In this issue, I will share my experience acquired from the conglomerate and its operating companies. For the purpose of this article, I will articulate the Agility which is one of the eleven core values and concepts used in 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 Baldrige Criteria:-
- Visionary Leadership
- Customer-Driven Excellence
- Organizational and Personal Learning
- Valuing Employees and Partners
- Focus on the Future
- Managing for Innovation
- Management by Fact
- Public Responsibility and Citizenship
- Focus on Results and Creating Value
- Systems Perspective
The Agility of an organization response to rapid changes to business has an advantage over those do not. Obviously this principle is easily understood in the business world. In today’s business environment, change is inevitable. It is so rapid that strategies and decision made previously no longer adequate or valid. Businesses are facing great demand in value added product and services from customers. Example: are shorted cycle time, instant information access, fast response to enquiries, etc. In order to respond to these demands, an organization needed to be agile. That requires agility.
Agility requires a whole set of new thinking in business structure, bureaucracy, restructure of work systems, multi-tasking of employees, simplified and innovative processes, employee empowerment, etc to strive for Agility in the organization. It is not about respond fast to the customer or business environment; it is about how to support it.
Agility is not just a philosophy of doing business to keep up to date, but they are key success factors for today’s business survivor. Hence, Key Performance Indicators must be established that are aligned to this new business platform. These KPI might include cycle time, response time, error rate, productivity, improvement efforts etc.
Case Study on Agility
All companies response to changes in business environment. As a matter of fact, some of them reacted so frequent that they loss focus on their long term business objective. To some extend, they take it part of the business process. Due to these unpredicted changes, crisis management seems to take over the continuous improvement initiatives.
At least some of the changes are not new, even way before their annual Business Plan and Budget. Unfortunately, they do not seem to prepared for the implication to their business when it become a reality. To quote some popular examples are: Foreign Exchanges fluctuation on USD against RM, escalating of raw material price, increase in logistic cost due to increase in petroleum price, a long list of them. It is not fair to say leaders of these companies do not know these factors will affect their profit margin, but most of them have the hope that it will not happen.
Issues with Agility
As mentioned, most companies faced with global challenges in terms of market share, profitability and escalation of cost. As all of these challenges are somehow uncontrollable by the company themselves, most of them spend much of their time in reacting to these crisis, and lack focus on long term improvement opportunities and initiatives. Hence, lack focus to restructure the organization to reduce operating cost, improving processes for better productivity, aggressively do material cost down program, develop employee to be more agile in their work with multi-skill. Solving problem using ad hoc team or crisis management seems to be the solution to the day-to-day operational issues…
Opportunity for Improvement
Leaders need to realize that most of the above scenarios are external factor which is not their circle of influence, therefore it is only logical that they take these changes as real and prepared themselves to counter it. Developing the organization be agile is a logical and most economical way to receive changes. With Agility, an organization can take changes and turn it into opportunities. Organization should be agile with short cycle time, reduce error and quality problem, improve productivity and reduce waste. Innovation to their product and service should be an focus effort tot drive the total business cost down.
In today’s Internet Technology, you should have heard much about corporation join Social Media such as Facebook. And you should have learn many corporate has a website to build their brand image.
In summary, having understood the Agility in Values and Concepts of Malcolm Baldrige, Leaders might benchmark their CEO of Baldrige Winners on their TQM successes in this value. My next article will articulate the next Core Values and Concepts in Focus on the Future
Source for the latest Malcolm Baldrige criteria can be obtained from Baldrige Website