Sample Article

The Assessment Process: An Introduction

Using the Assessment Process to drive Improvement

Senior executives in every type of organization today are asking "how can we do more with less?" – and urgently seeking practical answers. The dismantling of trade barriers has created golden opportunities for enterprising companies that are good enough to compete in markets abroad – and big problems for those that are not efficient enough to compete at home.

Public sector organizations – government departments, hospitals and even educational institutions – are also facing unprecedented new pressures. Most now face an era of cutbacks in resources while at the same time the demands for service are intensifying. Just like private sector companies, they face constant pressure to sharpen up, to deliver 'more bang for the buck'.

Will they succeed in their efforts to improve? It all depends upon what they decide to do. Some strategies that seem simple and easy to understand, and indeed are common practice, lead nowhere in the long run. Typical errors include:

cutting costs by cutting service rather than by eliminating waste
reducing headcount without figuring out how to get the work done with fewer people
failing to investigate and consider customer needs – and hence alienating those whom the organization exists to serve
adopting 'tough' new management tactics that make enemies of employees, unions, suppliers and other stakeholders – rather than enlisting their talents to help solve the problems
following 'fads' – applying approaches which are fashionable at the time, without a good understanding of how they will work for this organization, or without examining alternatives. This leads to a 'flavor of the month' style, in which there is little follow-through and management soon move on to the next fad
applying band-aids – attempting fixes which are too limited in scope, do no get at the root causes of problems
sub-optimizing – applying fixes which cause improvement in one area at the cost of making things worse elsewhere

If sensible decisions are to be made regarding where and how to improve, it is vital to find out at an early stage where the organization stands today. As in medical diagnosis, it is impossible to determine the best treatment without first assessing the condition of the patient.

What is an assessment?

There are countless ways of examining an organization as a preliminary to planning for improvement. One approach, which has proven to be particularly effective is to conduct assessments using broad-based quality management criteria, such as Baldrige, the Canada Awards for Excellence (CAE) or similar.

The criteria used make this process fundamentally different from other types of assessment – although looking at the same issues, the assessors are looking for quite different things.

Many leading companies, such as Xerox, Motorola, Westinghouse and IBM conduct regular assessments of their various divisions as a kind of comprehensive 'fitness test', using these or similar home-grown criteria. These companies know that there is a strong correlation between high assessment scores and high performance.

Many factors determine the performance of an organization, including external events beyond the control of management.

These external forces can cause results to vary from year to year. But management's job is to improve the underlying capability of the organization:– its ability to understand customer needs and to organize itself around these; its ability to develop and harness the talents of its people; its ability to develop efficient processes for doing business.

These are the capabilities that deliver results in the long term – and these are the capabilities that are tested by an assessment.

A study of Baldrige finalists conducted by the US General Accounting Office revealed that these companies demonstrated significant annual improvements over a broad range of indicators of efficiency and effectiveness. The average rate of growth in market share, for example, was 14% per annum, equivalent to doubling about every 5 years.

Another acid test for the financial community: a hypothetical portfolio of stock in Baldrige winners, purchased when each won the award, has appreciated in value more than twice as fast as stock market indices.

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