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Organizational Assessment:
2009 ESD
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Symposium
An
Essential
Tool
for
Enterprise
Transformation
2010 Annual Meeting
+*)$,--*./(0*-8
Poster
Session
Poster
Session
L. Nathan Perkins
Start date Jan 2008
Research
Group:
Expected
Graduation
Date:System
June 2011Design and Management
ESD
MIT
Technology and
Policy Program
Thesis
advisor:
Dr.Dr.
Ricardo
Thesis
advisor:
Ricardo Valerdi
Valerdi
Reader:Deborah
ProfessorNightingale
J. Utterback
Professor
(OOHQ&]DLND0DVWHU¶V6WXGHQW
nperkins@mit.edu
9*(0./(0*-$:$;)*<'#=
Motivation
9#("*7*'*>2
Assessment
Analysis and Insights (from LESAT)
CD6#E(#7$%*-()0<&(0*Abridged
LESAT
Corporations
develop on-going
similarly
to the way
With
greater acknowledgement
of the needcultures
for plasticity
and adaptability
in
organizations,
processes
are increasingly
integrated
intocultures
the
nations do.transformation
This research
investigates
whether
certain
strategic
imperative.
Organizational
is a crucial
tool in this
process,
align with
different
types ofassessment
innovation:
incremental
and
radical;
providing:
Following
a literature
review
Integrated,
Closed-Loop
Assessment
Ultimately,
be able
to help
align
strategy
Reassessment
is crucial
for guiding,
refining
andcorporate
updating the innovation
transformation plan.
Due to
thewith
time and
resource investment
to assess an enterprise,
organizations
corporate
culture required
and encourage
corporate
cultureoften
to do
not reassess often enough.
•insights into the current state of the organization
What is going
on? Companies
innovate capitalizing
but may not
be matching
their
high priority
areas for improvement,
on existing
strengths
•identifying
and measuring
transformation
•monitoring
type of innovation
to their
corporatesuccess
culture.
How did it get that way?
Companies create their corporate strategy
Assessment
Models
based on market analysis and external assessments instead of
looking inward at their own strengths and styles.
Existing enterprise assessment tools vary in criteria and process, as shown in the table
below. For analysis, we selected enterprise-focused tools that produce numeric scores
:K\LVQ¶WLWZRUNLQJQRZ"&RPSDQLHVIRUFHDVWUDWHJ\RQWKHLU
(used
for analysis and insights, driving the transformation process).
employees that is addressing the external world and forces
Key takeaways: Because of the difficulty in showing a causal link between assessment and
employees and the culture to act differently from its authentic form.
performance, assessment models should be selected for their alignment to key enterprise
goals and transformation strategies. As long as the assessment has commitment and buyin throughout the organization, it will be beneficial to the transformation process.
Hypothesis:
Corporate culture
Baldrige National Quality Program
and innovation type
reinforce or detract
from each other.
From:
LESAT
Shingo Prize
Harry S. Hertz, Director
Baldrige National Quality Program
can be
Internal
Self assessment in Award, can be
Assessment Type Award,
Subject: Why Is Baldrige Important for You Now?
adapted for internal diagnostic to
support of
adapted for
Because
the
Baldrige
Criteria
for
Performance
Excellence
are
about
you!
Because
they
are
about
success in your
assessment
distinguish
transformation
internal
marketplace every day with a high-performing, high-integrity organization. Because the Baldrige Criteria ask you all
between good
planning
assessment
the right questions.
and great
Is addressing all the Baldrige Criteria easy? No! But neither is achieving sustainable results in today’s challenging
companies
environment. Will the Criteria
help you think and act strategically? Yes. Will they help you align your processes and
Who Assessment
Involves
your resources? Yes. Will they help you engage your workforce and your customers? Yes. Are these worthwhile goals?
You decide.
Flexible
Top leadership
Broad
Flexible
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Criteria or
Information
Assessed
Whether your organization is small or large; is involved in service, manufacturing, government, or nonprofit work; and
has one office or multiple sites across the globe, the Criteria provide a valuable framework that can help you measure
performance
environment. The Criteria
can help
you decide on approaches
such as
ISO
Quality
and and plan in an uncertain
Best practices
Lean
enterprise
Toyota
Production
9000, Lean, a Balanced Scorecard, and Six Sigma; improve communication, productivity, and effectiveness; and achieve
customer
identified in Good practices
System and
strategic goals.
to Great book
(stakeholder
associated
How to begin that first Baldrige assessment? Take a few minutes and scan the questions in the Organizational Profile
with
driven,
holistic
principles
of of
Are certain corporate
cultures
suited
to
certain
types
on pages 4–6. A discussion
of (associated
the answersbetter
to these
questions
might
be your
first Baldrige
assessment.
For additional
highGetting
performing
enterprise
operational
guidance, refer to our free booklet
Started with the Baldrige
Criteria for view,
Performance Excellence.
innovation? If so,
how
can
a
company
create
an
innovation
organizations)
waste
reduction,
excellence
Do you need to know what your
employees and your senior leaders
think?
Or do you believe you
have been making
progress but want to accelerate or better focus your efforts? Try
using
our
simple
Are
We
Making
Progress? and Are
etc)
strategy that fits its own culture and prepares
it to compete
in the
commitment
We Making Progress as Leaders? questionnaires. Organized by the seven Baldrige Criteria Categories, they will help you
checkfor
your progress on organizational
communication
members and
Areas
Trendsgoals
in and can improve Gaps
and among your workforce
Successive
your leadership team.
Output of the
external
market?
Does
perspective
matter?
That is,adoption
does pyramid
seeing
improvement
and
implementation
of
prioritized
Assessment
Even
if you don’t expect to receive
the
Baldrige
Award,
submitting
an Award application
has valuable
benefits. Every
a corporationkeyas
determined
by
the
particular
people
comprising
principles
concepts
improvements
guides
applicant receives a detailed feedback report based on a rigorous evaluation conducted by a panel of specially trained
transformation
experts.
it or seeing it as
an entity through which different people
flow
The Criteria
are in your hands
. . . so is an incredible opportunity.
Why not take
opportunity?for
smallBroad
Designed
foradvantage of that
Designed
Sectors
When you turn these pages, you turn the corner toward performance excellence. If you want more information, please
influence
thisService,
research?
business, health
aerospace, recently manufacturing,
contact me at nqp@nist.gov.
applied to
recently expanded
healthcare
and
to Operational
.EED SOME USEFUL TOOLS TO BEGIN THE
"ALDRIGE CHALLENGE
4RY
USING
services
s Getting Started with the Baldrige Criteria
for Performance ExcellenceExcellence
Sample Size
(approximate)
s Easy Insight: Take a First Step Toward a Baldrige Self-Assessment, found on our
Thousands
Based
on 11
Dozens
Hundreds
Web
site at www.baldrige.nist.gov/eBaldrige/Step_One.htm
s Are Usage
We Makingunknown
Progress? and Are We Making Progress as Leaders?
Contact the Baldrige National Quality Program or visit our Web site for these and other educational materials.
To get support from your state or local quality award program, visit www.BaldrigePE.org.
An abridged LESAT facilitates the reassessment process by scoring a subset of practices.
Initially, determine whether a relationship exists between
corporate culture and innovation strategy or whether the external
market environment is the primary influence in innovation
strategy.
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models for innovation developed by Utterback, Abernathy,
Christensen, Henderson, Brown, Miller and Friesen, identify where
each test corporation falls in each model and run statistical regression
to determine significant correlations.
LESAT Scores and Associated Insights
Understanding the scores for each practice can be
guided by the table below.
Low
.ATIONAL )NSTITUTE OF 3TANDARDS AND 4ECHNOLOGY s $EPARTMENT OF #OMMERCE
To:
U.S. Organizations
Baldrige
Award
Good to Great
Scatter Plot - Current vs. Gap Scores
Histogram of Current Scores
By plotting the mean current and gap (difference
Histograms help visualize the varying perspectives
between current and desired) scores in a scatter
and the goals set out by the desired scores.
plot, one can prioritize transformation efforts to
address those practices in the top left (those
practices
low current score
and a big gap).
Usingwith
theasociological
categorizations
developed by Hofstede and the
engender innovation.
Benefits of Assessment Analysis
•Internal and Across-Enterprise Benchmarking
•Tracking Progress in Transformation Journey
•Tracking Personnel Cohesion and
Communication Scores
•Tracking Lean Knowledge
Some of the most important benefits are the
second order affects of assessment analysis:
•Providing Assessment Feedback to Personnel greater understanding and greater alignment
•Driving Enterprise Behavior - individuals and
departments will act holistically
•Enabling Better Decision Making - empower
decision making using enterprise knowledge
•Guiding Transformation
Current
Performance
Low current
performance or
enterprise maturity
High
High current
performance or
enterprise maturity
Desired
Performance
(based on
transformation
timeline)
Low priority or low High priority and
realized benefits
high potential
(could be unrealized benefits
benefits)
Gap (desired current)
Close to achieving
desired state, could
be under realizing
value of practice or
could be a low
priority practice
Area with low
current
performance and
high realized gains
making it a high
priority for
improvement
Range and
Variance of
Current Scores
High agreement
and understanding
of the practice at
hand
Low agreement and
understanding of
the practice, or
different levels of
performance across
divisions
Online LESAT
In order to improve the assessment process and enable
further research,I have developed an online version of
LESAT. By automating the process, the online tool
ensures more consistent and complete results with a
lower assessment cycle time. The online version includes
extensive facilitation and analysis tools.
http://www.onlinelesat.com/
Indicative practices are chosen to
minimize prediction errors. Predicted
scores for all other practices are
modeled based on independent
equations for current, gap and desired
score, and then are balanced to improve
accuracy.
Single State Prediction Accuracy
0.750
10-Fold Cross Validation MSE
disruptive and sustaining.
of appropriate sociological
models
With an integrated,
closed-loop assessment
(Hallammodels
2003), the assessment results
for cultural classification and technology andcontrol
business
analyzed to provide
numerous insights
for innovation, I selected the models in whichcan
to be
investigate
a
for the broader transformation process.
relationship. Then I identified candidate companies from which to
The charts include:
below show examples from the
collect data. The data to collect from each company
LESAT assessment
cultural data and innovation data to identify cultural
patternprocess.
and
current innovation type.
0.713
5EF-*G'#7>=#-(3
0.675
Prediction Formula
0.638
Parameters in the following function are
3URIHVVRU-DPHV8WWHUEDFNDQG³'LVUXSWLYH7HFKQRORJ\
minimized:
0.600
3UHGDWRURU3UH\´FODVV 0
5
10
15
Number of Practices
3URIHVVRU2OLYLHUGH:HFNDQG³6\VWHP3URMHFW0DQDJHPHQW
Combined Prediction Accuracy (RMSE): 0.277
(6'´
3URIHVVRU'HERUDK1LJKWLQJDOHDQG³,QWHJUDWLQJWKH/HDQ
(QWHUSULVH(6'-´
Acknowledgments
Dr. Ricardo Valerdi, Masters Thesis Advisor
20
H0(#)/(&)#$I#.0#G
•BAE Systems
•Dr. Ricardo Valerdi, Masters Thesis Advisor
•Boeing
•Professor Deborah Nightingale
•Raytheon
•Stan Rifkin (Coauthor on Assessment Models
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on Analysis
•Textron
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References
Ellen Czaika
eczaika@mit.edu