Ch.11 Baldrige

The Baldrige Framework for Performance Excellence

Introduction to the Baldrige Program

• The Malcolm Baldrige National Quality Improvement Act was signed into law on August 20, 1987 (Public Law 100-107).

• The program's initial focus was on:

  • Stimulating American companies to improve quality and productivity.

  • Recognizing companies that improve the quality of goods and services.

  • Establishing guidelines for evaluating quality improvement efforts.

  • Providing guidance for managing high quality.

• In 2010, the program was renamed the Baldrige Performance Excellence Program.

  • The term "quality" was dropped to broaden the mission.

  • The goal shifted to improving the competitiveness and performance of U.S. organizations.

  • The award's name was changed to the Malcolm Baldrige Award.

• The Malcolm Baldrige Award recognizes U.S. companies that excel in performance excellence practices and achieve high levels of customer and stakeholder satisfaction.

• The seven Baldrige Award criteria categories:

  • Leadership

  • Strategy

  • Customers

  • Workforce

  • Measurement, Analysis and Knowledge Management

  • Operations

  • Results

Criteria for Performance Excellence

• The award examination is based on the Criteria for Performance Excellence.

  • Designed to encourage companies to enhance their competitiveness through aligned organizational performance management.

Core Values and Concepts

• The Core Values and Concepts characterize a culture of performance excellence:

  • Systems Perspective

  • Visionary Leadership

  • Customer-Focused Excellence

  • Valuing People

  • Agility and Resilience

  • Organizational Learning

  • Focus on Success and Innovation

  • Management by Fact

  • Societal Contributions

  • Ethics and Transparency

  • Delivering Value and Results

Evolution and Focus

• The criteria have been streamlined to be more easily understood and useful.

• Content is revised to reflect relevant business practices and contemporary organizational thinking.

• A key focus today is on organizational sustainability.

  • Sustainability: An organization’s ability to address current business needs and prepare for the future, including short-term emergencies.

Evaluation Factors in the Baldrige Award Process

• Each item in categories 1-6 is evaluated on four factors:

  • Approach: Methods used, appropriateness, effectiveness, and systematic nature.

  • Deployment: Extent of application, consistency, and execution by work units.

  • Learning: Refining the approach through evaluation, improvement, innovation, and sharing.

  • Integration: Alignment with organizational needs, complementary measures, and harmonized plans.

• Category 7 addresses results.

  • Results: An organization’s outputs and outcomes.

  • Evaluation factors include:

    • Current performance levels

    • Rate and breadth of performance improvements

    • Performance relative to benchmarks

    • Measures addressing customer, product, market, process, and action plan requirements

    • Indicators of future performance

    • Harmonization across work units

Characteristics of Baldrige Recipients

• Distinguishing characteristics:

  • Achievement in results

  • Entrepreneurism and innovation

  • Agility

  • Governance and leadership metrics

  • Effective work systems and processes

Benefits of Using Baldrige Criteria

• Many organizations use the Baldrige Criteria for self-assessment or internal recognition programs.

• Benefits include:

  • Accelerating improvement efforts

  • Energizing employees

  • Learning from feedback

Economic and Social Impact of the Baldrige Award

• The Baldrige Award has had a significant economic impact.

• A 2011 study concluded that the benefit-to-cost ratio for surveyed applicants was 820 to 1.

• The program has influenced how organizations manage operations and has integrated TQ principles into organizational cultures.

Alignment with Deming's Principles

• Many of Deming’s principles are reflected in the Baldrige Criteria.

• Zytec (now part of Artesyn Technologies), which implemented a total quality system around Deming’s 14 Points, received a Baldrige Award.

International Recognition

• Many international award programs are patterned after the Baldrige Award.

• Examples include the EFQM Excellence Award and the Performance Excellence Award in China.

Comparison with ISO 9000 and Six Sigma

• Baldrige:

  • Focuses on performance excellence for the entire organization.

  • Provides an overall management framework.

  • Identifies and tracks important organizational results.

• ISO 9000:

  • Focuses on product and service conformity.

  • Guarantees equity in the marketplace.

  • Concentrates on fixing quality system problems and nonconformities.

• Six Sigma:

  • Focuses on measuring product quality.

  • Drives process improvement and cost savings.

Blending Baldrige, ISO 9000, and Six Sigma

• Many organizations successfully blend ISO 9000, Six Sigma, and/or Baldrige in their practices.

• ISO-based quality management systems provide synergies with Baldrige-based performance excellence approaches.

• Six Sigma can provide the impetus for change.

• Baldrige provides the keys to sustainability.

Resilience and Business Continuity

• All organizations face unplanned crises and disruptions.

• Disruption: Any disturbance or crisis that interrupts normal operations.

• Resilience: The ability to recover from or adjust to a disruption.

  • Includes the agility to modify plans, processes, and relationships.

• Resilience is vital for business continuity.

• The Baldrige Framework provides guidance for handling crises and disruptions, improving resilience, and enhancing business continuity.

Sustainability

• Sustainability refers to an organization’s ability to strategically address current business needs and develop a long-term strategy.

• Involves managing risk for all products, systems, supply chains, and processes to preserve resources for future generations.

• From a business perspective, sustainability is an organization’s commitment to address current business needs and economic vitality, and to have the agility and strategic management to prepare successfully for future business, markets, and operating environments.

Cybersecurity Framework

• The Baldrige program has created guidance for managing cybersecurity efforts.

• The Cybersecurity Framework assembles standards, guidelines, and practices.

• The Baldrige Cybersecurity Excellence Builder (BCEB) is a voluntary self-assessment tool that helps organizations understand the effectiveness of their cybersecurity risk management efforts.

Research on Baldrige and Sustainability/Resilience

• A research team identified emergent themes related to the impact of the Baldrige framework on organizational sustainability and resilience.

• Top three themes:

  • Embed Baldrige/Culture

  • Strategic Planning

  • Leadership

Role Model Organizations

• "Role model organizations" are those that have received the Baldrige Award.

• Key practices:

  1. Seek an engagement and performance culture

  2. Resilience.

  3. WIG's: Clearly articulated and strategic wildly important goals.

  4. Standard Work: Defined, repeatable processes.

  5. A3 Thinking: A problem-solving process to articulate problems, analyze them, propose solutions, develop an action plan, articulate the target outcome, and assign responsibilities.

  6. Hire for Cultural Fit: Commitment to core values.

  7. Use Net Promoter Scores (NPS).

  8. Start Baldrige "Before You Are Ready".

  9. Celebrate the Wins.