Context

Identify the Key Factors

Understand the organization's unique context. One of the main reasons to go through the trouble of developing a “custom” design is so the design “fits” the unique characteristics of the organization and situation. For example, the appropriate strategic management system for the local “Mom and Pop” grocery store is likely to be a bit different from the appropriate system for a multi-national Fortune 500 company with operations in over 40 countries. In order to design a system to fit the unique characteristics of the organization you first have to identify the key organizational factors that impact the design of the particular system.

Step one: Operating Environment - Know your organization and operating environment. The first step is to know your own organization and the internal and external environments. Identify key organization characteristics, including: what the organization does (products, services, and operations); why it does it (mission & purpose); how it does it (culture and values); who does it (employee demographics); and what tools they have to do it (technology, equipment, & facilities). In addition, identify where it does it - the operating environment, including the regulatory environment. While many systems are impacted by only a few contextual factors, management systems like strategy development and deployment are influenced by many to most of the contextual factors.

Examples:

1.Mission, Vision, Values
2.Type of organization and industry
3.Structure of organization
4.Culture of organization
5.Regulatory environment
6.Major technologies and changes

Step two: Stakeholders - Know your stakeholders (internal and external) and what they want.

Customers - Who are the key customers or users of the system and what are their requirements?

Suppliers and Partners - Who are the major suppliers and partners to the system and what are the key supply chain requirements? Step two: Stakeholders (cont.)

Employees - Who are the operators of the system and what are their requirements?

Investors - Who are the investors in this system (and organization) and what are the financial considerations? Investors include owners and stockholders for business; taxpayers for government organizations; and donors for non-profit organizations.

Management - Who are the managers of the system and what do they need?

Five Key Context Areas

•Organizational Environment p. 51
•Organizational Relationships p. 67
•Competitive Environment p. 79
•Strategic Challenges and Advantages p. 89
•Performance Improvement System p. 97

Each BUG section includes a “Blueprint” that identifies some of the applicable key factors. In addition, each section also includes “Integration” notes to explain the key factor linkages in the blueprint.

Example Blueprint (PDF)

Example Integration Notes (PDF)

Step three: Competitive Environment - Know your competitors and associated strategic advantages and challenges. Who are the key competitors, and how good are they? How does the organization compare to these competitors? What performance factors will make the greatest difference with the customers? What are the main challenges the organization faces in winning in the marketplace? What are the most significant operations, people, and global challenges? What advantages does the organization have?

Strategic Management System Example

1.Strategic challenges
2.Time horizon of industry
3.Competitive environment

The Baldrige User’s Guide addresses all aspects of the organization profile. If you are already using the CPE model for enterprise improvement then many to most of the key factors have already been identified in the organizational profile. If you already have an organizational profile the task is to identify the key factors that are important to the design of the particular system that you are working on. Each BUG book section includes a “Blueprint” that identifies some of the applicable key factors. In addition, each section also includes “Integration” notes to explain the key factor linkages in the system.