Managing for Quality and Performance Excellence, 9 th Edition
Summary of Key Points and Terminology
Chapter 10 – The Baldrige Framework for Performance
Excellence
● The Malcolm Baldrige National Quality Improvement Act was signed into law
(Public Law 100-107) on August 20, 1987. The focus of the program was defined
as:
o
Helping to stimulate American companies to improve quality and
productivity for the pride of recognition while obtaining a competitive
edge through increased profits;
o
Recognizing the achievements of those companies that improve the
quality of their goods and services and providing an example to others;
o
Establishing guidelines and criteria that can be used by business,
industrial, governmental, and other enterprises in evaluating their own
quality improvement efforts; and
o Providing specific guidance for other American enterprises that wish to
learn how to manage for high quality by making available detailed
information on how winning enterprises were able to change their cultures
and achieve eminence.
● In 2010, via an act of Congress, the Program changed its name to the Baldrige
Performance Excellence Program, dropping the term “quality” to signify its broader
mission: to improve the competitiveness and performance of U.S. organizations,
rather than improvement of quality, which many people associate primarily with
goods and services. The award’s name also changed to simply the Malcolm
Baldrige Award.
● The Malcolm Baldrige Award recognizes U.S. companies that excel in performance
excellence practices and results that achieve the highest levels of customer and
stakeholder satisfaction. The seven Baldrige Award criteria define key practices in
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categories of: leadership; strategic planning; customer focus; workforce focus;
measurement, analysis and knowledge management; operations focus; and results.
● The award examination is based upon a rigorous set of criteria, called the Criteria
for Performance Excellence, designed to encourage companies to enhance their
competitiveness through an aligned approach to organizational performance
management
● The Core Values and Concepts provide a set of key principles that characterize a
culture of performance excellence. They are:
o Visionary Leadership
o Customer-Driven Excellence
o Organizational and Personal Learning
o Valuing Workforce Members and Partners
o Agility
o Focus on the Future
o Managing for Innovation
o Management by Fact
o Societal Responsibility
o Focus on Results and Creating Value
o Systems Perspective
● The Baldrige criteria continue to evolve to ensure that they reflect current
business and organizational practices that facilitate performance excellence. A
key focus today is on (organizational) sustainability – which refers to an
organization’s ability to address current business needs and to have the agility
and strategic management to prepare successfully for the future, and to prepare
for real-time or short-term emergencies.
● In the Baldrige Award process, each item in categories 1-6 of the Criteria is
evaluated on four factors: approach, deployment, learning, and integration.
Approach refers to the methods used to accomplish the process, the
appropriateness of the methods to the item requirements and the organization’s
operating environment, the effectiveness of the use of the methods, and the
degree to which the approach is repeatable and based on reliable data and
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information (i.e., systematic). Deployment refers to the extent to which the
approach is applied in addressing item requirements relevant and important to
the organization, the approach is applied consistently, and the approach is used
(executed) by all appropriate work units. Learning refers to refining the
approach through cycles of evaluation and improvement, encouraging
breakthrough change to the approach through innovation, and sharing
refinements and innovations with other relevant work units and processes in the
organization. Integration refers to the extent to which the approach is aligned
with organizational needs identified in the Organizational Profile and other
process items; measures, information, and improvement systems are
complementary across processes and work units; and plans, processes, results,
analyses, learning, and actions are harmonized across processes.
● Category 7 addresses results. Results refers to an organization’s outputs and
outcomes. The factors used to evaluate results include current performance
levels; the rate and breadth of performance improvements; performance relative
to appropriate comparisons and benchmarks; and the extent to which results
measures address important customer, product, market, process, and action plan
performance requirements; include valid indicators of future performance; and
are harmonized across process and work units to support organization-wide
goals.
● Characteristics that distinguish Baldrige recipients from other organizations
include achievement in results, entrepreneurism and innovation, agility,
governance and leadership metrics, and effective work systems and work
processes.
● Many organizations use the Baldrige Criteria for self-assessment or internal
recognition programs, even if they do not intend to apply for the award. The
benefits of using the criteria for self-assessment include accelerating
improvement efforts, energizing employees, and learning from feedback—
particularly if external examiners are involved.
● The Baldrige Award has had a significant economic impact, and has generated a
phenomenal amount of interest, and many companies use its criteria as a basis
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for internal assessment of their quality systems. A study of the social impacts of
Baldrige, done in 2011, concluded that the benefit-to-cost ratio for the group of
surveyed applicants was 820 to 1. Importantly, the program changed the way in
which many organizations around the world manage their operations, and helped
significantly to bring the principles of TQ into the daily culture of these
organizations.
● Although Deming was not a supporter of the Baldrige Award, many of Deming’s
principles are reflected directly or in spirit within the criteria. In fact, Zytec (now
a part of Artesyn Technologies), which implemented its total quality system
around Deming’s 14 Points, received a Baldrige Award.
● Many international award programs are patterned after or are similar to the
Baldrige Award, such as the European Quality Award, Canadian Awards for
Business Excellence, and the Australian Business Excellence Award, and many
states in the U.S. have similar programs.
● In comparing Baldrige, ISO 9000, and Six Sigma, Baldrige focuses on
performance excellence for the entire organization in an overall management
framework, identifying and tracking important organizational results; ISO
focuses on product and service conformity for guaranteeing equity in the
marketplace and concentrates on fixing quality system problems and product and
service nonconformities; and Six Sigma focuses on measuring product quality
and driving process improvement and cost savings throughout the organization.
● Many organizations have successfully blended ISO 9000, Six Sigma, and/or
Baldrige in their practices. Honeywell Federal Manufacturing & Technologies
uses the analogy of taking a journey to performance excellence. ISO 9000 is the
driver’s license; it provides the discipline and the rules to follow. Six Sigma is
the car; the tool that gets you to your destination. Baldrige is the roadmap.
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