Agility – Values and Concepts of the Malcolm Baldrige Criteria – Part 5
In this issue I will share my experience gained from the conglomerate and its operating companies. For the purposes of this article, I will articulate Agility, which is one of the eleven core values and concepts used in the Malcolm Baldrige Criteria. As before, I will use case studies to show how some of the companies implement them.
below are the Eleven Core Values and Concepts of the Baldrige criteria:-
- visionary leadership
- Customer Driven Excellence
- Organizational and personal learning
- Valuation of employees and partners
- agility
- focus on the future
- Managing for Innovation
- Management by facts
- Public Responsibility and Citizenship
- Focus on results and value creation
- systems perspective
articulated agility
Agility in an organization’s response to rapid business changes has an advantage over those that do not. Obviously, this principle is easily understood in the business world. In today’s business environment, change is inevitable. It is so fast that the strategies and decisions made before are no longer adequate or valid. Companies face a high demand for value-added products and services from customers. Example: they are reduced cycle time, instant access to information, quick response to queries, etc. To respond to these demands, an organization needed to be agile. That requires agility.
Agility requires a whole set of new ideas in business structure, bureaucracy, restructuring work systems, employee multitasking, streamlined and innovative processes, employee empowerment, etc. to strive for Agility in the organization. It’s not about responding quickly to the customer or business environment; it’s about how to support it.
Agility is not just a philosophy of doing business to keep up, they are key success factors for today’s business survivor. Therefore, Key Performance Indicators must be established that are aligned with this new business platform. These KPIs can include cycle time, response time, error rate, productivity, improvement efforts, etc.
Agile Case Study
All companies respond to changes in the business environment. In fact, some of them reacted so frequently that they lost focus on their long-term business goal. To some extent, they take it as part of the business process. Due to these unforeseen changes, crisis management seems to take over continuous improvement initiatives.
At least some of the changes are not new, even long before your annual Business Plan and Budget. Unfortunately, they don’t seem ready to get involved in your business when it becomes a reality. To cite some popular examples are: currency fluctuation in USD versus RM, raw material price increase, logistics cost increase due to oil price increase, a long list of them. It’s not fair to say that the leaders of these companies don’t know that these factors will affect their profit margin, but most are hopeful that it won’t.
problems with agility
As mentioned, most companies face global challenges in terms of market share, profitability, and rising costs. As all these challenges are somehow uncontrollable by the company itself, most of them spend much of their time reacting to these crises and do not focus on long-term opportunities and improvement initiatives. Therefore, focus is lacking to restructure the organization to reduce operating costs, improve processes for better productivity, aggressively implement a material cost reduction program, develop employees to be more agile in their multi-skilled work . Solving problems using ad hoc teams or crisis management seems to be the solution to day-to-day operational problems…
opportunity for improvement
Leaders need to realize that most of the above scenarios are external factors other than their circle of influence, so it makes sense for them to take these changes for granted and prepare to counter them. Building the organization to be agile is the logical and cheapest way to welcome change. With Agility, an organization can take change and turn it into opportunity. The organization must be agile with short cycle times, reduce errors and quality problems, improve productivity and reduce waste. Innovation in your product and service should be an effort to reduce the total cost of doing business.
In today’s Internet technology, you should have heard a lot about corporations join social networks like Facebook. And you should have learned that many companies have a website to build their brand image.
In short, having understood Malcolm Baldrige’s Agility in Values and Concepts, Leaders could compare their CEO’s Baldrige Winners to their TQM successes in this value. My next article will articulate the next Core Values and Concepts in Focus on the Future
The source for Malcolm Baldrige’s latest criteria can be obtained from the Baldrige website