INTRODUCTION EFFECT BALDRIGE PERFORMANCE EXCELLENCE

INTRODUCTION EFFECT BALDRIGE PERFORMANCE

EXCELLENCE

CHAPTER ONE

During the 80s and 90s, competitive advantage was mainly based on mainstream

activities such as efficiency, quality, customer service and speed. However, in today’s

emerging knowledge economy and global competitions, Innovation became the main

competitive advantage and the indispensable resource for organizations to stay alive in today’s

fast changing global market.

It is not enough for an organization to rely on its past experience or current financial

status to sustain its business in the future, threat of substitution due to advancement in

technologies, innovation in products or introduction of new business models are out there all

the time. It is becoming harder for organization to survive today’s market competition without

continuous innovation. Thus, Innovation is the lifeblood for every living organization and it

must be in the center of every high performing organization.

In order to innovate, an organization must have innovation capabilities. Scholars call

them dynamic capabilities, which are the ability to build, integrate, and manage internal and

external resources to adopt or develop new ideas and convert them into innovative outcome.

Such dynamic capabilities are not easy to develop and maintain in an organization, they require

a holistic change to the organization culture, learning, processes, and strategies, and they also

require time, leadership, and perseverance.

Baldrige Performance excellence program provides none prescriptive solution and

guidance for senior management to assess current performance and institute a continuous

improvement system throughout the organization, which makes Baldrige an ideal framework

for organization to use in order to develop the required innovation capabilities. In this research,

I will study the effect of Baldrige performance excellence program on organization

innovation/dynamic capabilities, through analyzing three different performance excellence

assessment programs at Florida Sterling.

Florida Sterling Council is the approved Florida version of the US National Malcolm

Baldrige Quality Award Program. Florida Sterling offers seven management assessment

programs to help organizations in Florida improve their performance excellence. Three of the

different assessment programs are award level programs that require a written application by

the organizations and experienced external examiners. These three programs are: Sterling

Challenge Award, Governor Sterling Award (GSA), and Governor Sterling Sustained Award.

This research study will utilize Baldrige framework to measure the performance

excellence of a twenty-four organizations, each participating in one of the three Sterling award

assessment programs. The study will also measure the innovation capabilities of these

organizations that completed one of Florida Sterling performance excellence programs using a

survey-based tool. The data collected from both measurements of performance excellence and

innovation capabilities are completely independent from each other, as each measurement will

be conducted through a different mean and during a separate timing frame.

Research question and objective

This dissertation study is focusing on measuring the effect of Baldrige performance

excellence program on organizations’ innovation capabilities. Figure 1 shows the

conceptual framework of this study.

Figure 1: Conceptual framework for the study

This research will answer the following question and hypothesis to explain the relationship

between Baldrige assessment framework and innovation/dynamic capabilities.

Main question: What is the effect of Baldrige (Sterling) assessment framework on Organization’s

innovation/dynamic capabilities?

Main Hypothesis: Baldrige assessment framework has a positive impact on

Organization’s innovation/dynamic capabilities.

To answer the research main question, further sub-questions and hypothesises have been

developed, each sub-question addresses one of six areas that represent a foundation block for

organization’s innovation capabilities (figure 2.0).

Sub-question 1: What is the effect of Baldrige assessment framework on Organization’s value for

innovation?

Hypothesis, H1: Baldrige assessment framework has a positive impact on Organization’s

value for innovation.

Sub-question 2: What is the effect of Baldrige assessment framework on Organization’s behaviour

regarding innovation?

Hypothesis, H2: Baldrige assessment framework has a positive impact on Organization’s

behaviour regarding innovation.

Sub-question 3: What is the effect of Baldrige assessment framework on Organization’s

innovation culture?

Hypothesis, H3: Baldrige assessment framework has a positive impact on Organization’s

innovation culture.

Sub-question 4: What is the effect of Baldrige assessment framework on Organization’s

innovation’s resources?

Hypothesis, H4: Baldrige assessment framework has a positive impact on Organization’s

innovation’s resources.

Sub-question 5: What is the effect of Baldrige assessment framework on Organization’s

innovation’s processes?

Hypothesis, H5: Baldrige assessment framework has a positive impact on Organization’s

innovation processes.

Sub-question 6: What is the effect of Baldrige assessment framework on Organization’s

innovation measurement?

Hypothesis, H6: Baldrige assessment framework has a positive impact on Organization’s

innovation’s measurement.

Figure 2: Research Model

Research objective

The objective of this research is to study the effect of Baldrige program on

organizations innovation capabilities, and to show that this business performance excellence

program can help and guide organizations to conduct the required holistic changes to improve

organizations innovation’ capabilities.

Research Gap

According to literature, there is very little in-depth research on how organizational

capabilities for innovation are developed in practice (Börjesson & Elmquist, 2011). In the

Baldrige side, a recent study shows that limited amount of scholarly research has been

performed using the Baldrige Criteria and applicant data (Evans & Mai, 2014). The study

argues that rigorous research on the impact and effectiveness of the Baldrige program is still

nascent.

This dissertation research addresses both calls from organizational capabilities

and Baldrige program literatures. In this study, the effect of Baldrige program on

organization innovation capabilities will be assessed and analyzed (Figure 1.0).

Expected contribution

This study will contribute to both theoretical body of knowledge and practice. In

theory, this study will contribute to organizational capabilities theory through suggesting

Baldrige program as a practical and systematic framework for improving organizational

capabilities for ordinary capabilities and dynamic/innovation capabilities.

In practice, this study will help convince organizations leaders and senior managers

that Baldrige program can be used as a framework to guide the organization step by step in

assessing its current capabilities, identifying the gap in its ability to innovate and then

systematically developing and improving the skills, knowledge and processes that are needed

to support organization’s innovation.

Research Assumptions

In this research, several assumptions have been made. First, this study assumes that

organizations participating in Baldrige program know about innovation and have the

intentions to innovate. Secondly, participating employees in the survey are active in their

organization and are aware of their organization innovation efforts. Third, This study assumes

that organizations are participating in Baldrige (Florida Sterling) program to improve their

performance excellence and not for just winning a state award.

CHAPTER TWO: LITERATURE REVIEW

Introduction

This literature review covers multiple areas of interest as I am trying to link more than

one discipline to come up with an innovative research topic for my PhD. Dissertation. My

research links three main bodies of knowledge; Total quality management systems represented

in Baldrige program, Organization’s innovation, and organization’s capabilities. As I went

through the literatures and papers that cover these bodies of knowledge I managed to scope the

research to focus on Organization’s innovation/dynamic capabilities area of study and how

they are affected by a total quality management system such as Baldrige Performance

Excellence Program.

Methodology

The literature review started with collecting past literature reviews on the different

bodies of knowledge to understand the current status and know the important and significant

research studies in the field. Several key words were used in the title such as “organization’s

innovation”, “innovation capabilities”, “Baldrige” and “performance improvement” in the

following electronic databases: Science Direct, Proquest, Emerald, and Google scholar. Peer

reviewed mark was checked during the search. However, some references (less than 10%),

mostly related to Baldrige, are either books or manuals and are not considered peer-reviewed

articles. Selection criteria were based on number of citation for papers published before 2010,

as I selected the most cited papers, the ones that have been referenced at least more than 5

times a year, many of the selected papers are referenced hundreds of times. Also the journal

name was used to assess the quality of the paper for articles that have been published in the

past two years with low number of citations.

Innovation

Literatures reviews show no common definition for the term “innovation”, which lead

to confusion and challenges in qualifying innovation activities to advance the body of

knowledge (Cooper, 1998; Zairi, 1994). The different understanding of innovation is mainly

attributed to the vast studies on the topic in diverse fields of knowledge and by different

communities of researchers (F. Damanpour & Aravind, 2011). Lack of communication between

these different communities added some degree of fuzziness to the basic concept of innovation

(J. Fagerberg, 2004).

Different definitions of innovation have been offered over the years. As early as 1934,

J. Schumpeter defined innovation as a phenomenon that includes any of the following: 1)

introduction of a new good; 2) introduction of a new method of production; 3) opening new

market; 4) opening up a new source of supply for raw material; 5) creating a new organization

structure. Another early definitions of innovation stated, “Innovation is the generation,

acceptance and implementation of new ideas, processes products or services” (Thompson,

1965). At the organizational level, Innovation is defined as “any idea, practice, or material

artifact perceived to be new by the relevant unit of adoption” (Zaltman, Duncan, & Holbek,

1973). Innovation is defined as “the generation, development, and adaptation of novel ideas

on the part of the firm” (F. Damanpour, 1991). Another definition which was also quoted in

2009 (Wong,

Tjosvold, & Liu, 2009) states “Innovation can be defined as the effective application of

processes and products new to the organization and designed to benefit it and its stakeholders”

(West & Anderson, 1996). At the managerial level, innovation includes any policy, structure,

method or process, or any product or market opportunity that the manager of an operating unit

perceives to be new (Nohria & Gulati, 1996).

Some scholars tie innovation with “change”, they see innovation as a driver for change

that is needed due to external market pressure or as strategy to influence the external market (F.

Damanpour, 1996). While innovation results in change, not every change is innovation.

Researchers use the word “new” to distinguish innovation from regular changes

(Johannessen, Olsen, & Lumpkin, 2001; Slappendel, 1996). Also the amount of change

resulted from an introduced innovation depends on the organization’s resources, capacity,

strategy, and need (Baregheh, Rowley, & Sambrook, 2009).

The common theme in all different definitions of innovation is the key word “new”, a

further definition went on assessing the relativeness of the idea to the adopted entity, “As long

as the idea is perceived as new to the people involved, it is an ‘innovation’ even though it may

appear to others to be an ‘imitation’ of something that exists elsewhere” (Van de Ven, 1986).

Using the same concept of referent entity, Innovation is defined as an idea, practice or object

that is perceived as new by an individual or other unit of adoption (E.M. Rogers, 2002).

Sometimes people confuse innovation with invention. While invention is the process of

developing or generating a new idea and make it workable, Innovation on the other hand is the

process of converting this new idea into application used by customers and commercially

accepted in the market (Roberts, 2007). So a new workable idea will remain as an invention

until this idea goes through a process of manufacturing, marketing, and sales and get accepted

by the customers. Producing an economic value is the main distinction between invention and

innovation (Garcia & Calantone, 2003)

In addition, an invention requires technical knowledge in the field to come up with a

new workable idea, However, innovation requires the rest of skills needed to successfully carry

this idea from the lab or testing field to the outside world, such as manufacturing, management,

marketing, financing skills. (Jan Fagerberg, 2006; Garcia & Calantone, 2003; Roberts, 2007).

So innovation is the process of converting a static idea into a dynamic living product, process,

or concept.

Innovation always follows the introduction of an idea, in some cases there is a

considerable amount of time, years or decades, separate an invention from innovation. This

could be due to lack of required infrastructure, major input, complementary product, or

basically insufficient needs (Jan Fagerberg, 2006). For example, when Microsoft introduced

the tablet PC in 1999, after a decade of trials by other companies, the product failed in the

market due to lack of wireless infrastructure as requirement for mobility and lack of developed

applications. On the contrary, when Apple introduced its tablet “IPad” in 2010, ten years later,

the wireless infrastructure was everywhere, the need for such convenient mobile device was

there, and a market full of applications for this new device was in place. All these factors led

to a big success for the Apple IPad, as it turns to be a big hit and created a new market in the

industry and a new source of revenue for Apple.

This distinction between invention and innovation led to the following equation:

Innovation = Invention + Exploitation, where invention covers the seed of the workable idea

and exploitation covers the commercialization part of it (Roberts, 2007)

Latest studies in the field defines innovation comprehensively as “production or

adoption, assimilation, and exploitation of a value-added novelty in economic and social

spheres; renewal and enlargement of products, services, and markets; development of new

methods of production; and establishment of new management systems. It is both a process

and an outcome” (Crossan & Apaydin, 2010).

In summary, there are various definitions for innovations, which, basically depend on

the researcher background and area of study. Even though the definitions vary, but most

importantly, all researchers agree that innovation is something new that adds value to the

organization.

While there has been a growing interest in the concept of open innovation from the

early 2000s, one of the major challenges facing empirical research today is to understand the

learning mechanisms that might benefit from open innovation (Geenhuizen & Soetanto,

2012).

Classes (magnitude) of innovations

Innovation classification is used to differentiate innovations based on their magnitude

of innovativeness, newness, or degree of departure from existing line of innovation. Current

literature shows the following different classifications:

Dichotomous classification: radical/routine (Meyers & Tucker, 1989),

discontinuous/continuous (Anderson & Tushman, 1990), innovation/re-innovation (Rothwell &

Gardiner, 1988), Evolutionary/revolutionary (Utterback, 1996), sustaining/disruptive

(Christensen, 1997), Radical/incremental (Balachandra & Friar, 1997; Freeman, 1998; Kessler

& Chakrabarti, 1999), innovative/incremental (Schmidt & Calantone, 1998), really

new/incremental (Song & Montoya Weiss, 1998).

Triadic classification: discontinuous/dynamically continuous/continuous

(Robertson, 1967), low innovativeness/moderate innovativeness/high innovativeness

(Kleinschmidt & Cooper, 1991), incremental/platform/radical (Wheelwright, 1992).

Despite the different naming convention, All researchers agreed on the two extreme

ends of definition for the innovation classification, as they defined

continuous/incremental/routine/reinvention innovation as a miner or regular improvement of

an existing product with no market disruption or creation (Anderson & Tushman, 1990;

Meyers & Tucker, 1989; Robertson, 1967), while

discontinuous/radical/revolutionary/discontinuous innovation creates new products that

disrupts current market and create a new one, change customers behaviors and create new trend

(Anderson & Tushman, 1990; Meyers & Tucker, 1989; Robertson, 1967)

The different classifications are a result of different views by researchers in different

fields. One view develops its classification based on firm and industry existing knowledge,

skills, and production techniques. Based on this view, a radical or disruptive innovation will

change current firm and industry investment in the existing knowledge, skills, and production

techniques. Incremental or continuous innovation will keep building on existing knowledge,

skills and production technique (Utterback, 1996). Another view looks into the level of

departure from existing technological innovation, and whether this departure creates a new

market or not (Rothwell & Gardiner, 1988). A third view focuses on level of newness to the

world, market, and firms (Kleinschmidt & Cooper, 1991).

These different classifications have resulted in classifying a certain innovative product

differently, For example, certain innovation might be classified as radical innovation based on

one view in the meantime it’s classified as moderate innovation by another view. Some time

the same innovation is classified with the same magnitude by the different classifications but

with different labels such as, high innovative, radically new, or disruptive innovation (Garcia

& Calantone, 2003).

While different classifications in literature introduced over the years by different

researches in an effort to define the magnitude of the innovation output with more precision,

lack of standardization and the use of different innovation labels confuses the market and

managers who work on producing and managing innovative outputs.

Types of innovations

The identification of different types of innovations is attributed to Schumpeter’s early

work. Schumpeter distinguished between five different innovations: new products, new

methods of production, new sources of supply, new market, and new ways to organize

business (Jan Fagerberg, 2006; Godin, 2002). However, most studies focuses and differentiate

between the first two; product, and process innovations (Cooper, 1998; F. Damanpour &

Aravind, 2011; Jan

Fagerberg, 2006; Utterback, 1996; Zaltman et al., 1973)

Another classifications of innovations, mostly interested in organizational development,

distinguish three types of innovations; product/service innovation, process innovation, and

business model/organizational innovation (Crossan & Apaydin, 2010).

The organization for economic cooperation and development (OECD), consist of 30

countries from Europe and America, defines and distinguishes between four types of

innovation in the published Oslo manual, these four types are; product innovations, process

innovations, organizational innovations and marketing innovations (Publishing, 2005).

Five different types of innovations were also identified as part of organization’s

overall innovativeness; product innovativeness, market innovativeness, process

innovativeness, behavioral innovativeness, and strategic innovativeness (C. L. Wang &

Ahmed, 2004).

The literature provides the following definitions for the four most known types of

innovations: product, process, marketing, and organizational innovation.

Product innovation

Product innovation is defined as improving existing or producing a new product or

service with new capabilities and features new to the market (Publishing, 2005). The focus of

product innovation is external to the organization as the goal is to meet customers needs (F.

Damanpour & Aravind, 2011; Utterback & Abernathy, 1975), Timing of introducing the

product to the market is a critical factor in the definition of product innovation (C. L. Wang &

Ahmed, 2004).

Process innovation

Process innovation is defined as the introduction of a new method in the organization

to produce a product or render a service (F. Damanpour & Aravind, 2011; Publishing, 2005;

C. L. Wang & Ahmed, 2004). The focus of a process innovation is internal to the organization

as the goal is mostly efficiency improvement through cost cutting and reducing development

time for products (Cohen & Levinthal, 1990; J. Fagerberg, 2004; Frishammar, Kurkkio,

Abrahamsson, & Lichtenthaler, 2012; C. L. Wang & Ahmed, 2004).

Organizational innovation

Organizational innovation is defined as a new configuration of organizational

capabilities or developing a new way of doing business or introducing major changes to current

business practices within organizations (Armbruster, Bikfalvi, Kinkel, & Lay, 2008;

Carayannis & Provance, 2008; Publishing, 2005). In the context of economic development,

Schumpeter defined organizational innovation as “The carrying out of the new organization of

any industry, like the creation of a monopoly position or the breaking up of a monopoly

position” (F. Damanpour & Aravind, 2011). Wang and Ahmed (2004) view this model of

innovation as a strategic innovation, which they define as defining market gap and developing

a new strategy to cover this gap and create value for the firm.

Marketing innovations

Marketing innovation is defined as implementing new marketing channels and methods,

such as new promotions ideas, new pricing structure, new packaging (Publishing, 2005; C. L.

Wang & Ahmed, 2004). Marketing innovation is more involved with opening new markets,

product positioning, better understanding customers needs, and increasing sales (Gunday,

Ulusoy, Kilic, & Alpkan, 2011)

Innovations are also categorized as either technical or administrative innovations, this

is popular among organizational and management researchers. Technical innovation refers to

novel technological methods that effect production of products and services, while

administrative innovation is mainly concerns with organization’s activities that affect

management systems (F. Damanpour & Aravind, 2011). Another differentiation between the

two types of innovation is that technical innovation address changes that have direct influence

on the core business of the organization, such as new services or new products, while

administrative innovation address novel changes that has indirect influence on the core

business such as management related activities (S. Gopalakrishnan & Damanpour, 1997).

The different types of innovation has a link to the magnitude of innovation; As

incremental innovation is mostly associated with product/service or process innovation, and

radical innovation is associated with business model that is part of the organizational

innovation, even though radical product innovation is the focus of many organizations

(Crossan & Apaydin, 2010).

Innovation referent dimension

Innovation referent defines innovation newness in reference to an entity such as the

end customer, the adopting organization, or the market. For example, a product or service

might be new to the customer (C. L. Wang & Ahmed, 2004), organization (Davila et al.,

2006), or market (Lee and Tsai, 2005) but not to another entity. Innovation referent dimension

is linked with the magnitude of innovation, as the degree of innovativeness from highly

innovative to low innovative can be seen differently by different adopting entities. Most

studies take the organization’s perspectives as a referent towards the magnitude of innovation

more than other entities (customers, market) (Garcia & Calantone, 2003).

Innovation levels of analysis

Literatures shows that innovation analysis has been conducted at different levels;

individual, team, organization, industry, region, and nation. The macro level analysis study

innovation at the market, industry, region and nation level. The micro level analysis studies

innovation at the individual and team level. And the in between “meso level” studies

innovation at the organization level. Innovation is a multilevel phenomenon, however,

literature shows that most studies were conducted at specific levels and not across multiple

levels (Gupta, Tesluk, & Taylor, 2007).

Studies of innovation at the Individual level concentrates on the factors that determine

individual creativity. Two directions are used to evaluate innovation at the individual level, one

that treat individual as an entity and creativity as an output of personal traits, the other look at

the individual as part of a working environment which has much effect on the personal

creativity output. Studies at the team level concentrate on fostering group creativity and

interaction among group members. Studies show that teams with high number of diverse

members working together for long time demonstrate higher performance. The majority of

researches are conducted at the organizational level with three main areas of studies;

technological innovation, product or business development, networking among organizations

and its effect on organizational innovation. Studies at the industry level focus on the interaction

among organizations forming the industry and the diffusion of innovations. The analysis at this

level covers the effect of the cooperation and competitive nature among organizations in an

industry on the emergence and diffusion of innovations. Studies at the region and nation levels

focus on the determination of innovation and variation of innovation capacity across regions

and countries, Studies did not focus on the management of innovation as much as the

interaction among individuals and firms as well as the diffusion and creation of innovation

(Gupta et al., 2007).

The studies of different levels of analysis for innovation shows that organizations do

not innovate in isolation, but they interact with their environment horizontally and vertically

which create a system or network of innovation (Jan Fagerberg, 2006).

In this research, innovation is analyzed at the organization level, the relationship between

organization innovation and organization performance excellence is the target of this study.

Researches related to the macro or micro levels will not be covered in this study.

Diffusion of innovation

Innovation diffusion is the process of disseminating an innovation to target customers

over a period of time (Everett M Rogers, 1995). Certain innovations get adopted quicker

than others because diffusion of innovation is affected by four main factors; the innovative

product that need to be diffused, the channels of diffusion, time, and the target customer

(E.M. Rogers, 2002). The characteristics of each innovation define the rate of adoption by

the intended customers. These characteristics are:

• Relative advantage: the degree an individual perceives the innovation as

advantageous.

• Compatibility: the degree of consistency of an innovation with existing value and

previous experience.

• Complexity: the degree to which an innovation is perceived hard to use or

understand.

• Trialability: the degree to which an innovation may be experimented with for a

limited period of time.

• Observability: the degree to which the result of an innovation is visible to others.

An innovation that has perceived greater relative advantage, compatibility, trialability,

observability, and less complexity is adapted more quicker than other innovations(E.M. Rogers,

2002).

Organization Innovativeness and innovative capacity

Innovativeness is defined as the propensity of an organization to develop or adopt

new ideas and use them to develop new products (F. Damanpour, 1991; Ettlie, Bridges, &

O'keefe, 1984; Garcia & Calantone, 2003; Hurley & Hult, 1998).

The literature shows diverse understanding and dimensions for organizational

innovativeness, Hurley and Hult (1998) state that organizational innovativeness is associated

with the organization’s culture that is characterized by emphasis on learning, participation

in decision making, support and collaboration, tolerance to conflict, market focus, and power

sharing, They argue that these characteristics are antecedents to organizational

innovativeness.

Another empirical study argues that market orientation (activities related to generating,

disseminating, and responding to market intelligence), learning orientation (the development

of new knowledge), and entrepreneurial orientation (proactive risk taking through creating

new products and entering new market) are three key antecedents to organizational

innovativeness (Hult, Hurley, & Knight, 2004). Capon et all (1992) use four dimensions for

defining organizational innovativeness; market-related growth, technology-related revenue,

tendency to pioneer, and technological sophistication. Wang and Ahmed (2004) define five

dimensions to determine organizational innovativeness. The five dimensions are product

innovativeness (perceived newness of product), market innovativeness (innovation related to

market research, advertisements and promotion), process innovativeness (new production

method or new management approach), behavioral innovativeness (internal organizational

receptivity and reaction to innovations), and strategic innovativeness (identifying gaps in the

industry and seek new markets to create value to the organization).

While old studies used product innovation and organizational innovativeness

interchangeably (Capon, Farley, Lehmann, & Hulbert, 1992), other scholars differentiate

between organizational innovativeness and product innovativeness, they argue that product

innovativeness measure the degree of product newness to the customer, organization, or

market (Atuahene Gima, 1995; Danneels & Kleinschmidtb, 2001), and it does not measure

or reflect organizational innovativeness accurately, as a matter of fact, using product

innovativeness as an only measure for organizational innovativeness is a very narrow view of

organizational innovativeness (Garcia & Calantone, 2003).

Hurley and Hult (1998) suggest that organization innovativeness along with other

organization aspects, such as age, planning, formalizations, differentiation, market

intelligence, increase the organization’s capacity to innovate. Organization capacity to

innovate can be measured by the numbers of innovations developed or adopted successfully,

The higher innovation capacity an organization has the faster and more successful the

organization will respond to changes in the market. The higher the organization capacity to

innovate the more competitive and better performance the organization is in the market

(Hurley & Hult, 1998).

Innovative capacity, innovative capability, and absorptive capacity terms have been

used in different studies for almost the same meaning and concept. In one study innovative

capability and absorptive capacity are used synonymously and are defined as the organization’s

ability to identify the importance and value of new external information, understand it, apply

it, and commercialize it in the market successfully (Cohen & Levinthal, 1990). Another study

states that innovative capacity and absorptive capacity are relative and are measured by the

number of successfully adopted innovations (Hurley & Hult, 1998).

Process of innovation

Innovation as a value chain

Innovation process could be viewed, as a value chain comprised of three phases: idea

generation, conversion, and diffusion. Six tasks are linked together across these different

phases to form a chain. Internal, external, and cross-unit collaborations to generate ideas;

screening and development of ideas to convert them into product; then spreading developed

ideas within and outside the company as part of the diffusion phase. Weakness in any link of

the chain could break the innovation efforts. The value chain view of the innovation process

could help in focusing on the weakest link and work on improving it to increase the value of

innovation with organizations. Several practices can be used to strengthen these links; building

external networks to extract and pass customers needs to R&D labs and partners for solutions,

also building internal networks, communities of specialized groups from different units of the

organizations to solve specific problems; establish cross unit funding to support and develop

radical ideas, establish a separate business unit to develop new ideas that support the

organization strategy, this create a safe heaven for potential ideas; and designate idea

evangelists to support the diffusion of the developed product (Hansen & Birkinshaw, 2007).

Innovation and organization performance

Innovation has been linked positively with performance ever since the introduction of

innovation concept through the work of Schumpeter in 1934 and 1942, his theory states that

firms maintain temporary quasi monopoly through innovation that allow firms to extract rents,

however this temporary lead in the market can be eroded due to imitators from competitors or

a new innovation that put the leading firm’s innovation to obsolete. With distinctive

innovations, organizations establish dominant position in the competitive market, and provides

new entrants a foothold in the market (Danneels & Kleinschmidtb, 2001). But to maintain

sustainable competitive advantage, firms must continue to innovate to utilize better productive

processes and keep up with changing customers’ needs and demands (Gunday et al., 2011).

According to literatures, Four different types of performance dimensions are used

to define organization performance, these are financial performance, production

performance, market performance, and innovative performance (Gunday et al., 2011)

The literature also shows an increase number of studies that address the effect of

innovation on organization performance in recent years (Rubera & Kirca, 2012). While there

is a general agreement among researchers that innovation influence business performance

(Hult et al., 2004; Szymanski, Kroff, & Troy, 2007), some other studies show neutral effect

(Lin & Chen, 2007; Subramanian & Nilakanta, 1996).

The link between innovations and performance was also extended to cover other

dimensions beside types of innovations; for example, quickness and speed in adopting new

innovations and number of adapted innovations were tested against organization

performance, and the study concluded that both speed and amount of adopted innovations

have positive influence on organization’s financial performance (Shanthi Gopalakrishnan,

2000). Another study tested the effect of magnitude of innovation on organization’s

performance, specifically profit, economic rent, and risk, using data on new products from

consumer packaged goods industry, the study concluded that incremental innovation

preserve companies’ value and keep the company in the market with no additional risk,

however, radical innovation increase values for the companies, allows to achieve long term

growth with high associated risk that is usually offset by increase stock returns (Sorescu &

Spanjol, 2008).

The literature shows that most studies on the relationship between firm innovation and

firm performance measure the effect of different types of innovations (product, process,

organizational) as a whole or more than one type of innovation (process-product,

organizationalprocess, or organizational-product) on firm performance (Calantone, Cavusgil, &

Zhao, 2002; Hult et al., 2004; Hurley & Hult, 1998; Jenssen & Rand, 2006; Keskin, 2006;

Ortega, 2010; Yang, Marlow, & Lu, 2009). Studies also show that different innovation’s types

influence each other, thus several innovations types might need to be implemented at the same

time to achieve a better performance results (Walker, 2004).

The various impact of different types of innovations on organizational performance

encourage studying each type of innovation and assess its impact on the performance of the

organization (Publishing, 2005). New studies proofed that different types of innovations

have different influence on organizational performance (Gunday et al., 2011).

Organizational innovation and performance:

Literatures shows that studies on the relationship between organizational innovation

and organization performance scarce and mostly old (Mol & Birkinshaw, 2009). While old

studies showed little evidence on imperial relationship between organizational innovation and

organization performance, A study conducted in 2006 confirmed that organizations that have

better performance are more involved in innovative organizational changes (Mazzanti, Pini,

& Tortia, 2006). Changes introduced by organizational innovation, such as new organizational

method in a firm's business practices, workplace organization, or external relationships have

to be new to differentiate it from other regular changes in the organizations (Armbruster et

al.,

2008; Birkinshaw, Hamel, & Mol, 2008).

Another study was conducted in china to study SME innovation effect on their

performance, and the result showed that administrative innovation in terms of wide and new

organizational changes leads to increase of sales, which is the measure used to assess the

organizations performance in the study, (Lin & Chen, 2007).

Mol and Birkinshaw (2009) confirmed a positive relationship between the introduction

of new management practices and future improvement of organizaion performance. The

perfromance measure in Mol and Birkinshaw study was based on the productivity growth

within the organization, they argue that other measures of performance such as stock market

has the market condition as an exogenous factor and does not reflect pure results of

organizational innovation. Another study conducted in China and Hong Kong to test the effect

of organizational innovation on organization performance with two different institutional

context; chinese transition economy, and hong kong market economy. The study confirmed

that organiational innovation effects the performance of organizations in transtional economy

more than product innovation, and the opposite was also confirmed in market economy such

as in hong kong (Luk et al., 2008). This study also confirmed that the institutional context may

effect the result of organization perfromace that occur due to organizational innovation.

Camisón and Villar-López (2012) also confirm the relationship between orgnizational

innovation and organization performance using a resource-based view theoritical framework.

They tested different innovation’s types (organizational, process, and product) and their

effects on the performance of the organization as part of the imprical study condusted on 144

spanish industrial companies. Organizational innoavtion turned out to be as important as

other types of innoavtion as studies show better organization performance is resulted when

organizational innovation is considered along with other innovations types (product/process)

(Carayannis & Provance, 2008)

Process innovation and performance:

Process innovations are assumed to enhanced efficiency of organizations and thus

achieve competitive advantage in the market (Baer & Frese, 2002) through internal savings

that lead to competitive pricing offerings in the market (Gunday et al., 2011) and cost

leadership .

Cost cutting and saving is always tied with process innovation as stressed in the literatures (J.

Fagerberg, 2004). Beside operational savings, Organizations employ process innovation to

improve delivery lead-time (Fariborz Damanpour, 2010). According to Gunday et al. (2011)

Process innovation has a positive effect on organization’s innovative performance that act as a

mediator to production and market performance. A new study confirmed that process

innovation also has an indirect effect on organization’s performance when it is mediated by the

development of product innovation capability (Camisón & Villar-López, 2012). Process

innovation is crucial for organizations as the competitive advantage and economic

improvement lies in the innovative use of technologies, not in the development of new

technologies (Stone, Rose, Lal, & Shipp, 2008).

Product innovation and performance:

Literatures shows that among all the innovations types, product innovation is the

most type examined and the one that has most effect on performance compared to other

types of innovations (Gunday et al., 2011), unlike process innovation that mostly has

internal focus, product innovation has an external focus and drive organization’s

effectiveness through responding to customers need and capture market (Fariborz

Damanpour, 2010). A study showed that, hard to copy, new product innovations will help

organizations maintain their market leadership and cash-flow (González-Alvarez & Nieto-

Antolín, 2005), Another study confirmed this using stock market value as the performance

measure (Srinivasan, Pauwels, Silva-Risso, & Hanssens, 2009). The same study also tested

the radical type of product innovation, and it concluded that a new to the market product

(radical innovation) has seven times the impact of a new to the organization product

(incremental innovation). Similar conclusion of radically innovative products result in

higher performance impact was introduced in a recent meta-analysis study (Rubera & Kirca,

2012). These conclusions match with the resource based view (RBV) study (J. Barney,

1991), which states that firms with distinctive resources that are rare, valuable, inimitable,

and substitutable achieves superior performance and sustained competitive advantage. Hard

to copy radical innovative products have the distinction of rare, valuable, and inimitable at

least for some time.

Marketing innovation and performance:

Marketing innovation is critical for organizational performance, as targeting new

markets or new segment and creating new way to promote products increase the success rate

of a new product and increase sales. Market research that identifies new market practices and

new customer demands are crucial to product and process innovation (Publishing, 2005).

Sorescu & Spanjol (2008) confirmed in their study that marketing innovations represented in

new packaging and merchandising innovation can be a source of significant economic rent.

The literature shows a wide variety of studies that tried to explain the effect of

innovation on organizations performance, however, due to the different understandings and

views on innovations, the organization’s level innovation studies are fragmented, also the use

of different categorizations of innovation and different performance measurements lead to

contradictory results, this was mainly due to lack of agreement on innovativeness or

performance measures. Finally, most studies were conduced in developed countries; more

studies are needed in developing countries to better generalize the relationship between

innovation and performance.

Measuring organization innovativeness

Measuring innovation is very important; a survey conducted by McKinsey in 2008

found that companies that measure their innovation activities have the highest return from

innovation. About 70% of the interviewed firms indicated that innovation is in the top three

priorities in their organization agenda. Measuring innovation allows for proper resources

allocation, management and improving of the overall innovation performance (Stone et al.,

2008).

Innovation is a complex, nonlinear, and unpredictable phenomenon with multi facet

and dimensions. These various dimensions of innovation illustrate why innovation activities

are a difficult to measure. (Stone et al., 2008). The difficulty of measuring innovation also

comes from the fuzziness in the innovation concept and definition, as some define innovation

as an output of an R&D and other activities, while others define innovation as the activities

and R&D that leads to innovative output, this make innovation measurement a complex and

difficult process (Feeny & Rogers, 2003; Godin, 2002). Since there is no single and fix

method to innovate, using one dimension to measure innovation is likely not accurate

(Shapiro, 2006; Stone et al., 2008). Several indicators have been used over the past decades to

measure innovation in organizations. These indicators vary from input indicators, to output

indicators, to activities or process indicators. The literature shows that innovation metrics have

evolved over the years; starting with input indicators that was the main measurement for

innovation in 1950s-1960s, then output indicators came as next generation measurement in the

1970s-1980s, third generation indicators emerged during the 1990’s with focus on innovation

surveys, indexing, and benchmarking; the fourth generation indicators started in the early

2000 and focus on process indicators that mostly measure intangibles activities to assess

innovation (Stone et al., 2008).The following is a summary of most known indicators:

Innovation output indicators:

Output indicators represent the results of innovations activities within or outside (collaboration

with external organizations) the organization, these include all types of innovation output

(products, processes, marketing, organizational), it also include number of patents, percentage

of revenue from innovative products (Godin, 2002)

1. Number of Patents: patent statistics are the most commonly used measure for

innovation output. Patent gives firms a temporarily monopoly to use their discoveries,

It is an incentive given to firms to continue innovate. Patent data has several advantages;

it is available all time, shows collaboration with other organizations, and shows

technological level. However, these advantages come with drawbacks, not all

innovations are patented, some innovations are covered by multiple patents, also not all

patents are considered innovations as many patents might not end up in the market. In

addition,

different industries have different propensity to apply got patents. (Brenner & Broekel,

2011; Publishing, 2005)

2. Number of innovations: counting innovations over a period of time, for example

between 2010 and 2013, using experts’ opinions. The advantage is that this will provide

a direct measure of innovation output, however, the downside of it are the high cost and

efforts to identify these innovations, also this methods can’t be immune to selection

bias

(Brenner & Broekel, 2011).

3. Percent of revenues from new products: a quantitative method that is easy to

understand and use to measure innovativeness of organizations. It can be integrated

with an accounting system to automate this measurement once innovative products are

defined in the system. However, just like other methods of measurement, this measure

has some issues; perhaps identifying the innovative product is a major one, companies

update their products frequently; so does any change count as a new? How much update

is required to consider a product as innovative? What if the process of manufacturing a

product or rendering a service changed but the product or the service itself did not, cost

will go down but revenue might be the same. Another issue is related to the time, for

how long will this new product be measured? One year, two, or more. A predefined

period of time is required to measure the percent of revenue out of a new product, and

this time frame is different from one industry to another, in high tech industry one year

might be a suitable time frame, however, one year is not enough to measure revenue

coming out of new products in oil industry. Product life cycle is different from one

industry to another and this might change the time frame for measuring revenue from

innovative products. Third issue deals with the type of innovation, while pure product

innovations (product or service) can be measured easily with this approach, process,

organizational, or marketing innovation need extra thinking to be measured. Perhaps

even harder if a mix of innovations are used such as a mix of product with process or

product with marketing or product with new business model (Shapiro, 2006).

4. Percent of revenue from new platforms: another quantitative method proposed to

overcome the limitation of measuring percent of revenue from new products. This

method help measuring other types of innovations (i.e. process, organizational,

marketing). Revenue from platform could be an input indicator, but it’s mostly measure

the output of the types of innovations. New platforms could be new machineries in a

production line, new organization policies, new marketing channels, or new process in

delivering services or products. Just like revenue from new product, revenue from new

platform has similar issues, such as defining new platform and whether new is

considered an innovative or not. Also time frame could be longer here than in revenue

from new product (Shapiro, 2006).

Using the output only to measure innovation treats the innovation process as a black box; all

the interactions inside the box (activities) are not used to measure the firm innovation, which

result in missing many aspects of the efforts and activities used in producing the innovative

outputs. Innovation input indicators:

Input indicators represent all the efforts and resources, tangible and intangible, put into

the innovation system within an organization to innovate. These inputs include human capital,

R&D and non R&D expenditure, number of people devoted to innovation number of ideas or

concepts being generated. R&D expenditure is a critical innovation input; most innovative

companies’ invest in R&D to continue innovating in their market. Thus measuring R&D

expenditure thought to be a good assessment for innovation since the information of R&D

expenditures are usually available within firms’ accounting systems (Brenner & Broekel,

2011). However, even though R&D plays a major role in the innovation process, not all

innovations are based on R&D activities. In a recent survey conducted by economist

intelligent Unit, half the respondent said that their best ideas came from industry and market

structure change and only 21% said that they came from R&D (Unit, 2007), as matter of fact

many innovations relies on high skilled workers, interactions with external organizations, and

organizational structure and propensity to innovation (Publishing, 2005). Using R&D

expenditure only might not be an accurate measure as studies show that less than 10% of

innovation cost is attributed to R&D expenditures, This confirms that R&D only dimension is

not enough measurement for innovation (Godin, 2002).

Innovation process indicators:

The innovation process indicators covers all the activities that an organization take

internally and externally to innovate. They are mostly intangible indicators that have produce

innovation outputs and improve performance in organizations (Carayannis & Provance,

2008). Latest studies shows that collaboration with external organization as oppose to

organization’s internal knowledge represented in R&D, turns out to be more critical for

organizations to innovate (Powell, Koput, & Smith-Doerr, 1996). Open innovation became

a strategic direction for many organizations to innovate, it allows for exploring broader

solutions, in the meantime reduce risk and cost associated with internal R&D activities

(Stone et al., 2008). Firms collaborate, share resources, and human capital with partners

(external organizations) and all this contribute to improve organization’s innovations

(Brenner & Broekel, 2011) .

Multi-dimensions indicators:

Using a mix of input, output and process indicators to measure innovation (Carayannis

& Provance, 2008; Feeny & Rogers, 2003). The use of multiple indicators overcome some of

the limitation with single dimension measurement, however, the literature shows that this

approach is still underdeveloped as very few studies addressed this approach (Carayannis &

Provance, 2008). This approach might bring more accuracy in measuring innovation, however

this will add to the complexity of the measurement process.

In general, two main approaches are used to measure innovation: aggregate indicators

and monetization. The aggregate indices approach combines multiple indicators to come up

with an innovation measure. This approach was first used at the national level where the

European union community innovation surveys used to measure and compare innovation in

EU countries. Aggregate indices collect wide variety of innovation factors related data that is

mostly qualitative in nature. This approach help compare and discriminate between different

innovative entities and units, which is one of the main focus of EU governments, however it

does not provide any descriptive analysis of innovation and knowledge of innovation process,

on top of that aggregate indices are a complex measure and has limited financial data. The

monetization approach measures the ins and outs of innovation dollar sign to assess innovation.

It measure the investment in innovation systems and infrastructure and expenditures of

innovation activities and then measure the revenue and other nontangible income from

innovation activities to come up with the innovation value within a unit or entity. The

monetizing approach is easier than the indices approach and offers an insight into the

innovation process (Stone et al., 2008).

Innovation measurement is well established and standardized at the nation levels with

community innovation surveys being used in Europe and many other countries in Asia,

America, and Africa. The Oslo manual provides a complete framework for collecting

innovation data. In the other side, there is no standard measurement or framework for

measuring innovation at an organization level; different organizations establish different

methods and processes for measuring their innovation activities.

Data collection methodology:

Defining what type of indicators to use and collect to measure innovation is one issue

of the process of measuring organizations’ innovation, Deciding on a method to collect

innovation data is another issue that is still being researched to find better methods to collect

data accurately. The literature shows that surveys are the most common method for collecting

innovation data in comparison to other methods, focus group and interview.

• Survey: surveys are one of the most common used tools to collect innovations

information from organizations. European union (EU) use Community Innovation

Survey (CIS) base on the Oslo manual developed by the Organization for European

Economic Cooperation (OECD) (Brenner & Broekel, 2011; Smith, 2005). Advantages

of surveys are simplicity, wide reach, and collection of detailed information on various

innovation

types (i.e. product, service, process, marketing, organization), and other interesting

information regarding innovation activities such as, R&D and none R&D expenditures,

and collaboration. The disadvantages of surveys are as usual accuracy and response

rate. The collected data are mostly subjective and highly dependable on the person

responding to the questionnaires (Brenner & Broekel, 2011; Godin, 2002).

• Interview: provide better response rate in comparison to surveys, it provide responders

with clarification option, and it also allows for feedback and checking responder’s

behavior. However, interview methods is time consuming and hard to conduct with a

big sample of organizations (Li & Atuahene Gima, 2002).

• Focus Group: utilize expert opinions to provide information on organizational

innovative output. This approach provides direct measure of innovation output,

however, it lacks the depth and width or collecting other important data such as

innovation’s inputs and process indicators. Focus group methods can’t be immune to

selection bias (Brenner & Broekel, 2011).

Organizational capabilities

Organizational capabilities refer to what an organization can or can not do (Börjesson

& Elmquist, 2011). Other scholars define organizational capabilities as the ability of an

organization to perform a coordinated set of tasks, utilizing organizational resources, for the

purpose of achieving a particular end result (Schreyögg & Kliesch-Eberl, 2007), They view

organizations’ capabilities as a characteristic that evolve and change over time. Organization

capabilities have been also defined as the capacity to perform a particular activity in a reliable

and satisfactory manner (Helfat & Winter, 2011), Helfat and winter see reliability and

repeatability as an important feature of capability, otherwise the firm cannot have the capacity

or capability to do what intended to be done, they also see organization’s capabilities as a key

dimension of firm heterogeneity and characteristics that confers competitive advantage.

Schreyögg & Kliesch-Eberl (2007) share the same view as they see the different levels of

firms’ capabilities and resources result in different competitive advantages.

However, despite the various research and interest in organization’s capabilities, the

concept is still vague, as different authors call it different names; core competence,

collective skills, complex routine, best practices, or organizational capabilities (Schreyögg

& KlieschEberl, 2007).

Organizations capabilities can be classified as operational or dynamic, Operational

capabilities enable organization to perform their current on-going activities using existing

skills and techniques to maintain the status quo of the organization, good operational

capabilities enable organizations perform current activities efficiently and effectively.

However, dynamic capabilities are the ones that enable an organization to change the way it is

currently doing business (Helfat & Peteraf, 2003; Helfat & Winter, 2011). Dynamic

capabilities are different from operational capabilities, they differ in their purposes and

required outcome, however, the line between both types of capabilities are blurry since changes

occur all the time, level of changes from regular to radical is not completely defined, and there

are some capabilities that can be used for both operational and dynamic purposes such as

distribution, marketing, and sales capabilities (Helfat & Winter, 2011). Helfat & Winter

suggest that to distinguish between operational and dynamic capabilities we have to assess the

extent, nature, and speed of change that a capability enables, capability that introduces

significant economic change is dynamic even if the pace of change is slow. They also suggest

that a dynamic capability should not be restricted to new-to-the-world outcome or fast changes

to the market, sometime a dynamic capability can help support existing business such as

opening new outlets for a store in reaction to market change. Dynamic capabilities are strategic

and when used on top of the operational capabilities, organizations can maintain and extend

their competitive advantage into the future (David J.

Teece, 2012).

Dynamic capabilities was first introduced by Teece, Pisano, & Shuen (1997), they

defined it as higher-level competences that determine the firm’s ability to integrate, build, and

reconfigure internal and external resources/competences to address, and possibly shape,

rapidly changing business environments. Dynamic capability was introduced as an extension

to the resource based view (RBV) theory (J. B. Barney, 1986), which states that firms achieve

sustained competitive advantage through bundles of resources and capabilities, these bundles

of resources and capabilities have to be valuable, rare, costly to imitate, and non substitutable

for a firm to have a sustained advantage. The RBV theory was static in nature and could not

explain the competitive advantage in a continuous changing global environment; dynamic

capabilities came to address this gap through aligning the firm’s internal and external

configurations of resources and capabilities with the external changes in the environment.

This view established a link between organizations continuous innovation and their ability to

innovation (innovation capability) (Barreto, 2010; Ellonen, Wikström, & Jantunen, 2009;

David J Teece, Pisano, & Shuen, 1997).

Dynamic capabilities describe the ability of an organization to demonstrate

timely responsiveness and continuous innovation that is coupled with the management

ability to coordinate and updates organization’s competences (David J Teece et al.,

1997).

Scholars of dynamic capabilities argue that the difference in firms’ innovative

performance is related to the difference in their dynamic capabilities. A new study linked

organization’s dynamic capability with its innovative output, the study revealed that the

higher an organization dynamic capabilities the higher its innovative output (Ellonen et al.,

2009)

Dynamic capabilities are demonstrated by three types of activities: (1) identifying and

assessing an opportunity (sensing); (2) mobilization of researches to address an opportunity

and capture value from doing so (seizing); (3) continued renewal (transforming).

Organizations need to perform these activities effectively to sustain market changes; different

organization can maintain some or all of these activities better than others (David J. Teece,

2012).

Capabilities for Innovation

Global intense competition keep pressuring organizations and forcing them to innovate

in order to sustain their competitive advantage, thus the ability of an organization to innovate

is one of the most critical capabilities that should be possessed in todays business (Lawson &

Samson, 2001). Moreover, the rapid development of new products and emerging of knowledge

economy require organizations to continuous upgrade their innovation capabilities (C.-h.

Wang, Lu, & Chen, 2008). An innovation is a result of successful implementation of creative

ideas, and the level of innovation depends on the organization ability to learn and apply the

new knowledge (Alegre & Chiva, 2008), the more ideas an organization implement the higher

innovation capability the organization is assumed to have (Francis & Bessant, 2005). Wang

and Ahmed (2004) define innovation capability as the organizational ability to produce an

innovative outcome. Studies show that different organization’s capabilities result in different

innovative outputs, some originations tend to produce radical innovations that cannibalize their

current knowledge and existing products, while others produce incremental innovations that

build and enhance their existing knowledge and existing resources (Ellonen et al., 2009)

Differentiating between ordinary capabilities from innovation capabilities have been

identified more than 20 years ago when Kanter (1989) argued that mainstream (ordinary)

business capabilities are different from new stream (innovation) capabilities, he further

suggested that each capabilities require different resources and need to be managed differently.

Mainstream activities provide stable income that funds new stream activities that are needed

to develop new products, which later become part of the mainstream autonomous to provide

fund for newer new stream activities (Kanter, 1989)

Researchers defined innovation capability as a higher order integration capability that

is the ability to mold and manage multiple capabilities (C.-h. Wang et al., 2008), this matches

Treece et all (1997) concept of dynamic capabilities that refer to higher-level competences

that determine organization’s capability to integrate, build, and reconfigure internal and

external resources/competences to create innovative products. In another view, dynamic

capabilities explain how organizations manage and deploy its current resources and obtain

new resources to continue innovate over time (Cetindamar, Phaal, & Probert, 2009).

Dynamic capability theory is not specific to certain capability (i.e. technological,

financing, etc.) it is meant to reflect a combination of capabilities needed to continue innovate

at any point of time, these capabilities include management, R&D, manufacturing, sales and

marketing, human resources, product & process development and knowledge learning and

management (Lawson & Samson, 2001).

Even through innovation is in the central focus of dynamic capabilities, Lawson and

Samson (2001) see that dynamic capabilities theory have some deficiencies, they argue that

it is hard to identify which capabilities individually or collectively are effective for

performance, furthermore, many resources are complementary, which makes it a system of

resources and capabilities that matters not individual components. However, they still see that

dynamic capabilities approach is well suited to the study of organization innovation due to

the fact that it takes a holistic view of organizational innovation and there is no special focus

on technology.

Malcolm Baldrige Framework

The Malcolm Baldrige National Quality Award is one of the top programs that help

organizations in the US and other parts of the world to improve their quality and increase

their overall performance (Evans & Mai, 2014). The award program was the US response to

the Japanese Deming prize. During the 1970s and 1980s, the US manufacturing companies

where lagging behind their overseas competitors, specially the Japanese companies, this

created a major problem for the US economy as customers around the world turned away

from American products. The high quality of the Japanese product surprised the American

companies to the point that they had to send representative to Japan to study their methods.

They found out that level of defects was much lower in the Japanese factories compared to

the American factories, sometime staggering 1000 times lower. When the American started

investigating the Japanese methods, they discovered that there is no technique or a tool used

to reach this high quality. It was a complete framework of quality management system such

as Just-in-time (JIT) and total quality control (TQC) that differentiated the Japanese

production and business philosophies from the American counterpart (Loomba &

Johannessen, 1997). In 1991, Europe established the

European Quality Award (EQA) through the European Foundation for Quality Management

(EFQM) to recognize companies with high commitment to quality (Lee, Rho, & Lee, 2003).

The Malcolm Baldrige National Quality Improvement Act passed by the U.S.

Congress in 1987 to enhance the competitiveness of U.S. firms and businesses. The purpose

of the program is to identify and recognize role-model organizations that demonstrated

significant improvement in their goods and services quality, also help other US organizations

who seek to improve the quality of their products and services and increase their performance

through establishing criteria for evaluating improvement efforts and adopting best practices

from award winner organizations. The Baldrige program covers manufacturing, service,

none-profit, health care, education, government, small and big businesses (NIST, 2011)

Currently, 44 states in the

US have a local Baldrige program (Lee et al., 2003)

The MBNQA criteria have evolved over the years to keep up with the changes in the

market and to serve different industries and organizations in the nation. It started with focus

on manufacturing quality then in 1999 it was expanded to include education and healthcare

organizations, then later in 2006 the criteria were updated to include nonprofit and

government organization. The name of the program have also changed in 2010 from Malcolm

Baldrige National Quality Award to the Baldrige Performance Excellence Program (Link,

2011; NIST, 2011).

The Baldrige criteria are non-prescriptive, meaning that the criteria do not prescribe a

specific structure or practice for management, they do not recommend certain tools or

benchmarking, and they do not tell organizations which path their business should take. The

criteria focus on results not on tools or procedures. They also focus on the approach,

deployment, learning, and integration of processes. This encourages organization to develop

their own innovative methods to meet the requirements of the criteria. The focus on the goal

rather than the method foster communications, sharing, and integrations of ideas that results in

innovative solutions. Specific solutions are avoided also to ensure that the program can help

different types, sizes, and level of organization maturity (NIST, 2011).

Applicants are judged and assessed by external examiners in seven categories:

Leadership, strategic planning, customers and market focus, measurements and knowledge

management, human resource focus, process management, organization performance results

(Garvin, 1991; Wisner & Eakins, 1994). The scoring system is based on a 1000 points scale

and three-level judging process. The process starts when applicants submit the answers to the

Baldrige self assessment survey questionnaires, a group of members of the board of examiners

review and score the applicant response then pass the initial results to a panel of judges who

select the top applicants based on their scores, then a team of senior and professional

examiners visit the selected applicants for further interviews and documents checking, the

score will be updated based on the site visit outcome, then judges meet again for a final time

to select winners (Garvin, 1991; Loomba & Johannessen, 1997).

Baldrige award is not a quick fix program; it is a journey of transformation that needs

dedication and continuous involvement from senior management. From the time an

organization perform the Baldrige self assessment check to understand and know it is current

stand in term of performance excellence till it reaches a high class organization and win the

Baldrige award there could be many years of work to cover the gap in the various areas assessed

by the Baldrige criteria (Garvin, 1991; Hertz, 2012).

The Baldrige assessment for each process in the first six categories is based on four

clear measures, Approach, Deployment, Learning, and Integration (ADLI). Each process

measure is analyzed for strengths and weaknesses (opportunity for improvement). The ADLI

measures ensure a horizontal and vertical deployment of every improvement process in the

framework with high degree of alignment and harmony. The horizontal deployment shows

whither the improvement program covers one area, couple of areas or all areas in the

organization. The vertical deployment covers the tying of strategic goals established by senior

management and lower activities done by line workers. Based on these four stages of

improvement Baldrige board of examiners differentiates between organizations that have some

performance improvement efforts and others that have fully matured improvement processes.

Organizations with low score, usually 300 or less, have weakness in most Baldrige categories;

they might have one or two good projects or one Baldrige category where the company

performs well, but lack proper deployment and integrations of improvement processes, and

show no or few links between quality activities and strategic goals. Organizations with medium

score, usually between 400 and 600, are strong in two or three categories and have more

programs that are fully deployed and integrated with links between strategic goals and

activities, these companies are usually strong in the leadership, human resources, and customer

focus categories, but weak in information and knowledge management, results and strategic

planning. Deployments outside the operation areas have issues with lower activities not linked

to strategic goals. High scorers, usually over 700, have balanced outstanding performance

across the organization, All Baldrige seven categories are rated excellent, Every quality and

improvement activity in the organization is deployed and integrated well horizontally and

vertically (Garvin, 1991; NIST, 2011).

MBNQA and organization performance

Baldrige award has been proofed to be an effective framework for improving

organizations’ performance and competitiveness, between 1997 and 2000, the index of the

companies that received MBNQA outperformed Standard & Poor’s 500 by 4.5:1 (Lee et al.,

2003). Hospitals that won Baldrige award are six times more likely to be among the top 100

hospitals, they also outperform their top 100 peers in six out of seven key evaluated measures

(Hertz, 2012). Studies show that Baldrige award winners perform as well or better than their

competitors financially in the market (Wisner & Eakins, 1994). In 2010 Jerry Rose, Vice

President, Cargill, Inc. Baldrige award winner, demonstrated the impact and return on

investment of using Baldrige. He demonstrated the ROI of three different units in the company

that have different level of Baldrige deployment, the unit that has high Baldrige deployment

showed 30% increase in cumulative earning after tax (EAT) compared to 13% for the unit that

has partial

Baldrige deployment, and -12% for the unit that just started the Baldrige program (Rose, 2010).

A study was conducted on 2001 concluded that the US economic benefit from the program

based on the benefit-to-cost ratio was 207 to 1. This ratio was updated in a new study using

data from 273 applicants from 2006 till 2010 and different analysis, the benefit-to-cost ratio

surged to reach 820 to 1 (Link, 2011).

MBNQA Critics & supporters

Despite the wide success, business people, journalists, and quality gurus have

criticized the Baldrige award since the beginning of the program. Edward Deming said that

Baldrige concentrate on results and not on actual quality management. Philip Crosby argued

that organizations are not rewarded for becoming expert in quality, but for complying with

Baldrige criteria (Loomba & Johannessen, 1997). Other criticisms were based on three main

issues:

First, engagement in the Baldrige award program is costly; it requires major

investment in time and money to go through the application and assessment process. Xerox

spent $800,000 and a year long of 20 full time employees working hours to prepare for

winning the Baldrige award in 1989. Small companies cannot afford to compete with such

amount of money and resources needed to win the award (Garvin, 1991; Loomba &

Johannessen, 1997).

Second, Baldrige does not reflect financial success, several Baldrige winners suffered

financially after wining the award, including Motorola in 1988, Fedex in 1990, and Cadillac in

1990. Even worse, Wallace company Inc., winner of 1990, filed for bankruptcy less than two

years after they had won the award (Garvin, 1991; Loomba & Johannessen, 1997).

Third, Baldrige award does not reflect superior product or high quality service. When

Cadillac won the award in 1990, they ranked number eight in overall customer satisfaction

for the same year by powers reports, consumer reports and J.Ds powers rated Cadillac as

less than other stellar rated cars (Loomba & Johannessen, 1997).

Supporters of Baldrige award believe that most criticisms have no or limited merits,

while some companies spent lots of time and money to win the award other companies did

not spend much in return for winning such a prestigious award, Baldrige has different awards

for big and small organizations so fairness is there, in the meantime, Baldrige helps

organization on the long run and not for short term gains, profit is not guaranteed with wining

Baldrige award, also the earlier criteria does not cover all aspect of financial success such as

effective marketing, innovative R&D and financial planning (Garvin, 1991). Newer criteria

however have innovation embedded within the different Baldrige categories (NIST, 2011).

Defenders of Baldrige do admit that it is not perfect and that is why the criteria get reviewed

and updated continuously. But, the adoption of the criteria by many countries around the

world provides more evidence for the success of the program. The main value of the Baldrige

program is having a road map and process that help organizations change to the better in

terms of quality and performance. Dr. Juran supported Baldrige and he thought that critics

misunderstood the main goal of the award, He said that “It’s not, Meeting the criteria is the

heroic effort” (Loomba & Johannessen, 1997).

Baldrige and Organization’s Dynamic/innovation capabilities

In the 21st century, an organization not only need to do things right, but also need to

do the right things in order to stay in competition. Quality and efficiency that is driven by the

improvement programs such as Baldrige, TQM, Six Sigma, and ISO result in excellent

mainstream (operational) capabilities, however, this might not be sufficient alone to sustain

fierce competition and continuous changes. Organization must possess innovation (dynamic)

capabilities to be able to innovate to sustain the competition. A radical innovative product

introduced by a small company can pose a major threat to a leading company operating in

the same market. At this time, Most CEOs want their organization to innovate and develop

the required capabilities for that, however, this is not an easy task, introducing changes in the

organization requires knowledge, patience and leadership along with a systematic framework

that guide the organization to assess, build and sustain the changes.

Baldrige framework provides a vehicle for change, it helps organizations assess their

current performance, also help management to plan, perform, and measure improvement

activities and results. This leads to continuous enhancement in organization’s products,

services, and processes. It also helps organizations align their processes and resources to

achieve the organizations goals. Baldrige performance excellence program is a complete

transformation framework that is easy to understand and follow. The Baldrige program can be

used to improve the operational/mainstream capabilities and Dynamic/new stream capabilities

required to help organizations innovate to sustain their businesses and increase their

competitive advantage.

Possible future work

Despite the increased interest in dynamic capabilities approach (David J Teece et al.,

1997) in recent years, The concept is still not fully established in research literature (Ellonen

et al., 2009). Critics suggest that the field of dynamic capabilities requires guidance for future

research regarding construct, relationships, boundaries conditions, and contingencies (Barreto,

2010). Dynamic capabilities literature is still in early stages and future opportunities for further

research lies in the links between individual, group managerial actions, dynamic capabilities,

and firms performance (David J. Teece, 2012). Future research may consider the

operationalization of a firm’s dynamic capabilities as a simple sum of its four dimensions or

multiplicative nonlinear function of these dimensions (Barreto, 2010). Future researches can

utilize financial analysts in surveys to collect data for measuring dynamic capabilities

constructs, this will mitigate firm’s managers responses to such surveys (Barreto, 2010).

Furthermore future research can continue address the relationship between dynamic

capabilities and intermediate outcome, also between intermediate outcome and performance

(Barreto, 2010). There is also a need to have studies that focus on dynamic capabilities and

how they link to functional capabilities such as IT, R&D, and marketing. Furthermore, there is

a need to explore the construct of dynamic capabilities in other context such as traditional

industries, and other countries where different constraints and conditions apply (Easterby

Smith, Lyles, & Peteraf, 2009). Future research can consider how sensing, seizing, and

reconfigurations of capabilities are manifested in different industries, Also the interrelationship

between firm’s capabilities and its innovations activities is a promising research area (Ellonen

et al., 2009). Finally, despite the increase interest in organizational and dynamic capabilities,

there is little in-depth on how organizational capabilities for innovation are developed in

practice (Börjesson & Elmquist, 2011).

From the Baldrige program literature, limited amount of scholarly research has been

conducted using the Baldrige Criteria, Some scholars like Pannirselvam, Siferd, and Ruch

(1998), Wilson and Collier (2000), Meyer and Collier (2001), and Flynn and Saladin (2001)

focused on validating the Baldrige model using surveys and data from states’ award

programs. Other researches such as Evans (1997), Ford and Evans (2000), Jack and Evans

(2003) Evans (2004) and Stephens, Evans, and Matthews (2005) studied the conceptual

linkage among the elements of the criteria and the results items. However, very little studies

have been conducted using Baldrige applicant data.

Conclusion

In conclusion, the literature review in a multidiscipline topic requires intensive

research in many areas in order to have an established understanding of the status in the

various bodies of knowledge. Even though, such study is overwhelming with information and

requires huge amount of time and efforts, the link between multiple bodies of knowledge is

innovative in itself.

According to literature, there is very little in-depth research on how organizational

capabilities for innovation are developed in practice (Börjesson & Elmquist, 2011). In the

Baldrige side, recent a study shows that limited amount of scholarly research has been

performed using the Baldrige Criteria, also very little research has been performed using

Baldrige applicant data (Evans & Mai, 2014). The study argues that rigorous research on the

impact and effectiveness of the Baldrige program is still nascent.

Up to this writing, there is no study that has addressed the impact of Baldrige

Excellence Framework, utilizing applicants’ data and scores, on organizations’

innovation/dynamic capabilities.

CHAPTER THREE: METHODOLOGY

Introduction

This chapter describes the design and methods that will be used in this research and will

outline and discuss the steps and rational behind the activities that will take place to measure

and collect the required data to achieve the objective of this research study, which is to measure

the

effect and correlation between Baldrige (Sterling) framework on organizations

innovations/dynamic capabilities.

Methodology

A quantitative method is being used in this research study to explain the effect and the

correlation between organizations’ performance excellence measured by Baldrige (Sterling)

assessment score and their innovation/dynamic capabilities level. Two numerical data for each

organization will be measured/collected, one that measures the level of organization’s

performance excellence represented by the Baldrige (Sterling) assessment framework, and one

that measures the organization’s innovation/dynamic capabilities using a survey tool.

This research will answer the following question and hypothesis to explain the relationship

between Baldrige assessment framework and innovation/dynamic capabilities.

Main question: What is the effect of Baldrige (Sterling) assessment framework on Organization’s

innovation/dynamic capabilities?

Main Hypothesis: Baldrige assessment framework has a positive impact on Organization’s

innovation/dynamic capabilities.

To answer the research main question, further sub-questions and hypothesises have

been developed, each sub-question addresses one of six areas that represent a foundation block

for organization’s innovation capabilities (figure 2.0).

Sub-question 1: What is the effect of Baldrige assessment framework on Organization’s value for

innovation?

Hypothesis, H1: Baldrige assessment framework has a positive impact on Organization’s

value for innovation.

Sub-question 2: What is the effect of Baldrige assessment framework on Organization’s behaviour

regarding innovation?

Hypothesis, H2: Baldrige assessment framework has a positive impact on Organization’s

behaviour regarding innovation.

Sub-question 3: What is the effect of Baldrige assessment framework on Organization’s

innovation culture?

Hypothesis, H3: Baldrige assessment framework has a positive impact on Organization’s

innovation culture.

Sub-question 4: What is the effect of Baldrige assessment framework on Organization’s

innovation’s resources?

Hypothesis, H4: Baldrige assessment framework has a positive impact on Organization’s

innovation’s resources.

Sub-question 5: What is the effect of Baldrige assessment framework on Organization’s

innovation’s processes?

Hypothesis, H5: Baldrige assessment framework has a positive impact on Organization’s

innovation processes.

Sub-question 6: What is the effect of Baldrige assessment framework on Organization’s

innovation measurement?

Hypothesis, H6: Baldrige assessment framework has a positive impact on Organization’s

innovation’s measurement.

Figure 3: Research Model

Participants

In this research study, a total of 24 organizations participated in the study. The

participating organizations represent different industries; healthcare; education; private and

government. All the participating organizations are located in Florida State since Florida

Sterling council conducts Baldrige framework assessment on local organizations only.

The organizations selection was coordinated with Florida Sterling council who is

supporting this research by providing the assessment reports for the participating organizations

and communicating with organizations’ leaders to invite/encourage them to participate in the

study.

The innovation survey (appendix A) will be assessed at three different levels of

organization hierarchy; top management, middle management, and employees in order to have

a broad and 360 feedback from across the organization.

Instruments

This research employed two different instruments to measure organizations’ performance

excellence and innovation capabilities. Baldrige framework (Sterling assessment) was used to

measure organization’s performance excellence, and a comprehensive survey was used to

measure organization’s innovation capabilities.

Baldrige Framework (Sterling Assessment)

Florida Sterling has three main assessment programs; Challenge, GSA, and Sustained.

The Sterling Challenge is designed for organizations that are in the early stages of developing

a system wide approach to improve their processes, It’s the first step towards GSA and

Sustained programs.

The Sterling Challenge consist of an organization profile and a 20 pages answers to a simplified

and direct questionnaires on the seven areas of management practices: Leadership, Strategic

Planning, Customer Focus, Measurement, Analysis and Knowledge management, Workforce

Focus, Operations Focus and Results. During the five days site visit, a team of experts between

56 members interview employees at all levels of the organization.

The Sterling GSA is designed for mature organizations with systematic processes and

positive results. The GSA assessment program is rigorous and consisting of organization profile

and a 50 pages response to a detailed questionnaires. GSA is conducted over an extensive seven

days site visit. A detailed feedback report at the item level is provided that identifies strength,

opportunities and overall organization theme.

The Sterling Sustained is designed to help GSA recipients retain their role model status

as a top performing organizations. The sustained program is a high-level assessment process

that examines the long-term sustainability of the Baldrige management framework. A formal

off-site and on-site assessment is conducted by a team of experienced examiners to verify and

clarify current organization performance through interviewing leaders and professionals in the

organization.

Innovation Survey

A comprehensive Innovation survey (appendix A) has been used in this research to

measure organizations’ innovation/dynamic capabilities. The survey is designed with fixed

response items based on a 5-point rating scale question. The survey questionnaires consist of

six building blocks: innovation Value, innovation behaviour, innovation culture, innovation

resources, innovation processes, and innovation success measurement. Each building block

addresses three factors, and each factor consists of three elements. This yields a total of 54

questions in the survey. The six building blocks of organization innovation capabilities

reviewed in details as part of the literature review and summarised as follow:

• Block 1 - Innovation value: The ability to value innovation across the organization

through:

o Instituting an entrepreneurial mindset that is action-oriented, has a hunger for

exploring new opportunities, and has tolerance for ambiguity.

o Institute creativity through encouraging new ways of thinking, providing freedom

to pursue new opportunities, and creating playful space.

o Institute learning habit through asking questions to uncover the unknowns,

experimenting new things, and treating failures as learning opportunities.

• Block 2 – Innovation behavior: The ability to show the right behavior by leaders

and employees in the organization to reflect the value put on innovation in practice.

This can be done through:

o Energize the organization by inspiring the employees with future vision,

challenge the employees to act innovatively, and show the right innovation

model for employees to follow.

o Engage the employees through coaching and supporting their innovative

initiatives.

o Enabling innovation in the organization through use of strategies to

overcome obstacles, change course of action when needed, and follow

opportunities persistently.

• Block 3 – Innovation Culture: The ability to transform the organization culture to

one that cultivates and encourage creativity and innovation. This can be done through:

o Create a collaboration climate in the organization through encouraging teamwork,

respecting diversity, having common understanding of innovation.

o Create a safe environment in the organization that encourages employees to

voice their opinions and question decisions that are inconsistent with the

organization values.

o Create a simple workplace environment that minimize bureaucracy, discourage

finger pointing and encourage taking responsibilities.

• Block 4 – Innovation Resources: The ability to provide and mobilize the required

resources to support innovation within the organization, resourcing includes:

o People: Are the most critical factors in resources especially champions who

impact organizations values and culture, experts who guide others with

innovation tools, and talents who ensure projects success.

o Systems: that hires the right people for supporting innovation culture in the

organization, provides a collaboration tools to support innovation efforts, and

leverage relationships with suppliers and partners to pursue innovation

opportunities.

o Projects: providing employees with time, money, and space to pursue new

opportunities.

• Block 5 – Innovation processes: The ability to develop the required processes that

funnel creative ideas through different stages till it become fully commercialized.

This requires:

o Ideation: a process that allows generation and collection of ideas from different

sources, screen the generated ideas for promising ones, and balance risk versus

opportunities.

o Shape: through prototyping promising opportunity, customers’ feedback, and

quick failing based on predefined criteria.

o Capture: through flexible process that takes promising opportunity quickly to

the market and allocates resources to scale initiatives that shows market

promise.

Block 6 – Innovation Success Measurement: The ability to measure innovation

efforts at different levels:

o External: measuring organization’s innovation with customers, against

competitors, and through organization’s financial performance.

o Enterprise: assessing the organization new capabilities over the past three years,

long term vision and approach to innovation.

o Individual: measuring employees’ satisfaction, growth, and reward in regard to

innovation efforts and initiatives.

Measurement scale

The two measurement instruments use different scale to assess their related measurements:

Baldrige Framework (Sterling Assessment)

Baldrige Framework (Sterling Assessment) measurement scale is based on two

evaluation dimensions: process and results. The processes criteria follow a scoring scale (Table

1) that is different from the result criterion scoring scale (Table 2). Process refers to the way

organizations perform and improve works in Leadership, Strategic planning, Customer Focus,

Measurement, Analysis and Knowledge management, Workforce Focus, Operation Focus. The

processes are evaluated based on four factors; Approach, Deployment, Learning and

Integration (ADLI). Approach refers to the method used to accomplish the process and how

appropriate and effective these methods are, Deployment refers the extent and consistency of

used approaches across the organization, Learning refers to the improvement conducted on

these approaches and sharing of best practices and Integration refers to the alignment of these

approaches with the organization goals and needs. Results refer to the output of the organization

processes in the six areas mentioned above. Four factors are used to evaluate results; Levels,

trends, Comparisons, and integration (LeTCI). Level refers the current level of performance.

Trends refer to results over extended time or the slope of the results. Comparisons refer to the

organization performance in relation to competitors and industry leaders. Integration refers to

how relative the results to the organization profile key factors.

Baldrige (Sterling) assessment program uses a scale of 1000 points to measure the

organization performance excellence. These points are distributed on the seven management areas,

Table 1 Measurement scale, Shows the breakdown of the points over the seven management areas.

Table 1: Sterling Measurement scale

Management Area

Score

Leadership

140

Strategic Planning

100

Customer Focus

100

Measurement, Analysis & Knowledge Management

100

Workforce Focus

100

Operations Focus

100

Results

360

Innovation Survey

The organizations’ innovation/dynamic capabilities will assess 6 building blocks that

covers; innovation Value, innovation behaviour, innovation culture, innovation resources,

innovation processes, and innovation success measurement. Each building block is divided

into three factors and each factor includes three elements. East elements is rated based on a 5

points Likert Scale:

1. 1 = Strongly disagree

2. 2 =mildly disagree

3. 3 =neutral

4. 4 =mildly agree

5. 5 =strongly agree

Block

Factor

Element

Score 1-5

Factor Ave.

Block Ave.

Values

Entrepreneurship

Hunger

Ambiguity

Action Orientated

Creativity

Imagination

Autonomy

Playful

Learning

Curiosity

Experiment

Failure

Behaviors

Energy

Inspire

Challenge

Model

Engagement

Coach

Initiative

Support

Enablement

Influence

Adapt

Grit

Climate

Collaboration

Community

Diversity

Teamwork

Safety

Trust

Integrity

Openness

Simplicity

No Bureaucracy

Accountability

Decision Making

Resources

Talent

Champions

Experts

Talent

Systems

Selection

Communication

Ecosystem

Time

Programs

Money

Space

Processes

Ideation

Generate

Filter

Priorities

Testing

Prototype

Iterate

Fail Smart

Speed

Flexibility

Launch

Scale

Success

External

Customers

Competitors

Financial

Organizational

Purpose

Discipline

Capabilities

Individual

Satisfaction

Growth

Reward

Organization innovation score (Average of the six Block scores)

Table 2: Innovation Capabilities score

Elements will be averaged to obtain the factor score, and factors will be averaged to

calculate the block score, the average of the six building blocks reflect the overall

organization innovation capabilities score.

Table 3: Process criteria measurement scale

Factor

0–5%

10–25%

30–45%

50–65%

70–85%

90–100%

No systematic

approach to Item

requirements is evident;

information is

anecdotal.

The beginning of a

systematic approach to

the basic requirements

of the Item is evident.

An effective, systematic

approach, responsive to

the basic requirements

of the Item, is evident.

An effective, systematic

approach, responsive to

the overall

requirements of the

Item, is evident.

An effective, systematic

approach, responsive to

the multiple

requirements of the

Item, is evident.

An effective,

systematic approach,

fully responsive to the

multiple requirements

of the Item, is evident.

Little or no deployment

of any systematic

approach is evident.

The approach is in the

early stages of

deployment in most

areas or work units,

inhibiting progress in

achieving the basic

requirements of the

Item.

The approach is

deployed, although some

areas or work units are in

the early stages of

deployment.

The approach is well

deployed, although

deployment may vary in

some areas or work units.

The approach is well

deployed, with no

significant gaps.

The approach is fully

deployed without

significant weaknesses

or gaps in any areas or

work units.

An improvement

orientation is not evident;

improvement is achieved

through reacting to

problems.

Early stages of a

transition from reacting

to problems to a general

improvement orientation

are evident.

The beginning of a

systematic approach to

evaluation and

improvement of key

processes is evident.

A fact-based, systematic

evaluation and

improvement process and

some organizational

learning, including

innovation, are in place

for improving the

efficiency and

effectiveness of key

processes.

Fact-based, systematic

evaluation and

improvement and

organizational learning,

including innovation, are

key management tools;

there is clear evidence of

refinement as a result of

organizational-level

analysis and sharing.

Fact-based, systematic

evaluation and

improvement and

organizational learning

through innovation are

key organization-wide

tools; refinement and

innovation, backed by

analysis and sharing, are

evident throughout the

organization.

No organizational

alignment is evident;

individual areas or work

units operate

independently.

The approach is aligned

with other areas or work

units largely through

joint problem solving.

The approach is in the

early stages of

alignment with basic

organizational needs

identified in response to

the Organizational

Profile and other Process

Items.

The approach is aligned

with overall

organizational needs

identified in response to

the Organizational

Profile and other Process

Items.

The approach is

integrated with current

and future organizational

needs identified in

response to the

Organizational

Profile and other Process

Items.

The approach is well

integrated with current

and future organizational

needs identified in

response to the

Organizational Profile

and other Process Items.

Table 4: Results criteria measurement scale

Factor

0–5%

10–25%

30–45%

50–65%

70–85%

90–100%

There are no

organizational

performance

results and/or

poor results in

areas reported.

A few organizational

performance results are

reported, responsive to the

basic requirements of the

item, and early good

performance levels are

evident.

Good organizational

performance levels

are reported,

responsive to the basic

requirements of the

item.

Good organizational

performance levels are

reported, responsive to the

overall requirements of

the item.

Good to excellent

organizational

performance levels are

reported, responsive to the

multiple requirements of

the item.

Excellent organizational

performance levels are

reported that are fully

responsive to the

multiple requirements

of the item.

Trend data either

are not reported or

show mainly

adverse trends.

Some trend data are

reported, with some

adverse trends evident.

Some trend data are

reported, and a

majority of the trends

presented are

beneficial.

Beneficial trends are

evident in areas of

importance to the

accomplishment of the

organization’s mission.

Beneficial trends have been

sustained over time

in most areas of

importance to the

accomplishment of the

organization’s mission.

Beneficial trends have

been sustained over time

in all areas of

importance to the

accomplishment of the

organization’s mission.

Comparative

information is not

reported.

Little or no comparative

information is reported.

Early stages of

obtaining comparative

information are

evident.

Some current

performance levels have

been evaluated against

relevant comparisons

and/or benchmarks and

show areas of good

relative performance.

Many to most trends and

current performance

levels have been evaluated

against relevant

comparisons and/or

benchmarks and show

areas of leadership and

very good relative

performance.

Evidence of industry

and benchmark

leadership is

demonstrated in many

areas.

Results are not

reported for any

areas of importance

to the

accomplishment of

the organization’s

mission.

Results are reported for

a few areas of

importance to the

accomplishment of the

organization’s mission.

Results are reported for

many areas of

importance to the

accomplishment of the

organization’s mission.

Organizational

performance results are

reported for most key

customer, market, and

process requirements.

Organizational

performance results are

reported for most key

customer, market,

process, and action plan

requirements.

Organizational

performance results

and projections are

reported for more key

customer, market,

process, and action

plan requirements.

Quality and validity of tools:

Reliability and validity of the used instrument are crucial to ensure quality of the

measurement. Reliability deals with the stability and consistency of the measure instruments.

There are four types of reliability test for a measurement instrument; Test-retest reliability,

parallel form reliability, inter-rater reliability, and internal consistency reliability. Validity refers

to the extent an instrument measures what it is purported to measure. Validity is measured in

four forms; face validity, content validity, criterion validity, and construct validity.

In this research, Organization’s innovation/dynamic capabilities are measured using

an established instrument, survey questionnaires that have been field-tested for over two

years for statistical validity and executive acceptance as both a diagnostic and actionable

tool. Data was gathered from 1,026 executives and managers in 15 companies headquartered

in the U.S., Europe, Latin America and Asia. Confirmatory factor analysis revealed that 16

out of the 18 factors were reliable at 0.7 or above; the other two were above 0.6. A complete

item analysis showed that item discrimination was 0.3 and above (Rao & Weintraub, 2013).

The organization performance excellence assessment follows the Baldrige framework for

assessment, which is a standard methodology that is being use in the US and other countries

across the world to assess and improve organizations performance. The assessment process

goes through ten steps:

1) Organization training: where Florida Sterling trains potential organizations on

the performance excellence framework and assessment criteria.

2) Organization profile: the organization develops a complete profile that reflects

the organizations products, services, customer, partners, workforce profile. The

organization also provides current and future strategy, goals and objectives,

competitive challenges and advantages.

3) Criteria response: The organization responds to the assessment criteria based

ADLI (Approach, Deploy, Learning, and Integration) process. Which means that

every criteria response has to show consistent approach across the organization,

it also has to be deployed and used throughout the organization, there must be

learning in the process, and it has to show integration with whole system. The

criteria response usually takes between 10 to 50 pages.

4) Examiners training: Florida sterling trains the examiners on the assessment

process and this takes three training classes in addition to completing a case

assessment.

5) Examiner Team: Sterling organization forms the examining team based on the

domain of knowledge and industry of the organization operate in. usually six to

nine examiners are assigned the assessed organization.

6) Individual evaluation: first actual assessment step is done individually by all

examiners, where each examiner review the organization responses to all criteria

and complete an independent evaluation.

7) Team consensus: where the examining team meet for a full day to review all

independent assessments and come with a consensus result.

8) Site visit: the team arrange for a five to seven days site visit during which, the

examiners meet with staff from the organization and conduct an interview with

leaders, managers, and staff working in the organization. The consensus

assessment gets updated based on the site visit collected information.

9) Finalize assessment report: The team finalize the assessment report and sent it

Florida Sterling.

10) Feedback: Florida Sterling reviews the report and develop an official feedback

report to the applicant in case of Challenge program. If the organization is

participating in a GSA or Sustained program, the final assessment report is sent

to judges to review and select performance winners.

The process for assessing organizations performance is rigorous and takes from two to

six months to complete based on the size and type or assessment. To ensure that the data from

the performance excellence does not interfere or affect the data from innovation capability

measure, Both assessment have been done separately with at least two months difference and

through different medium. The Baldrige assessment is mainly face to face with on-site and off-

site assessment; Innovation assessment is an online survey.

Analysis

Once the data are collected, each organization will have two data records, one that

measures the organization performance excellence in term of leadership, strategic planning,

customer focus, workforce focus, knowledge management, operation, and results, these

performance scores are aggregated to establish the overall organization performance excellence

score out of 1000 points.

The other data measure represents the organization innovation capability in terms of innovation

value, innovation behaviour, innovation culture, innovation resources, innovation process, and

innovation measurement; these innovations scores are aggregated to establish an organization

innovation capability score out of 5 points.

First step, validate the three different Baldrige (Sterling) performance excellence

assessment programs and their effect on organizations’ overall performance. Using ANOVA,

we analyse the difference of performance means among the three assessment programs;

Challenge, GSA, and sustained. This will show that the different assessment programs do

reflect different performance excellence levels that we will be using to measure their effects on

organizations innovations’ capabilities.

Second step, Regression analysis will be used to test the six hypothesises to measure the

relationship between Baldrige assessment framework and each of the six measured innovation

blocks. This will show the effect of Baldrige (Sterling) management framework on each

innovation building block.

Third step, Regression analysis will be used to test the main hypothesis to measure the

relationship between Baldrige assessment framework and overall organization’s innovation

capability score.

Phased Timeline

The following is a phased approach (Figure 2.0) with check gate at the end of every phase

for time and process control. The dissertation project has 5 phases with 10 steps that cover the

research study from initial concept to discussion and recommendation.

Figure 4: Phased timeline

Detailed timeline

Table 5: Detailed timeline

Research step

Expected completion date

Status

Step 1 – Identify research area and topic

JAN. 2013

✓

Step 2 – Narrow topic focus

FEB. 2013

✓

Step 3 – Identify research gap

MAR. 2013

✓

Step 4 – Develop research question

APR. 2013

✓

Gate A – Candidacy exam

MAY 2013

✓

Step 5 – Develop hypothesis

NOV. 2013

✓

Step 6 – Data collection plan

DEC. 2013

✓

Gate B – Proposal

APR. 2014

✓

Step 7 - Collect performance & innovation data

NOV. 2014

✓

Gate C – Data Collection complete

DEC. 2014

✓

Step 8 – Analyze data

FEB. 2015

✓

Step 9 – Summarize findings

APR. 2015

✓

Step 10 – Discussion and recommendation

AUG. 2015

✓

Gate 11 – Journal paper 1

DEC. 2015

✓

Gate D – Defense

JAN. 2016

Gate 11 – Journal paper 2

JAN. 2016

Step 12 – update document

FEB. 2016

Gate E – Graduate

MAY. 2016

Limitations

The research study has the following limitations:

1. Since the study is being conducted with Florida Sterling Council, all participating

organizations are from Florida, which cover businesses in one-state and not nation wide

or international organizations. However, these organizations are benchmarking with top

performing organizations operating in the same industry across the US. Which might

reflect a national perspective to this study.

2. Due to the limited number of participating organizations in Florida Sterling Council

assessment programs, this study will be conducted with twenty-four organizations from

different industries, such as; healthcare, education, manufacturing, private and

government. This sample mix might yield some inconsistency in the collected data, as

different industries might have different innovation levels.

3. The twenty-four organizations participated in this study went through Florida Sterling

Council performance excellence programs over the past 5 years, so some of these

organizations specially the ones that did the assessment in 2010 might not had strong

focus on innovation due to limited innovation criteria at that year criteria version. Also

the newer organizations that participate in 2014 might not have enough time to realise

the effect of

the program in their innovation capabilities. So all these variations in time and criteria

version used among the participating organizations might produce different data.

However, Florida Sterling Council keep updating participating organizations with

newer criteria every two years and also invite and encourage those organizations to

continue their journey to higher level of performance excellence through providing

different assessment programs. Which might help the organizations continue focus on

improving their operational and dynamic capabilities.

4. Another limitation in might have been in the innovation survey, eleven of the twenty-

four organizations responded to the innovation survey, a response rate of 45.8%. Senior

examiners in mature organizations completed the innovation survey. However, new

organizations with no experienced examiners had their employees completed the

survey. This might have inconsistent feedback, however to control this, a large number

of participants were required from new organizations in order to accept their data.

5. Finally, Performance excellence data were collected through examiners. No clear data

is available to examine the effect of examiners levels in the scoring process. Examiners’

experience might have influenced the data. However, Florida sterling intensive

examiners training, careful examiners selections based on the examiners performance

during training and participation of senior examiners during the site visit and final

scores suggest that

reliability of the collected data is not an issue.

CHAPTER FOUR: FINDINGS

Introduction

The objective of chapter four is to present the findings that have been collected as part

of this research study, which measures the effect of Baldrige (Florida Sterling) performance

excellence framework on organizations’ innovations capabilities. This is a quantitative

correlation study that is trying to measure the correlation between performance excellence

and the organization’s innovation capabilities. Findings will be presented based on the

significance of the tested hypothesis. The data demographics will be presented in this chapter,

where type, specifications and age of collected data are discussed.

Data demographics

The target population in this research is consisted of any organizations of any size from

private, government, education, manufacturing and healthcare sectors that have participated

in one of Florida Sterling performance excellence programs. This research is focusing on

three main performance excellence assessment programs; Sterling challenge, Governor

Sterling Award

(GSA), or Sterling Sustained Award. All organizations are located in the state of Florida, in

the US. However, these organizations are benchmarking with top performing organizations

operating in the same industry across the US. Which reflects a national perspective to this

study. The data were collected from organizations that have been assessed through Sterling

programs over the past five years (2010-2014). Some of these organizations have been

assessed multiple times before 2010 and showed improvement in their performance

excellence over the years; others are being assessed for the first time. New organizations

usually start their performance excellence journey with the challenge program and move on

to utilize other assessment programs as they work on improving current processes and results.

Organizations Performance excellence data

The sampled organizations represent a wide range of performance output on the scale of

performance excellence (100-1000) points. Starting from low performing organizations that

score low in the Sterling challenge assessment program, Which is used by most organization

in their early stages of performance excellence journey, to high performing organizations that

score high on the same scale in the Sterling sustained program, which is used by organizations

that have spent years in improvement and went through the detailed assessment program

represented by the Governor Sterling Award (GSA) program.

The performance excellence data are extracted and summarized from each organization

final performance assessment report. Performance assessment reports vary in length from one

assessment type to another. For example, the challenge report assessment averages at twenty

pages. The Governor Sterling Award assessment report, which is the most detailed one,

averages at sixty pages. The Sterling Sustained assessment report averages at sixteen pages.

A typical assessment report reflects a detailed measurement in the Baldrige seven

management areas (Leadership, Strategic planning, Customer focus, Measurement and

knowledge management, Workforce focus, Operation focus and results). A detailed data of

the collected results are listed in Appendix D (performance excellence data). In this study, the

detailed data have been aggregated to calculate the process performance score and the results

score for each organization. The process performance has a maximum score of 640 points

and the results score has a maximum score of 360 points. Once the process and result scores

are obtained, both numbers are added to come up with the organization overall performance

excellence score out of 1000 points. Table 6.0 (Performance excellence scores) shows the

performance excellence scores of the twenty-four participated organizations. Table 6:

Performance excellence scores

Number

Year

Organization

Code

Assessment

Type

Process

score

Result

score

Performance

score

2013

SIC109

Challenge

248

311

2011

SIC124

Challenge

200

135

335

2014

SIC114

Challenge

288

351

2011

SIC123

Challenge

240

135

375

2012

SIC125

Challenge

348

411

2013

SIC117

Challenge

308

135

443

2014

SIC126

Challenge

368

207

575

2014

SIC120

Challenge

456

207

663

2014

SIC116

GSA

416

149

565

2011

SIC121

GSA

436

178

614

2014

SIC108

GSA

416

207

623

2011

SIC111

GSA

442

193

635

2014

SIC118

GSA

456

207

663

2012

SIC103

GSA

452

221

673

2014

SIC107

GSA

466

250

716

2012

SIC112

GSA

488

250

738

2013

SIC110

GSA

507

250

757

2011

SIC115

GSA

529

243

772

2012

SIC127

Sustained

451

241

692

2011

SIC104

Sustained

528

223

751

2014

SIC102

Sustained

499

264

763

2011

SIC122

Sustained

538

241

779

2013

SIC101

Sustained

518

264

782

2011

SIC106

Sustained

538

253

791

The collected data reflects the three different assessment programs; eight organizations

participated in Sterling challenge assessment program, ten organizations participated in

Sterling GSA program, and six organizations participated in the Sterling Sustained program.

The collected results from the three different assessment programs have been tested using

ANOVA to assess the different performance levels as result of participating in different

performance excellence programs and maturity of the organization (Table 7: Different

assessment programs data).

Table 7: Different assessment programs data

# Of Organization

Assessment scores per program

Challenge

GSA

Sustained

311

565

692

335

614

751

351

623

763

375

635

779

411

663

782

443

673

791

575

716

663

738

757

772

The ANOVA results a statistical difference among the three different performance

excellence programs, which means at least one group has a different mean of performance

excellence score. Table 8 (ANOVA-Challenge, GSA, Sustain) shows the outcome of the

ANOVA analysis.

Table 8: ANOVA-Challenge, GSA, Sustain

Method

One way ANOVA

Null hypothesis

All means are equal

Alternative hypothesis

At least one mean is different

Significance level

Equal variances were assumed

Factor Information

α = 0.05 for the analysis.

Factor

Levels Values

Assessment Type

Analysis of Variance

3 Challenge, GSA, Sustained

Source

DF Adj SS Adj MS

F-Value

P-Value

Code

2 453727.058 226863.529

33.83

<0.0001

Error

21 140821.9 6705.805

Total

23 594548.958

Further test has been conducted to confirm statistical differences between each two

programs to confirm that as the organization continue with the performance excellence journey

and go through the different level of performance excellence programs, the organization will

improve its performance and eventually sustain the results on the long run.

Using Tukey method for multiple comparisons to compare each pair of groups (Table 9:

Tukey method to compare pairs of means) confirmed a statistical difference in mean

performance excellence score between Challenge assessment programs and GSA assessments,

Also between Challenge and Sustained assessment program. However, there is no statistical

difference in the mean performance excellence score between GSA and Sustained assessment

programs.

Table 9: Tukey method to compare pairs of groups

Tukey method with 95% CIs shows the differences between pair of assessment groups

(Figure 5: Tukey 95% CI difference of means for performance score). Any test does not include

zero represent a statistical difference. In this case, both GSA and Sustained programs have a

statistical difference that Challenge; however, there is no statistical difference between GSA

and Sustained assessment programs.

Figure 5: Tukey 95% CI difference of means for performance score

Using Dunnett Method and 95% confidence to test the difference of assessment means in

comparison using Challenge assessment as a control group. Table: 10 (Dunnett method test

using Challenge assessment as a control group).

Table 10: Dunnett method test using Challenge assessment as a control group

Grouping Information Using the Dunnett Method and 95% Confidence

Assessment type

Mean

Grouping

Challenge

(control)

424

Sustained

759.5

GSA

675.6

Means not labeled with the letter A are significantly different fro

Dunnett Simultaneous Tests for Level Mean - Control Mean

m the control level mean.

Difference of SE of

Levels Difference of Means Difference

95% CI T-Value

Adj. P-Value

GSA-Challenge 251.6 38.84

(159.46, 343.74) 6.48

<0.0001

Sustained-

Challenge 335.5 44.23

Individual confidence level = 97.27%

(230.60, 440.40) 7.59

<0.0001

Figure:6 (Dunnett method test using Challenge assessment as a control group) below

provide a visual representation of the Dunnett test, where Challenge is the control group. Any

test does not include zero represent a statistical difference, which means that both tests shows

that GSA and

Sustained assessment programs.

Figure 6: Dunnett method test using Challenge assessment as a control group

Note that Challenge assessment program is available to all organizations new to

Baldrige performance excellence model. Usually organizations use this Challenge assessment

as a baseline to get to know their weaknesses and strengths in order to start the journey of

performance excellence. So this group is an ideal for a control group that we could use to

measure the effect of Baldrige performance excellence model on organization performance

improvement.

The model summary in Table 11 below shows how well the model fits the data. S

represents the standard deviation of how far the data values fall from the fitted values, the

lower the S the better, here S is equal to 81.88. R2 measures the percentage of variation in the

response that is explained by the model, the higher R2 the better, R2 equal to 76.3%

Table 11: Model summary

Normality test was conducted on the collected data to check the normal distribution of

the data (Figure 7: Normality test). The normal probability plot of the residuals should

approximately follow a straight line to satisfy the normality assumption in order for the test

result is reliable. Twenty-four data were collected and based on the normality chart below; we

could say that the collected data show normal distribution with a clear outlier in point # 8. This

data was collected from SIC120 and it was flagged for further investigation once innovation

data is collected.

Figure 7: Normality test

One of the main assumptions in this research is that by implementing the different levels

of Florida Sterling performance excellence assessment programs, Organizations improve their

processes and overall performance over time. This assumption was confirmed during this study.

As per the ANOVA test, Figure 8 (Performance score per program) shows that organizations

that went through the GSA and Sustained assessment programs have higher performance

excellence scores than the ones that went through Challenge assessment program.

Figure 8: Performance score per program

Looking into the individual value plot diagram (figure 9: individual value plot

of performance score vs. assessment type), We see that point # 8, which was collected

from SIC120, is an outlier.

Figure 9: individual value plot of performance score vs. assessment type

Organization SIC120 was investigated for this high score and it turns out that this

organization has multiple Sterling examiners some of them are senior examiners and they were

implementing the Baldrige management model internally for many years before going into the

Challenge assessment program. The organization scored high in all categories and received

the Sterling Challenge Award on May 2014. As a matter of fact, one of the senior examiners

mentioned that they used the GSA Assessment criteria when applying for the challenge

assessment program , and they also won the GSA in 2015 when they applied for GSA level

assessment. Based on this we can comfortably remove point # 8 from the model and redo the

ANOVA test for better fit.

ANOVA test after removing the outlier data

Table 12 below shows the performance scores for organizations from different

assessment groups. Note that point number 8 in the Challenge assessment group was

removed since it was an outlier.

Table 12: Different assessment programs data without outliers

# Of

Organization

Assessment scores per program

Challenge

GSA

Sustained

311

565

692

335

614

751

351

623

763

375

635

779

411

663

782

443

673

791

575

716

738

757

772

The results below confirm a statistical difference among the three different performance

excellence programs, as P-value is less than 0.05 as per Table 13 below.

Table 13: ANOVA-Challenge, GSA, Sustain

Method

One way ANOVA

Null hypothesis

All means are equal

Alternative hypothesis

At least one mean is different

Significance level

Factor Information

α = 0.05

Factor

Levels

Values

Assessment Type_1

Analysis of Variance

Challenge, GSA, Sustai

ned

Source

Adj SS

Adj MS

F-Value

P-Value

Assessment Type_1

516368.982

258184.491

68.36

<0.0001

Error

75540.757

3777.038

Total

591909.739

Using Tukey method for multiple comparisons to compare each pair of groups (Table

14: Tukey method to compare pairs of means) confirmed a statistical difference in mean

performance excellence score among the three performance excellence assessment programs

(Challenge, GSA and Sustained). This is changed from the previous ANOVA model, where

GSA and Sustained assessment programs did not have a statistical difference.

Table 14: Tukey method to compare pairs of means

The model summary in Table 15 (Tukey method to compare pairs of means) confirms

a better model after removing the outlier data. S in this model is equal to 61.45 compared to

82.88 from the previous model, remember the lower the S the better. R2 is equal to 87.24%

compared to 76.3% from the previous model, the higher R2 the better.

Table 15: Model Summary

Using the residual plots to confirm the assumptions of the analysis. Figure 10

(Histogram) shows the histogram of the residual.

Figure 10: Histogram

Figure 11 (Residual vs. Fits) shows the residuals versus fits plot to versify the assumption

that the residual are randomly distributed and have consistent variance.

Figure 11: Residual vs. Fits

Using the normal plot of residuals to verify the assumption that the residuals are

normally distributed. The normal probability plot of the residuals should approximately

follow a straight line. Figure 12 (Normality test without outlier point) show that the normal

probability plot of the residuals here follows a straight line, which satisfy the normality

assumption in this model.

Figure 12: Normality test without outlier point

Figure 13 (Residual vs. Order) shows that residual are independent from one another,

which verify the assumption of the analysis.

Figure 13: Residual vs. Order

The new model strongly confirms the main assumption in this research, which is implementing the

different performance excellence assessment programs do improve the organizations’ performance Figure 14

(Performance score per program) shows the mean of performance score of each assessment group; Challenge,

GSA, and Sustain.

Figure 14: Performance score per program

Figure 15 (individual value plot of performance score vs. assessment type) below

shows the individual value of each organization in the three different assessments of Sterling

performance excellence programs.

Figure 15: Individual value plot of performance score vs. assessment type

Organizations innovation data

The Twenty-four sampled organization were also surveyed for innovation capability

assessment (Appendix A). Thirteen of the twenty-Four have responded, a response rate of

54.17%. Eleven of the thirteen organizations’ data were accepted and two were rejected due to

low number of sample size. Table 16 (innovation scores) shows the innovation data collected

from the surveyed organizations.

Table 16: Innovation scores

Organization

Code

Innovation

overall

score

Innovation

Value

Innovation

Behavior

Innovation

Climate

Innovation

Resources

Innovation

Process

Innovation

Success

SIC109

1.54

1.67

1.33

1.22

2.50

1.33

1.17

SIC124

SIC114

1.72

1.78

1.89

1.56

1.22

1.67

2.22

SIC123

SIC125

SIC117

2.76

3.06

3.5

2.44

2.11

2.44

SIC126

SIC120

3.76

4.33

4.22

3.22

3.94

3.33

3.50

SIC116

SIC121

SIC108

3.85

4.00

4.67

4.11

3.33

2.89

4.11

SIC111

SIC118

SIC103

SIC107

4.28

4.5

4.35

4.28

4.11

3.9

4.53

SIC112

SIC110

4.56

4.67

4.56

4.44

4.56

SIC115

SIC127

SIC104

3.96

3.94

4.06

4.00

3.78

3.72

4.28

SIC102

4.05

4.33

4.41

4.22

3.74

3.85

SIC122

SIC101

3.29

3.64

3.45

3.12

3.05

3.45

SIC106

4.29

4.33

4.28

4.33

4.00

4.50

The collected innovation data reflects the innovation measure for organizations

participated in the three different performance excellence assessment programs; four data

points in Sterling challenge assessment program, three data points in Sterling GSA program,

and four data points in the Sterling Sustained program (Table 17: Innovation scores).

Table 17: innovation overall scores

# Of Organization

Innovation Value survey data

Challenge

GSA

Sustained

1.54

3.85

3.96

1.72

4.28

4.05

2.76

4.56

3.29

3.76

4.29

Note that the Organization SIC120 that was removed from the performance excellence

ANOVA model due to the outlier result had an innovation score of 3.76 out of 5 in the challenge

group. This also reflects a high innovation score for this group and shows an outlier in the

individual plot for innovation score per assessment program (Table 17). Based on this we will

also remove the related innovation scores of SIC120.

Figure 16: Individual plot for innovation score per assessment program

Innovation data analysis

In this part, ANOVA testing will be used to analyze the collected innovation data from

organizations that went through the three different Florida Sterling (Baldrige) performance

excellence programs. After removing the outlier data from the collected innovation scores,

table 18 (innovation scores without outliers) represents the overall innovation scores that will

be tested using ANOVA in this section.

Table 18: Innovation scores without outliers

# Of Organization

Innovation Value survey data

Challenge

GSA

Sustained

1.54

3.85

3.96

1.72

4.28

4.05

2.76

4.56

3.29

4.29

The ANOVA results below confirm a statistical difference among the three

innovation mean scores of the different performance excellence programs’ groups; as P-

value is less than 0.05, see Table 19.

Table 19: ANOVA-Innovation Challenge, GSA, Sustain

Method

ANOVA one-way

Null hypothesis

All means are equal

Alt. hypothesis

At least one mean is different

Significance level

α = 0.05

Equal variances were assumed for the a

Factor Levels

nalysis.

Values

Assessment Type_1 3

Analysis of Variance

Challenge, GSA, Sustained

Source DF

Adj SS Adj MS

F-Value

P-Value

Assessment Type_1 2

8.8718583 4.43592917

18.55

0.0016

Error 7

1.6735417 0.23907738

Total 9

10.5454

Using Tukey method for multiple comparisons to compare each pair of groups (Table

20: Tukey method to compare pairs of means) confirmed a statistical difference in mean

innovation score between Challenge and GSA assessments programs’ groups, Also between

Challenge and Sustained assessments programs’ groups. However, there is no statistical

difference in the mean innovation score between GSA and Sustained assessments programs’

groups.

Table 20: Tukey method to compare pairs of means

Grouping Information Using the Tukey Method and 95% Confidence

Assessment Type_1 N

Mean

Grouping

GSA 3

4.23

Sustained 4

3.8975

Challenge 3 2.00667

Means that do not share a letter are significantly different.

Tukey Simultaneous Tests for Differences of Means

SE of

Difference of Levels Difference of Means Difference

95% CI

T-

Value

Adj. P-

Value

GSA-Challenge

2.2233

0.3992

(1.046, 3.40)

5.57

0.0021

Sustained-Challenge

1.8908

0.3734

(0.790, 2.99)

5.06

0.0036

Sustained-GSA

Individual confidence level = 97.8

-0.3325

0.3734

(-1.434, 0.768)

-0.89

0.6629

Tukey method with 95% CIs shows the differences between pair of assessment groups

(Figure 14: Tukey 95% CI difference of means for innovation score). Any test does not

include zero represent a statistical difference. In this case, both GSA and Sustained programs

have a statistical difference than Challenge group; however, there is no statistical difference

between

GSA and Sustained assessment programs innovation mean scores.

Figure 17: Tukey 95% CI difference of means for innovation score

Using Dunnett Method and 95% confidence to test the difference of innovation scores’

means in comparison using Challenge assessment group as a control group. Table: 21 (Dunnett

method test using Challenge assessment as a control group).

Table 21: Dunnett method test using Challenge assessment as a control group

Grouping Information Using the Dunnett Method and 95% Confidence

Assessment Type_1 N

Mean

Grouping

Challenge (control)

2.00666667

GSA

4.23

Sustained

3.8975

Means not labeled with the letter A are significantly different from

Dunnett Simultaneous Tests for Level Mean - Control Mean

the control level mean.

Difference of SE of

Levels Difference of Means Difference

T-

95% CI Value

Adjusted

P-Value

GSA-Challenge 2.2233

0.3992

(1.128, 3.319) 5.57

0.0015

Sustained-Challenge 1.8908

Individual confidence level = 97.13%

0.3734

(0.866, 2.916) 5.06

0.0026

Figure 18 (Dunnett method test using Challenge assessment as a control group) below

provides a visual representation of the Dunnett test, where Challenge assessment is the control

group. Any test does not include zero represent a statistical difference, which means that both

assessment groups, GSA and Sustained groups, have a statistical difference in innovation scores

than the control group “Challenge group”.

Figure 18: Dunnett method test using Challenge assessment as a control group

The model summary in Table 22 below shows how well the model fits the data. S

represents the standard deviation of how far the data values fall from the fitted values, the

lower the S the better, here S is equal to .4889. R2 measures the percentage of variation in the

response that is explained by the model, the higher R2 the better, R2 equal to 84.13%. This

means that

84.13% of the innovation variation is explained by changes in performance excellence.

Table 22: Innovation scores model summary

Model Summary

R-sq

R-sq(adj)

R-sq(pred)

0.488955398

Means

84.13%

79.60%

66.76%

Assessment Type_1

Mean

StDev

95% CI

Challenge

2.0067

0.6586

(1.3391, 2.6742)

GSA

4.23

0.3576

(3.5625, 4.8975)

Sustained

Pooled StDev = 0.488955398

3.8975

0.4283

(3.3194, 4.4756)

Normality test was conducted on the collected data to check the normal distribution of

the data, Figure 19 (Normality test for innovation scores). The normal probability plot of the

residuals approximately follows a straight line, which satisfies the normality assumption for

reliable results.

Figure 19: Normality test for innovation scores

100

Based on ANOVA test, Baldrige (Florida Sterling) performance excellence programs

do have effect on organizations innovation. Comparing the innovation scores of the

organizations that went through the Challenge performance excellence assessment with the

innovation scores of other organizations that did GSA and Sustained performance excellence

programs. We see that the more experienced organizations with Baldrige framework and

performance excellence have better innovation scores that the new organizations that just

started Baldrige performance excellence. Figure 20 (interval plot of innovation vs assessment

groups) and figure 21 (individual value plot of innovation vs. assessment groups) below

provide a visual representation to the different performance excellence groups and their

innovation scores.

Figure 20: interval plot of innovation vs. assessment groups

101

Figure 21: individual value plot of innovation vs. assessment groups

Innovation – Value

Innovation Value is the first building block of the Innovation building model that is

used in this research. In the following section, the Baldrige performance excellence will be

examined against organizations’ Innovation Value using regression analysis. Table 23

(Innovation value vs. Performance excellence) show the innovation Value scores that were

collected from the surveyed organizations and their performance excellence scores.

Table 23: Innovation value vs. Performance excellence

Assessment

Type

Organization

Code

Performance Score

Innovation

Values

102

Challenge

SIC109

311

1.67

Challenge

SIC124

335

Challenge

SIC114

351

1.78

Challenge

SIC123

375

Challenge

SIC125

411

Challenge

SIC117

443

3.00

Challenge

SIC126

575

Challenge

SIC120

663

GSA

SIC116

565

GSA

SIC121

614

GSA

SIC108

623

4.00

GSA

SIC111

635

GSA

SIC118

663

GSA

SIC103

673

GSA

SIC107

716

4.5

GSA

SIC112

738

GSA

SIC110

757

4.56

GSA

SIC115

772

Sustained

SIC127

692

Sustained

SIC104

751

3.94

Sustained

SIC102

763

4.33

Sustained

SIC122

779

Sustained

SIC101

782

3.64

Sustained

SIC106

791

4.33

Correlation test: Pearson correlation of performance excellence score and Innovation

Value score = 0.926, P-value= 0.0001

Based on the output of Pearson correlation of performance score and innovation’s

value, r= 0.926 which, indicates a high positive correlation between organization’s Baldrige

performance excellence and organization’s innovation value building block of the innovation

model.

103

Table 24: Linear regression test for Innovation Value vs. performance score

Analysis of Variance

Source

Adj SS

Adj MS

F-Value

P-Value

Regression

8.9800657

8.98006572

48.36

0.0001

Performance score

8.9800657

8.98006572

48.36

0.0001

Error

1.4855843

0.18569804

Total

Model Summary

10.46565

R-sq

R-sq(adj)

R-sq(pred)

0.430926949

85.81%

84.03%

78.41%

Coefficients Term

Coef

SE Coef

T-Value

P-Value

VIF

Constant

0.2401

0.4985

0.48

0.6429

Performance score

0.0053044

0.0007628

6.95

0.0001

Regression Equation

Innovation_Values = 0.2401 + 0.0053044 Performance score

Figure 22: Fitted line plot for linear model

104

The P-value of the linear model is less than 0.05, however, we noticed some curvature

in the data in the Fitted line plot, the model R2 = 85.81% and S= 0.4309. So in order to get a

better fit for the model, the test will be repeated with an addition of a polynomial term.

Table 25: Quadratic regression test for innovation value vs. performance excellence

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 9.7791853 4.88959263 49.86 <0.0001

Performance score 1 1.3109633 1.31096333 13.37 0.0081

Performance score^2 1 0.7991195 0.79911954 8.15 0.0245

Error 7 0.6864647 0.09806639

Total 9 10.46565

Model Summary

S R-sq R-sq(adj) R-sq(pred)

0.31315554 93.44% 91.57% 87.43%

Coefficients Term Coef SE Coef T-Value P-Value VIF

Constant -4.331 1.642 -2.64 0.0335

Performance score 0.023886 0.006533 3.66 0.0081 138.904791

Performance score^2 -0.000016647 0.000005832 -2.85 0.0245 138.904791

Regression Equation

Innovation_Values = − 4.331 + 0.0239 Performance_score − 0.0000167 Performance_score^2

The P-value of the new model is less than 0.05, which means that the terms involved

in the regression model are ok. It’s noticed that the model has improved after adding the

polynomial term in the model, R2 = 93.44%, which higher than previous model R2 (85.81%)

and S = 0.313 which is less than the previous model S (0.4309). Figure 23 (Fitted line plot for

the quadratic model) shows the regression data has better fit with 95% CI and 95% PI.

105

Figure 23: Fitted line plot for the quadratic model

ANOVA analysis will be used here to test the means of Innovation Value scores output

from the three performance excellence assessment programs in order to find which program

(group) has a statistical difference.

Table 26: ANOVA test for Innovation Value

Source

Adj SS

Adj MS

F-Value

P-Value

Assessment Type_1

8.8501833

4.42509167

19.17

0.0014

Error

1.6154667

0.23078095

Total

10.46565

Table 27: Tukey method test for Innovation Value

Grouping Information Using the Tukey Method and 95% Confidence

Assessment Type_1 N Mean Grouping

106

GSA 3 4.35 A

Sustained 4 4.06 A

Challenge 3 2.15

Means that do not share a letter are significantly different.

Figure 24: Tukey test difference of means for innovation value

Figure 25: Interval Plot of Innovation value vs. assessment type

107

Innovation – Behavior

Innovation behavior is the second building block of building innovation capabilities

within organization. In the following section, the Baldrige performance excellence will be

examined against organizations’ Innovation Behavior using regression analysis. Table 28

(Innovation Behavior vs. Performance excellence) show the innovation Behavior scores that

were collected from the surveyed organizations and their performance excellence scores.

Table 28: Innovation Behavior vs. Performance excellence

Assessment

Type

Organization

Code

Performance Score

Innovation

Behavior

Challenge

SIC109

311

1.33

Challenge

SIC124

335

Challenge

SIC114

351

1.89

Challenge

SIC123

375

Challenge

SIC125

411

Challenge

SIC117

443

3.06

Challenge

SIC126

575

Challenge

SIC120

663

GSA

SIC116

565

GSA

SIC121

614

GSA

SIC108

623

4.67

GSA

SIC111

635

GSA

SIC118

663

GSA

SIC103

673

GSA

SIC107

716

4.35

GSA

SIC112

738

GSA

SIC110

757

4.56

GSA

SIC115

772

Sustained

SIC127

692

Sustained

SIC104

751

4.06

Sustained

SIC102

763

4.41

Sustained

SIC122

779

108

Sustained

SIC101

782

3.45

Sustained

SIC106

791

4.28

Correlation test: Pearson correlation of performance excellence score and Innovation

Value score = 0.872, P-value= 0.001

Based on the output of Pearson correlation of performance score and innovation’s value,

r= 0.872 which, indicates a high positive correlation between organization’s Baldrige

performance excellence and organization’s innovation Behavior building block of the

innovation model.

Table 29: Linear regression for innovation Behavior vs. performance excellence

Analysis of Variance

Source

Adj SS

Adj MS

F-Value

P-Value

Regression

9.3838505

9.38385052

25.31

0.001

Performance score_1

9.3838505

9.38385052

25.31

0.001

Error

2.9659895

0.37074869

Total

Model Summary

12.34984

R-sq

R-sq(adj)

R-sq(pred)

0.608891357

75.98%

72.98%

63.05%

Coefficients Term

Coef

SE Coef

T-Value

P-Value

VIF

Constant

0.197

0.7044

0.28

0.7868

Performance score_1

0.005422

0.001078

5.03

0.001

Regression Equation

Innovation Behavior = 0.1970 + 0.005422 Performance score

109

Figure 26: Fitted line plot for linear model

The P-value of the linear model is less than 0.05, however, we noticed some curvature

in the data in the Fitted line plot, the model R2 = 75.98% and S= 0.6089. So in order to get a

better fit for the model, the test will be repeated with an addition of a polynomial term.

Table 30: Quadratic regression for innovation Behavior vs. performance excellence

Source

Adj SS

Adj MS

F-Value

P-Value

Regression

11.6032

5.80160

54.39

<0.0001

Performance score_1

3.04256

28.53

0.0011

Performance score_12

2.2194

2.21936

20.81

0.0026

Error

0.7466

0.10666

Total

Model Summary

12.34984

R-sq

R-sq(adj)

R-sq(pred)

0.32659

93.95%

92.23%

88.60%

Coefficients Term

Coef

SE Coef

T-Value

P-Value

VIF

Constant

-7.421

1.712

-4.33

0.0034

Performance score

0.03639

0.006813

5.34

0.0011

138.905

Performance score^2

-0.000028

0.000006

-4.56

0.0026

138.905

110

Regression Equation

Behavior_1 = − 7.421 + 0.036389 Performance score − 0.000027743 Performance score^2

The P-value of the new model is less than 0.05, which means that the terms involved

in the regression model are ok. It’s been noticed that the model has improved with the use of

the polynomial term where R2 = 93.95%, higher than previous model R2 (75.98%) and S =

0.313, less than the previous model S (0.6089). Figure 20 (Fitted line plot for the quadratic

model) shows the regression data has better fit with 95% CI and 95% PI.

Figure 27: Fitted line plot for quadratic model

ANOVA analysis will be used here to test the means of Innovation Behavior

scores output from the three performance excellence assessment programs in order to

find which program (group) has a statistical difference.

Table 31: ANOVA test for Innovation Behavior

Analysis of Variance

Source

Adj SS

Adj MS

F-Value

P-Value

Assessment Type_1

10.1959067

5.09795333

16.57

0.0022

111

Error

2.1539333

0.30770476

Total

12.34984

Table 32: Tukey method test for Innovation Behavior

Grouping Information Using the Tukey Method and 95% Confidence

Assessment Type_1 N Mean Grouping

GSA 3 4.52666667 A

Sustained 4 4.05 A

Challenge 3 2.09333333

Means that do not share a letter are significantly different.

Figure 28: Tukey test different of means for Innovation Behavior

112

Figure 29: Interval plot of Innovation Behavior vs. assessment type

Innovation – Climate

Innovation Climate is the third building block of building innovation capabilities

within organization. In the following section, the Baldrige performance excellence will be

examined against organizations’ Innovation Behavior using regression analysis. Table 33

(Innovation Behavior vs. Performance excellence) show the innovation Behavior scores that

were collected from the surveyed organizations and their performance excellence scores.

Table 33: Innovation Climate vs. Performance excellence

Assessment

Type

Organization

Code

Performance Score

Innovation

Climate

Challenge

SIC109

311

1.22

Challenge

SIC124

335

Challenge

SIC114

351

1.56

Challenge

SIC123

375

Challenge

SIC125

411

Challenge

SIC117

443

3.50

Challenge

SIC126

575

Challenge

SIC120

663

GSA

SIC116

565

GSA

SIC121

614

GSA

SIC108

623

4.11

GSA

SIC111

635

GSA

SIC118

663

GSA

SIC103

673

GSA

SIC107

716

4.28

GSA

SIC112

738

GSA

SIC110

757

4.67

GSA

SIC115

772

Sustained

SIC127

692

Sustained

SIC104

751

4.00

Sustained

SIC102

763

4.22

113

Sustained

SIC122

779

Sustained

SIC101

782

3.12

Sustained

SIC106

791

4.28

Correlation test: Pearson correlation of performance excellence score and Innovation

Value score = 0.842, P-value= 0.0023

Based on the output of Pearson correlation of performance score and innovation’s value,

r= 0.842 which, indicates a high positive correlation between organization’s Baldrige

performance excellence and organization’s innovation Behavior building block of the

innovation model.

Table 34: Linear regression for innovation Climate vs. performance excellence

Source

Adj SS

Adj MS

F-Value

P-Value

Regression

9.08938

9.0893800

19.43

0.0023

Performance score

9.08938

9.0893800

19.43

0.0023

Error

3.74306

0.4678825

Total

Model Summary

12.83244

R-sq

R-sq(adj)

R-sq(pred)

0.684019368

70.83%

67.19%

52.09%

Coefficients Term

Coef

SE Coef

T-Value

P-Value

VIF

Constant

0.1409

0.7913

0.18

0.8631

Performance score

0.005337

0.001211

4.41

0.0023

Regression Equation

Innovation Climate = 0.1409 + 0.005337 Performance score_1

114

Figure 30: Fitted line plot for linear model

The P-value of the linear model is less than 0.05, however, we noticed some curvature

in the data in the Fitted line plot, the model R2 = 70.83% and S= 0.684. So in order to get a

better fit for the model, the test will be repeated with an addition of a polynomial term.

Table 35: Quadratic regression for innovation Climate vs. performance excellence

Analysis of Variance

Source

Adj SS

Adj MS

F-Value

P-Value

Regression

11.3620391

5.68101953

27.05

0.0005

Performance score

3.0902211

3.09022114

14.71

0.0064

Performance score^2

2.272659

2.27265902

10.82

0.0133

Error

1.4704009

0.21005728

Total

Model Summary

12.83244

R-sq

R-sq(adj)

R-sq(pred)

0.45832006

88.54%

85.27%

78.20%

Coefficients Term

Coef

SE Coef

T-Value

P-Value

VIF

Constant

-7.568

2.403

-3.15

0.0162

Performance score

0.036673

0.009561

3.84

0.0064

138.905

Performance score^2 -0

.000028074

0.000008535

-3.29

0.0133

138.905

Regression Equation

Innovation Climate = − 7.568 + 0.036673 Performance score − 0.000028074 Performance score2

115

The P-value of the new model is less than 0.05, which means that the terms involved

in the regression model are ok. It’s noticed that the model has improved with the use of the

polynomial term where R2 = 88.54%, higher than previous model R2 (70.83%) and S = 0.458,

less than the previous model S (0.684). Figure 20 (Fitted line plot for the quadratic model)

shows the regression data has better fit with 95% CI and 95% PI.

Figure 31: Fitted line plot for quadratic model

ANOVA analysis will be used here to test the means of Innovation Climate scores

output from the three performance excellence assessment programs in order to find which

program (group) has a statistical difference.

Table 36: ANOVA test for Innovation Climate

Source

Adj SS

Adj MS

F-Value

P-Value

Assessment Type_1

8.7766067

4.38830333

7.57

0.0177

Error

4.0558333

0.57940476

Total

12.83244

Table 37: Tukey method test for Innovation Climate

Grouping Information Using the Tukey Method and 95% Confidence

116

Assessment Type_1 N Mean Grouping

GSA 3 4.35333333 A

Sustained 4 3.905 A

Challenge 3 2.09333333

Means that do not share a letter are significantly different.

Figure 32: Tukey test different of means for Innovation Climate

Figure 33: Interval plot of Innovation Climate vs. assessment type

117

Innovation – Resources

Innovation Resources is the fourth building block of building innovation capabilities

within organization. In the following section, the Baldrige performance excellence will be

examined against organizations’ Innovation Resources using regression analysis. Table 38

(Innovation Resources vs. Performance excellence) show the innovation Resources scores

that were collected from the surveyed organizations and their performance excellence scores.

Table 38: Innovation Resources vs. Performance excellence

Assessment

Type

Organization

Code

Performance

Score

Innovation

Resources

Challenge

SIC109

311

2.50

Challenge

SIC124

335

Challenge

SIC114

351

1.22

Challenge

SIC123

375

Challenge

SIC125

411

Challenge

SIC117

443

2.44

Challenge

SIC126

575

Challenge

SIC120

663

GSA

SIC116

565

GSA

SIC121

614

GSA

SIC108

623

3.33

GSA

SIC111

635

118

GSA

SIC118

663

GSA

SIC103

673

GSA

SIC107

716

4.11

GSA

SIC112

738

GSA

SIC110

757

4.56

GSA

SIC115

772

Sustained

SIC127

692

Sustained

SIC104

751

3.78

Sustained

SIC102

763

3.74

Sustained

SIC122

779

Sustained

SIC101

782

3.05

Sustained

SIC106

791

4.33

Correlation test: Pearson correlation of performance excellence score and Innovation

Resources score = 0.8439, P-value= 0.0021

Based on the output of Pearson correlation of performance score and innovation’s

Resources, r= 0.872 which, indicates a high positive correlation between organization’s

Baldrige performance excellence and organization’s innovation Resources building block of

the innovation model.

Table 39: Linear regression for innovation Resources vs. performance excellence

Analysis of Variance

Source

Adj SS

Adj MS

F-Value

P-Value

Regression

6.76398365

19.79

0.0021

Performance

score_1

6.76398365

19.79

0.0021

Error

2.73365635

0.34170704

Total

Model Summary

9.49764

R-sq

R-sq(adj)

R-sq(pred)

0.584557134

Coefficients

71.22%

67.62%

46.03%

Term

Coef

SE Coef

T-Value

P-Value

VIF

119

Constant

0.4117

0.6763

0.61

0.5595

Performance

score_1

0.004604

0.001035

4.45

0.0021

Regression Equation

Innovation Resources = 0.4117 + 0.004604 Performance score

Figure 34: Fitted line plot for linear model

The P-value of the linear model is less than 0.05, however, however, when the test was

done with quadratic and cubic regression models the P-values were more than 0.05, so the

linear regression model is the best fit with R2 = 71.22% and S= 0.584.

ANOVA analysis will be used here to test the means of Innovation Resources

scores output from the three performance excellence assessment programs in order to find

which program (group) has a statistical difference.

Table 40: ANOVA test for Innovation Resources

Source

Adj SS

Adj MS

F-Value

P-Value

Assessment Type_1

6.85467333

3.42733667

9.08

0.0114

Error

2.64296667

0.37756667

Total

9.49764

120

Table 41: Tukey method test for Innovation Resources

Assessment Type_1 N Mean Grouping

GSA 3 4 A

Sustained 4 3.725 A

Challenge 3 2.05333

Means that do not share a letter are significantly different.

Figure 35: Tukey test different of means for Innovation Resources

Figure 36: Interval plot for innovation resources vs. assessment type

Innovation – Process

Innovation Process is the fifth building block of building innovation capabilities

within organization. In the following section, the Baldrige performance excellence will be

121

examined against organizations’ Innovation Process using regression analysis. Table 42

(Innovation Process vs. Performance excellence) show the innovation Process scores that

were collected from the surveyed organizations and their performance excellence scores.

Table 42: Innovation process vs. performance excellence

Assessment

Type

Organization

Code

Performance

Score

Innovation

Process

Challenge

SIC109

311

1.33

Challenge

SIC124

335

Challenge

SIC114

351

1.67

Challenge

SIC123

375

Challenge

SIC125

411

Challenge

SIC117

443

2.11

Challenge

SIC126

575

Challenge

SIC120

663

GSA

SIC116

565

GSA

SIC121

614

GSA

SIC108

623

2.89

GSA

SIC111

635

GSA

SIC118

663

GSA

SIC103

673

GSA

SIC107

716

3.90

GSA

SIC112

738

122

GSA

SIC110

757

4.44

GSA

SIC115

772

Sustained

SIC127

692

Sustained

SIC104

751

3.72

Sustained

SIC102

763

3.74

Sustained

SIC122

779

Sustained

SIC101

782

3.05

Sustained

SIC106

791

4.00

Correlation test: Pearson correlation of performance excellence score and Innovation

Resources score = 0.932, P-value= 0.0001

Based on the output of Pearson correlation of performance score and innovation’s

Resources, r= 0.932 which, indicates a high positive correlation between organization’s

Baldrige performance excellence and organization’s innovation Resources building block of

the innovation model.

Table 43: Linear regression for innovation process vs. performance excellence

Source

Adj SS

Adj MS

F-Value

P-Value

Regression

8.9014157

8.90141569

53.13

<0.0001

Performance score

8.9014157

8.90141569

53.13

<0.0001

Error

1.3404343

0.16755429

Total

Model Summary

10.24185

R-sq

R-sq(adj)

R-sq(pred)

0.409333957

Coefficients

86.91%

85.28%

81.32%

Term

Coef

SE Coef

T-Value

P-Value

VIF

Constant

-0.2352

0.4736

-0.5

0.6328

123

Performance score_1 0

.0052811

0.0007246

7.29

<0.0001

Regression Equation

Innovation Processes = −

0.2352 + 0.0052811

Performance

score

Figure 37: Fitted line plot for linear model

The P-value of the linear model is less than 0.05, however, when the test was done

with quadratic and cubic regression models the P-values were more than 0.05, so The linear

regression model is the best fit with R2 = 86.91% and S= 0.4093.

ANOVA analysis will be used here to test the means of Innovation Process scores

output from the three performance excellence assessment programs in order to find which

program (group) has a statistical difference.

Table 44: ANOVA test for Innovation Process

Source

Adj SS

Adj MS

F-Value

P-Value

Assessment Type_1

8.20444

4.10222083

14.09

0.0035

Error

2.037408

0.29105833

124

Total

10.24185

Table 45: Tukey test for Innovation Process

Grouping Information Using the Tukey Method and 95% Confidence

Assessment Type_1 N Mean

Grouping

GSA 3 3.74333333

Sustained 4 3.6275

Challenge 3 1.70333333

Means that do not share a letter are significantly different.

Figure 38: Tukey test different of means for Innovation Process

125

Figure 39: Interval plot of Innovation Process vs. assessment type

Innovation – Success

Innovation Success is the sixth building block of building innovation capabilities

within organization. In the following section, the Baldrige performance excellence will be

examined against organizations’ Innovation success using regression analysis. Table 46

(Innovation Behavior vs. Performance excellence) show the innovation Behavior scores that

were collected from the surveyed organizations and their performance excellence scores.

Table 46: Innovation Success vs. performance excellence

Assessment

Type

Organization

Code

Performance

Score

Innovation

Success

126

Challenge

SIC109

311

1.17

Challenge

SIC124

335

Challenge

SIC114

351

2.22

Challenge

SIC123

375

Challenge

SIC125

411

Challenge

SIC117

443

2.44

Challenge

SIC126

575

Challenge

SIC120

663

GSA

SIC116

565

GSA

SIC121

614

GSA

SIC108

623

4.11

GSA

SIC111

635

GSA

SIC118

663

GSA

SIC103

673

GSA

SIC107

716

4.53

GSA

SIC112

738

GSA

SIC110

757

4.56

GSA

SIC115

772

Sustained

SIC127

692

Sustained

SIC104

751

4.28

Sustained

SIC102

763

3.85

Sustained

SIC122

779

Sustained

SIC101

782

3.45

Sustained

SIC106

791

4.50

Correlation test: Pearson correlation of performance excellence score and Innovation

Value score = 0.907, P-value= 0.0003

Based on the output of Pearson correlation of performance score and innovation’s value,

r= 0.904 which, indicates a high positive correlation between organization’s Baldrige

performance excellence and organization’s innovation Behavior building block of the

innovation model.

Table 47: Linear regression for innovation success vs. performance excellence

127

Analysis of Variance

Source

Adj SS

Adj MS

F-Value

P-Value

Regression

10.2761828

37.31

0.0003

Performance

score_1

10.2761828

37.31

0.0003

Error

2.2035072

0.2754384

Total

Model Summary

12.47969

R-sq

R-sq(adj)

R-sq(pred)

0.524822254

Coefficients

82.34%

80.14%

71.42%

Term

Coef

SE Coef

T-Value

P-Value

VIF

Constant

-0.0564

0.6072

-0.09

0.9283

Performance score

0.0056743

0.000929

6.11

0.0003

Regression Equation

Success_1 = − 0.0564 + 0.0056743 Performance score_1

Figure 40: Fitted line plot for linear model

128

The P-value of the linear model is less than 0.05, however, when the test was done

with quadratic and cubic regression models the P-values were more than 0.05, so The linear

regression model is the best fit with R2 = 82.43% and S= 0.5248.

ANOVA analysis will be used here to test the means of Innovation Behavior

scores output from the three performance excellence assessment programs in order to

find which program (group) has a statistical difference.

Table 48: ANOVA test for Innovation Success

Source

Adj SS

Adj MS

F-Value

P-Value

Assessment Type_1

10.7800233

5.39001167

22.2

0.0009

Error

1.6996667

0.24280952

Total

12.47969

Table 49: Tukey method test for Innovation Success

Grouping Information Using the Tukey Method and 95% Confidence

Assessment Type_1 N Mean

Grouping

GSA 3 4.4

Sustained 4 4.02

Challenge 3 1.94333333

129

Figure 41: Tukey test different of means for Innovation Success

Figure 42: Interval plot of Innovation Success vs. assessment type

Innovation – Overall score

Innovation overall score is the aggregate of the six building blocks of innovation

capabilities within the organization. At the beginning of this chapter, we analyzed the

innovation overall score data using ANOVA methodology. We tested the overall innovation

scores of the three performance excellence assessment groups; Challenge, GSA, and Sustained

130

for difference in mean, Table 18 (innovation scores without outliers). The ANOVA output in

Table 5 (ANOVA-Innovation Challenge, GSA, Sustain) confirmed a statistical difference

among the three performance excellence groups innovation outputs. We also used ANOVA

Tukey method for multiple comparisons to identify which pair of groups has a statistical

difference Table 6

(Tukey method to compare pairs of means). The output of the Tukey method test confirmed that

Challenge performance excellence assessment group has a lower statistical mean than GSA and

Sustain performance excellence assessment groups that have no statistical difference in mean

Figure 3 (Tukey 95% CI difference of means for innovation scores).

ANOVA analysis helps us identify the difference in output means between two groups

of more, however, it does not tell us if a particular independent variable has a positive or

negative or even an effect at all on the output. This is where we use regression analysis to test

the relationship between performance excellence score level and innovation overall score

In the following section, the Baldrige performance excellence will be examined against

organizations’ Innovation overall score using regression analysis. Table 38 (Innovation overall

score vs. Performance excellence) show the innovation Behavior scores that were collected

from the surveyed organizations and their performance excellence scores.

Table 50: Innovation overall score vs. performance excellence

Assessment

Type

Organization

Code

Performance

Score

Innovation

Overall score

Challenge

SIC109

311

1.54

Challenge

SIC124

335

Challenge

SIC114

351

1.72

Challenge

SIC123

375

131

Challenge

SIC125

411

Challenge

SIC117

443

2.76

Challenge

SIC126

575

Challenge

SIC120

663

GSA

SIC116

565

GSA

SIC121

614

GSA

SIC108

623

3.85

GSA

SIC111

635

GSA

SIC118

663

GSA

SIC103

673

GSA

SIC107

716

4.28

GSA

SIC112

738

GSA

SIC110

757

4.56

GSA

SIC115

772

Sustained

SIC127

692

Sustained

SIC104

751

3.96

Sustained

SIC102

763

4.05

Sustained

SIC122

779

Sustained

SIC101

782

3.29

Sustained

SIC106

791

4.29

A quick correlation test using Pearson correlation of performance excellence score

and overall innovation score provide us with P-value = 0.0002 and r= .917 which, indicates

a high positive correlation between organization’s Baldrige performance excellence score

and organization’s innovation overall score.

Table 51: Linear regression for innovation overall score vs. performance excellence

Analysis of Variance

Source

Adj SS

Adj MS

F-Value

P-Value

132

Regression

8.8628528

8.86285275

42.14

0.0002

Performance score

8.8628528

8.86285275

42.14

0.0002

Error

1.6825472

0.21031841

Total

Model Summary

10.5454

R-sq

R-sq(adj)

R-sq(pred)

0.458604847

Coefficients

84.04%

82.05%

76.22%

Term

Coef

SE Coef

T-Value

P-Value

VIF

Constant

0.117

0.5306

0.22

0.831

Performance score

0.0052696

0.0008118

6.49

0.0002

Regression Equation

Innovation overall score = 0.1170 + 0.0052696 Performance score

The P-value of the linear model equal 0.0002 which is less than 0.05, the model S=

0.4586 and R2 = 84.04% which means that 84.04% of the variation in innovation capability of an

organization is explained by the change in its performance excellence score.

133

Figure 43: Fitted line plot for linear model

Figure 44 (overall innovation normal probability plot) shows the normality fit of the

innovation data.

Figure 44: Overall innovation normal probability plot

Anderson Darling normality method was used to test the normality of the collected data

Table 40 (innovation overall score normality test). The P-value equal 0.0678, this means that the

null hypothesis (H0: data follow a normal distribution) can’t be rejected. Even though this is a

134

good output for our test, however, we still can not confirm that the collected data is normal. We

can say that the data is not following a non normal distribution, Figure 45 (Anderson darling

normal probability plot).

Table 52: innovation overall score normality test

Descriptive Statistics

Mean StDev

3.43 1.0825

Anderson-Darling Test

Null hypothesis

H₀: Data follow a normal distribution

Alternative hypothesis

H₁: Data do not follow a normal distribution

AD-Value

P-Value

0.64

0.0678

Figure 45: Anderson darling normal probability plot

135

CHAPTER FIVE: DISCUSSION

In this chapter, we will discuss the output and results from the previous chapter. In this

research, we collected/measured two types of data for twenty-four organizations. All the

organizations that participated in this research are using Baldrige performance excellence

program to improve their overall performance. The two types of data that were used in this

research are; Performance excellence score and Innovation capability score.

The performance excellence score was measured for each organization and it consists of

two measures: Process score and Results score. The innovation score was also measured for

each organization and it consists of six innovation building blocks: Innovation value,

innovation behaviour, innovation climate, innovation resources, innovation process, and

innovation success.

The objective of this research is to measure the effect of Baldrige performance excellence

program on organization’s innovation capabilities. So we measured the effect of the

performance excellence score level on each of the six innovation building blocks and the

overall innovation score.

In the following section we will discuss the research main hypothesis to answer the main

question of this study, using the result of the data analysis for the overall innovation score. We

will also discuss the research sub-hypothesis to answer the six sub-questions we have in this

study, using the results of the data analysis for each of innovation building block.

136

Performance excellence improvement

Before discussing the research main objective results, this study presents an

important finding, which is the confirmation of the positive effect of Baldrige performance

excellence program on organizations overall performance. Performance excellence scores

were measured

/collected for twenty-four organizations that implemented one of the three types of Florida

Sterling performance excellence assessment programs; Challenge, GSA, Sustain.

Remember, Challenge assessment program is designed for new organizations that have

no experience with Baldrige program and are in the process of starting their performance

excellence journey. GSA assessment program is designed for more experienced organizations

that mostly went through the Challenge assessment in the past three years and want to further

improve their performance using intensive assessment program. Sustain assessment is for

mature organizations that have done the intensive GSA assessment over the past three years

and looking forward to sustain and keep up with the continuous improvement system in the

organization.

Based on ANOVA test that was used in this research, seven organizations conducted the

challenge performance excellence assessment, ten organizations conducted the GSA

performance excellence assessment, and six organizations conducted the Sustain performance

excellence assessment. The results confirm that as the organization go through the different

assessment program; the performance excellence score of the organization gets improved.

137

Figure 46 (Performance Scores Box Plot) shows a positive trend in performance excellence

among the three assessment programs’ groups.

Figure 46: Performance Scores Box Plot

Research questions and results

In this section, we will present the results of each of the six sub-questions and the main

question of this study and discuss these results accordingly. The research model that was

introduced in chapter one Figure 2.0 (Research Model) presents the following research

questions and hypothesis:

Main question: What is the effect of Baldrige (Sterling) assessment framework on

Organization’s innovation/dynamic capabilities?

Main Hypothesis: Baldrige assessment framework has a positive impact on Organization’s

innovation/dynamic capabilities.

138

To answer the research main question, further sub-questions and hypothesises have been

developed, each sub-question addresses each one of six innovation building blocks that

represent a foundation for organization’s innovation capabilities.

Sub-question 1: What is the effect of Baldrige assessment framework on Organization’s value

for innovation?

Hypothesis, H1: Baldrige assessment framework has a positive impact on Organization’s

value for innovation.

Sub-question 2: What is the effect of Baldrige assessment framework on Organization’s

behaviour regarding innovation?

Hypothesis, H2: Baldrige assessment framework has a positive impact on Organization’s

behaviour regarding innovation.

Sub-question 3: What is the effect of Baldrige assessment framework on Organization’s

innovation culture?

Hypothesis, H3: Baldrige assessment framework has a positive impact on Organization’s

innovation culture.

Sub-question 4: What is the effect of Baldrige assessment framework on Organization’s

innovation’s resources?

Hypothesis, H4: Baldrige assessment framework has a positive impact on Organization’s

innovation’s resources.

139

Sub-question 5: What is the effect of Baldrige assessment framework on Organization’s

innovation’s processes?

Hypothesis, H5: Baldrige assessment framework has a positive impact on Organization’s

innovation processes.

Sub-question 6: What is the effect of Baldrige assessment framework on Organization’s

innovation measurement?

Hypothesis, H6: Baldrige assessment framework has a positive impact on Organization’s

innovation’s measurement.

140

Final Research Model results

Based on the analysed data, we can confirm that Baldrige performance excellence framework

has a positive effect on Organizations’ innovation capabilities, Figure 47 (research model

results) shows a visual result of the main and sub-hypothesis we started this research with.

Figure 47: Research Model Results

Notice that Baldrige performance excellence also has a positive effect on all the six

innovation building blocks. In the following section, we will discuss each innovation building

block and the relationship between Baldrige performance excellence program and that sub

component.

Performance excellence effect on Innovation’s value

Innovation value is first building block of the innovation model we used in this research.

The first sub-question and hypothesis presented in this research are as follow:

141

Sub-question 1: What is the effect of Baldrige assessment framework on Organization’s value

for innovation?

Hypothesis, H1: Baldrige assessment framework has a positive impact on Organization’s

value for innovation.

In this research we found that Baldrige performance excellence has a positive effect on

organizations’ leaders’ innovations’ Value. This means that as organizations go through the

performance excellence program and increase their performance excellence, organizations’

leaders will increase their value for innovation.

Based on the regression analysis that was conducted in this research, Innovation value is

correlated with Performance excellence as demonstrated in equation 1.

𝐼𝑛𝑛𝑜𝑣𝑎𝑡𝑖𝑜𝑛 𝑉𝑎𝑙𝑢𝑒 = −4.331 + 0.0239 𝑃𝐸𝑥 − 0.000016 𝑃𝐸𝑥2 ( 1 )

The model P-value was less than 0.05 and R2 = 93.44%, which mean that 93.44% of

the increase in organizations’ innovation value is explained by changes in performance

excellence level of the organization.

Furthermore, ANOVA test with P-value less than 0.05 confirmed that the leaders of

the organizations that go through Sterling GSA and Sustain performance excellence

assessment programs have higher innovation Value scores than those leaders of the

organizations that are new to Baldrige and are going through the Sterling Challenge

performance excellence assessment program. Figure 48 (Sterling assessment type on

142

Innovation Value) show that organizations doing Challenge assessment program has lower

innovation Value than organizations that are doing GSA and Sustain programs.

Figure 48: Sterling Assessment type on Innovation Value

Performance excellence effect on Innovation’s behavior

Innovation Behavior is the second building block of the innovation model we used in this

research. The second sub-question and hypothesis presented in this research are as follow:

Sub-question 2: What is the effect of Baldrige assessment framework on Organization’s

behaviour regarding innovation?

Hypothesis, H2: Baldrige assessment framework has a positive impact on Organization’s

behaviour regarding innovation.

In our research we found that Baldrige performance excellence has a positive effect on

organizations’ leaders’ innovations’ Behaviour. This means that as organizations go through

the performance excellence program and increase their performance excellence,

organizations’ leaders’ innovation behaviour will be improved.

143

Based on the regression analysis that was conducted in this research, Innovation Behavior

is correlated with Performance excellence as demonstrated in equation 2.

𝐼𝑛𝑛𝑜𝑣𝑎𝑡𝑖𝑜𝑛 𝐵𝑒ℎ𝑎𝑣𝑖𝑜𝑟 = −7.421 + 0.0364 𝑃𝐸𝑥 − 0.000028 𝑃𝐸𝑥2 ( 2 )

The model P-value was less than 0.05 and R2 = 93.95%, which mean that 93.95% of

the increase in organizations’ innovation Behavior is explained by changes in performance

excellence level of the organization.

Furthermore, ANOVA test with P-value less than 0.05 confirmed that the leaders of

the organizations that go through Sterling GSA and Sustain performance excellence

assessment programs have higher innovation Behaviour scores than those leaders of the

organizations that are new to Baldrige and are going through the Sterling Challenge

performance excellence assessment program. Figure 49 (Sterling assessment type on

Innovation Behavior) show that the leaders of organizations that are new or doing Challenge

assessment program has lower innovation Behavior than those leaders of organizations that

are doing GSA and Sustain programs.

144

Figure 49: Sterling assessment type on Innovation Behavior

Performance excellence effect on Innovation’s climate/Culture

Innovation Climate/culture is the third building block of the innovation model we used in

this research. The third sub-question and hypothesis presented in this research are as follow:

Sub-question 3: What is the effect of Baldrige assessment framework on Organization’s

innovation culture?

Hypothesis, H3: Baldrige assessment framework has a positive impact on Organization’s

innovation culture.

In this research, we found that Baldrige performance excellence has a positive effect on

organizations’ innovations’ Culture/Climate. This means that as the organizations go through

the performance excellence program and increase their performance excellence,

organizations’ innovation Culture will be improved.

145

Based on the regression analysis that was conducted in this research, Innovation Climate is

correlated with Performance excellence as demonstrated in equation 3.

𝐼𝑛𝑛𝑜𝑣𝑎𝑡𝑖𝑜𝑛 𝐶𝑙𝑖𝑚𝑎𝑡𝑒 = −7.568 + 0.0367 𝑃𝐸𝑥 − 0.000028 𝑃𝐸𝑥2 ( 3 )

The model P-value was less than 0.05 and R2 = 88.54%, which mean that 88.54% of the

increase in organizations’ innovation Climate is explained by changes in performance

excellence level of the organization.

Furthermore, ANOVA test with P-value less than 0.05 confirmed that the organizations

that go through Sterling GSA and Sustain performance excellence assessment programs have

higher innovation Climate scores than those organizations that are new to Baldrige and are

going through the Sterling Challenge performance excellence assessment program. Figure 50

(Sterling assessment type on Innovation Climate) show that organizations doing Challenge

assessment program has lower innovation Climate than organizations that are doing GSA and

Sustain programs.

146

Figure 50: Sterling Assessment type on Innovation Climate

Performance excellence effect on Innovation’s resources

Innovation Resources is the fourth building block of the innovation model we used in this

research. The fourth sub-question and hypothesis presented in this research are as follow:

Sub-question 4: What is the effect of Baldrige assessment framework on Organization’s

innovation’s resources?

Hypothesis, H4: Baldrige assessment framework has a positive impact on Organization’s

innovation’s resources.

In our research we found that Baldrige performance excellence has a positive effect on

organizations’ innovations’ Resources. This means that as organizations go through the

performance excellence program and increase their performance excellence, organizations will

invest more resources into innovation. Based on the regression analysis that was conducted in

this research, Innovation Resources is correlated with Performance excellence as demonstrated

in equation 4.

𝐼𝑛𝑛𝑜𝑣𝑎𝑡𝑖𝑜𝑛 𝑅𝑒𝑠𝑜𝑢𝑟𝑐𝑒𝑠 = 0.4117 + 0.0046 𝑃𝐸𝑥 ( 4 )

The model P-value was less than 0.05 and R2 = 71.22%, which mean that 71.22% of

the increase in organizations’ innovation Resources is explained by changes in performance

excellence level of the organization.

147

Furthermore, ANOVA test with P-value less than 0.05 confirmed that the organizations

that go through Sterling GSA and Sustain performance excellence assessment programs put

more resources into innovation than those organizations that are new to Baldrige and are going

through the Sterling Challenge performance excellence assessment program. Figure 51

(Sterling assessment type on Innovation Resources) show that organizations doing Challenge

assessment program use less innovation Resources than organizations that are doing GSA and

Sustain programs.

Figure 51: Sterling Assessment type on Innovation Resources

Performance excellence effect on Innovation’s Process

Innovation Process is the Fifth building block of the innovation model we used in this

research. The fifth sub-question and hypothesis presented in this research are as follow:

Sub-question 5: What is the effect of Baldrige assessment framework on Organization’s

innovation’s processes?

148

Hypothesis, H5: Baldrige assessment framework has a positive impact on Organization’s

innovation processes.

In our research we found that Baldrige performance excellence has a positive effect on

organizations’ innovations’ Process. This means that as organizations go through the

performance excellence program and increase their performance excellence, organizations’

innovation Process will be improved.

Based on the regression analysis that was conducted in this research, Innovation Process is

correlated with Performance excellence as demonstrated in equation 5.

𝐼𝑛𝑛𝑜𝑣𝑎𝑡𝑖𝑜𝑛 𝑃𝑟𝑜𝑐𝑒𝑠𝑠 = −0.235 + 0.0053 𝑃𝐸𝑥 ( 5 )

The model P-value was less than 0.05 and R2 = 86.91%, which mean that 86.91% of

the increase in organizations’ innovation Resources is explained by changes in performance

excellence level of the organization.

Furthermore, ANOVA test with P-value less than 0.05 confirmed that the organizations

that go through Sterling GSA and Sustain performance excellence assessment programs have

higher innovation Process scores than those organizations that are new to Baldrige and are

going through the Sterling Challenge performance excellence assessment program. Figure 52

(Sterling assessment type on Innovation Climate) show that organizations doing Challenge

assessment program has lower innovation Process score than organizations that are doing GSA

and Sustain programs.

149

Figure 52: Sterling Assessment type on Innovation Process

Performance excellence effect on Innovation’s success measurement

Innovation Success measurement is the sixed building block of the innovation model

we used in this research. The third sub-question and hypothesis presented in this research are

as follow:

Sub-question 6: What is the effect of Baldrige assessment framework on Organization’s

innovation Success?

Hypothesis, H6: Baldrige assessment framework has a positive impact on Organization’s

innovation’s Success.

In our research we found that Baldrige performance excellence has a positive effect on

organizations’ innovations’ Success measurements. This means that as organizations go

through the performance excellence program and increase their performance excellence based

150

Baldrige framework, the organizations’ innovation Success measurement will be

improved. Based on the regression analysis that was conducted in this research,

Innovation Success is correlated with Performance excellence as demonstrated in

equation 6.

𝐼𝑛𝑛𝑜𝑣𝑎𝑡𝑖𝑜𝑛 𝑆𝑢𝑐𝑐𝑒𝑠𝑠 = −0.0564 + 0.0057 𝑃𝐸𝑥 ( 6 )

The model P-value was less than 0.05 and R2 = 82.34%, which mean that 82.34% of the

increase in organizations’ innovation Success is explained by changes in performance

excellence level of the organization.

Furthermore, ANOVA test with P-value less than 0.05 confirmed that the organizations

that go through Sterling GSA and Sustain performance excellence assessment programs have

higher innovation Success scores than those organizations that are new to Baldrige and are going

through the Sterling Challenge performance excellence assessment program. Figure 53 (Sterling

assessment type on Innovation Success) show that organizations doing Challenge assessment

program has lower innovation Success score than organizations that are doing GSA and Sustain

programs.

151

Figure 53: Sterling Assessment type on Innovation Success

Performance excellence effect on overall Innovation capabilities

Overall Innovation capabilities score is the average score of the six building blocks of

the innovation model we used in this research. The main question and hypothesis presented in

this research are as follow:

Main question: What is the effect of Baldrige (Sterling) assessment framework on

Organization’s innovation/dynamic capabilities?

Main Hypothesis: Baldrige assessment framework has a positive impact on Organization’s

innovation/dynamic capabilities.

The overall innovation capabilities score is calculated based on the average of the six

innovations’ building blocks; innovation Value, innovation behaviour, innovation

culture/Climate, innovation resources, innovation processes, and innovation success. Each

152

building block addresses three factors, and each factor consists of three elements. A total of

54 questions are used to assess an organization’s innovation capabilities scores. This reflects

a 360 assessment to innovation within the organization.

In our research we found that Baldrige performance excellence has a positive effect on

the organizations’ overall innovation’s capabilities. This means that as the organizations

increase their performance excellence based on Baldrige framework, the organizations’ overall

innovation capabilities will be improved.

Based on the regression analysis, organizations’ Innovation’s capabilities is correlated with

Performance excellence as demonstrated in equation 7.

𝐼𝑛𝑛𝑜𝑣𝑎𝑡𝑖𝑜𝑛 𝐶𝑎𝑝𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 = 0.117 + 0.00527 𝑃𝐸𝑥 ( 7 )

The model P-value was less than 0.05 and R2 = 84.04%, which mean that 84.04% of the

increase in organizations’ innovation Overall capabilities is explained by changes in

performance excellence level of the organization.

Furthermore, ANOVA test with P-value less than 0.05 confirmed that the organizations

that go through Sterling GSA and Sustain performance excellence assessment programs have

higher innovation overall scores than those organizations that are new to Baldrige and are

going through the Sterling Challenge performance excellence assessment program. Figure 54

(Sterling assessment type on Innovation overall) show that organizations doing Challenge

assessment program has lower innovation Capabilities score than those of organizations that

are doing GSA and Sustain programs.

153

Figure 54: Sterling Assessment type on Overall Innovation score

CHAPTER SIX: SUMMARY & CONCLUSIONS

Building innovation and Dynamic capabilities within an organization requires good

understanding and strong believes by leaders in innovation. Those leaders not only need to

talk about and discuss innovation in their meetings, but they also need to show that they truly

value innovation through their behaviors and actions. Leaders’ values for innovation are

reflected in how much of their personal time are dedicated for innovation and are reflected

in how much dollar they spend in innovation projects and efforts.

To instill innovation within organizations, leaders have to make innovation part of the

organization strategy for success. Financial measures should be in place to track revenue from

new innovative products and services that have been developed in the last three years for

example. Customers’ feedback and satisfaction with the organization’s innovation projects

154

should be measured and tracked. Continuous improvement to innovation process is critical to

increase productivity and efficiency through reducing cycle time and failures. Finally, leaders

should promote creativity, continuous learning and experimentation with new ideas and

solutions to create a culture of entrepreneurship within the organization.

The more value put into innovation, the more impact the leaders will have on people’s

behavior within the organization. Innovation behavior is manifested in how leaders and

employees react towards cannibalizing existing products in favor of new ones. Modeling the

right behavior by leaders translate values into actions that inspire and encourage middle

management and employees to take initiatives, overcome obstacles and continue

experimenting with creative ideas. Leaders’ behaviors toward innovation is also reflected in

influencing, coaching, and supporting employees’ creative ideas and innovation efforts.

A culture of innovation is required within the organization in order to create a safe,

learning, and fun environment for employees to search for new opportunities that can be further

tested and then converted into new products, services or business model. Leaders are directly

and solely responsible for building this culture within the organization, Leaders must provide

required resources such as time, money and space for employees to become creative and

innovate. Sharing internal knowledge and providing access to experts and external information

help employees overcome obstacles and continue their innovation efforts.

Once leaders put value in innovation and reflect this in action through providing

required resources and creating a culture that nurture creativity and encourage innovation,

then a systematic process for innovation is required to guide and help employees focus on

155

real opportunities, test and validate their ideas, then experiment with the solutions and get

customers feedback to further tune and improve the output. Most importantly, kill

unworkable ideas as early as possible to avoid waste and increase efficiency in developing

innovation. A clear process for innovation not only will help employees understand the steps

they need to take to test and validate their ideas, but also help middle management and

leaders support the outcome of the process and provide the means to further develop and

market the solution.

Finally, in order to build the required innovation capabilities and continue improving

it, then hard evidence of the efforts and results must be presented; this is where measurement

of the innovation efforts should take place at different points of the process. Collecting data on

the organization’s innovation input, innovation process and innovation output will help

organizations further tune and improve innovation capabilities.

It takes huge efforts and time for leaders to develop the required innovation

capabilities within their organizations. The problem is in the absence of a clear framework

that can help the organization takes the right steps in building the required capabilities.

Sometime organizations lack the proper ordinary/operational capabilities that enable them to

perform their current ongoing activities using existing skills and techniques to maintain the

status quo of the business, good operational capabilities enable organizations perform current

activities efficiently and effectively.

Without these basic (ordinary/operational) capabilities in place, it’s hard for

organizations to develop the required advanced capabilities (Dynamic/innovative) for

156

innovation. Proper Leadership, good strategy development and implementation, Deep

understanding of customers needs, process management and improvement, ability to acquire

talents and empower them, and ability to measure and develop a knowledge management

system, all these basic capabilities are crucial for any business to maintain good performance.

Having these basic capabilities in place will save organizations time and money to invest in

developing the required advance capabilities (Dynamic/innovation) for innovation.

These basic capabilities will also provide the support required for continues

innovation. The more you know your customers the more you can develop innovative

solutions for them, the more you know your employees the more you can utilize their skills,

knowledge and creative ideas, the more you know and continue improve your processes the

more innovation can be introduced internally, the more you know how to measure and track

your performance the more efficient the organization will be in innovation.

This dissertation study suggests using Baldrige performance excellence program to

help organizations systematically develop the advanced (innovation/dynamic) capabilities

that is required for innovation.

Baldrige Performance Excellence program consist of a set of assessment criteria that

provides guidance and vehicle for organizational change. Baldrige program help senior

management develop internal improvement system that can be used to target the various

organization’s systems and processes. Organizations use this integrated framework to

improve their Basic (Ordinary/operational) capabilities to become more efficient and

effective. The new updated criteria contain innovation related questions that can help

157

organizations’ leaders systematically assess current innovation performance and develop the

required advanced (dynamic/innovation) capabilities to improve this performance.

In this research, Twenty-four organizations, that implemented Baldrige

Performance Excellence program, were studied to measure the effect of Baldrige

implementation on the organizations’ innovation/dynamic capabilities. Two types of data

measurements were calculated/collected from the organizations: Performance excellence

scores and Innovation capabilities scores.

These twenty-four organizations worked with Florida Sterling Council, the approved

local state version of the US National Malcolm Baldrige Quality Award program, to

implement the Baldrige performance excellence program.

Florida Sterling Council developed several performance excellence assessment programs

based on Baldrige criteria to help organizations in various stages of their performance journey.

Three specific assessment programs were utilized by the twenty-four participating organizations.

These assessment programs are: Sterling Challenge, Sterling GSA, and Sterling Sustained.

Sterling Challenge assessment program is used by new organizations that are new to

Baldrige performance excellence criteria; eight organizations of the twenty-four were

participating in Sterling Challenge assessment program. Sterling GSA assessment program is

used by mature organizations that are familiar with Baldrige performance excellence criteria;

ten organizations of the twenty-four were participating in Sterling GSA assessment program.

Sterling Sustain assessment program is used by more mature organizations that went through

GSA assessment before and are fully familiar with Baldrige performance excellence criteria;

158

six organizations of the twenty-four were participating in Sterling Sustained assessment

program.

In this research, each assessment program was treated as a separate group with the

Challenge assessment program being the control group. ANOVA analysis was used to compare

the mean performance scores of the three different performance excellence assessment

programs. The outcome shows a statistical difference among the three groups, which proof

that implementing Baldrige performance excellence program does improve organization

performance excellence. This improvement targets the basic (operational/ordinary) capabilities

that are needed for effective and efficient operation.

Further to the calculated performance excellence scores for each of the twenty-four

organizations, the innovation capabilities of these organizations were also measured through

an online survey. Eleven organizations completed the survey, four from the challenge group,

three from the GSA group and four from the Sustained group. The survey examines six

foundational building blocks for innovation capabilities: Innovation-value, Innovation-

Behavior, InnovationCulture, Innovation-Resources, Innovation-Process, and Innovation

Success. Each of the six innovation building block consist of three factors and each factor

consist of three elements for a total of fifty-four questions included in this survey.

ANOVA statistical analysis was used to assess the difference of mean innovation

capability score among the three assessment groups with the Challenge group being the

control group. The outcome shows a statistical difference among the three groups, which

159

proof that implementing Baldrige performance excellence positively impact organization

Advanced (innovation/dynamic) capabilities.

Finally, regression analysis was used to measure the correlation between the

organizations’ performance excellence levels and the different innovation capabilities

building blocks including the overall innovation capability level. This help us further

understand the impact of Baldrige Excellence framework on the different innovation

capabilities. The outcome shows that all six sub-hypotheses were supported and that Baldrige

Excellence framework has a positive impact on all the six-innovation building blocks.

Key Findings

Several key findings were reached in this dissertation study that went beyond the scope

of this research, which was focusing on measuring the effect of Baldrige performance

excellence program on Organizations’ dynamic/innovation capabilities. These findings can be

summarized as follow:

Key Finding 1: This dissertation research studied the effect of Baldrige performance

excellence on leaders’ value for innovation. The outcome confirmed that as an organization

continue utilize the Baldrige framework to improve its performance excellence, the leaders’

value for innovation in this organization increases. When the leaders have strong value for

160

innovation they will focus more on building the required capabilities within their

organizations to become innovative.

Key Finding 2: This dissertation research studied the effect of implementing

Baldrige performance excellence on leaders’ behavior when it comes to innovation. The

outcome confirmed that as an organization continue utilize the Baldrige framework to

improve its performance excellence, the behavior of those leaders improves from being risk

avoidance to become more accommodating to risk and uncertainty that accompanies

innovation efforts.

Key Finding 3: This dissertation research studied the effect of implementing Baldrige

performance excellence on organization’s innovation culture. The outcome confirmed that as

the organization continue utilize the Baldrige framework to improve its performance

excellence, the organization will have better culture for innovation. Since the leaders of high

performing organizations have more appreciation for innovation and show positive attitude

and behavior towards risks and uncertainties, they will build a safe environment that nurture

the entrepreneurial culture within the organization to help employees take actions, continue

learning, and experimenting with creative ideas.

Key Finding 4: This dissertation research studied the effect of implementing Baldrige

performance excellence on organization’s innovation resources. The outcome confirmed that

as the organization continue utilize the Baldrige framework to improve its performance

excellence, the organization will invest more resources into innovation efforts. The effect of

more value, positive behavior, and better Culture for innovation is reflected on the how leaders

161

invest time and money in innovation. This will improve how the organization invest in

innovation and hence increase its capabilities in Innovation.

Key Finding 5: This dissertation research studied the effect of implementing Baldrige

performance excellence on organization’s innovation process. The outcome confirmed that as

the organization continue utilize the Baldrige framework to improve its internal processes, the

organization will develop and continue improve its process for innovation. In fact, the ADLI

(Approach, Deploy, Learning, and Integration) four-dimensional assessment model that is part

of Baldrige performance excellence assessment program will help in ensuring that the

innovation process is fully deployed across the organization and fully integrated with the

organization goals and objectives.

Key Finding 6: This dissertation research studied the effect of implementing

Baldrige performance excellence on organization’s innovation success measurement. The

outcome confirmed that as the organization continue utilize the Baldrige framework to

improve its measurement system and results, the organization will have better

understanding for innovation outcomes throughout the process and will continue measure

its innovation efforts for tuning, feedback and alignment. Baldrige uses LeTCI four-

dimensional assessment model to measure results will improve how organizations measure

their innovation success and benchmark with leaders in the market.

Key Finding 7: The study also concludes that Baldrige performance excellence does

improve the organizations advanced (dynamic/innovation) capabilities. Organizations

innovation capabilities were assessed at six areas with the focus on leaders’ ability to lead

162

innovation efforts, also their ability to create the required culture to nurture creative ideas and

support employees with required resources. In this research, organizations with higher

performance excellence scores have higher innovation capabilities measure in all six-

innovation building blocks based on the assessed survey. This means that the more the

organizations focus on implementing Baldrige performance excellence program and improve

their performance, the more capacity “Innovation/dynamic capability” will be developed

within these organizations to innovate.

Key Finding 8: this research study confirmed that implementing Baldrige performance

excellence framework does help improve organizations overall performance. The higher

performance is a direct outcome of improving internal processes and systems and increasing

alignment throughout the organization, which is also reflected on the organization’s results.

Organization that implemented Baldrige performance excellence will have higher capacity to

perform day-to-day work more effectively and efficiently. As mentioned in the literature

review, the capacity to do day-to-day work with existing skills and techniques is defined as

operational/ordinary capability, which I defined here as the basic capabilities. This dissertation

study confirmed that Implementing Baldrige performance excellence does improve

organization’s Basic (operational/ordinary) capabilities. This key finding supports pervious

scholars studies that confirms the benefits of implementing Baldrige Excellence Framework.

Most of the studies focused mainly on financial and market outcome from implementing

Baldrige, In this research the focus was on the performance excellence improvement, which

covers the organization processes and their results, financial results is one outcome of many

other outcomes assessed in Baldrige.

163

With all these key findings, we can conclude that implementing Baldrige performance

excellence program as a framework not only will improve organizations’ basic

(operational/ordinary) capabilities to become more efficient and effective in using its

resources, but it will also help the organizations develop the required advanced

(innovation/dynamic) capabilities systematically and continue improving these capabilities to

stay innovative.

Future work

This is a cross sectional study with twenty-four organizations participating in the

research. Perhaps a longitudinal study over the cycle of the performance excellence journey is

needed to focus on each innovation building block and develop continues measures for the

effect of Baldrige performance excellence program on organization’s dynamic/innovation

capabilities. A future work could also focus on developing an innovation performance

measurement within the Baldrige Excellence Framework. Which will help organizations better

understand and focus on innovation when their innovation performance is translated into

numbers.

164

APPENDIX A: INNOVATION SURVEY QUESTIONNAIRES

Building

Blocks

Factors

Element

SURVEY QUESTIONS

Elements

Score

Factor

Average

Block

average

Values

Entrepreneurship

Hunger

We have a strong desire to explore opportunities and to create new things

Ambiguity

We have a healthy appetite and tolerance for ambiguity when pursuing new opportunities

Action Orientated

We avoid analysis paralysis when we identify new opportunities by exhibiting a bias towards

Creativity

Imagination

We encourage new ways of thinking and solutions from diverse perspectives

Autonomy

Our leaders provide us with the freedom to pursue new opportunities

Playful

We take delight in being spontaneous and are not afraid to enjoy ourselves

Learning

Curiosity

We are good at asking questions in the pursuit of the unknown

Experiment

We are constantly experimenting in our innovation efforts

Failure

We are not afraid to fail and we treat failure as a learning opportunity.

Behaviors

Energy

Inspire

Our leaders inspire us with a vision for the future and concisely articulate the opportunities for the

Challenge

Our leaders frequently challenge us to think and act entrepreneurially.

Model

Our leaders model the right innovation behaviors for others to follow.

Engagement

Coach

Our leaders devote time to coach and provide feedback on our innovation efforts.

Initiative

In our organization people at all levels proactively take the initiative to innovate.

Support

Our leaders provide support to project team members during both successes and failures.

Enablement

Influence

Our leaders use appropriate influence strategies to help us navigate around organizational

Adapt

Our leaders are able to modify and change course of action when needed.

Grit

Our leaders persist in following opportunities even in the face of adversity.

Climate

Collaboration

Community

We have a community that speaks a common language about innovation.

Diversity

We appreciate, respect and leverage the differences that exist within our community.

Teamwork

We work well together in teams to capture opportunities.

Safety

Trust

We are consistent in actually doing the things that we say we value.

Integrity

We question decisions and actions that are inconsistent with our values.

Openness

We are free to voice our opinions about unconventional and controversial ideas

Simplicity

No Bureaucracy

We simplify our workplace by minimizing rules, policies and bureaucracy

Accountability

People take responsibility for their own actions and avoid blaming others.

Decision Making

Our people know exactly how to get started and move initiatives through the organization.

Resources

Talent

Champions

Our leaders are committed and champion innovation

Experts

We have access to innovation experts who can support our projects.

Talent

We have the internal talent to succeed in our innovation projects.

Systems

Selection

We have the right recruiting strategy in place to support a culture of innovation

Communication

Our collaboration tools effectively support our innovation efforts

Ecosystem

We are good at leveraging our relationships with suppliers and vendors to pursue innovation

Programs

Time

We give people dedicated time to pursue new opportunities

Money

We have dedicated finances to pursue new opportunities

Space

We have the right amount of quality space to pursue new opportunities

Processes

Ideation

Generate

We generate ideas from a vast and diverse set of sources

Filter

We filter and refine ideas to identify the most promising opportunities.

Priorities

We select opportunities based on a clearly articulated risk portfolio

Testing

Prototype

We move promising opportunities quickly into prototyping

Iterate

We have effective feedback loops between our organization and the voice of the customer

Fail Smart

We can fail quickly and stop projects based on predefined failure criteria

Speed

Flexibility

Our processes are tailored to be flexible and context based rather than control and bureaucracy

Launch

We quickly go to market with the most promising opportunities

Scale

We rapidly allocate resources to scale initiatives that show market promise

Success

External

Customers

Our customers think of us as an innovative organization

Competitors

Our innovation performance is much better than other firms in our industry

Financial

Our innovation efforts have led us to better financial performance than others in our industry

Organizational

Purpose

We treat innovation as a long term strategy rather than a short term fix

Discipline

We have a deliberate, comprehensive and disciplined approach to innovation

Capabilities

Our innovation projects have helped our organization develop new capabilities that we did not

Individual

Satisfaction

I am satisfied with my level of participation in our innovation initiatives

Growth

We deliberately stretch our people’s competencies by getting them to participate in new initiatives

Reward

We reward people for participating in potentially risky opportunities, irrespective of the outcome

165

167

APPENDIX B: BALDRIGE ASSESSMENT CRITERIA

168

Challenge Assessment program

1. Leadership

The Leadership category asks how senior leaders’ personal actions guide and

sustain your organization. It also asks about your organization’s governance system;

how your organization fulfills its legal, ethical, and societal responsibilities; and how it

supports its key communities.

Answer the following questions in your assessment:

1. How do senior leaders set and communicate your organization’s vision and

values?

2. How do senior leaders create an environment for learning, performance

improvement, and innovation to guide and sustain your organization?

3. How do senior leaders communicate with the workforce and encourage high

performance and a customer and business focus?

4. What are your organization’s governance system and processes for management

and financial accountability, transparency in operations, and senior leader

performance evaluation?

5. How does your organization promote and ensure legal and ethical behavior in

all interactions?

6. How does your organization fulfill its societal responsibilities and support its

key communities?

169

2. Strategic Planning

The Strategic Planning category asks how your organization develops strategic

objectives and action plans, implements them, changes them if circumstances require,

and measures progress.

Answer the following questions in your assessment:

1) How do you conduct strategic planning, including key steps, participants, and short-

and longer-term planning horizons?

2) How do you use data, information, and comparative data to determine and address

strategic opportunities, challenges, and advantages?

3) How do you determine key work systems and core competencies and use these in

making work system decisions, including what work you will do internally and what

you will outsource?

4) How do you develop strategic objectives? Summarize your organization’s key

strategic objectives and their related goals.

5) How do you convert strategic objectives into action plans and communicate these?

Summarize your organization’s key action plans, and action plan performance

measures or indicators.

6) How do you allocate resources or ensure financial and other resources are available

to support the achievement of your action plans?

7) How do you monitor progress against your objectives, and make changes to action

plans when needed?

170

3. Customer Focus

The Customer Focus category asks how your organization engages its customers

for long-term marketplace success, including how your organization listens to the voice

of the customer, builds customer relationships, and uses customer information to

improve and to identify opportunities for innovation.

Answer the following questions in your assessment:

• How do you listen to the voice of the customer?

• How do you determine customer requirements for

products/services and communication methods to support

customers?

• How do you build and manage customer relationships?

• How do you determine customer satisfaction and engagement and

use this information to make improvements?

• How do you manage and resolve customer complaints and recover

their confidence?

4. Measurement, Analysis, and Knowledge Management

The Measurement, Analysis, and Knowledge Management category asks

how your organization selects, gathers, analyzes, and manages its data, information,

and knowledge assets; how it learns; and how it manages information technology.

The category also asks how your organization uses review findings to improve its

performance.

171

Answer the following questions in your assessment:

1) How do you measure, analyze, review, and improve performance through the

use of data and information at all levels and in all parts of your organization?

2) What are your key organizational performance measures?

3) How do you select comparative data and use it effectively to support

decisionmaking?

4) How do you identify internal operations that are high performing and select and

share their best practices with other areas of your organization?

5) How do you build and manage knowledge assets?

6) How do you ensure the quality and availability of needed data, information,

software, and hardware for your workforce, suppliers, partners, collaborators,

and customers and ensure availability in the event of an emergency?

5. Workforce Focus

The Workforce Focus category asks how your organization assesses workforce

capability and capacity needs and builds a workforce environment conducive to high

performance. The category also asks how your organization engages, manages, and

develops your workforce to utilize its full potential in alignment with your

organization’s overall mission, strategy, and action plans.

Answer the following questions in your assessment:

1) How do you manage workforce capability and capacity to accomplish the work of

the organization?

2) How do you recruit, hire, place, and retain new workforce members?

172

3) How do you maintain a healthy, secure, and supportive work climate?

4) How do you engage, compensate, recognize and reward your workforce to achieve

high performance?

5) How do you assess workforce engagement and use the results to achieve higher

performance?

6) How are members of your workforce, including leaders, developed to achieve high

performance?

7) How do you manage effective career progression and succession planning including

the transfer of knowledge from departing or retiring workforce members?

6. Operations Focus

The Operations Focus category asks how your organization designs, manages,

and improves its products, services, and work processes and improves operational

effectiveness to deliver customer value and achieve organizational success and

sustainability.

Answer the following questions in your assessment:

• How do you design your products/services and the key work processes that

deliver these, and determine key product/service requirements and key

work process requirements?

• How do you manage, measure, and improve key work processes and

support processes to improve performance and reduce variability?

• How do you control the overall costs of your operations?

• How do you manage supplier performance?

173

• How do you provide a safe operating environment and ensure workplace

preparedness for disasters or emergencies?

7. Results

The Results category asks about your organization’s performance and

improvement in all key areas—product and process results, customer-focused results,

workforce-focused results, leadership and governance results, and financial and

market results. The category asks about performance levels relative to those of

competitors and other organizations with similar product offerings.

Provide results that address the following questions in your assessment:

1) What are your organization’s key product/service performance and

process effectiveness and efficiency results? Include processes that

directly serve customers, strategy, and operations (including emergency

preparedness and supply chain management). Segment your results by

product /service offerings, by customer groups and market segments,

and by process types and locations as appropriate. Include appropriate

comparative data.

2) What are your organization’s key customer focused results for

customer satisfaction, dissatisfaction, and engagement? Segment your

results by product/service offerings, customer groups, and market

segments, as appropriate. Include appropriate comparative data.

3) What are your organization’s key workforce focused results for

workforce environment and for your workforce engagement? Segment

174

your results to address the diversity of your workforce and to address

your workforce groups and segments, as appropriate. Include

appropriate comparative data.

4) What are your organization’s key senior leadership and governance

results, including those for fiscal accountability, legal compliance,

ethical behavior, societal responsibility, support of key communities,

and strategy implementation? Segment your results by organizational

units, as appropriate. Include appropriate comparative data.

5) What are your organization’s key financial and marketplace

performance results by market segments or customer groups, as

appropriate? Include appropriate comparative data.

GSA Assessment program

1. Leadership

1.1. Senior Leadership: How do your senior leaders lead the organization?

a. Vision, Values, and Mission

1) Vision and Values: How do senior leaders set your organization’s vision

and values? How do senior leaders deploy the vision and values through

your leadership system, to the workforce, to key suppliers and partners,

and to customers and other stakeholders, as appropriate? How do senior

leaders’ personal actions reflect a commitment to those values?

175

2) Promoting Legal and Ethical Behavior: How do senior leaders’ actions

demonstrate their commitment to legal and ethical behavior? How do

they promote an organizational environment that requires it?

3) Creating a Successful Organization: How do senior leaders’ actions

build an organization that is successful now and in the future? How do

they:

• create an environment for the achievement of your mission,

improvement of organizational performance, performance

leadership, organizational learning, and learning for people in the

workforce;

• create a workforce culture that delivers a consistently positive

customer experience and fosters customer engagement;

• create an environment for innovation and intelligent risk taking,

achievement of your strategic objectives, and organizational agility;

and

• participate in succession planning and the development of future

organizational leaders?

b. Communication and Organizational Performance

1) Communication: How do senior leaders communicate with and engage

the entire workforce and key customers? How do they:

• encourage frank, two-way communication, including effective use

of social media, when appropriate;

176

• communicate key decisions and needs for organizational change;

and

• reinforce high performance and a customer and business focus by

taking a direct role in motivating the workforce, including by

participating in reward and recognition programs?

2) Focus on Action: How do senior leaders create a focus on action that

will achieve the organization’s mission? How do senior leaders:

• create a focus on action that will improve the organization’s

performance, achieve innovation and intelligent risk taking,

and attain its vision;

• identify needed actions; and

• in setting expectations for organizational performance, include

a focus on creating and balancing value for customers and

other stakeholders?

1.2. Governance and Societal Responsibilities: How do you govern your

organization and fulfill your societal responsibilities

a. Organizational Governance

1) Governance System: How does your organization ensure responsible

Governance? How do you review and achieve the following key aspects

of your Governance system:

• Accountability for senior leaders’ actions;

• Accountability for strategic plans;

• Fiscal accountability;

• Transparency in operations;

177

• Selection of governance board members and disclosure policies for

them, as appropriate;

• Independence and effectiveness of internal and external audits;

Protection of stakeholder and stockholder interest, as appropriate;

• Succession planning for senior leaders?

2) Performance Evaluation: How do you evaluate the performance of your

senior leaders, including the chief executive, and your governance board?

• How do you use performance evaluations in determining executive

compensation?

• How do your senior leaders and governance board use these performance

evaluations to advance their development and improve both their own

effectiveness as leaders and that of your board and leadership system, as

appropriate?

b. Legal and Ethical Behavior

1) Legal and Regulatory Compliance: How do you anticipate and address

public concerns with your products, services, and operations? How do

you:

• address any adverse societal impacts of your products, services, and

operations;

• anticipate public concerns with your future products, services, and

operations; and

178

• prepare for these impacts and concerns proactively, including

through conservation of natural resources and effective supply chain

management processes, as appropriate?

• What are your key compliance processes, measures, and goals for

meeting and surpassing regulatory and legal requirements, as

appropriate? What are your key processes, measures, and goals for

addressing risks associated with your products, services, and

operations?

2) Ethical Behavior: How do you promote and ensure ethical behavior in

all interactions?

• What are your key processes and measures or indicators for enabling

and monitoring ethical behavior in your governance structure;

throughout your organization; and in interactions with your

workforce, customers, partners, suppliers, and other stakeholders?

• How do you monitor and responds to breaches of ethical behavior?

c. Societal Responsibilities

1) Societal Well-Being: How do you consider societal well-being and

benefit as part of your strategy and daily operations? How do you

contribute to societal well-being through your environmental, social,

and economic systems?

2) Community Support: How do you actively support and strengthen your

key communities?

• What are your key communities?

179

• How do you identify them and determine areas for organizational

involvement, including areas that leverage your core competencies?

• How do your senior leaders, in concert with your workforce,

contribute to improving these communities?

2. Strategic Planning

2.1. Strategy Development: How do you develop your strategy?

a. Strategy Development Process

1) Strategic Planning Process: How do you conduct your strategic planning?

What are your key process steps? Who are the key participants? What

are your short- and longer-term planning horizons? How are they

addressed in the planning process? How does your strategic planning

process address the potential need for:

• transformational change and prioritization of

change initiatives;

• organizational agility; and operational

flexibility?

2) Innovation: How does your strategy development process stimulate

and incorporate innovation? How do you identify strategic

opportunities? How do you decide which strategic opportunities are

intelligent risks for pursuing? What are your key strategic

opportunities?

3) Strategy Considerations: How do you collect and analyze relevant data

and develop information for your strategic planning process? In this

collection and analysis, how do you include these key elements?

180

• Your strategic challenges and strategic advantages

• Risks to your organization’s future success

• Potential changes in your regulatory environment

• Potential blind spots in your strategic planning process and

information

• Your ability to execute the strategic plan

4) Work Systems and Core Competencies: What are your key work

systems? How do you make work system decisions that facilitate the

accomplishment of your strategic objectives? How do you decide

which key processes will be accomplished by external suppliers and

partners? How do those decisions consider your core competencies

and the core competencies of potential suppliers and partners? How

do you determine future organizational core competencies and work

systems?

b. Strategic Objectives

1) Key Strategic Objectives: What are your organization’s key strategic

objectives and timetable for achieving them? What are your most

important goals for these strategic objectives? What key changes, if

any, are planned in your products and services, customers and

markets, suppliers and partners, and operations?

2) Strategic Objective Considerations: How do your strategic objectives

achieve appropriate balance among varying and potentially competing

organizational need? How do your strategic objectives:

181

• address your strategic challenges and leverage your core

competencies, strategic advantages, and strategic opportunities;

• balance short- and longer-term planning horizons; and

• consider and balance the needs of all key stakeholders?

2.2. Strategy Implementation: How do you implement your strategy?

a. Action Plan Development and Deployment

1) Action Plans: What are your key short- and longer-term action plans?

What is their relationship to your strategic objectives? How do you

develop your action plans?

2) Action Plan Implementation: How do you deploy your action plans?

How do your deploy your action plans to your workforce and to key

suppliers and partners, as appropriate, to ensure that you achieve your

key strategic objectives? How do you ensure that you can sustain the

key outcomes of your action plans?

3) Resource Allocation: How do you ensure that financial and other

resources are available to support the achievement of your action plans

while you meet current obligations? How do you allocate these

resources

to support the plans? How do you manage the risks associated with the

plans to ensure your financial viability?

4) Workforce Plans: What are your key workforce plans to support your

short- and longer-term strategic objectives and action plans? How do the

182

plans address potential impacts on your workforce members and any

potential changes in workforce capability and capacity needs?

5) Performance Measures: What key performance measures or indicators

do you use to track the achievement and effectiveness of your action

plans? How does your overall action plan measurement system reinforce

organizational alignment?

6) Performance Projections: For these key performance measures or

indicators, what are your performance projections for your short- and

longer-term planning horizons? How does your projected performance

on these measures or indicators compare with your projections of the

performance of your competitors or comparable organizations and with

key benchmarks, as appropriate? If there are gaps in performance against

your competitors or comparable organizations, how do you address

them?

b. Action Plan Modified:

How do you establish and implement modified action plans if circumstances

require a shift in plans and rapid execution of new plans?

3. Customer Focus

3.1. Voice of the Customer: How do you obtain information from your customers?

a. Customer Listening

183

1) Current Customers: How do you listen to, interact with, and observe

customers to obtain actionable information? How do your listening

methods vary for different customers, customer groups, or market

segments? How do you use social media and web-based technologies

to listen to customers, as appropriate? How do your listening methods

vary across the customer life cycle? How do you seek immediate and

actionable feedback from customers on the quality of products and

services, customer support, and transactions?

2) Potential Customers: How do you listen to potential customers to obtain

actionable information? How do you listen to former customers,

potential customers, and competitor’s customers to obtain actionable

information on your products and services, customer support, and

transactions, as appropriate?

b. Determination of Customer Satisfaction and Engagement

1) Satisfaction, Dissatisfaction, and Engagement: How do you determine

customer satisfaction, dissatisfaction, and engagement? How do your

determination methods differ among your customer groups and market

segments, as appropriate? How do your measurements capture

actionable information to use in exceeding your customers’ expectations

and securing your customers’ engagement for the long term?

2) Satisfaction Relative to Competitors: How do you obtain information on

your customers’ satisfaction:

• relative to their satisfaction with your competitors; and

184

• relative to the satisfaction of customers of other organizations that

provide similar products and services or to industry benchmarks, as

appropriate?

3.2. Customer Engagement: How do you engage customers by serving their needs

and building relationships?

a. Product Offerings and Customer Support

1) Product/Service Offerings: How do you determine product offerings and

services? How do you:

• determine customer and market needs and requirements for product

offerings and services;

• identify and adapt product/service offerings to meet the

requirements and exceed the expectations of your customer groups

and market segments; and

• identify and adapt product/service offerings to enter new markets,

to attract new customers, and to create opportunities to expand

relationships with current customers, as appropriate?

2) Customer Support: How do you enable customers to seek information

and support? How do you enable them to conduct business with you?

What are your key means of customer support, including your key

communication mechanisms? How do they vary for different customers,

customer groups, or market segments? How do you:

• determine your customers’ key support requirements; and

185

• deploy these requirements to all people and processes involved in

customer support?

3) Customer Segmentation: How do you determine your customer groups

and market segments? How do you:

• use information on customers, markets, and product offerings to

identify current and anticipate future customer groups and market

segments;

• consider competitors’ customers and other potential customers and

markets in this segmentation; and

• determine which customers, customer groups, and market segments

to emphasize and pursue for business growth?

b. Customer Relationships

1) Relationship Management: How do you build and manage customer

relationships? How do you market, build, and manage relationships

with customers to:

• acquire customers and build market share;

• manage and enhance your brand image;

• retain customers, meet their requirements, and exceed their

expectations in each stage of the customer life cycle; and increase

their engagement with you?

• How do you leverage social media to manage and enhance your

brand and to enhance?

2) Complaint Management: How do you manage customer complaints?

How do you resolve complaints promptly and effectively? How does

your management of customer complaints enable you to recover your

186

customers’ confidence, enhance their satisfaction and engagement, and

avoid similar complaints in the future?

4. Measurement, Analysis, and Knowledge Management

4.1. Measurement, Analysis, and Improvement of Organizational Performance:

How do you measure analyze, and then improve organizational performance?

a. Performance Measurement

1) Performance Measures: How do you use data and information to track

daily operations and overall organizational performance? How do you:

• select, collect, align, and integrate data and information to use in

tracking daily operations and overall organizational performance;

and

• track progress on achieving strategic objectives and action plans?

• What are your key organizational performance measures, including

key short- and longer-term financial measures? How frequently do

you track these measures?

2) Comparative Data: How do you select and effectively use comparative

data and information? How do you select and effectively use key

comparative data and information to support operational decision

making?

3) Customer Data: How do you use voice-of-the-customer and market data

and information? How do you:

• select and effectively use voice-of-the-customer and market data and

information (including aggregated data on complaints) to build a

187

more customer-focused culture and to support operational decision

making; and

• use data and information gathered through social media, as

appropriate?

4) Measurement Agility, how do you ensure that your performance

measurement system can respond to rapid or unexpected organizational

or external changes?

b. Performance Analysis and Review:

How do you review your organization’s performance and capabilities?

How do you use your key organizational performance measures, as well as

comparative and customer data, in these reviews? What analyses do you

perform to support these reviews and ensure that conclusions are valid?

How do your organization and its senior leaders use these reviews to:

• assess organizational success, competitive performance, financial health,

and progress on achieving your strategic objectives and action plans; and

• respond rapidly to changing organizational needs and challenges in your

operating environment, including any need for transformational change in

organizational structure and work systems?

• How does your governance board review the organization’s performance and

its progress on strategic objectives and action plans, if appropriate?

c. Performance Improvement

1) Best Practices: How do you share best practices in your

organization? How do you identify organizational units or operations

188

that are high performing? How do you identify their best practices

for sharing and implementing them across the organization, as

appropriate?

2) Future Performance: How do you project your organization’s future

performance? How do you use findings from performance reviews

(addressed in 4.1b) and key comparative and competitive data in

projecting future performance? How do you reconcile any

differences between these projections of future performance and

performance projections developed for your key action plans

(addressed in 2.2a[6])?

3) Continuous Improvement and Innovation: How do you sue findings

from performance reviews (addressed in 4.1b) to develop priorities

for continuous improvement and opportunities for innovation? How

do you deploy these priorities and opportunities:

• to work group and functional-level operations; and

• when appropriate, to your suppliers, partners, and collaborators to

ensure organizational alignment?

4.2. Knowledge Management, Information, and Information Technology: How do

you manage your organizational knowledge assets, information, and

information technology infrastructure?

a. Organizational Knowledge

1) Knowledge Management: How do you manage organizational

knowledge? How do you:

189

• collect and transfer workforce knowledge;

• blend and correlate data from different sources to build new

knowledge;

• transfer relevant knowledge from and to customers, suppliers,

partners, and collaborators; and

• assemble and transfer relevant knowledge for use in your innovation

and strategic planning processes?

2) Organizational Learning: How do you use your knowledge and resources

to embed learning in the way your organization operates?

b. Data, Information, and Information Technology

1) Data and Information Quality: How do you verify and ensure the

quality of organizational data and information? How do you manage

electronic and other data and information to ensure their accuracy and

validity; integrity and reliability; and currency?

2) Data and Information Security: How do you ensure the security of

sensitive or privileged data and information? How do you manage

electronic and other data and information to ensure confidentiality and

only appropriate access? How do you oversee the cybersecurity of your

information systems?

3) Data and Information Availability: How do you ensure the availability

of organizational data and information? How do you make needed data

and information available in a user-friendly format and timely manner

190

to your workforce, suppliers, partners, collaborators, and customers, as

appropriate?

4) Hardware and Software Properties: How do you ensure that hardware

and software are reliable, secure, and user friendly?

5) Emergency Availability: In the event of an emergency, how do you

ensure that hardware and software systems, and data and information

continue to be secure and available to effectively serve customers and

business needs?

5. Workforce Focus

5.1. Workforce Environment: How do you build an effective and supportive

workforce environment?

a. Workforce Capability and Capacity

1) Capability and Capacity: How do you assess your workforce

capability and capacity needs? How do you assess the skills,

competencies, certifications, and staffing levels you need?

2) New Workforce Members: How do you recruit, hire, place, and retain

new workforce members? How do you ensure that your workforce

represents the diverse ideas, cultures, and thinking of your hiring and

customer community?

3) Work Accomplishment: How do you organize and manage your

workforce? How do you organize and manage your workforce to:

• accomplish your organization’s work;

• capitalize on your organization’s core competencies;

• reinforce a customer and business focus; and

191

• exceed performance expectations?

4) Workforce Change Management: How do you prepare your workforce

for changing capability and capacity needs? How do you:

• manage your workforce, its needs, and your organization’s needs

to ensure continuity, prevent workforce reductions, and minimize

the impact of such reductions, if they become necessary;

• prepare for and manage periods of workforce growth; and prepare

your workforce for changes in organizational structure and work

systems, when needed?

b. Workforce Climate

1) Workplace Environment: How do you ensure workplace health, security,

and accessibility for the workforce? What are your performance

measures and improvement goals for your workplace environmental

factors? For your different workplace environments, what significant

differences are there in these factors and their performance measures or

targets?

2) Workforce Benefits and Policies: How do you support your workforce

via services, benefits, and policies? How do you tailor these to the needs

of a diverse workforce and different workforce groups and segments?

What key benefits do you offer your workforce?

5.2. Workforce Engagement: How do you engage your workforce to achieve a

highperformance work environment?

a. Workforce Engagement and Performance

192

1) Organizational Culture: How do you foster an organizational culture

that is characterized by open communication, high performance, and an

engaged workforce? How do you ensure that your organizational culture

benefits from the diverse ideas, cultures, and thinking of your

workforce?

How do you empower your workforce?

2) Drivers of Engagement: How do you determine the key drivers of

workforce engagement? How do you determine these drivers for

different workforce groups and segments?

3) Assessment of Engagement: How do you assess workforce

engagement? What formal and informal assessment methods and

measures do you use to determine workforce engagement, including

satisfaction? How do these methods and measures differ across

workforce groups and segments? How do you also use other indicators,

such as workforce retention, absenteeism, grievances, safety, and

productivity, to assess and improve workforce engagement?

4) Performance Management: How does your workforce performance

management system support high performance and workforce

engagement? How does it consider workforce compensation, reward,

recognition, and incentive practices? How does it reinforce:

• intelligent risk taking to achieve innovation;

• a customer and business focus; and achievement of your action

plans?

193

b. Workforce and Leader Development

1) Learning and Development System: How does your learning and

development system support the organization’s needs and the personal

development of your workforce members, managers, and leaders? How

does the system:

• address your organization’s core competencies, strategic challenges,

and achievement of short-and longer-term action plans;

• support organizational performance improvement, organizational

change, and innovation;

• support ethics and ethical business practices;

• improve customer focus;

• ensure the transfer of knowledge from departing or retiring

workforce members; and

• ensure the reinforcement of new knowledge and skills on the job?

2) Leaning and Development Effectiveness: How do you evaluate the

effectiveness and efficiency of your learning and development system?

How do you:

• correlate learning and development outcomes with findings from

your assessment of workforce engagement and with key business

results reported in Category 7; and

• use the correlations to identify opportunities for improvement in both

workforce engagement and learning and development offerings?

194

3) Career Progression: How do you manage career progression for your

organization? How do you manage career development for your

workforce? How do you carry out succession planning for

management and leadership positions?

6. Operations Focus

6.1. Work Processes: How do you design, manage, and improve your key products

and services and work processes?

a. Product, Service and Process Design

1) Products/Services and Process Requirements: How do you determine

key product/service and work process requirements? What are your

organization’s key work processes? What are the key requirements for

these work processes?

2) Design Concepts: How do you design your products, services, and work

processes to meet requirements? How do you incorporate new

technology, organizational knowledge, product and service excellence,

customer value, and the potential need for agility into these products,

services, and processes?

b. Process Management

1) Process Implementation: How does your day-to-day operation of

work processes ensure that they meet key process requirements? What

key performance measures or indicators and in-process measures do

you use to control and improve your work processes? How do these

measures relate to end-product quality and performance?

195

2) Support Processes: How do you determine your key support

processes? What are your key support processes? How does your day-

to-day operation of these processes ensure that they meet key business

support requirements?

3) Product/Service and Process Improvement: How do you improve your

work processes to improve products/services and performance,

enhance your core competencies, and reduce variability?

c. Innovation Management:

How do you manage for innovation? How do you pursue the strategic

opportunities that you determine are intelligent risks? How do you make

financial and other resources available to pursue these opportunities? How

do you discontinue pursuing opportunities at the appropriate time to enhance

support for higher-priority opportunities?

6.2. Operational Effectiveness: How do you ensure effective management of your

operations? In your response, include answers to the following questions:

a. Process Efficiency and Effectiveness:

How do you control costs of your operations? How do you:

• incorporate cycle time, productivity, and other efficiency and

effectiveness factors into your work processes;

• prevent defects, service errors, and rework;

• minimize warranty costs or customers’ productivity losses, as

appropriate;

196

• minimize the costs of inspections, tests, and process performance audits,

as appropriate; and balance the need for cost control with the needs of

your customers?

b. Supply Chain Management: How do you manage your supply chain? How

do you:

• select suppliers and ensure that they are qualified and positioned to not

only meet operational needs but also enhance your performance and your

customers’ satisfaction;

• measure and evaluate your suppliers’ performance;

• provide feedback to your suppliers to help them improve; and deal with

poorly performing suppliers?

c. Safety and Emergency Preparedness

1) Safety: How do you provide a safe operating environment? How

does your safety system address accident prevention, inspection, root-

cause analysis of failures, and recovery?

2) Emergency Preparedness: How does your disaster and emergency

preparedness system consider prevention, continuity of operations,

and recovery? How does your disaster and emergency preparedness

system take your reliance on suppliers and partners into account?

7. Results

7.1. Product/Service and process Results: What are your product performance and

process effectiveness results?

197

a. Customer Focused Product and Service Results

What are your results for your products/services and your customer service

processes? What are your current levels and trends in key measures or

indicators of the performance of products and services that are important to

and directly serve your customers? How do these results compare with the

performance of your competitors and other organizations with similar

offerings? How do these results differ by product/service offerings,

customer groups, and market segments, as appropriate?

b. Work Process Effectiveness Results

1) Process Effectiveness and Efficiency: What are your process

effectiveness and efficiency results? What are your current levels and

trends in key measures or indicators of the operational performance of

your key work and support processes, including productivity, cycle time,

and other appropriate measures of process effectiveness, efficiency, and

innovation? How do these results compare with the performance of your

competitors and other organizations with similar processes? How do

these results differ by process types, as appropriate?

2) Emergency Preparedness: What are your emergency preparedness

results? What are your current levels and trends in key measures or

indicators of the effectiveness of your organization’s preparedness for

disasters or emergencies: How do these results differ by location or

process type, as appropriate?

c. Supply Chain Management Results

198

What are your supply chain management results? What are your results for

key measures or indicators of the performance of your supply chain,

including its contribution to enhancing your performance?

7.2. Customer-Focused Results: What are your customer-focused performance

results?

a. Customer-Focused Results

1) Customer Satisfaction: What are your customer satisfaction and

dissatisfaction results? What are your current levels and trends in key

measures or indicators of customer satisfaction and dissatisfaction? How

do these results compare with those of your competitors and other

organizations providing similar products? How do these results differ by

product offerings, customer groups, and market segments, as

appropriate?

2) Customer Engagement: What are your customer engagement results?

What are your current levels and trends in key measures or indicators of

customer engagement, including those for building customer

relationships? How do these results compare over the course of your

customer life cycle as appropriate? How do these results differ by

product offerings, customer groups, and market segments, as

appropriate?

7.3. Workforce-Focused Results: What are your workforce-focused performance

results?

a. Workforce-Focused Results

199

1) Workforce Capability and Capacity: What are your workforce

capability and capacity result? What are your current levels and trends

in key measures of workforce capability and capacity, including

appropriate skills and staffing levels? How do these results differ by

the diversity of your workforce and by your workforce groups and

segments, as appropriate?

2) Workforce Climate: What are your workforce climate results? What

are your current levels and trends in key measures or indicators of your

workforce climate, including those for workforce health, safety, and

security and workforce services and benefits, as appropriate? How do

these results differ by the diversity of your workforce and by your

workforce groups and segments, as appropriate?

3) Workforce Engagement: What are your workforce engagement results?

What are your current levels and trends in key measures or indicators

of workforce satisfaction and workforce engagement? How do these

results differ by the diversity of your workforce and by your workforce

groups and segments, as appropriate?

4) Workforce Development: What are your workforce and leader

development results? What are your current levels and trends in key

measures or indicators of workforce and leader development? How do

these results differ by the diversity of your workforce and by your

workforce groups and segments, as appropriate?

200

7.4. Leadership and Governance Results: What are your senior leadership and

governance results?

a. Leadership, Governance, and Societal Responsibility Results

1) Leadership: What are your results for senior leaders’ communication and

engagement with the workforce and customers? What are your results

for key measures or indicators of senior leaders; communication and

engagement with the workforce and customers to deploy your vision and

values, encourage two-way communication, and create a focus on

action? How do these results differ by organizational units and customer

groups, as appropriate?

2) Governance: What are your results for governance accountability?

What are your key current findings and trends in key measures or

indicators of governance and internal and external fiscal accountability,

as appropriate?

3) Law and Regulation: What are your legal and regulatory results? What

are your results for key measures or indicators of meeting and surpassing

regulatory and legal requirements? How do these results differ by

organizational units, as appropriate?

4) Ethics: What are your results for ethical behavior? What are your results

for key measures or indicators of ethical behavior, breaches of ethical

behavior, and stakeholder trust in your senior leaders and governance?

How do these results differ by organizational units, as appropriate?

201

5) Society: What are your results for societal responsibility and support of

your key communities? What are your results for key measures or

indicators of your fulfillment of your societal responsibilities and support

of your key communities?

b. Strategy Implementation Results

What are your results for the achievement of your organizational strategy

and action plans? What are your results for key measures or indicators of

the achievement of your organizational strategy and action plans? What are

your results for building and strengthening core competencies? What are

your results for taking intelligent risks?

7.5. Financial and Market Results: What are your financial and marketplace

performance results?

a. Financial and Market Results

1) Financial Performance: What are your financial performance results?

What are your current levels and trends in key measures or indicators

of financial performance, including aggregate measures of financial

return, financial viability, and budgetary performance, as appropriate?

How do these results differ by market segments and customer groups,

as appropriate?

2) Marketplace Performance: What are your marketplace performance

results? What are your current levels and trends in key measures or

indicators of marketplace performance, including market share or

position, market and market share growth, and new markets entered,

202

as appropriate? How do these results differ by market segments and

customer groups, as

appropriate?

Sustain Assessment program

I. EXECUTIVE SUMMARY Baseline

– Areas to Address

a) Identify the year(s) when the organization was recognized as a role model.

b) What, if anything, is different with respect to the scope of this organization

compared to the award year organization?

c) Briefly summarize key approaches and results that contributed to the organization’s

role model recognition.

d) Briefly summarize significant challenges/opportunities cited in first assessment.

Evidence of Sustained Performance Excellence

a) Summarize the key leadership and management approaches (if any) that

have changed or evolved since the award year.

b) Summarize any awards, achievements, certifications, re-certifications, and

recognition, including significance/relevance, since the Governor’s Sterling

Award.

c) Briefly summarize your analysis of whether the organization has

continually improved and maintained its role model status—or not—based

on the current assessment.

203

II. SUSTAINING A CULTURE OF PERFORMANCE EXCELLENCE

a) Summarize evidence that indicates this organization will operate in good health two

to five years from now or beyond.

b) Summarize any recent improvements to the organization’s governance system that

has reduced systemic risk, increased its ability to handle disruptions, and positioned

it for future growth and/or sustainability.

c) Summarize how and to what extent the organization embraces a culture of

continuous learning. Briefly list any significant, implemented organizational

innovations.

d) Summarize any opportunistic decisions that led to strategic organizational

breakthroughs.

e) What progress has the organization made in relation to its strategic actions,

objectives, and goals identified at the time it received the Governor’s Sterling

Award?

f) Summarize any potential industry, market, environmental, or regulatory challenges

and/or threats related to future sustainability and any mitigating steps the

organization is taking to address these challenges.

III. KEY ORGANIZATIONAL APPROACHES

a) Summarize 3-5 most significant approach strengths. Include how the organization

specifically addressed opportunities cited in the previous assessment and how its

approaches have continued to evolve and improve since the previous assessment.

204

b) Summarize 2-3 most significant opportunities for improvement related to the

organization’s approaches.

c) Summarize 3-5 most significant approach strengths. Provide evidence that the

organization specifically addresses Criteria changes that occurred since it achieved

the Governor’s Sterling Award.

d) Summarize 2-3 most significant opportunities for improvement related to the

organization’s approaches.

IV. KEY ORGANIZATIONAL RESULTS

a) Summarize 3-5 most significant results strengths. These should be themes focused

on how the organization sustained and/or improved key results since award-year

evaluation. Give focus to new results identified due to changes in organizational

priorities, the industry/sector, and in competitor/comparison performance.

b) Summarize 2-3 most significant opportunities or remaining challenges related to the

organization’s results.

Students also viewed