Baldrige is intentional in the ordering of its seven categories, and leadership is first because it frames the success of the organization, as well as the following two Baldrige categories – Strategy and Customers.
The Leadership category is the second-largest scoring component of the Baldrige framework (Framework, 2017).
The two primary objectives of the Leadership domain are to understand how the personal actions of senior leaders impacts the organization and how the organization is satisfying its legal, ethical, and societal responsibilities through its governance structure and behaviors (Framework, 2017).
Leadership impacts every layer of the Organizational Hierarchy of Needs, creating a cascading impact.
Without strong leadership capabilities, organizations cannot effectively engage colleagues, which deters organizational effectiveness, which in turn hinders customer value and financial performance.
1. Vision and Value
How can Senior Leaders set, deploy, and exemplify the organization’s vision and values (Framework, 2017)?
After establishing or clarifying the organization’s hoshin or purpose, leaders can incorporate the organizational shared values and vision in every component of action and communication.
A positive “roots system” supports each layer of the Organizational Hierarchy of Needs giving strength and purpose to all coordinated activities. When this approach is not effectively deployed, employees and customers see through the shallow façade of actions not aligning with words.
How do senior leaders communicate with employees and customers (Framework, 2017)?
This becomes practical through both the development of an effective cascading scorecard and ongoing dialogue via catchball. The cascading scorecard ensures vertical and horizontal integration with visibility and alignment of actions to strategy.
As previously stated, catchball encourages frequent, open, and two-way discussion between multiple organizational layers through meaningful, intentional leader rounding.
Maintaining open communication channels with customers enables organizations to tap into the market demand, understand and subsequently exceed customer expectations, which ultimately inspires loyalty, as previously outlined in the Organizational Hierarchy of Needs section.
3. Mission and Organizational Performance
How do senior leaders create an environment for learning, achievement, and engagement (Framework, 2017)?
By understanding the strategic priorities of the organization, leaders can encourage employee, company, and customer growth focused around those priorities. Not only does this allow actionable progress with current or annual objectives, it also enables succession planning towards the overarching mother strategies of the organization.
An effective SES empowers employees to act as owners, encouraging action to hit the desired performance measures.
4. Organizational Governance
How does the organization ensure leader accountability and leader performance (Framework, 2017)?
A major advantage of deploying the Strategy Execution System (SES) is that it naturally creates visibility in the system, which promotes accountability in general operations as well as performance evaluations. This is done through the definition, cascade, and measurement of goals, initiatives, and action items.
Tracking performance without regular and visible metrics towards the goal can be likened to playing a sports game without a scoreboard; there is a different level of intensity when you know exactly how far ahead or behind you are from your opponent or goal. Furthermore, the cascading scorecard focuses on consistent alignment to the customer and shareholders via the organization’s strategic goals.
5. Legal and Ethical Behavior
How does the organization anticipate and address compliance concerns and promote ethical behavior (Framework, 2017)?
While the SES does not specifically target any one operational area (such as Compliance), it directly supports whichever areas are critical to the organization. Referring to the Kano Analysis, general compliance components are typically considered Basic Expectations, meaning the business must maintain a focus on these. Subsequently, potential compliance concerns or critical factors should be integrated into the cascading scorecard when relevant.
Additionally, the SES promotes a more focused, yet comprehensive, view of the strategic and operational objectives, enabling leaders to more quickly recognize issues with compliance processes, measures, or goals.
6. Societal Responsibilities
How does the organization strengthen and engage in key community affairs (Framework, 2017)?
Not only does the Baldrige framework assess societal responsibility for individual organizations, it has also developed a new framework specific to communities, known as the Communities of Excellence framework, which aims to improve the overall health and well-being of an entire community by engaging key stakeholders, such as hospitals, churches, schools, and businesses.