforming businesses, updated by the best practices and the best experiences of
leading-edge companies on an ongoing basis.
Focus on legal
and ethical behavior
One example of these best practices is the increased focus in 2003 on organization governance and leadership responsibilities for legal and ethical behavior.
Performance excellence also enables growth and prosperity, not just of the business,
but also organizations and individuals.
Starting performance
excellence
Where does it all start? It starts with sustained, visible leadership. CGISS
wanted to be the best it could be. When CGISS leaders agreed to support and apply
the performance excellence framework to the business in early 1999, they never
wavered on that commitment.
So how did CGISS get the performance excellence framework in place?
Consistent with the performance excellence scoring criteria, it used approach,
deployment, and results as guides to track our progress. Together with the senior
team, the organization created an architectural blueprint and a five-year roadmap.
The baseline analysis identified the gaps, teams were assigned, the company committed to a yearly assessment by an external party, and the cycle has been repeated each
year since 1999.
Winter 2003/2004
CASE STUDY
Value of Baldrige
application
40
CGISS applied for the Baldrige award because the company saw both internal
and external value in it. With regard to the internal proposition, it felt that it was
important that CGISS compared itself to the best in class. Company executives
believed that objective feedback from external examiners was an important validation of direction.
The external value proposition concerned CGISS’s business of developing
mission-critical communication systems and information solutions. The award
recognizes the company as a leader in its industry, and that strengthens its brand
image with customers and positions it in front of the competition. Being recognized
as an industry leader also brings with it a responsibility to continue to raise the
stakes and set higher standards in the industry. CGISS leaders think being recognized by the Baldrige awards has accomplished this for the company.
Key Results
Customer focus success
The first key result is in the customer focus area. CGISS has thousands of
customers worldwide. It has achieved very high levels of customer satisfaction over
the years. The challenge was to retain the very high levels and at the same time
relentlessly pursue any issues causing dissatisfaction, while also continuing to
evaluate and improve the processes the company used to gather that information,
and improve its quality. One example of this, due to customers’ inputs, was that
CGISS went to an electronic process in 2000. Not only did the company see a big
improvement in participation, and better data, but the cost of doing the surveys
went down dramatically.
One of the areas customers identified as a priority was to resolve technical and
nontechnical issues quickly. CGISS has made substantial improvements in overall
cycle time. Its state-of-the-art global customer care system is designed to capture all
customer issues, and not only to improve responsiveness, but also eliminate systemic
issues. These issues can range from simple administrative questions not solved at
point of contact to complex system enhancement requests.
Financial results
In financial results, CGISS measures itself against three competitive baskets:
Baldrige winners, the telecommunications industry, and the two-way radio and
systems industry. Despite the current challenging economic and difficult geopolitical
environment, CGISS continues to demonstrate strong financial results and to
outperform competitors. As an example, it has maintained its strong growth-margin
performance relative to all its competitive baskets. It has generated substantial cash
flow for the corporation and again outperformed its competition.
Retaining top talent
One of the company’s business imperatives is to retain talented people. The
effort and focus on leadership supply and development has resulted in 100%
retention of top talent. CGISS regularly surveys its people, and one of the key
CASE STUDY
Retaining top talent,
continued
Community outreach
41
opportunities identified for improvement was a clarity of goals, direction, and how
individual goals link to business strategies. By using the performance excellence
framework and the scorecard, CGISS was able to really drive improvement in these
areas. The process was demonstrated: There is a strong connection between people
having a clear vision and feeling better about where they work.
September 11 was a terrifying event. For the team at CGISS, the terror quickly
translated into the realization that several of its key customers were in the middle of
chaos and destruction. Through the combination of its people, partners, processes,
and solutions, CGISS was able to predict what its customers would need even before
they had a chance to make a request. It is in times like these that performance
excellence and teamwork shine.
With regard to education, CGISS has a wide reach. Establishing forty primary
schools in rural China, and increasing engineering graduates in Israel are just two of
its many projects.
The journey to excellence
continues
The journey to performance excellence is never-ending, acknowledge CGISS’s
leaders. Feedback from the Baldrige examiners’ site visit has already been incorporated into the company’s short- and long-term plans.
CGISS realizes that by receiving the Malcolm Baldrige award, it has raised the
expectations of its stakeholders, and in particular its customers. The need for
innovation, agility, and continuous improvement is even greater than before. Robert
Quinn in his book Deep Change: Discovering the Leader Within, said, “Excellence is a
form of deviance.” To achieve excellence is to deviate from the norm. For that
reason, say its leaders, CGISS will continue its journey to deviate from the norm, to
pursue performance excellence.
Winter 2003/2004
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call 800-643-4316 or 603-893-1944 or visit www.goalqpc.com
CASE STUDY
Clarke American Checks, Inc.: 2001 Malcolm Baldrige National Quality Award
43
Clarke American Checks, Inc.
2001 Malcolm Baldrige National Quality Award
Author
Cathy Kingery, Editor/Writer, GOAL/QPC
Editor’s note
This article was developed from a presentation made at the 2002 Quest for Excellence
XIV conference, presented by AQP, ASQ, and ASTD. Some of the data has been updated
to reflect current business conditions.
Organizational Profile and Leadership
Who Clarke is
Founded in 1874, San Antonio–based Clarke American provides checks and checkrelated products, a customer contact center, and direct-response marketing services
to over 4,000 financial-institution partners. Its annual revenue is $470 million; the
company employs 3,300 associates.
It serves a national marketplace with twelve manufacturing plants and five
customer-contact centers. Each year, it produces over fifty million check orders and
answers more than fifteen million calls from its partners and customers. Its plants
and contact centers are linked in a real-time environment to provide outstanding
service to its partners. It is able to serve a mature check-printing industry as well as
an ever-consolidating financial-institution marketplace by bringing them innovation
and quality-driven solutions that are aligned with their strategic needs.
Its investments in digital printing, call-center technology, and direct-response
marketing have enabled it to help its partners strengthen their customer relationships. Its products and accessories continue to evolve to meet the changing needs of
its customers, its financial-institution partners, and the U.S. payment industry.
Clarke’s vision, mission,
and core values
Clarke’s vision is shown in Figure 1 below. Its key leadership team (KLT) is
responsible for ensuring that all associates understand the vision and how Clarke will
achieve it. KLT members do this by visiting all company locations annually and
updating every associate on Clarke’s current progress toward achieving this vision.
First in Service® is the way Clarke employees work together to run and change
the company. This business strategy, based on the Baldrige model, is the key to
achieving success and realizing the vision. The
FIS tools, methodology, and systematic process
Figure 1. Clarke
give Clarke the discipline to remain fact-based,
American’s Vision.
aligned, and customer focused. Through the FIS
To become a world-class
strategy, its associates are empowered to work
customer-managementsolutions company
together to grow and improve the business.
Clarke’s mission statement reads as
follows: “We will be recognized as a ‘First in
Service’ company by our customers, partners,
suppliers, and shareholders as a result of our
© 2004 by GOAL/QPC
providing innovative,
quality-driven solutions
that delight our partners
and customers.
Winter 2003/2004
CASE STUDY
44
Clarke’s vision, mission,
and core values, continued
commitment to superior service and quality performance.” The company’s core
values—integrity, mutual respect, knowledge sharing, measurement, recognition,
responsiveness, teamwork, maintaining a quality workplace, and putting the customer first—define Clarke American’s culture and behavior.
A crisis resulted in
a defining moment
Clarke American’s quality journey had its most defining moment between
1993 and 1994. At that time a crisis occurred, which was characterized by several
events. First, the banking industry began a rapid consolidation, which gave it
significant buying power. Second, the check industry consolidated, going from over
fifty check printers to just a handful. Third, industry products and services were not
significantly different, so price became the differentiator. For Clarke, this meant a
$43 million price decline in just eighteen months. Fourth, customers began to have
access to convenient, lower-cost checking products through direct mail.
Finally, Clarke’s twenty-year president and CEO retired, and a new person
stepped into the role, putting Clarke under new leadership. The new CEO now had
to lead a dramatic change in the culture that he had spent his entire career creating.
Renewing its vows
This was by far the largest and most serious leadership challenge in Clarke’s
history. The outlook for the check was grim. As one Clarke spokesperson stated,
“during times like this, it is tempting to fall out of love with your core business.”
The company’s response was to renew its vow to the check and to its quality
commitment to FIS. It differentiated itself by taking FIS to a new level. To succeed,
the company knew that the FIS philosophy had to become an integrated, quality
business strategy. Clarke American adopted the Baldrige model and benchmarked
twelve award recipients and two additional companies to learn how they dealt with
similar issues. Clarke twice applied for the Baldrige award and worked hard to close
the gaps that were cited in the feedback reports.
A new customer-focused
business model
Up to that time, Clarke had talked about focusing on customers, but it was
focused only on the financial institutions that it served, not the end customer. To
achieve its goals and add value to its partnerships, it needed to align itself with its
financial institutions so it could become their business partner. Clarke needed to
understand their strategic priorities and redesign its business model to help these
financial institutions deepen their customer relationships.
It also needed to demonstrate a passion for the end customer. To this end, it
conducted a comprehensive strategic study to ensure it understood the direction of
the financial-institution industry and its customers’ needs. Then it introduced
several initiatives to solicit feedback, establish joint goals, and measure its progress.
Also, this internally focused company had to transform into a customerfocused one. It began to use new tools and methodologies, and it trained its line
managers to be facilitators, assessors, and trainers to ensure their buy-in and understanding. They then cascaded this training to the rest of the organization through
their line management to move Clarke to a new customer-focused business model.
CASE STUDY
An expanded view
brought positive results
45
Clarke created divisions within itself to serve the unique needs of its markets.
It also organized its processes to deliver products and services around the customers’
needs and, more important, what its partners and customers valued.
This change to being a customer-focused organization has enabled Clarke to
make successful strategic investments, valued at over $100 million, to grow its
partnerships. The result is dynamic new products and services that drive significant,
profitable growth. Today Clarke continues to grow its business, based on what it
calls a “Triple Win” strategy: Its partners win, its customers win, and Clarke wins.
A dual perspective
The key to the company’s success was having the discipline to achieve both
continuous improvement and breakthrough improvement. Clarke defines continuous improvement as “running the business,” with a target of 3 percent to 5 percent
improvement. It defines breakthrough improvement as “changing the business,”
with a minimum target of 20 percent improvement. (More on this later.)
Clarke’s winning
performance strategy
Clarke adheres to a simple and logical winning strategy that speaks to the
passionate associates who work there every day. The strategy states that motivated
associates deliver high-quality products and services, thus satisfying and delighting
Clarke’s partners and customers, which in turn provides more business and allows
Clarke to give even more opportunities to its associates. The company has created
650 jobs and promoted over 1,500 associates over the past five years.
Clarke American takes very seriously the importance of its associates and the
training necessary to keep them motivated and engaged in the business so they can
develop themselves for advancement opportunities. The company believes it must
compete on service, cost, and quality, and it honors its promises to its shareholders
by delivering expected returns for its capital investments. Clarke keeps a hand on
the pulse of its business by performing annual internal business-excellence assessments that correspond to the Baldrige Criteria. Internal teams led by company
officers visit different company sites, perform self-assessments, and provide feedback
to the local management team in each location.
Quality pays
Clarke American’s processes continually improve with regard to security,
privacy, and environmental responsibility, giving the company’s partners and customers confidence in it and in the integrity of its products and services. The results
of Clarke’s quality business strategy can be summed up in three words: sustainable,
profitable growth. The company has grown both its revenue and its operating profit
in a flat-to-declining market. Quality really pays.
Strategic Planning
A three-part framework
As the company’s Baldrige application summary states, “One of Clarke American’s
greatest strengths is our ability to consistently develop a sound, long-term strategy
and create a competitive advantage by converting our strategic intents into valuable
action.” Clarke’s strategic-planning process aligns the entire organization and all
Winter 2003/2004
CASE STUDY
A three-part framework,
continued
46
stakeholders toward achieving Clarke American’s goals and objectives. The
company’s strategic-planning methodology includes a framework that consists of
a vision, a three-year strategic plan, and a one-year deployment activity.
Clarke’s strategic vision
By looking at opportunities, business-design models, financial models for
profitability, and major implementation milestones, along with the typical supplyand-demand analysis and critical business factors, it can develop a high-level, longterm vision for its business. This strategic vision is critical for it to know where it
wants to go and to be focused on known and emerging partner and customer needs.
The three-year strategic
plan
Clarke derives the key components of its three-year business plan from this
strategic vision. The three-year plan involves a four-step process. First, the company
determines whether the strategic vision is still valid and updates it if necessary.
Second, it identifies objectives, such as the position in the marketplace or the performance level it would like to achieve. Third, it develops a strategy around these
objectives. Finally, it agrees on the key projects and action plans required to achieve
these objectives, matching available resources against the proposed project list.
Typically there is far more ambition to do projects than there are resources.
Therefore, Clarke uses a priority matrix, which includes capital, technology, and
personnel, to help it determine which projects are necessary and prioritize them.
The Balanced Business
Plan and balanced
scorecard
As mentioned earlier, Clarke American makes a strong distinction between
“changing the business” and “running the business.” The Balanced Business Plan is
the tool it uses to specify its “change the business” goals, measurements, and targets.
It uses this tool at the company level and in each of its divisions to look for breakthrough improvements. By doing this, the company gains three benefits: linkage of
strategy to action, an improvement focus for each market segment, and a balanced
perspective in four key areas—Associate/Team Development, Process/Supplier
Management, Partner/Customer Value, and Shareholder/Community Value.
These four key areas correspond to the four standard quadrants of a balanced
scorecard. In fact, the measures from the BBP become the inputs for Clarke’s
balanced scorecard, which helps it throughout the year to determine its progress and
how it is moving toward achieving its goals. Clarke American’s BBP and balanced
scorecard are updated annually as part of its goal-deployment process.
Goals and measures are developed in each of four key areas of both the BBP
and the accompanying balanced scorecard. For example, the Associate/Team Development quadrant might include retention goals measured for associates who are in
their first two years of employment (the period that shows the greatest turnover).
The Process/Supplier Management quadrant might contain goals to reduce waste
that can be measured as a reduction in errors, cost, and time. For Partner/Customer
Value, Clarke might focus on growing the business through partnership development as measured by its partnership scorecards. Finally, Shareholder/Community
CASE STUDY
47
The Balanced Business
Plan and balanced
scorecard, continued
Value might measure what Clarke is giving back to its communities. In addition to
the common financial measures that the company normally associates with shareholders, it measures attributes such as associate participation in volunteer programs
through organizations such as the United Way and Junior Achievement.
Goal deployment ensures
plan execution
Clarke uses goal deployment to ensure the execution of its BBP. This gives it
a competitive edge because its goal deployment (1) focuses on the important issues,
(2) provides a framework to guide its activities, (3) aligns its units and teams to
avoid a loss of energy, (4) involves the people who make it happen (plans do not
execute themselves), (5) removes ambiguity in its commitment to goals (goals need
to be easy to understand and explain), (6) focuses attention on achieving what it
promises, and (7) mobilizes and energizes the organization to deliver results.
Developing a good strategy is not uncommon; the key is executing that
strategy. Critical to the execution of any strategy is follow-through, which is one
area where Clarke American truly excels.
Developing and
deploying a strategy
The discipline Clarke shows in the development and deployment of its strategy
enables it to achieve outstanding results. Developing measures and setting targets are
the keys to understanding and communicating whether the organization is achieving
its goals. Measurements must show a direct linkage to the company strategy. The
strategy plan and balanced scorecard should be virtually interchangeable.
Developing Clarke’s strategy is a process. The BBP drives the “change the
business” metrics, which are listed in the balanced scorecard. The key measures
from this scorecard are then delivered through the focus and execution of key
company projects. These projects must outline how the measures will be achieved
and the names of the people who are accountable.
A catchball process
determines priorities
Goal deployment is a negotiated goal-setting process that aligns everyone in
the organization to Clarke American’s goals and objectives. If the goals are set
properly by the company leaders, the negotiations focus on the “how” and not the
“what.” By this point in Clarke’s goal-deployment process, the KLT has firmly
established the “what” in the development process.
Effective deployment requires leaders to agree, through a catchball process,
how priorities will be met. Catchball is a process of continuously aligning an organization to its goals through specific actions and discussions. This process often
requires taking the “like-to-haves” off the list and sticking with the “must-haves.”
For example, Clarke’s executive team might come up with a goal of reducing
errors. No debate about whether this goal should be undertaken is allowed in the
organization. The executive team might, however, create a dedicated team to discuss
how to achieve this goal. That team might come up with a technology solution that
takes an error-prone step out of a process. Part of the catchball process that follows
might be finding a way to pay for that technology by taking off the list other
projects to which Clarke American previously had budgeted and dedicated resources.
Winter 2003/2004
CASE STUDY
The final step: The
Business Excellence
Agreement
48
The final step of goal deployment is to get everyone in the company
aligned with the goals. For this, Clarke American uses a tool called the Business
Excellence Agreement (BEA), which every associate completes with his/her team
leader during the annual performance evaluation.
This tangible agreement specifically ties the associate’s actions to the company’s
goals and measures. It serves as a driver for each associate’s personal development
plan and is used to ensure that he/she obtains any needed education and skills
training. Developing the agreement together with the team leader helps each
associate understand how the things he/she does feed up to the company-level goals.
Partner focus
Clarke’s business partners typically sign multiyear contracts that regularly come
up for renewal. By structuring itself into divisions built around the types of partners
that each serves (national banking organizations, community banks, or credit
unions), Clarke can truly focus on its partners and deliver high quality and value.
An annual deployment
cycle
The company’s deployment cycle involves a discrete order: think, plan, deliver,
and review. It is actually an eighteen-month cycle in which activities that were
started during one year are not fully completed until the final review, which takes
place roughly eighteen months later. This creates an overlap. But because Clarke
begins another cycle of thinking and planning twelve months after the previous one,
the company refers to the process as an annual cycle.
Using a defined think-plan-deliver-review sequence ensures that the company
gets linkage among its processes, from development to implementation. For example, Clarke does most of its formal benchmarking in the second quarter of the
year, during the think portion of the cycle. Benchmarking done at a different time
of year would disrupt the cycle and the linkage.
Proper deployment
is key
Properly deployed, strategic development delivers great results. Between 1995
and 2000, Clarke American’s revenue grew significantly faster than that of the checkprinting industry as a whole. Its profit-growth rate showed steady and sustained
increases during this period. In 2001, its accounts receivable for days sales outstanding (i.e., how fast it collects money from its sales) was less than thirteen days between the sale and the date that it collected the money from that sale, a world-class
benchmark. And the company’s market share between 1996 and 2001 increased
from 16 percent to 25 percent. Clarke attributes this success to (1) its ability to serve
the needs of the marketplace in an FIS manner, (2) excellent process management,
(3) a passion for its partners, and (4) a focus on the customer.
Clarke’s in-place processes, action plans, clarity of strategic direction, and focus
on the vital few goals all guide the way the company operates. Constant communication with associates and partners and among employees ensures alignment of the
organization. In addition, the constant monitoring and measurement of progress
against the goals results in an ability to deliver the financial commitments Clarke
CASE STUDY
Proper deployment
is key, continued
49
makes to its stakeholders. Using the Baldrige process to develop and deploy this
disciplined focus on strategic planning, coupled with actionable follow-through, has
enabled Clarke American to increase the value it delivers to all its stakeholders.
Customer and Market Focus
A three-part vision
Since its inception in 1874, Clarke American has provided many different products
and services. Checks have always been important for Clarke and are still an important part of what it does today. But as it looks to the future, it understands that its
financial-institution partners and its customers—the people who actually have
checking accounts—have more sophisticated needs today than in the past.
Clarke views its vision in three parts. First, it wants to be recognized as a
world-class organization. As a recipient of the Baldrige Award, it believes it has
reached a huge milestone in that journey, which it looks forward to continuing.
Second, it wants to provide customer-management solutions (CMS). Simply
put, these solutions help the company’s financial-institution partners acquire and
retain customers. Clarke’s acquisition of new customers has slowed in recent years;
therefore, the growth and retention of its existing customers is crucial.
Helping its partners retain their existing customers allows Clarke American
to delve into new products and services. For example, in the demand deposit
account (DDA) relationship, the printed check is one of the first products a DDA
user sees when he/she opens a new account with the bank. But these users need a
lot of other products and services as well, such as certificates of deposit (CDs),
equity loans, and investment services. As Clarke works to provide CMS, it moves
into services that support its financial-institution partners, once again helping
them retain and grow their customer base.
Third, the company wants to provide innovative, quality-driven solutions that
delight its partners and customers. To create value, it has to align its goals with
those of its partners and have passion for their customers.
Building and nurturing partnerships leads to what Clarke calls the Triple Win,
which means that its customers win, its partners win, and Clarke wins. The Triple
Win also describes the value the company brings to its partnerships by increasing
revenue, improving efficiency and customer satisfaction, and retaining its partners.
Today Clarke bases its decisions and actions on its ability to deliver the Triple Win.
Partner relationships
are critical
As mentioned above, prior to the 1990s, Clarke American was a traditional
company with traditional capabilities based on what its partners needed: checks
printed correctly and on time. Because that was the only thing its customers looked
to Clarke to provide, that was all it provided. But as its partners started to need
additional services, it changed its capabilities so it could deliver CMS. The check
business is an approximately $2 billion market that is not growing. The CMS
market, on the other hand, is approximately $14 billion, and it is definitely growing.
Clarke has learned that, to improve as an organization, it must use an approach
Winter 2003/2004
CASE STUDY
Partner relationships
are critical, continued
50
that supports its partners. Partner retention is critical. The way Clarke is going to
grow is by growing its current partners by bringing real value to them. If they are
successful, Clarke is successful. Its platform for growth is to strengthen the relationships that its financial-institution partners have with their customers. By doing this,
it can sell valuable solutions to these partners and achieve profitable growth.
To accelerate its achievement around CMS, Clarke expanded its partnerrelationship model. After it studied the characteristics of relationships, it looked at
the degree of alignment it had with its partners. Providing solutions other than
checks required serious integration with its partners’ platforms and customer
information. In 1993, it began to evaluate its business relationships by segmenting
its partners. In the mid-1990s, it also looked to build strategic partnerships. By
1996, it had begun to understand the characteristics of different partnerships.
Three groups of partners
Clarke American’s partners fall into three groups. The first, check partners, are
transaction-based. These institutions are happy for Clarke to provide high-quality
check packages delivered on time and accurately to their customers.
The second group is customer-focused partners. They might be interested in
allowing Clarke to help them improve the level of service that they provide to their
customers (or members, in the case of credit unions) when they visit their branches.
Clarke helps those partners offload the expense, and perhaps the inefficiency, of
serving their customers during peak hours. Some need assistance with their call
center. They have long hold times, and Clarke helps by offloading some of those
phone calls concerning checks and check-related products.
The third group, solution-based partners, are those that want Clarke American
to provide an even higher level of service.
When Clarke first talks to a prospective partner, the first conversation is about
the partner’s needs. That helps Clarke to put the partner in one of these categories
and understand what their relationship might be as it begins working with them.
By understanding all its partners’ priorities, Clarke American is better able to
focus its CMS on the right partners. It works with those partners that aren’t ready
for it to support them in that way and tries to solve the issues they have. Clarke
hopes to be able to bring the value of CMS to them in the future if they need it.
Long-term relationships
lead to the “Four X”
Clarke American values long-term relationships. To develop and understand
its relationships with its partners, it had to evolve as an organization. It went from
being a reaction-oriented partnership—one in which it was not aligned with its
partners—to using more customer-focused solutions.
It now works with customers in joint planning sessions to get more aligned
with them and then move on to joint goal setting. During these meetings, joint goals
are reviewed to make sure everyone is on target for what they want to accomplish.
Staying closely aligned to customers enables Clarke to understand what they need
and provide products that help Clarke grow. It gets input from its customers and
CASE STUDY
Long-term relationships
lead to the “Four X,”
continued
51
partners constantly; it meets with its partners at daily, weekly, and monthly intervals.
As its capabilities evolved over the years, Clarke listened to its partners and
customers to determine how it could better help its partners serve their customers
better. The company also looked at what its current capabilities were and how it
could expand its products, programs, and services to further help its partners.
By doing that, Clarke American was able to attain what it affectionately calls
the “Four X”: The company was able to quadruple its revenue with some of its
partners by providing additional products and services.
The VOC process
One of Clarke’s key processes is the voice of the customer (VOC) process.
Despite its name, it is actually a way of capturing comments from partners and
customers alike. This closed-loop process has evolved over time to provide Clarke
with real-time information that enables it to take real-time action.
When Clarke receives a comment from a partner or a customer, that information is entered into the database. At the same time, some decisions are made. First,
is action required? In the case of a comment, after it gets keyed into the database, it
is moved forward to the appropriate process owner, who addresses any specific
complaints or initiates a process improvement.
If action is required, the company determines whether it can immediately
resolve the problem. Over 99 percent of the time it does. One-call resolution is
important. If the problem is resolved, that information is keyed into the database.
For the less than one percent of comments for which the company is not able
to resolve a problem immediately, a Clarke American Response Exercise (CARE)
form is generated. The information on that form is then sent to the appropriate
point of contact to resolve the problem.
In general, Clarke tries to resolve all issues within twenty-four hours, but its
customers define that cycle time. It might be the next day, but it might be within the
hour if that’s what the customer prefers. Clarke ensures that it follows up accordingly, gets back to the customer or partner, and then documents the resolution in the
database. All that information is provided to associates on a weekly basis.
The goal-deployment
process
During the goal-deployment process, the KLT meets and establishes what
Clarke wants to do, where it believes its capabilities lie, its strengths, and where it
might best impact its primary market—financial institutions, banks, and credit
unions nationwide. In 2001, the company identified twenty-eight major projects.
Many of those came from the VOC or from partner recommendations.
Making these decisions is the most difficult challenge Clarke faces on an
annual basis. The company is judicious about evaluating what its opportunities are.
Customer and partner
satisfaction
In keeping with the Triple Win concept, Clarke trends partner and customer
satisfaction. It measures overall satisfaction, as well as satisfaction by product,
program, and service. This way, as changes are made within the organization, Clarke
Winter 2003/2004
CASE STUDY
Customer and partner
satisfaction, continued
52
is able to see whether it has an impact on its partners and customers.
Clarke American knows from its research and listening posts that timely
product delivery is a priority for its customers and partners, and the company
continues to improve its product cycle time. One of its key measures in this area is
twenty-four-hour service, which is defined as orders produced and shipped within
twenty-four hours. Another key measure is “on-time service,” which Clarke defines
as “in today and out tomorrow.” It has consistently improved its processes to reduce
its cycle time and improve its performance in these two key measures. The company
also performs well against its benchmarks in these areas.
By continuing to identify and meet or exceed its partners’ requirements,
Clarke is able to retain consistently high satisfaction levels. In partner satisfaction,
it trends at or above 96 percent. In 2000 it began to focus on its partner-loyalty
ratings because partner satisfaction had basically capped. The loyalty ratings
provided a new measure to drive the company’s incremental step performance.
By benchmarking another Baldrige winner, Clarke learned that a company’s
personnel do what they are given incentive to do. Therefore, a big part of the bonus
given to each of Clarke’s associates is based on customer and partner satisfaction.
Six key practices
In sum, six key practices have enabled Clarke American’s success in creating
passion for its customers and partners. These practices are (1) organization of the
company’s customer-centric processes, (2) segmentation based on customer and
partner type (and further evolving that segmentation where it makes sense), (3)
identifying and enforcing a disciplined partner-selectivity process, (4) developing
solutions-based partnerships to create a Triple Win, (5) using a comprehensive VOC
process to drive Clarke’s business decisions, and (6) tying associate performance
reviews and compensation to customer satisfaction.
Information and Analysis
An understandable,
systematic approach
Clarke strongly believes that a systematic approach for measuring business performance that everyone in the organization understands is required for any organization to continually realize its goals. Clarke’s performance-measurement system
outlines how it selects its measures and deploys them throughout the organization.
This system drives what measures and information Clarke selects, the analyses
it performs, and the corresponding actions it takes. It is the result of numerous
improvement cycles. The company reviews its processes every year and makes any
changes that it believes are necessary to improve this system.
Measurement is a core
value
Measurement is one of Clarke’s core values. It links closely with the company’s
other core values, which include knowledge sharing, integrity, and mutual respect.
Working together, employees implement process improvements across Clarke’s
nationwide network. Clarke’s manufacturing processes are standardized so it can
move quickly to implement process improvements, which are documented and
CASE STUDY
Measurement is a core
value, continued
53
communicated in various ways, including voice mail and Lotus Notes.
The quality of every measure or metric Clarke uses is important. Equally
important is keeping the number of measures reasonable. It’s essential to focus on
the vital few areas about which all employees can do something. Clarke uses a vital
few metrics to evaluate its daily operations in all areas of its business, its overall
organizational performance, and its partner and customer requirements. It tries to
limit the number of “change the business” metrics to no more than twelve, and the
number of “run the business” KPIs to thirty or less, at any one time.
Measurement must contribute to actionable improvement. Measurement
for measurement’s sake does no good. If you do not plan to do anything with your
measures, the energy and expertise you use to gather the information would be
better utilized in other areas to improve processes and increase customer satisfaction.
Separate focuses and
metrics
Clarke has separate focuses and separate metrics for “change the business” and
“run the business.” Its goal-deployment process and balanced scorecard focus on
changing the business, and its key performance indicators (KPIs) focus on running
the business. As mentioned earlier, the “change the business” initiatives, which
Clarke selects on an annual basis, are ones where the company believes breakthrough
(i.e., 20 percent or better) improvement is needed for the company to continue to
succeed. Clarke’s senior leadership spends 70 percent to 80 percent of their time on
these types of activities. The KLT is in charge of deploying these initiatives.
The BBP, which is communicated to every associate, defines the “change the
business” objectives. Every associate has a BEA that specifies his/her individual
objectives that contribute to the overall company goals.
The “run the business” activities are everyday operational activities that Clarke
must continually improve to keep its customers, partners, associates, and other
stakeholders happy. It uses defined KPIs to measure these activities, and the goals in
these areas represent incremental-step improvements in all processes. The “run the
business” activities provide the funding for the “change the business” initiatives.
Clarke strives to achieve continuous improvements in “run the business”
activities that amount to 3 percent to 5 percent every year. This pays for the annual
merit increases awarded to associates based on their individual performance.
Differentiating the two
types of initiatives
“Change the business” and “run the business” perspectives are viewed concurrently, but each has a different set of measures to keep Clarke’s performance-measurement system current with all its business needs and directions.
How does Clarke differentiate between “change the business” and “run the
business” initiatives? Consider the way it handles technological developments for its
manufacturing processes. When it develops new work processes, procedures, or
equipment, its activities during this phase are “change the business” activities.
Once Clarke has completely developed those new processes, procedures, or
equipment, it then documents all necessary processes and moves any new
Winter 2003/2004
CASE STUDY
Differentiating the two
types of initiatives,
continued
All proposed metrics are
evaluated
54
equipment into production. Then the new equipment, processes, and/or procedures
move to “run the business” status, and the company starts applying the appropriate
metrics for running its day-to-day business.
To increase the quality of the company’s metrics, leadership evaluates each
proposed metric for certain attributes. It must pass this test before it is selected as
either a “change the business” or a “run the business” metric.
If a metric is required by shareholders or by statute, it is automatically selected
as a KPI. If not, Clarke first asks whether the indicator is actionable; that is,
is it going to drive action, or is it one of those measures for measurement’s sake?
If it is actionable, Clarke asks whether it supports BBP (i.e., breakthrough)
performance. If it does, it becomes a candidate for the BBP and balanced scorecard.
If it doesn’t support breakthrough performance but does support the business and is
critical to Clarke’s everyday processes, it becomes a candidate for a KPI.
Each metric, for both “change the business” and “run the business,” is
assigned an owner who is responsible for meeting the goal and reporting the results
at a predetermined frequency. More frequent reviews are considered better if the
data is reliable. The owner of the metric is also responsible for defining the metric
and communicating the method of calculation.
Leading and lagging
indicators
The KLT is comprised of Clarke American’s CEO, chief operating officer, and
all process champions from every division. This team reviews all key metrics for
continued relevancy and integrity during the company’s annual goal-deployment
process, which is a part of its strategic-planning process. These key metrics include
all “change the business” metrics on the BBP as well as all KPIs.
Clarke establishes new targets to increase performance levels and implement
process improvements. The metrics it uses are reviewed for balance between leading
and lagging indicators for both “change the business” and “run the business.”
The use of both leading and lagging indicators provides the company with the
continual ability to test and understand the correlation among the various metrics
that affect its business. Clarke makes adjustments during every cycle of improvement
to reflect any new learnings and to monitor newly discovered correlations that are
supported by the company’s fact-based measurements.
FIS meetings
Monthly FIS meetings are held by every process and division in the organization. Because all associates see these measures every month, they know how they are
doing and how they affect these measures through the BEA. Divisions also report
their contributions to the overall company goals for selected metrics. They use a
divisional BBP, which is a separate balanced scorecard from the one at the company
level. Divisions also do comparisons against their target for the current period and
their prior year’s performance on all measures whenever applicable.
Clarke American tries to select actionable KPIs that everyone can understand.
CASE STUDY
55
FIS meetings, continued
Quantifiable measures relating to time, cost, and quality are established, and stretch
goals are set. These measures are established against a baseline for continuous
improvement. As improvements occur, they are incorporated into new performance
standards across the company’s entire network. Clarke takes a balanced approach to
its KPIs. It has metrics in place with full definition and calculation methods that
support each of the company and process objectives of the BBP.
KPI report cards
Each process and division has KPI report cards for its respective contributions
to the overall company objectives. The KLT reviews these report cards monthly. It
also reviews additional KPI metrics during weekly “run the business” meetings.
Report cards typically show KPI ownership, past performance, current goals,
and current performance. They also include visual indicators—blue ribbons, bull’seye targets, and magnifying glasses—in the far-right column. Blue ribbons are
reserved for projects that exceed their targets by more than 5 percent. Bull’s-eye
targets are used for performances that are within plus or minus 5 percent of their
target. Magnifying glasses are for projects that are greater than 5 percent off target.
Those magnifying glasses get a lot of attention.
Benchmarking in an
effort to differentiate
Like its parent company, Clarke American searches for ways to differentiate its
organization from the competition. For many years it based its benchmarks on only
its competitors in the printing industry. But company advisors kept telling Clarke
that it had to look outside of its industry. It began to understand that it was no
longer enough to be as good as the competition, or even best in class in the printing
industry. It had to try to be even better.
Clarke then began to benchmark companies noted for world-class performance
through so-called study tours. It came away from each tour with a best practice that
it was committed to implementing. During its study tour with Ritz-Carlton, for
instance, it witnessed the importance of empowering associates to solve issues and
take ownership of their work systems. By moving from an “employee” to an “associate” focus, Clarke American has experienced an improvement in associate retention
and a steady improvement in associate satisfaction.
The leadership scorecard is a best practice that Clarke adopted from another
Baldrige recipient. This tool assesses where and how the company spends its time
by awarding point values to various categories, including strategy deployment,
customer focus, and self-development. Each leadership scorecard, including the
CEO’s, is posted openly in the company for everyone to see.
Through all this external learning Clarke American came away with three
major lessons about the benchmarking process: (1) Benchmarking and the use of
comparative information must be done over time; (2) you should benchmark for a
specific reason rather than undertake “industrial tourism”; and (3) you must decide
what you will do with the learnings you pick up during your study tours after you
select a benchmark that you want to attain.
Winter 2003/2004
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56
Centralized information
network
Clarke American uses a centralized, automated information collection and
distribution network to ensure that secure data is available to its 4,000 partners
located in over 85,000 locations, its millions of customers, over 3,300 associates
across the U.S., and, as required, certain supplier partners. It uses internal and
external resources as well as strategic alliances with key suppliers to ensure the
continued integrity and efficient availability of data and information to all its
stakeholders. This is one of the cornerstones of its fact-based management system.
Characteristics of
quality data
Quality data has four key aspects. The first is reliability: Information must be
accurate and timely. Whenever possible, Clarke uses real-time data capture in its
centralized automated systems. It uses manual control processes whenever manual
data capture is necessary. Reliability is all about accuracy and timeliness.
The second aspect is accessibility: Information must be available when it is
needed. This is a key component of Clarke’s knowledge-sharing vision, which
extends to customers, partners, associates, and supplier partners through a number
of channels. All these parties must be able to get appropriate data when they need it.
The third aspect is security. Clarke’s centralized core systems are controlled by
password and user ID assignment. Manually collected data is handled by trained
associates using front-end processes with built-in features to ensure the data’s security.
The final aspect is validity. Clarke ensures its data remains valid by constantly
asking whether, based on business conditions, it is tracking the right data.
Information-and-analysis
best practices
Clarke’s customers decide what the company needs to do; Clarke decides how
it is going to do it. It needs to use reliable data and appropriate metrics to chart its
course. It uses several best practices with respect to information and analysis.
One is that it constantly makes improvements and changes to its centralized
information network to meet the emerging needs of its partners and customers. All
changes are made in accordance with a strict change-management process: They
must go through a rigorous risk assessment, peer review, walk-through process, and
testing before Clarke allows them to be put into its production environment.
Clarke’s past measures have shown that with change comes instability, and with
consistency comes stability. To this end, another best practice that it uses is called
“IT quiet period.” This prohibits IT personnel from making any discretionary
changes to any of Clarke’s systems during times of critical partner needs or deadlines.
Another best practice is having the discipline to stay focused on the vital
few measures. It’s easy to over-commit and under-resource. Instead, Clarke decides
what things are important and makes sure they get done.
Fourth, once you begin to measure a particular area, it tends to respond by
showing a 10 percent to 15 percent improvement and/or increase in performance.
Measurement brings with it a focus that can provide insight that can in turn
lead to substantial improvements that were previously unattainable. Clarke American has learned, for instance, that associates whose performance is measured tend
CASE STUDY
Information-and-analysis
best practices, continued
57
to have higher performance levels than unmeasured associates.
Fifth is to understand that there is no perfect set of measures. Some measures
lose their relevancy as business conditions change over time. In those cases, Clarke
always manages to find new and improved measures. It doesn’t allow perfect to
stand in the way of good enough.
Finally, Clarke doesn’t allow measurement to act as a barrier by not keeping
up with changes in its business. The measurement process must keep pace with the
organization’s momentum. Clarke understands where it is trying to go and devises
measures, even if they are simple ones, to predict and report its progress.
Human Resource Focus
Clarke’s people are its
greatest asset
Clarke American’s people are its greatest asset, and it has worked hard to build a
performance-based culture. Its $118 million revenue growth between 1997 and
2001 is an example of what this culture and its associates have been able to achieve.
First in Service:
Centerpiece of the culture
First in Service is the Clarke American trademark for performance excellence.
The embedded centerpiece of its culture, it is how employees work together to run
and change the business. FIS provides a cultural framework—set in the context of
Clarke’s vision, mission, and direction—for all employees. It creates an environment
of continuous improvement, teamwork, participation, and empowerment of Clarke
employees to serve the company’s customers. It is how associates have transformed
the company into the market leader in growth, innovation, and partner and customer satisfaction. FIS encompasses all seven categories of the Baldrige Criteria.
Clarke uses the same FIS quality tools and approaches across its associate base
nationwide, but it adapts them uniquely for its four distinct associate groups. One
group is its plant network; another is its call-center network. Third is its network of
field salespeople, who are deployed close to partners’ locations. They spend most
of their time on the road and in front of Clarke’s partners, and they are virtually
connected to Clarke by the phone and their laptops. Fourth is the corporate office in
San Antonio, which encompasses professional, technical, and managerial employees.
Embedding FIS into the culture has long been a priority at Clarke American.
To this end, the company provides a variety of training courses and learning opportunities for its people. For example, a new associate receives a half-day introductory
course to FIS training during his/her orientation period. Within ninety days, he/she
attends a three-day FIS training class, taught by one of Clarke’s line managers.
Leadership model
At the center of Clarke’s leadership model are its vision, mission, values, and
core purpose. Annual “change the business” goals are set around the four quadrants
of the BBP, the center of attention for all 3,300 Clarke American associates.
The BBP is implemented, and goals are achieved, through a series of
sequential steps. Those steps, done by each leader in his/her area of responsibility,
are (1) setting the direction and planning, (2) carrying out the plan through comWinter 2003/2004
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Leadership model,
continued
58
munication and alignment, (3) monitoring progress and making adjustments as
needed, and (4) capturing the learning from the experience and turning that learning into innovation the next time around.
Clarke expects all this leadership to occur in a committed and passionate
manner. This model rewards and recognizes the accomplishments of associates and
provides developmental opportunities for them. Clarke leadership is responsible for
the development of employees; the human resources group facilitates this process.
This model has many applications throughout the organization. The KLT
drives the annual plan, while line managers lead the daily operations of their facilities, the team leaders throughout the organization, and the improvement projects for
Clarke’s processes. The company expects a great deal from all its line managers. How
they lead is equally as important as what their operations accomplish.
High-performance work
system
Clarke American is a performance-based company. It counts on individualand team-based achievements to meet its customers’ changing needs.
Its high-performance work system is guided by the FIS approach; built
on the strong foundation of Clarke’s culture, mission, vision, and values; and
underpinned by a well-defined set of human resources processes. All of Clarke’s
processes share a common set of performance-excellence themes, which are adapted
to the four distinct associate groups mentioned earlier.
Everyone in the organization has an individual role, as well as one or more
team roles, to fulfill. Each person is accountable for the achievement of his/her
personal goals through the BEA, for continuing to develop his/her skills through a
personal development plan, and for improving the processes in which he/she works
through the S.T.A.R. program (described in detail later). Team activities include
carrying out job duties, driving improvement, managing change, and coordinating
activities across processes, locations, and divisions. Every Clarke American associate
is exposed to a set of modules on role-model behavior (see Figure 2 below) when
he/she joins the company. The first module focuses on Clarke’s customers.
Figure 2. Role-Model Behavior.
Focusing
on
customers
Action
plans
Leading
quality
Managing
processes
Working
for
improvement
TQ
toolbox
CASE STUDY
59
Selecting associates
for life
The goal of the company’s recruiting and selection process is to select associates
for life. The national trend is for people to have three to five different careers over
the course of a forty-year work life. At Clarke American, the philosophy is for
associates to make those career changes within Clarke American. The company
believes career growth is key to its high associate satisfaction and retention rates.
A disciplined selection
process
Clarke follows a disciplined selection process for all positions, from entry level
to executive level. When a job position opens up, its roles, responsibilities, skills, and
required competencies are all defined up front. Initially positions are posted internally to give Clarke associates an opportunity to advance. If no qualified internal
candidate surfaces, then a search outside the company begins.
Qualified job candidates go through team interviews, realistic job previews,
competency base testing, and testing for personality characteristics. Clarke conducts
personality testing because it is not necessarily interested as much in applicants’
skills as it is in finding people who fit in with its values. With all new hires, it also
performs background checks, physicals, and drug-screening tests before an offer is
made. The spirit behind all this testing is to protect Clarke’s current associates.
Using associate profiles
For all positions, Clarke has established that it takes a certain type of person to
want to do that job and to excel at it. Every two to three years the company looks at
the groups of associates for which it has profiles and looks at the profiles of its ten
top-performing associates. As the company’s technology and environment change, it
makes any necessary adjustments to make sure that the profiles it uses are still
appropriate. This method does a good job of measuring how well a person will line
up with the culture and how happy he/she will be with the organization.
Career opportunity
program
Since the mid-1990s, Clarke has put an increasing amount of focus on its
career opportunity program and the development of the associates who use it. The
fact that it has many associates with different skill sets created a great deal of awareness about career opportunities that might exist in the company for them. In 1995,
40 percent of non-entry-level positions were filled internally. By the end of 2001,
that number had risen to 70 percent. Clarke’s goal for 2002 was 80 percent.
The company truly believes that a person can start anywhere and go anywhere
in the organization. For example, the current CEO started at Clarke American
thirty years ago as a quality-assurance trainee. In addition, the company has several
examples of entry-level operators who have become plant managers and of customerservice consultants who now run call centers.
Training is an
investment
Clarke views training as an investment—in associates’ career growth as well as
in the company’s drive for continuous improvement. Most important, it’s an investment in attaining and growing the skills it needs to realize its vision.
The company tries to keep its training objectives focused around its strategic
initiatives. This is a direct output of the annual planning and goal-deployment cycle.
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CASE STUDY
Training is an
investment, continued
60
Typically the focus areas for training revolve around the “change the business”
initiatives. These range from technology changes, to process changes, to new product
and service offerings, to the evolution of Clarke American’s strategy—which is
changing rapidly. These focus areas include planned behavioral changes that the
company believes are necessary to keep it moving on its journey.
As its view of people as strategic assets has evolved, so has Clarke American’s
approach to the training process. In 2002 it targeted twenty hours of training for
every associate in the company, regardless of his/her role or the change involved.
This was in the spirit of continuous improvement within each associate’s current
role. Associates who are involved in some of the faster-changing roles were targeted
to receive well over 100 hours of training in 2002.
Returns on the training
investment
Clarke American expects to receive a return on all the investments the company makes; that goes for training as well. The company uses metrics to measure the
effectiveness of its training in terms of performance improvement.
In 1997, for example, the company’s associate opinion survey (more details
on this later) revealed an issue with leadership style that was prevalent across
Clarke’s front-line supervisory group. In response to that, the company developed
a training course called Quality Leadership Development. As it deployed this
training to its 400 front-line supervisory group members between 1998 and 2000,
associates’ views of those managers improved steadily.
InTouch is a digital printing technology that Clarke American uses. Between
1996 and 2001, an increase in the number of associates receiving InTouch training
resulted in an increase in operator efficiency.
Common goals
Clarke American’s profit-sharing and bonus plans allow associates to share in
the overall success of the organization. The company evolved over time from
having different plans for different areas of the business to having one plan with
one set of goals. This helps Clarke to communicate its progress to all its 3,300
associates every month. All non-sales associates participate in the common bonus
plan. The opportunity varies by level, but the goals for everyone are identical:
customer satisfaction, revenue growth, and profit growth.
As mentioned earlier, associates commit to their goals each year in the BEA,
which every associate has. He/she and his/her team leader both commit to
the goals and actions listed in this agreement by signing it. Developing the agreement together helps associates understand what they are personally doing for the
good of the company. Their goals feed up to the company-level goals.
Performancemanagement process
Clarke’s performance-management process creates accountability for performance by aligning associates’ goals and objectives with those of the organization.
The process includes understanding associates’ developmental needs for achieving
those goals and conducting reviews to provide feedback on their performance.
All associates create a personal development plan. The supervisor and associate
CASE STUDY
Performancemanagement process,
continued
61
sit down together; during the discussion, the supervisor asks the associate questions
such as “What do you want to do in the future? Where do you see your career
going? What are your career ambitions?” Mutually the associate and the leader
talk through what the developmental opportunities are for the associate to realize
his/her personal dream. The trick is to balance each associate’s wants and desires
with the needs of the company.
After this discussion, the associate and manager agree in writing on a one-page
personal development plan. Both parties sign this agreement. It then becomes the
associate’s responsibility to drive those improvement initiatives, or even to initiate
them. It is the manager’s responsibility to provide the resources for that to happen
(e.g., granting the associate time away from work to attend a seminar).
Performance reviews
At least annually, all employees go through a three-dimensional performance
review. They are measured in three ways: against the goals on the BEA, against their
skill competencies (i.e., the primary skill requirements of the position), and behaviorally, with regard to their performance in relation to Clarke’s FIS values.
The output from this review process is expressed in a numerical rating score
(from one to five) that is fed directly into Clarke’s compensation system and drives
the amount of each associate’s merit pay increase for the year. The last step in the
performance-review process is recognition. In Clarke’s culture, this is key to reinforcing desired behaviors. That is why recognition is one of its core values.
Communication is a
major challenge
With 3,300 associates, nearly thirty facilities, and a virtual sales force, Clarke
finds communication to be a major challenge. It puts a lot of work and energy into
communication because it’s so critical to keeping everyone linked and aligned. Its
communication processes evolve continually and include a disciplined set of structured meetings and events as well as some continual, interactive processes.
For instance, the KLT meets once a week for half a day. The focus of these
operational meetings is to compare Clarke’s performance against its KPIs. Monthly
the KLT spends two days together to take a broader look at the company’s operational performance and to review the KPIs, balanced scorecard, and progress made
regarding key project plans. Quarterly the KLT spends an entire week together, offsite typically, to step back from the business and check Clarke’s progress against its
full-year business plan and projections for the future.
These meetings are disciplined and structured; they involve minutes, action
items, ground rules, and a lot of protocol. All KLT meetings result in action items
that get fed directly into staff process meetings or division steering-team meetings,
where follow-through takes place. Every KLT meeting starts with a review of previous action items. There is personal accountability on the part of KLT members to
make sure they and their teams take action as agreed.
Methods of information
sharing
Clarke’s experience says that there is absolutely no substitute for face-toface communication. Leaders need to be seen, particularly during times of great
Winter 2003/2004
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Methods of information
sharing, continued
62
change, and associates need opportunities to be heard.
At least weekly the company conducts organization-wide stand-up “huddles.”
These meetings cover the topics of the day, Clarke’s performance from the prior
week, and priorities for the current week. It’s also a great opportunity for recognition. In some departments, huddles occur at the beginning of every shift.
Clarke supplements face-to-face communication with e-mail, voice mail, and
shared databases. For instance, it uses voice mail in a fairly structured way. Each
week every KLT member gives an update to his/her full team. This is in the form
of a three- to five-minute voice mail explaining what was accomplished for the
week, process issues, and other information that team members need to know.
These voice mails get forwarded to other personnel on a need-to-know basis.
Clarke also uses the Lotus Notes database feature to capture knowledge
sharing and best practices. This serves as the central repository for a lot of its process
documentation, particularly around its people practices. For instance, if someone
wants to learn about how the hiring process works, he/she can go to the human
resources home page, which is constructed within Lotus Notes, and look it up.
FIS meetings
Keeping everyone in the company aligned takes a disciplined approach. All
associates on all shifts at every one of Clarke’s locations participate in a monthly FIS
meeting, which typically lasts between one and two hours. It ensures that a consistent message is delivered and heard across the entire organization.
The anchor of each meeting is the FIS focus presentation, which is prepared
by the KLT and delivered by the location manager. This presentation includes a
balanced-scorecard update, key accomplishments, important upcoming events,
and policy and procedure enhancements. Clarke American also uses this forum for
recognition and team-building activities.
Team Excellence Award
Clarke’s project teams drive both continuous and breakthrough improvement
and manage complex activities and events. Thus, the teaming process is important.
To move that process forward, the company uses a Team Excellence Award process.
This is an opportunity for it to recognize the best-performing teams. During this
process, front-line managers and some of the professional staff members assess
Clarke’s teams using specific project-management criteria. These people are trained
regarding the criteria and the measurement/assessment approach.
Annually each location holds a team celebration day, where winning teams
share how they handled a specific process and the results. Associates regard the team
shirts given out at the end of this day as badges of honor. Through the years, the
Team Excellence Award has become the most coveted one within Clarke American.
Associate opinion survey
Each year Clarke conducts an associate opinion survey. Associates receive
encouragement to participate from the company president, the KLT member from
their particular location, and their location managers and line managers. Associates
CASE STUDY
Associate opinion survey,
continued
63
are given an opportunity during the workday to complete the survey, which consists
of about fifty questions that are arranged into eight categories. The participation rate
for this survey has reached 96 percent.
An external marketing company does all the analysis for Clarke American, so
it’s completely anonymous. Completed surveys are returned to this marketing
company, and Clarke in turn receives the results back from it. Clarke has done focus
groups with associates to ensure that the questions are understandable and appropriate. The company makes any necessary adjustments to the survey every year.
When Clarke shares the results, it typically spends an hour or more in each
location reviewing them with its people. Each location then usually forms a team to
address the lowest-scoring areas for that location. These teams are tasked with
making recommendations and corrections to problems identified by the survey.
Over the years Clarke American has gained a great deal of trust from its
associates through persistent communication of survey results and through actions
taken to improve the lowest-scoring areas. Associates know that their inputs typically
result in improvement. The anonymity and the action that the company takes are
the biggest success factors in the associate opinion survey.
Clarke’s people make
the company what it is
Clarke’s people make the company what it is. It has a clearly defined culture
and values, it takes action to meet associates’ needs, and it engages its associates
in improving its processes (see Figure 3 below). Its partners always say that its people
are one of the main reasons they do business with Clarke. Anyone you meet within
Clarke American will say he/she is proud to be a part of the organization.
Figure 3. Clarke’s Associates Are Its Greatest Asset.
Great associate satisfaction
and more associate
growth opportunities
Additional volume of business
and new opportunities for
deepening relationships
High associate
motivation, participation,
and teamwork
Improved partner/customer
satisfaction, delight,
and loyalty
Delivery of high service
and a quality customer
experience
Process Management
A transition to a process
focus
Clarke’s vision (see Figure 1) is ambitious. To achieve it, it must ensure that its
work processes are customer driven and respond quickly to changing customer reWinter 2003/2004
CASE STUDY
focus, continued
64
quirements, and it must judge their performance from its customers’ perspective.
Clarke American’s transition from a traditional functional organization to a
true process-oriented one began in the early 1990s and took several years. The
traditional organizational structure focused on individuals and their performance—
instead of on how processes were designed—to deliver results. The description
shown in Figure 4 below, written by H. James Harrington, was an early catalyst of
Clarke’s change. It describes the benefits of having a process focus—and the characteristics of the organization Clarke strives to be.
Figure 4. Moving to a Process Focus.
From an Organizational Focus…
• Employees are the problem
• Employees
• Doing my job
• Understanding my job
• Measuring individuals
• Change the person
• Can always find a better employee
• Motivate people
• Controlling employees
• Don’t trust anyone
• Who made the error?
• Correct errors
• Bottom-line driven
To a Process Focus
• The process is the problem
• People
• Helping to get things done
• Knowing how my job fits
• Measuring the process
• Change the process
• Can always improve the process
• Remove barriers
• Developing people
• We are all in this together
• What allowed the error to occur?
• Reducing variation
• Customer driven
Source: Business Process Improvement, H. James Harrington
As it embraced process management, Clarke learned several key lessons and
adopted many best practices. Process champions were established and assigned
ownership of resources and accountability for process outputs and performance.
The company began to use workshops to define and document its processes. As a
result, key process requirements were clearly understood, and time, cost, and
quality measures were established to track performance and drive continuous
improvement. In addition, Clarke realized the importance of understanding the
linkage among processes and aligning the organization.
Prior to 1995, Clarke was a functionally oriented company primarily focused
on serving its partners—the financial institutions it serves. In 1995 it started the
transition to becoming an organization focused on serving not only its partners but
also the end users of its products: their mutual customers. It identified its core
processes, which were established to best serve its partners and divisions. Each
process champion sits on the KLT, which is led by Clarke’s CEO.
The core processes that primarily affect the customer are selling and marketing,
order fulfillment, servicing, and customer/partner integration (a bedrock for Clarke’s
future, CMS initiatives). The enabling processes, which support the core processes,
are FIS performance excellence, financial management, human resources manageJournal of Innovative Management
CASE STUDY
65
focus, continued
ment, information technology, engineering and technology, and procurement.
Process-management
workshops
Clarke American defines and documents its core and enabling processes using
process-management workshops, which began in 1996. During these workshops, the
company first defines the process inputs and required outputs. Then it defines the
macro steps required and determines process capabilities and goals. Once that is
done, it defines a process’s linkages to other processes and divisions and establishes
ongoing process measures and targets for continuous improvement.
As a result of this transition, Clarke evolved into a customer-focused organization comprised of four partner and customer divisions and ten core processes that
ensure the entire company is fully aligned with partner and customer requirements.
As needed, Clarke defines new processes through this approach to ensure
alignment across the organization. For example, in 1998 it established the procurement process, elevating the focus on strategic supplier management and better
utilizing its procurement expertise. In 2000, when partner connectivity emerged as
a critical factor to its success, it added the customer/partner integration process.
Continuous-processimprovement methods
Continuous process improvement is expected of all associates in every element
of the business. Clarke has implemented several tools to support this commitment.
One is FIS training for all associates, which arms them with the tools and knowledge
they need to implement improvements in their work area. Second is a defined
quality-improvement Plan, Do, Check, Act (PDCA) Cycle with clear, easy-tounderstand steps to process improvement. Third is the S.T.A.R. program (explained
below). Fourth is the BEA, which defines each associate’s specific expectations and
his/her commitment to support the organization’s goals. Finally, Clarke has KPIs for
all processes that clearly show process performance and improvement opportunities.
FIS tools and disciplines
Clarke’s embedded culture and FIS improvement tools and disciplines ensure
that all improvement activities, whether individual or team, are managed in a
consistent manner with the appropriate tools, review steps, and communications.
The company’s FIS tools are numerous. One is project briefs, which document the
membership, mission, timing, and projected benefits of an activity. Another is
milestones, which are key project-deliverable dates used to manage the timelines for
projects. A third is the PDCA storyboard, which guides teams through the steps of
the quality-improvement cycle and provides a vehicle for recording their actions for
later use in knowledge sharing, one of Clarke’s core values.
Other traditional tools are also required for all teams. They include meeting
agendas and minutes, member contracts, team roles, and process-improvement tools.
Clarke American’s FIS tools and disciplines are updated and refined to meet its
changing needs. As mentioned earlier, the company uses these tools consistently
across all teams, processes, and divisions. This standardizes the company’s approach
and creates efficiency during the start-up and execution of projects.
Winter 2003/2004
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The S.T.A.R. program
66
Clarke’s S.T.A.R. program, which stands for suggestions, teams, actions, and
results, provides a proactive way for all associates to demonstrate initiative and
innovation. Through this program, all associates and teams submit process-improvement ideas for implementation at an individual, workgroup, or team level.
The program emphasizes “go do it” ideas that can be implemented within an
individual’s work area without significant additional support or resources. Sharing
of best practices is accomplished through networked associates, sales conference
calls, various publications and newsletters, and multiple knowledge-sharing tools,
including Clarke’s servicing database and order-fulfillment home page.
Participation in the S.T.A.R. program and in the implementation of resulting
ideas is a requirement of all Clarke American associates. In 2002, each associate had
a target of eight implemented ideas. This target is documented on the BEA and is
part of each associate’s annual performance review.
Breakthrough
improvement initiatives
As mentioned earlier, the company’s breakthrough improvement initiatives
specifically focus on “change the business” projects. During the annual goal-deployment process, it defines the vital few projects that it wants to achieve a 20 percent or
greater improvement (i.e., breakthrough results) in specific processes or divisions. It
then dedicates and deploys specific resources to lead these initiatives.
Each project has an executive-level sponsor to ensure that the necessary
resources are allocated to the team and that any barriers to success are removed
at an early stage. Since most of Clarke’s key projects require capital, the return on
investment is a significant determining factor for resource allocation. Each project
is reviewed by the KLT on a monthly basis to ensure that progress is being made
and that the project is on budget.
To prioritize the company’s efforts and determine the vital few projects, Clarke
uses a weighted decision matrix tool. The KLT evaluates potential projects by
considering their strategic importance, the internal rate of return, the length of time
the project will take, the project’s relative risk or complexity, external and internal
expenses required to complete the project, and the capital expenditure required. The
output of this process helps Clarke to determine which opportunities will become
the key company projects in the coming year.
Most every associate at Clarke at one time or another has participated on at
least one project team. The company tries to get projects done in ninety days or less
so it can drive some improvement and move on to the next level of projects.
A thirteen-step PDCA
Cycle
The PDCA Cycle is Clarke American’s approach to the systematic evaluation
and improvement of key processes. The company uses this approach, which is a
fundamental part of its basic quality training for all associates, to guide individual
and team improvement, both formally and informally.
Clarke follows a thirteen-step PDCA Cycle for significant process changes
(see Figure 5 on the next page) and a streamlined seven-step cycle for smaller
CASE STUDY
A thirteen-step PDCA
Cycle, continued
Partner and supplier
relationships
improvements. Each
team has dedicated
and shared resources
allocated to the
initiative. It also must
have a team leader
and a dedicated
facilitator, in addition
to the executive-level
sponsor. The PDCA
Cycle’s formal
project-management
disciplines ensure
that maximum results
are achieved within
the project’s designated time frame.
67
Figure 5. The Thirteen-Step PDCA Process.
1. Select an opportunity for improvement.
2. Identify the customer’s requirement.
3. Define the problem.
4. Collect data.
5. Analyze for root causes.
6. Find solutions.
7. Prepare plan to implement solutions.
8. Implement solutions.
PLAN
DO
9. Monitor results; evaluate against plan.
10. Determine reasons for deviations.
CHECK
11. Take corrective action for deviations.
12. Standardize the process.
13. Review.
ACT
Clarke has created a unique competitive advantage through innovation,
integration, service quality, and customer focus. This advantage results from positioning the entire value chain with a view toward—and a passion for—the customer.
The company’s sales and marketing teams bring FIS values and a passion for
the customer to Clarke’s partner relationships. Similarly, its category managers instill
in its suppliers the FIS principles and a passion for Clarke’s partners and customers.
Clarke knows the value of making its key suppliers aware of its business
direction and its partners’ and customers’ requirements. It manages its suppliers to
provide them with a view of the customer throughout the entire value chain.
Supplier management
Clarke views its key suppliers as enablers who help it reach its vision, and it
expects them to provide a competitive advantage—and go beyond that to help it
accelerate its business growth. It uses several processes and tools to manage them.
The company first maps its suppliers based on their relative strategic value and
its total annual expenditure level for each one. To enable it to concentrate more of its
spending on fewer suppliers and to develop more focused relationships with its
strategic suppliers, it targets those suppliers with low strategic value and low annual
expenditure levels for consolidation. For those suppliers with higher strategic value
and/or higher annual expenditure levels, Clarke increases the degree of supplier
management accordingly. Approximately 85 percent of its expenditures are now
consolidated among fifty suppliers that it selected based on overall value.
Clarke uses category management to oversee the supply of strategic critical or
high-dollar goods and services. The category managers from the procurement
process are accountable for developing and implementing supply strategies that
Winter 2003/2004
CASE STUDY
Supplier management,
continued
68
deliver breakthrough and continuous improvements in quality, cost, and service.
To ensure that its suppliers are fully aligned with its business direction, mission, and vision, Clarke conducts biennial strategic-supplier symposiums. These
events reinforce the company’s vision, its customer and partner requirements, and
its expectations of key suppliers. The symposiums also provide a forum for supplier
recognition and supplier input into Clarke’s goal-deployment process.
Clarke measures and improves its suppliers’ performance using scorecards that
translate its business objectives into specific supplier requirements. Each requirement
is measured, scored, and assigned a rating of red, yellow, or green, depending on the
level of performance. Scorecards are reviewed regularly with suppliers, who submit
action plans to address any requirements that receive yellow or red ratings.
Finally, Clarke’s value-management process reduces total cost in the supply
chain, increases customer satisfaction, and adds value. During this process, crossfunctional and cross-company teams analyze suppliers’ and Clarke’s processes,
identify opportunities to enhance value or reduce costs, and develop action plans,
which are then jointly implemented. To further enhance its relationships with
suppliers, Clarke often shares the benefits of value management with them.
Benefits of Clarke’s
approach to supplier
management
The company has reaped many benefits as a result of its approach to supplier
management. These include improved revenue, increased profitability, and the
introduction of new products and services, which enhances customer satisfaction.
Clarke developed a new service in response to its customers’ need for timely
and secure delivery of their checks at an affordable cost. In a team effort with a
major delivery carrier, Clarke developed and began marketing what it calls the
Preferred Parcel Service, which provides a guaranteed four-day secure delivery at a
retail cost significantly below that of other expedited delivery-service options. This
service has developed into a Triple Win—for the supplier, for Clarke American, and
for the customer. In the five months following its introduction, Clarke’s shipment
volume using this service increased by 886 percent.
Procurement profit improvement is a measure of the combined benefit to
Clarke American of reductions in total supply-chain cost and profit margins from
new products and/or services introduced through supplier integration with Clarke’s
business. Between 1997 and 2000, the company’s annual procurement profit
improvement measurement increased by 220 percent.
Manufacturing and
service improvements
Through Clarke’s breakthrough and continuous-improvement initiatives, it
strives for double-digit productivity improvement in manufacturing each year. This
funds the company’s employee wage increases and new capital investments.
Clarke has established several measurements to enable it to better understand
and drive cycle-time improvement. Manufacturing cycle time, which the company
measures in hours, demonstrates a reduction of in-plant production time due to
technology enhancements, production regionalization, and electronic order accepJournal of Innovative Management
CASE STUDY
Manufacturing and
service improvements,
continued
69
tance. Check manufacturing units per hour, which measures manufacturing productivity, increased by 150 percent between 1991 and 2001.
Clarke’s move from using offset printing technology and the manual boxing
of checks to using InTouch non-impact printing and automated packaging was a
process improvement that significantly reduced the steps required to produce an
order. This resulted in breakthrough improvements in cycle time, twenty-four-hour
service, units per hour, process waste, error rate, and order accuracy.
Since the mid-1990s, the company’s approach to process management has also
driven breakthrough improvements in printing efficiency by more than 30 percent
and reduced its manufacturing waste by 50 percent.
In addition to providing world-class customer service, the company’s servicing
process is charged with driving the Triple Win through delighting customers,
improving partner revenue, and increasing Clarke American revenue. One measure
of the effectiveness of the company’s servicing process is the percentage of customer
and partner telephone calls during which a cross-sell or an up-sell is accomplished.
Since 1997, Clarke has seen continuous improvement each year.
Clarke is committed to
continuous improvement
Clarke American is committed to continuous process improvement. Associates
at all levels of the organization are motivated and developed to participate in this,
and they excel in utilizing the company’s FIS tools and disciplines to achieve performance results. Process champions take ownership and accountability for process
outputs and performance. Clarke ensures alignment of its work processes with its
partners and customers, and it focuses on being customer-driven and on being able
to respond quickly to changes in their requirements.
Clarke educates and involves its key suppliers so they understand Clarke’s
business direction and the needs of its partners and customers throughout the supply
chain. It views its key suppliers as enablers who help it to reach its vision, and it
looks for continuous and breakthrough improvements in quality, cost, and service
from them. With front-end process measures in place, it is able to improve efficiencies and prevent significant errors from passing through the process.
Clarke American knows that its performance must be judged from the customers’ perspective. By focusing on its partners and having passion for every customer, the company is confident that it will successfully achieve its vision.
Clarke’s Performance-Excellence Journey
The journey’s beginning
Clarke American initiated a Baldrige approach in 1993 and, based on the feedback
it received, deployed many new approaches that led it to where it is today. At the
beginning of its quality journey, its First in Service commitment was an externally
focused customer-service philosophy. Introduced to the company by a British
consulting service in 1985, it actually pre-dated the advent of the U.S. Baldrige
process. Although Clarke was much smaller and functionally organized, even then
it was heavily focused on measurement, accountability, and action.
Winter 2003/2004
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The journey’s beginning,
continued
70
Since the FIS philosophy was about customer focus, Clarke began customerperception studies. Its focus on the customer then led it to the Baldrige process.
The company applied for site visits in 1993 and 1994 but did not receive
one in either of those years. Company leaders didn’t completely understand the
Criteria in those early days. The excellent feedback the company received from the
Baldrige process taught it that it was far too internally focused. As a result, it set its
sights on learning from that to create a building block for its future.
The catalyst for the
journey
As mentioned earlier, a defining moment was during 1993 and 1994, when
the company sustained a 10% price decline in just eighteen months. In addition to
this decline, there was a direct-mail channel emerging, the banking industry was
undergoing a major change, and Clarke American was under new leadership.
This market and industry backdrop formed the catalyst for the company’s
quality journey, and Baldrige became the company’s new platform. Company
executives evaluated the industry and Clarke’s business in an effort to understand
what the organization could do to improve its chances of survival.
Developing an external
focus
The early Baldrige feedback Clarke received indicated that the company
needed to develop an external focus. As a result, following a critical-needs review of
the organization, the executive team went on study tours of fourteen world-class
companies, twelve of which were Baldrige recipients. Clarke American team
members met and engaged in conversation with their counterpart executive leadership teams. The company discovered a number of best practices this way.
For instance, it learned that it needed a more systematic approach to running
the business, so it adopted its first quality model, which reflected the Results and
Enablers Wheels that were widely used in Europe during the mid-1990s. The
company also developed a robust FIS training program around its quality model’s
processes and tools. The program was taught to line managers, who were then
responsible for teaching their associates.
During this time Clarke also transitioned its process thinking, which was
already well embedded in its manufacturing and engineering disciplines, into other
functions company-wide. It introduced a quality toolbox to teach associates how to
use the quality tools, and it introduced standard meeting protocols. These practices
are very much a part of Clarke’s FIS team disciplines still in place today.
Integrating quality
and business strategies
Clarke also began to perform something called a Fitness Review. This marked
the early stages of Clarke’s internal assessment methodology, which is Baldrige-based.
It began in 1995 with integrating the company’s quality and business strategies.
One lesson Clarke learned from the executive team’s study tours was that a
company’s business strategy, quality direction, and philosophy are more effective if
they are merged and synergistic. So, using the model shown in Figure 6 on the next
page, Clarke went to work. It evaluated its strategic plan using its business strategies,
and it combined its functional plans with its strategic assessment.
CASE STUDY
Integrating quality
and business strategies,
71
Figure 6. Integrating the Quality and Business Strategies.
continued
Strategic
Plan
Quality
Assessment
A significant turning
point
Business
Strategies
Executive
Quality
Tours
Functional
Plans
Executive
Assessor
Training
Executive
Quality
Workshop
A Single
Quality
Business
Strategy
The company combined its Baldrige assessment feedback with learnings from
best practices at the fourteen role-model companies and from case studies at executive training. It conducted an executive quality workshop to study these combined
inputs. The result of this workshop was Clarke American’s first quality business
strategy. This marked a significant turning point in the company’s journey—it
recognized that quality was the best way to run its business.
Since that time, Clarke American has embraced this concept in its FIS/
Baldrige framework. The company puts a great deal of emphasis on understanding
its customers and serving their needs, and it has organized its business segments
around customer types. In addition, Clarke has developed an intent focus on
business processes beyond manufacturing, and in the late 1990s it began to
organize itself around the Baldrige model. Clarke embedded the model to move
the organization forward and make FIS a reality.
At that time the company also mapped its business processes and fully understood the power of being a process-focused company. It developed an approach to
goal deployment, the means by which it transfers goals from the leadership team
to all Clarke American associates across the organization.
A dual perspective
The company began to align itself around the strategic goals that move it
toward its vision. These goals have a dual perspective: “change the business” and
“run the business.” “Change the business” produces breakthrough function change,
while “run the business” is focused on incremental, continuous improvement.
Clarke American’s broad quality model began to include an intense focus on project
teams discipline, as well as the introduction of many listening posts from which
the company solicits feedback from its customer base. Clarke also developed leadership and behavior assessments to ensure that company leaders were able to lead the
organization with their new skill sets.
Moving toward world
class
As Clarke American moved toward becoming a world-class organization, it
fully embraced the Baldrige model and made it a part of its FIS framework. The
company trained more than 100 employees in the Baldrige assessment methodology.
The company’s KLT members were the first to be trained in it.
Winter 2003/2004
CASE STUDY
Moving toward world
class, continued
72
Clarke American now performs these assessments annually at each of its sites.
This is done by three assessors who perform the evaluations using the Baldrige
Criteria. The company’s partner and customer focus is more mature today, and
Clarke has successfully managed to evolve its capabilities to become both a manufacturing business and a servicing business.
Clarke takes very seriously the responsibility of being the only 2001 Texas
Quality Award recipient and the only 2001 manufacturing recipient of the Baldrige
Award. Its approach for improved performance has sustained its business through
challenging economic times and market upheavals. The company is eager to share
its learnings with the financial institutions that it serves.
FIS pays
There is no shortage of data to validate that FIS pays. Clarke American’s
associate satisfaction increased significantly—by nine percentage points—between
1995 and 2000. Employee bonuses and profit-sharing payouts essentially doubled
during that period. Revenue per associate has almost doubled, and annual profit
growth has been as high as 17.3 percent.
These results make the company believe that there is an undeniable and direct
correlation among the innovative approach, the extent of deployment, and the
achieved results as championed by the Baldrige process (see Figure 7 below).
Figure 7. First in Service Pays.
1995
1996
1997
1998
1999
2000
75%
72%
77%
80%
82%
84%
$2,918
$3,034
$3,257
$3,685
$4,931
$74
$684
$1.150
$1.600
$7.870 $10.050
On-Time Service
86.1%
91.8%
94.6%
96.4%
96.5%
98.6%
Charitable Donations (K)
$286
$391
$460
$704
$836
$1.300
Revenue (M)
$306
$320
$333
$351
$405
$470
$84.10
$89.80
7.6%
7.2%
Associate Satisfaction
Bonus Plan and Profit$2,835
Sharing Payout (Avg./Assoc.)
S.T.A.R. Savings (K)
Revenue per Associate (K) $80.90
Profit Growth
An integrated systems
perspective
3.3%
$120.50 $138.70 $144.10
1.0%
6.1%
17.3%
The Baldrige framework is Clarke American’s business model; FIS is the
way in which the company does business. Its unrelenting focus on its partners and
customers serves to distinguish Clarke American as the value provider of its
products and services. The company’s culture thrives because the company is
values-based and has a team-oriented environment that is totally aligned with the
vision and goals of the organization.
Clarke is also fact-based, focusing on measurement. The associates the company hires want to know that they are making progress. Clarke puts a great deal of
CASE STUDY
An integrated systems
perspective, continued
73
emphasis on learning from the past and reviewing the lessons that are learned
every time a process cycle repeats.
Clarke American is now poised for tremendous growth. As the company
continues its journey, its greatest challenge is to ensure that it is able to sustain its
FIS culture during this time of expansion. The organization will nurture that
culture as it grows and changes.
In 1995 Clarke American was catapulted into a culture of rapid and
aggressive change. It was faced with challenging market conditions and was
developing an externally focused organizational view of integrating quality into its
business strategy. Speedy change is still very prevalent in its business today. The
company will continue to learn from its past and incorporate its learnings in
the future as it further pursues its vision.
Author information
Cathy Kingery is an editor/writer in the New Product Development Department
at GOAL/QPC. She has edited journals, books, and magazines for nearly 20 years.
Editorial assistance for this article was provided by Daniel Picard.
Winter 2003/2004
&
News
Views
2003 Malcolm Baldrige National Quality Award Winners Announced
74
Baldrige 2003: 5 Categories; 7 Winners
NIST—Seven organizations are 2003 Malcolm Baldrige National Quality Award Winners, the
most recipients since the program started in 1988, and the first time there are recipients in all five
award categories. You’ll find quick highlights of the winners in this article.
For in-depth information you can meet the winners and hear their presentations at Quest for
Excellence XVI, March 28-31, 2004, Marriott Wardman Park, Washington, DC. The conference is
designed to maximize learning and networking opportunities. For information: http://
www.quality.nist.gov/Quest_for_Excellence.htm.
The Winners
Medrad, Inc., Indianola, PA – (Manufacturing Category)
Medrad develops, manufactures, markets and services medical devices that enable and enhance
imaging of the human body. Used in diagnostic and therapeutic imaging, products include vascular
injection systems and magnetic resonance (MR) accessories. Medrad’s products are sold to hospitals
and medical imaging centers worldwide. Medrad is a subsidiary of Schering, AG (Germany).
Sales: $254 million. Workforce: 1,194 employees. Locations: Two in the U.S., Indianola, PA.
(headquarters) and Pittsburgh, PA., and fourteen around the world, including Africa, Australia,
Canada, France, Germany, Japan, Norway, and Singapore.
Quality and Performance Results:
• Revenue growth has exceeded the average growth trend of comparable companies, increasing
from $35 million in 1988 to $254 million in 2002. Medrad has consistently achieved its
growth goal since 1998, with an average annual revenue growth rate of 15%.
• Operating income as a percent of revenue, has increased from 16% in 1999 to 20% in 2002
and is approaching best in class.
• Market leader in the U.S. and Europe for its vascular injection systems and related services,
with market shares significantly greater than its best competitor in many product lines and
regions around the world.
• Results for on-time delivery range from 98% to near 100% for syringes, disposables, injectors,
and magnetic resonance coils. These results equal or exceed best-in-class levels.
• In the 2002 Medical Imaging Magazine industry survey, Medrad ranked among the top four in
all ten of the performance areas measured, including two first place rankings. Medrad ranked
third out of fifty-seven for overall satisfaction and second for both quality of products and
service and support. The company’s key competitor did not finish in the top-ten in any of the
performance areas.
• Since 1999, overall employee satisfaction has exceeded an industry best-in-class benchmark.
Annually since 1994, Medrad has also outperformed the medical device industry benchmark
of five OSHA reportable incidents per 100 employees.
• In the 2002 Medical Imaging Magazine survey, customers ranked Medrad third of the top
twenty-one medical imaging companies for “internal company leadership.” Medrad’s major
competitor ranked twenty-first. In addition, employee confidence in leadership as measured
by the semi-annual employee survey improved from just over 60% in 2000 to 70% in 2003,
surpassing an industry survey benchmark.
Boeing Aerospace Support, St. Louis, MO (Service Category)
Boeing Aerospace Support (AS), part of the Boeing Company, provides support for an aircraft’s
lifetime which can be as long as seventy-five years. Boeing AS products and services include aircraft
maintenance, modification, and repair; training for aircrews and maintenance staff, and providing
spare parts. The primary customer of Boeing AS is the military.
Sales: $4 billion+. Workforce: 12,303 employees. Location: Headquarters in St. Louis; nine
© 2004 by GOAL/QPC
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major sites (eight in the U.S., one in Australia); more than 129 secondary and smaller sites.
• For the past four years, earnings grew at an average cumulative growth rate of 17% per year.
• New orders improved each year since 1999, exceeding the last four years, and are significantly
higher than competitors’ cumulative growth.
• Annual revenue more than doubled from 1999 to 2003.
• Since 1998, the “exceptional” and “very good” responses from government customers regarding Boeing AS’ performance have gone up 23%.
• Since 1999, on-time delivery of maintenance and modification products and services has been
at or near 95%. The overall depot quality for the maintenance of C-17’s has been at or near
100% since 1998 compared to AS’ competitor at about 70% in 2002 and 90% in 2003. Ontime delivery of significant hardware, aircraft, kits, and other has been at about 99% since
2001.
• Contracting Cycle Time, which measures the time elapsed from receiving a request for proposals from customers through modification of the contract, consistently has improved from
100 days in 1998 to the current performance level of twenty-three days, well below the internal goal of fifty days.
• Supplier on-time delivery rate has improved from about 68% in 1999 to about 95% in 2003,
which is 25% better than a recent Baldrige recipient and matches best-in-Boeing results.
Quality of Supplier Deliverables has been above 99.5% for the last three years.
• Employee involvement (employees taking ownership and responsibility for operations and
processes leading to a high performance work environment) survey scores show improvement
from 150 in 1999 to 170 in 2002, outperforming industry and Boeing data and are close to
the best-in-class performance score of 178.
• From 2000 to 2003, employees had about one lost work day due to on-the-job injuries per
100 employees. This is under the parent’s rate of 1.9 and a similar competitor’s rate of 3.1.
• Voluntary terminations by employees have decreased from 3.5% in 2000 to 2.3% in 2003;
better than the best-in-class level of 5% and the industry average level of 8%.
• Cash awards are paid to individuals and teams to reward extraordinary performance. The
dollars spent for this have tripled over the past three years. Additionally, employees who successfully complete higher education degree programs are awarded shares of stock.
Caterpillar Financial Services Corp., Nashville, TN (Service Category)
Caterpillar Financial Services Corporation U.S. (CFSC) is the financial services business unit
within Caterpillar Inc., a manufacturer of construction and mining equipment, gas and diesel engines, and industrial turbines. Incorporated in 1981 to finance Caterpillar’s forklift trucks, CFSC
now provides financing for the complete line of Caterpillar products. CFSC is the second largest
captive-equipment lender in the United States and provides financing services to users and dealers of
Caterpillar equipment and the Caterpillar business units.
Revenue: $1.293 billion. Workforce: About 750 employees. Location: Nashville, Tenn.
• Since 1998, CFSC has increased assets 34% and profit 54% while industry performance
declined 21% and 35% respectively. The organization has attained favorable credit ratings
from the top three credit rating agencies.
• CFSC constitutes about 5% of Caterpillar Inc.’s revenues. Its contribution to the parent’s total
earnings has improved from 5.6% in 1998 to 25.6% in 2003. This supports its mission of
helping Caterpillar, Cat dealers, and customers succeed through financial service excellence.
• Non-interest expense as a percent of assets, a key measure of organizational efficiency, has
stayed below 3% from 1998 to present, while the industry top quartile comparison has increased from 2.41% to 3.99%, and the industry average has increased from 5.46% to 8.73%.
• Satisfaction of end users, one of three key customer groups, has increased from 89% to 93% over
the past five years in the Equipment Division, which represents 74% of CFSC business. User
satisfaction with Loan Origination in the Marine Division has improved from 91% to 97%
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from 1999 to 2002, and from 90% in 2002 to 93% in 2003 in the Power Division. Levels of
performance exceed industry and American Customer Satisfaction Index world-class benchmarks.
• CFSC exceeded customers’ expectations 34% of the time in 2000 and 2001 and 48% in
2002, compared to 25% and 26% in 2000 and 2001, and 21% in 2002 for its competitors.
Only 1% to 2% of users were dissatisfied.
• CFSC has created an environment of empowerment for employees. As a result, employee
satisfaction with their involvement in the business has improved fifteen points to 79% since
2001, with the current level of performance significantly better than the industry norm at
51% and best practice benchmark at 68%.
• Trends in the Employee Satisfaction Index have improved from 67% in 1995 to 89% in 2003.
Employee satisfaction with the job has ranged between 89% and 92% since 2000, which
exceeds the 83% financial services norm.
• Managed Assets per Employee, captures the combined impact of process management, Six
Sigma, and technology management on the company’s overall productivity and efficiency.
The organization improved this measurement by more than 10% ($2 million) since 1997,
with the current level of performance nearly 35% better than the average of the financial
industry’s Top 100.
• The vision for CFSC’s Business Excellence model is “We will be a significant reason customers
select Caterpillar worldwide.” Seventy-nine percent of all users report that CFSC influenced
their decision to buy Cat equipment, with 61% suggesting it was an extremely important
factor in the decision.
• Ninety-three percent of employees participate in the Caterpillar Healthy Balance program
which earned a C. Everett Koop Award for Wellness Promotion in 1999 and the Wellness
Councils of America “Well-Workplace Award” in 2002. Caterpillar’s benefit program has
been rated one of the best by Money Magazine. To help maintain employees’ health, CFSC has
a fully staffed fitness center on site. Sixty percent of employees use the center, up from 42% in
2000, exceeding the YMCA’s benchmark of 25%.
Stoner Inc., Quarryville, PA (Small Business Category)
Stoner is a small, privately owned manufacturer of more than 300 specialized cleaners, lubricants, and coatings, which include car care and auto detailing products, mold release agents, and
specialty cleaners for electronics and other critical components. Products are sold to consumers as
well as businesses in aerosol cans and in bulk liquid containers ranging from one to 275 gallons.
Stoner is the smallest business to ever receive a Baldrige Award.
Workforce: forty-five full-time and five part-time employees. Location: Quarryville, Pa.
• Sales have increased 400% since 1990, compared to the growth in the U.S. gross domestic
product of 63% for the same period. Retail sales have increased from zero in 1996 to 20% of
company sales in 2003. Internet sales through company web site moreshine.com have increased 1,000% from 1999 to 2003.
• A 39% return-on-assets exceeds the industry average by 29% and its best competitor by 14%.
• Since the introduction of its glass cleaner, “Invisible Glass,” Stoner has increased its automotive market share for this product from 5% in June 2002 to 29% in October 2003, gaining
more than 15,000 retail outlets.
• Manufacturing productivity has increased 150% since 1991 and weekly average output of
aerosol can products has increased 33% from 1998 to 2003.
• Stoner has sustained consistent profitability which has grown along with sales, fueling the
company’s improvement initiatives and growth.
• Overall morale index has increased from 64.6% in January 2002 to 74.5% in July 2003,
exceeding the benchmark of 60.5%.
• Overall favorable percentage of satisfied employees has increased from 72.8% in January 2002
to 79.5% in July 2003, exceeding the benchmark of 64.8%.
• An employee survey prepared by the Hogan Center for Performance Excellence compares the
results of Stoner employees with a comparable group of employees in other companies, inJournal of Innovative Management
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cluding previous Baldrige Award winners and winners of the Texas Award for Performance
Excellence. The results show that Stoner scored in the top 10% of companies surveyed.
• Since 2000 Stoner won three times as many customers as it has lost. Over the past five years,
it retained more than 98% of its top customers, those accounting for over 60% of business.
• On a national industry survey, Stoner ranks first in satisfaction on four of the five factors most
important to its customers—quality, delivery, service, and value. It is in the top quartile for
the fifth factor, price.
• Since 2000 Stoner has reduced the amount of toxic chemicals used by 31%, and the use of
more environmentally friendly water-based formulations has increased by 74%.
• Implemented an Enterprise Resource Planning System that resulted in 100% of orders shipped
on the day received and the number of shipping errors has been reduced to less than 0.05%.
Community Consolidated School District 15, Palatine, IL
(Education Category)
Community Consolidated School District 15 (D15) is a K-8 school system serving 12,390
students in all or part of seven municipalities in northwest suburban Chicago. Its student population includes 37.5% minority students and 32.5% at the low-income level. Approximately 32% of
D15’s students come from non-English-speaking backgrounds; seventy-two different languages are
spoken in the homes of its students The school system has fourteen K-6 schools, three junior high
schools, and one alternative school. D15 operates its own transportation, maintenance, technology,
and food services departments.
Budget: $146.9 million. Workforce: 1,898 faculty and staff. Location: Palatine, Ill.
Quality and Performance Results
• D15 implemented programs and services to help all students reach performance goals. These
include intensive reading intervention programs in kindergarten, first grade, and second grade;
the Soar to Success program to accelerate reading growth for children in grades three through
six; and Read 180, which combines technology with high-interest, age-appropriate print materials for children in junior high and targeted elementary schools. Programs for English Language Learners include bilingual or English as a Second Language classes and one-on-one or
small group sessions.
• In the 2002-03 school year, 84% of second-grade students were reading at or above grade
level. This is an improvement of approximately 10% since 2000-01 and is nearly 35% above
the national average.
• The rate at which special education students are meeting goals has shown steady improvement
since 1998-99, reaching approximately 14% in 2002-03, significantly higher than both national and state comparisons of about 5%. For English Language Learners, the rate has increased from 8% in 1998-99 to approximately 15% in 2002-03. In one group of kindergarten students, 18% required intervention services when entering school, but this number was
reduced to 1% by fourth grade. These rates exceed national and state comparisons.
• Third- and eighth-grade gifted students participating in the 2001-02 World Class Tests for
math and problem solving had a higher pass percentage rate than those from the other countries participating: the United Kingdom, Australia, Hong Kong, and New Zealand.
• Students demonstrated improvement in meeting or exceeding state standards of learning as
assessed through the Illinois Standards Achievement Test, given in grades three, five, and eight
for reading and math and in grades four and seven for science. The district equaled or outperformed its comparison district at all levels and in all subjects from 1998-99 through 2001-02.
In addition, in 2002-03, performance in third grade math exceeded the 90% target and approached the state’s top 3% benchmark. Grade five math, grade seven science, and grade three
reading neared the 90% target.
• The district has increased the number of its teachers who have achieved National Board Certification from two in 1994-95 to forty-eight in 2002-03, the second-highest number in the
state. In addition, highly qualified teachers, as defined in the Illinois criteria for meeting the
federal “No Child Left Behind” legislation, teach 100% of the district’s classes.
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• Turnover rate in the district for certified staff was 11.7% for 2002-03, compared to a national
average of 20%, and attrition for first-year teachers decreased significantly, from 19.5% in
1996-97 to 6.3% in 2002-03, well below the 20% level of comparative local school district.
• As a result of safety efforts, 97% of teachers rate their work environment as safe and secure,
and parents’ satisfaction level with school safety and security was at the 93% level in 2002-03.
In addition, the percentage of staff who had accidents decreased from 9.7% in 1999-2000 to
3.6% in 2002-03 (well below the 7.6% figure for the comparative local school district), and
the number of workers’ compensation claims for the same period decreased from 170 to 73
(compared to 168 for the comparative local school district).
• Over the past three years, the level of student respect in the schools increased from 15% to
43%; the district average increased 20%.
• Among eighth-grade students, enthusiasm for reading increased from about 42% in 2001-02
to about 82% in 2002-03; enthusiasm for math increased from about 50% to about 80%;
and enthusiasm for science increased from about 42% to about 82%.
Baptist Hospital, Inc., Pensacola, FL (Health Care Category)
Baptist Hospital, Inc., a subsidiary of Baptist Health Care, includes two hospitals—Baptist
Hospital of Pensacola, a 492-bed tertiary care and referral hospital and Gulf Breeze Hospital, a sixtybed medical and surgical hospital—and Baptist Medical Park, an ambulatory care complex that
delivers an array of outpatient and diagnostic services.
Revenue: $100 million-$500 million. Workforce: 2,252 employees. Location: Baptist Hospital
(BH), Pensacola, FL., Gulf Breeze Hospital (GBH), Gulf Breeze, FL., Baptist Medical Park (BMP),
Pensacola, FL.
Quality and Performance Results
• Inpatient satisfaction for BH and GBH has been near the 99th percentile of the Press Ganey
survey each quarter since 1998. Outpatient satisfaction for BH has been near the 99th
percentile each quarter since 1999 and for BMP near the 99th percentile since the third quarter
of 2001. Ambulatory Surgery satisfaction for GBH has been near the 99th percentile of the
Press Ganey survey each quarter since the second quarter of 2000 and for BH has been above
the 95th percentile since the first quarter of 1997. The overall satisfaction of home health care
for services provided by BH has been close to the 99th percentile since the first quarter of 1999.
The Emergency Room for GBH has been in the 99th percentile as has LifeFlight, which serves
all three locations.
• Patient surveys of staff sensitivity, attitude, and concern, and overall cheerfulness of hospital
staff all have been near the 99th percentile for BH and GBH.
• Employee turnover rate improved at BH from 27% in 1997 to 13.9% in 2003 and GBH has
improved from 31% in 1997 to 14% in 2003. These levels for both hospitals are more favorable
than the northwest Florida average and the national average and are at the best-in-class level.
• BHI staff report positive morale has risen from 47% in 1996 to 84% in 2001. Its best competitor
reported positive morale for about 70% of staff.
• A Customer Value Analysis Survey demonstrates that all responses, including nine care/service
questions, two emotional questions, one location/environment question, two nurse questions,
and one physician question, rated BHI more favorable than its two competitors. In addition,
BHI ranked higher than its two competitors in loyalty, 54% vs. 45%.
• BHI has developed a comprehensive tool called CARE (Clinical Accountability Report of
Excellence) that uses an index scoring method to capture more than fifty departmental and
hospital wide results. One indicator is the hospital-wide medication event rate, which measures
adverse reactions to medication, including medication errors. In fiscal year 2000, 2.5 events
occurred per 10,000 doses dispensed, while only 1.5 events occurred per 10,000 doses
dispensed in fiscal year 2002. These results are at levels more favorable than the VHA
benchmark of eighteen.
• Diverse thinking is captured through the Bright Ideas program, FOCUS-PDCA (a performance
improvement process) teams, around-the-clock employee forums, and peer interviewing using
behavior-based questions. The number of ideas has increased from 1,400 in 1998 to 6,800 in
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2003 and the number of ideas implemented has increased from 370 in 1998 to 5,000 in 2003.
• Surveys indicate an improving trend in the overall rating of the Board’s effectiveness by its
members from a 60% “strongly approve” rating in 1999 to 78% in 2003. A similar trend is
shown in the self-evaluation of board effectiveness, from 69% in 1999 to 81% in 2001.
• Health screenings and physicals provided by BHI to the community are increasing. Heart risk
screenings increased from 1,100 in 2000 to more than 2,400 in 2003. BHI’s new Women’s
Heart Advantage program was established to improve awareness of heart disease among
women, provide education on healthy lifestyles, and to provide women with easy access to
cardiac testing and treatment. BHI’s goal is to provide 2,500 screenings to women in 2003.
Saint Luke’s Hospital of Kansas City, Kansas City, MO (Health
Care Category)
Founded in 1882, Saint Luke’s Hospital (SLH) is the largest hospital in the Kansas City metropolitan area. Affiliated with the Diocese of West Missouri of the Protestant Episcopal Church, it is
a not-for-profit comprehensive teaching and referral health care organization that provides twentyfour-hour coverage in every health care discipline. Other facilities include the Mid America Heart
Institute, the Mid America Brain and Stroke Institute, an ambulatory surgery center, an outpatient
care center, and a nursing college.
Revenue: $937 million. Workforce: 3,186 employees, 500 physicians. Location: Kansas City,
Missouri.
• In its 2002 report, Consumer’s Checkbook ranked SLH 35th in the nation out of 4,500
hospitals evaluated. SLH received an overall score of 7669 compared to a national average of
5418. The rating for SLH physicians was 86% compared to a national average of 33%.
• SLH utilizes a broad-based Medical Staff Clinical Indicator Index to track fifty-eight critical
measures of clinical quality. The index denotes the number of indicators that fall outside of
statistically allowed tolerances. In 2002, 95.3% of the fifty-eight indicators were in control.
• The National Research Corporation (NRC) study of regional providers shows that patients
believe that SLH delivers the best quality health care and has the best doctors and the best
nurses of the twenty-one facilities in the market area. This top position has been sustained
since 1997.
• In 2002, SLH participated in measuring and comparing its performance in the areas of Acute
Myocardial Infarction treatment and Surgical Infection with ten best peer hospitals through
the Voluntary Hospitals of America. SLH was best-in-class in surgical infection and second
out of the ten in Acute Myocardial Infarction.
• In treating ischemic stroke, a leading cause of death and permanent neurologic disability, SLH
leads the nation in the percentage of diagnosed patients receiving Tissue Plasminogen Activator (tPA) to help restore circulation and reduce permanent brain injury. Twenty-seven percent
of SLH patients received tPA in the second quarter of 2003 versus a national average of 3%.
• SLH was in the top 5% of the national teaching hospitals comparative group for four of the
eight Obstetrical and Perinatal indicators (e.g., rate of cesarean sections and anesthesia complications) and was in the acceptable range for the remainder of the indicators.
• SLH outperforms the Council of Teaching Hospitals (COTH) top quartile and ranks in the
top 5% of hospitals nationwide in total margin.
• SLH has shown financial improvements over a four-year period in the areas of Days Cash On
Hand (DCOH), from 215.9 days to 359.9 days, and Net Revenue per Case Mix Index (CMI)
Adjusted Discharge from $10,000 to $14.500. CMI normalizes data for the complexity of
conditions treated. Sustained financial improvements in these areas have resulted in SLH
exceeding hospitals with similar bond ratings for DCOH and achieving COTH top quartile
performance for Net Revenues per CMI Adjusted Discharge. SLH has an A-1 Bond Rating
from Standard and Poor’s and an A+ Bond Rating from Moody’s.
• Employee retention has consistently exceeded the Saratoga Institute’s median for the past five
years and is approaching 90%.
Winter 2003/2004
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A
Journal
of Innovative
Management
Collection
Putting the Patient at the Core of a Healthcare Organization
Tom Tibbitts,President,and Sue Thompson,VP, Patient Support Services,Trinity Health
Systems,Ft.Dodge, Iowa
From Incremental to Breakthrough Performance
Ellen J.Gaucher, Senior Associate Director and COO, University of Michigan
Hospitals,Ann Arbor, Michigan
Hoshin Planning in Health Care
Geoffrey Crabtree,VP, Strategic Planning & Mar ket Services,Methodist Healthcare
System,San Antonio,Texas;Dona Hotopp, Director of Healthcare Services,
GOAL/QPC, Salem,New Hampshire;Owen McNally, Director of Total Quality
Management,Our Lady of Lourdes Medical Center, Camden,New Jersey
Managing by Teams at Rush Home Care Network
Kathryn E.Christiansen, D.N.Sc.,Executive Director, Rush Home Care Network,
Rush-Presbyterian-St.Luke’s Medical Center, Chicago, Illinois
From a Culture of Safety to a Culture of Excellence
Martin D. Merry, M.D., C.M.,Senior Medical Advisor, New Hampshire Hospital
Association and Associate Professor of Health Management,University of New
Hampshire, Exeter, New Hampshire;Jeffrey P. Brown,M.Ed.,Principal,System Safety
Group, Peterborough,New Hampshire
Process Management and Systems Thinking for Patient Safety
Joanne E. Turnbull, Ph.D.,Executive Director, National Patient Safety Foundation,
Chicago, Illinois
The Business of Health Care
A Journal of Innovative Management Collection
GOAL/QPC
The health care articles in this book, first published in the
over the past several years,
showcase some valuable examples. They are assembled in this
single volume for easy access and includes:
Improving Patient Care in Hospitals
Paul N.Uhlig,M.D.,Medical Director, Cardiac Surgery Services,Concord Hospital,
Concord,New Hampshire, and Associate Professor of Surger y, Dartmouth
Medical School,Hanover, New Hampshire
Six Sigma in Health Care:A Road Less Traveled
Joseph Calvaruso, President & CEO, Mt.Carmel Health Systems,Columbus,Ohio
Process Design and Management:The Path to Organizational Transformation
Sr. Mary Jean Ryan,FSM,President and CEO, SSM Health Care, St.Louis
Living and Breathing a Customer-Centered Culture
Christine Kelly, Director of Laborator y, Health System Minnesota,and Elizabeth
Lentz,Regional Laboratory Manager, Park Nicollett Clinic , Health System
Minnesota,Minneapolis,Minnesota
Untangling the Web: Bringing Information Therapy to the New Healthcare Consumer
Molly Mettler, Sr.VP, Healthwise, Inc.,Boise, Idaho
Chaos Theory and Creativity:The Biological Basis of Innovation
Ary Goldberger, M.D.,Associate Professor of Medicine, Harvard Medical School and
Director of the Electrocardiography and Arrhythmia Monitoring Laboratory, Beth
Israel Deaconness Medical Center, Boston,Massachusetts
The Future of Medicine
Andrew Weil,M.D.,Director, Integrative Medicine Program and Clinical Professor of
Medicine, University of Arizona Medical Center,Tuscon,Arizona
Counteracting the Harmful Effects of Stress through Self-Care to Enhance
Wellness and Profitability
Herbert Benson,M.D.,President,Mind/Body Medical Institute, and Associate
Professor of Medicine, Harvard,Medical School,Boston,Massachusetts
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BALDRIGE 2003: FIVE CATEGORIES; SEVEN WINNERS
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