Be Ready for Anything

From the Baldrige application, Section 2.1, "Strategy Development":

How do your strategic objectives enhance your ability to adapt to sudden shifts in your market conditions?

Baldrige requires that applicants' strategic plans promote "organizational agility"—the ability to dodge threats and seize opportunities. Because Midway's full-on, seven-hour planning meetings—each involving nine senior managers plus a rotating cast of other employees—take place monthly, no more than a month elapses between a market development and a planning meeting. So swift action is guaranteed. And because schedules, costs, and resources for most projects are reassessed at each meeting, senior leaders can efficiently identify what to postpone in favor of a more urgent goal.

Consider Midway's response when the election of Barack Obama—widely perceived by gun lovers as an advocate for gun control—prompted a run on products such as high-capacity magazines and military-caliber rifle ammunition. "The industry was cleaned out almost overnight," says Midway's president, Matt Fleming. "We had to make a pretty significant change to put quantity limits on products, or people would hoard things." In the first meeting after it became clear shortages would persist, the executive team ran down its list of initiatives, decided it could afford—in the interests of customer satisfaction—to push back a system for managing the due dates of incoming products, and swiftly reallocated resources. In less than 30 days, a quantity-limitation system representing hundreds of SKUs was in place.

Know the Competition

From the Baldrige application, Section 4.1, "Measurement, Analysis, and Improvement of Organizational Performance":

How do you select and ensure the effective use of key comparative data and information to support operational and strategic decision making and innovation?

Baldrige assesses applicants on their benchmarking of operations and results both inside and outside their industries, something Midway used to do only sporadically. Today, Midway's knowledge of its competition has gone from summary to encyclopedic. On a wall outside the e-commerce department, a sprawling chart rates 43 companies on their execution of 97 website features, including whether they provide discussion boards for every product and which credit cards they accept. The chart, which is updated twice a year, notes not just whether particular sites have particular features but also how strong those features are and includes data on the percentage of sites that offer each one.

A similar chart in HR compares Midway's compensation, benefits, and work environment against those of competitors, local companies, and organizations dubbed best places to work. The marketing version considers subjects such as pricing and customer policies. Department heads constantly measure Midway's performance against all those numbers.

Put Yourself Out There

From the Baldrige application, Section 3.2, "Customer Engagement":

How do you make, market, build, and manage relationships with customers to increase their engagement with you?

Baldrige expects applicants to have methods for increasing "customers' willingness to actively advocate for and recommend your brand." In 2006, Potterfield, a once-retiring man whose public appearances were limited to the Optimist and Rotary clubs, concluded that the best way to engage customers with the brand was to get them to engage with him. So he created GunTec, a marketing-department division that produces Midway commercials, firearm safety videos, and instructional vignettes on gunsmithing. These run on the Outdoor Channel and YouTube. (The YouTube videos have been viewed more than 11 million times.) Three mornings a week, Potterfield dons his trademark red shirt and takes his place in an in-house film studio, where two staff videographers record him as he crowns the muzzle of a rifle barrel or advises viewers on selecting a gun vise. Every video ends with the same words: "I'm Larry Potterfield with MidwayUSA. And that's the way it is." "I took that from Walter Cronkite," says Potterfield. "He was from Missouri, too."

Elevate Process

From the Baldrige application, Section 6.2, "Work Processes":

How do you design and innovate your work processes to meet all the key requirements?

Baldrige focuses on process management rather than project management, the thinking being projects achieve their ends and expire, but key work processes produce ongoing internal value. Midway has separate processes for designing processes and for improving processes. Just to give you an idea: Each new process proposal is laid out in a "charter" document, which includes an executive summary, sign-offs from all stakeholders—internal and external—who will be in any way affected by the process, an analysis of how the new process will interact with other processes, input from subject-matter experts who are knowledgeable about elements of the process, an estimate of net present value for initiatives likely to affect a cost or revenue key measure, sample scenarios of how the process will be used, an exhaustive rundown of resource requirements, an explanation of how features may be used differently by people in different departments.…

You might wonder whether all this upfront work isn't overkill. And it would be, except that, as Krishnasundeep Boinpally, an engineer at Midway, explains, it applies only to major initiatives that require more than 40 hours of staff time. "As part of the Baldrige work-force focus, we empower people to make smaller improvements without red tape or bureaucracy," Boinpally says. "Under 40 hours and you're good to go."