state program logo the colorado performance excellence (cpex) award program creating a culture of...
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The Colorado Performance Excellence (CPEx) Award Program
Creating a Culture of Excellence Pervasive Throughout Colorado
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In today’s highly competitive global environment …
Is it possible to …
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Increase market share in a
tight market?
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YES!
Increased sales 72% from 1999 to 2004
In the stagnant food manufacturing industry, The Bama Companies, Inc.
Increased total revenue from $123 million to $211 million
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YES!
Increased sales 93%, growing total revenues from $14M to $27M in 2006
Since 2000, MESA Products, Inc.
Improved return on equity from –5% in 1999 to > 25% in 2005, exceeding industry competitors by 20%
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Yes!
Has been continuously profitable for 12 years in an industry that has been undergoing widespread bankruptcies and consolidations.
Has doubled profits over the past five years!
PRO-TEC Coating Company
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YES!
RWJ Hamilton Hospital’s occupancy rate grew from 70% to 90%
– More than 25 percentage points higher than its nearest competitor!
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Have totally satisfied customers?
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YES!
from 75% in 2001
The Bama Companies, Inc. has increased customer satisfaction
to 100% in 2004
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YES!
From 2001 to 2005
Sunny Fresh Foods maintained
nearly 100% customer satisfaction
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YES!
Park Place Lexus’Customer Satisfaction Index
for new cars is
nearly 100% for both its locations
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In today’s highly competitive global environment …
Is it possible to …
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Have highly satisfied employees?
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YES!
In 2005 employee satisfaction at DynMcDermott Petroleum Operations
was 83%
vs.
the industry benchmark of 43%
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YES!
For 3 years in a row (2004, 2005 & 2006)
Bronson Methodist Hospital
“100 Best Companies to Work For”
Has been named one of Fortune Magazine’s
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YES!
has increased to 4.62
In 2005
At Jenks Public Schools
staff enthusiasm for work
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Why Are These Organizations Outperforming?
They view their organizations as an integrated holistic system
They use the Criteria for Performance Excellence as a framework to assess and improve their system
They recognize that high-performance comes from all the parts of the system working effectively together
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What is Performance Excellence?
performance management approachbased on continuous improvement
that leads tooutstanding organizational results
An integrated
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WHY IS IT IMPORTANT?
Global Environment
Competitive Advantage
Demonstrated Results
Why Not???
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Where is your organization on the Performance Excellence Continuum?
Do your leaders set clear a direction that is aligned with the vision, mission, and values and is cascaded throughout the organization with measurable goals?
Ad Hoc Management Approach High Performance Management System
Do people in your organization have the information they need to make good decisions?
Does your organization factually understand customers—their needs, expectations, and preferences?
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Continuous Improvement, It’s All Relative!
Excellence Model is based on “continuous improvement”
Even the best try to continuously improve Departure point is irrelevant
– Low to high– High to World Class
Staying in place is not an option
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The Excellence ModelWhat is it & Where did it come from?
Malcolm Baldrige National Quality Award
Enactment of Congress 1987
Setting the new standard of “Excellence”
Expansive use for award programs and road-mapping for improvement
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Demonstrated, Sound Management Framework
4Measurement, Analysis, and Knowledge Management
5Human
ResourceFocus
3Customer &
Market Focus
2StrategicPlanning
1Leadership
6Process
Management
ORGANIZATIONAL PROFILE: ENVIRONMENT, RELATIONSHIPS, AND
CHALLENGES
7Organizational
Results
Baldrige-Based Model – a Systems Perspective
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Endorsed by Presidents
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President Ronald Reagan – “The Malcolm Baldrige National Quality Award offers companies a standard with which to compare their own progress to that of the country’s very best.”
President Bill Clinton – “Every year I feel more strongly that this is the way America ought to work. This is the way all of our organizations ought to work.”
President George W. Bush – “These organizations have been selected as exemplifying the qualities of excellence and ethics. They are being recognized for their continual improvement, their commitment to employees and community, and their enterprising spirit.”
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91%
43%
69%
32%
79%
37%
23%
7% 8%
0%
9% 6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
OperatingIncome
Sales TotalAssets
Employees Return onSales
Return onAssets
Award Winners
Control Firms
Performance Measures
Per
cen
tag
e C
han
ge
HENDRICKS AND SINGHAL STUDYHENDRICKS AND SINGHAL STUDY
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The Excellence Model, A Few Big Picture Thoughts
A flexible systems approach Non-prescriptive - not an “aspirin for all
ailments” Validated management practices A set of “How do you” questions
– What is your approach– How is it deployed– How is it continuously improved
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CPEx Award Program
Creating a Culture of Excellence Pervasive Throughout Colorado
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About the CPEx Program State-wide Enhances and recognizes organizational
performance excellence Creates communities of performance
excellence practice Private, non-profit 501(c)(3) corporation Based on the Baldrige National Quality
Program Criteria for Performance Excellence
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Who we are
Vision – The CPEx community creates a culture of excellence that is pervasive throughout Colorado.
Mission – We serve the people of Colorado by cultivating performance excellence that generates outstanding results. We fulfill this promise through:
training and education, assessment and feedback, recognition and awards,
networking, and the sharing of best practices.
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What we do
Recognize Colorado organizations that have a role model organizational management system
Raise awareness about the importance of quality and performance excellence as a competitive edge
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Core Values of Your State Program
Visionary Leadership Customer Driven Organizational and
Personal Learning Valuing Employees
and Partners Agility Focus on the Future
Managing for Innovation
Management by Fact Public Responsibility
and Citizenship Focus on Results and Creating Value Systems Perspective
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CPEx Assessment and Award Program
Open to all organizations Annual Awards Cycle:
– Training: Anytime!!– Letter of Intent: March– Written Application to CPEx/Baldrige: May– Application Review & Consensus: May-July– Site Visit July: Sept– Feedback Report: Oct– Quest for Excellence Conference/Award
Ceremony: Oct - Nov
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CPEx Award Levels
High Plains (Organizational Profile)– Organizations in the initial stage of self-assessment– A snapshot of the organization that includes key influences
and challenges Foothills (Approach)
– How the Category and Item requirements are addressed, i.e. the methods used
Timberline (Deployment)– The extent to which the approach is applied
Peak (Results)– Results refer to outcomes
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Past CPEx Award Recipients
Peak: – Poudre Valley Health System (Fort
Collins, CO) – 2004, 2008– GCC (Denver, Pueblo, Hesperus) - 2008
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Past CPEx Award Recipients
Timberline: – LexisNexis Case Law and Citations (Colorado Springs, CO) –
2006– McKee Medical Center (Longmont, CO) – 2006– North Colorado Medical Center (Greeley, CO) – 2006– Veterans Administration Health Administration Center (Denver,
CO) – 2005– Transportation Expansion (T-REX) Project (Centennial, CO) –
2004 – Monfort College of Business, University of Northern Colorado
(Greeley, CO) – 2004– Colorado Department of Labor Unemployment Insurance
Program (Denver, CO) – 2008– St. Mary’s Hospital and Regional Medical Center ( Grand
Junction) – 2008- The Aurora Mecical Center/Centennial Medical Plaza - 2008
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Why Apply?“For us, Baldrige has provided the best consulting services we’ve ever received and the least expensive.
Over the four years that we applied, we received more than 200 pages of feedback from highly trained, experienced, and professional Examiners, who spent literally hundreds of hours with our application and on site visit.
Sr. Mary Jean Ryan, President/CEOSSM Health CareBaldrige Award Recipient, 2002
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Why Apply?
“Because the Criteria are focused on what best-in-class companies do and are ever evolving. Measuring ourselves against them and applying for the Award has helped us strive to be the best we can be.”
Martin Swarbrick, VP & DirectorOffice of Business ExcellenceMotorola CGISSBaldrige Award Recipient, 2002
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“What evolved was a very clear direction toward the Baldrige definition of quality. You can’t afford not to focus on it. Because really if you break the Baldrige criteria down, all it is is how to run a quality organization…and get great results. And isn’t that what companies are in business for?”
Why Apply?
John Heer, PresidentBaptist Hospital Inc.Baldrige Award Recipient 2003
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Benefits of Applying
Accelerate improvement efforts
Energize employees
Gain an outside perspective
Learn from the feedback
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Benefits of Applying
Align efforts
Focus on results
Enhance certification & accreditation efforts
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To Sum Up
Improved
Alignment of plans and processes
Communication
Employee morale
Results!
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Doesn’t this quality stuff apply just to manufacturing?
NO!
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EDUCATION
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Education Market Sector Baldrige Recipients
Pearl River School District, NY – 2001 Chugach School District, AK – 2001 University of Wisconsin-Stout, WI – 2001 Community Consolidated School District 15, IL – 2003 Kenneth W. Monfort College of Business, CO – 2004 Jenks Public Schools, OK – 2005 Richland College, TX – 2005
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Monfort College of Business2004 Baldrige Award Recipient in Education
(College/University)
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Results!
“Student applications have increased 28% after we received the Baldrige award. Contributions have increased nearly 20%.”
Dr. Joe Alexander, DeanKenneth W. Monfort College of BusinessUniversity of Northern ColoradoBaldrige Award Recipient in Education, 2004
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Richland College2005 Baldrige Award Recipient in Education
Enrollment has increased from approx. 12,500 credit students in 2000 to approx.14,500 in 2005 (16%)
Exceeded local competitors in all five years, including the next highest performer by more than 3,000 in 2005.
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Jenks Public Schools2005 Baldrige Award Recipient in Education
Results: Drop-Out Rates
Drop-Out Rate
0.00%1.00%2.00%3.00%4.00%5.00%6.00%7.00%
1999 2000 2001 2002 2003 2004
School Year
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Pearl RiverSchool District
Cost EfficiencyR
ES
UL
TS Annual Per Pupil Expenditure
vs. Consumer Price Index
0.0
19
2.35.2
8 10.111.9 13.7
16.117.8
16.7
-3.3
-4.3
-4 -1
4.4
8.912.6
-10
-5
0
5
10
15
20
25
CPI 2.3 5.2 8 10.1 11.9 13.7 16.1 17.8 19
PPE 0.0 -3.3 -4.3 -4 -1 4.4 8.9 12.6 16.7
1995 1996 1997 1998 1999 2000 2001 2002 2003
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Why Apply?
“For us, going through the full application cycle was a major catalyst in improving our organization. … For an affordable application fee and site visit expenditure, Baldrige provides education applicants with teams of experts who conduct a thorough review and provide detailed feedback, expertise that would be too costly for us to purchase on the open market.”
Dr. Frank Auriemma,SuperintendentPearl River School DistrictBaldrige Award Recipient, 2001
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HEALTH CARE
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“Five health care systems that have either won the Malcolm Baldrige National Quality Award in Health Care or have been documented in extensive case studies share a common model of management…this approach produces results that are substantially and uniformly better than average across a wide variety of acute care settings.
As customers, courts, and accrediting and payment agencies recognize this management approach, we argue that it will become the standard for all hospitals to achieve.”
John R. Griffith, University of Michigan, and Kenneth R. White, Virginia Commonwealth University Journal of Health Care Management, May/June 2005
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Healthcare Sector SSM Healthcare, MO – 2002 Baptist Hospital, FL – 2003 St. Luke’s Hospital of Kansas City, MO – 2003 Robert Wood Johnson University Hospital
Hamilton, NJ – 2004 Bronson Methodist Hospital, MI – 2005 North Mississippi Medical Center – 2006 Mercy Health System – 2007 Poudre Valley Health System - 2008
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Results
“We do this for one simple reason. We have found it saves lives.”
Rulon Stacey, CEOPoudre Valley Health System
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North Mississippi Medical Center2006 Baldrige Award Recipient in Health Care
Since 1999 a Care-Based Cost Management Approach has provided cumulative gains of $11.1M
Debt has from 26% to 21.8% in 2006 2006 Physician overall satisfaction was 99% 2006 Patient Likelihood to Recommend Scores
approached the Press Ganey 90th percentile
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Bronson Methodist Hospital2005 Baldrige Award Recipient in Health Care
Physician Satisfaction99th Percentile*
* Professional Research Consultants, Inc. (Percentile calculated from a database of 19,684 physician responses across 161 hospitals)
Physician Satisfaction
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Proven Bottom-line Results
SSM Healthcare – 2002 Baldrige recipient
Physicians connected to an automated information system have increased steadily from 3,200 in 1999 to 7,288 in 2002.
For four years, SSMHC has maintained an “AA Credit Rating” attained by < 1% of U.S. hospitals.
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Robert Wood Johnson University Hospital Hamilton
2004 Baldrige Award Recipient in Health Care
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What we tend in health care to focus on a lot of times is the bottom line … the financials. That’s not what health care is all about. Hospitals were not created to make money. Hospitals were created, at the very first to take care of patients, to take care of people. So, the Baldrige criteria actually forces organizations to be focused on the right things and to spend the right amount of time on the things that are really important in health care.
John Heer, PresidentBaptist Hospital Inc.Baldrige Award Recipient 2003
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NON-PROFIT/PUBLIC SECTOR
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While some may suggest that business would go down if they launch a thorough examination of their practices using WSQA (Washington State Quality Award) tools and methodology (who has the time, right?), well, DCS (Dept. of Child Services) is experiencing the opposite. Business is booming. Collections were up over 8% from last year at this time. Well above the norms from years past and well beyond what might be attributed to a positive economy or other outside factor.
Bottom line, by using WSQA tools and philosophies, committing to a performance culture, being unafraid to ask the hard questions, supporting continuous improvement and quality awareness at all levels, DCS is kicking some serious quality behind.
Sam Senn, Acting Assistant SecretaryDivision of Social and Health Services /Economic Services Administration
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City of Coral Springs, FL GOV’T FIN. OFFICERS ASSOC.
DISTINGUISHED BUDGET AWARD FOR 16 CONSECUTIVE YEARS
LOWEST CRIME RATE IN STATE
4TH LOWEST CRIME RATE IN NATION (POPULATION 100K – 500K)
10TH LOWEST CRIME RATE OVERALL FOR TYPE 1 CRIMES
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U.S. ARMY ARMAMENT RESEARCH, DEVELOPMENT AND ENGINEERING CENTER
(ARDEC)
Overall revenue from ~ $600M in FY 01 to ~ $1.2B in FY 07
Approx. 75% of technology projects transition from research to customer funded development
Job satisfaction from 87% in FY 04 to 92% in FY07 (exceeding Gov’t Prod. & Qlty benchmarks)
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More Nonprofit Impacts
Saved over $107M from quality improvements
Has become 68% more efficient Leader in the Army for timeliness, quality,
and overall customer satisfaction
U.S. Army Engineering and Support Center, Huntsville
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More Nonprofit Impacts
Since 1996: – Improved its average Ride Quality Index for
Interstate Roads by 24%– Increased the number of interstate highway
miles in good condition by 16%– Decreased fatalities by 15%
New Mexico State Highway and Transportation Department
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But We …
Aren’t anywhere near a role model organization
Don’t need an award
Aren’t interested in an award
Don’t have time to apply for an award
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It’s Not Just Another Award!
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Just for Applying ….
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Your Organization Receives …
A low cost value-added assessment of your organization’s operational excellence by a team of highly trained examiners
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Value“We applied for the Award, not with the idea of winning, but with the goal of receiving the evaluation of the Baldrige Examiners. That evaluation was comprehensive, professional, and insightful … making it perhaps the most cost-effective, value-added business consultation available anywhere in the world today.”
Bob Barnett, Executive Vice President, Motorola, Inc.Baldrige Award Recipient, 1988
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Your Organization Also Receives ….
Highlights strengths and opportunities for improvement
An extensive, objective feedback report that
Is based on independent assessment by recognized experts
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Feedback
“If you use the feedback, your organization will improve and so will your results. Baldrige is the best way to get better faster.”
Sr. Mary Jean Ryan, President/CEOSSM Health CareBaldrige Award Recipient, 2002
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The Power of a CPEx Assessment
Internal Analysis – provides insightful self-assessment
Powerful strategic planning tool
External Analysis & Feedback Report– provided by a team of trained examiners
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Value of the CPEx Evaluations
Factors
# of hours per examiner x # of examiners x $100 per hour
Foothills – $ 20,000 - $25,000 Timberline – $ 50,000 - $ 60,000 Peak – $ 100,000
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The Return on Investment (ROI) on application fee and site visit expense
is at least 10:1
but probably more!!
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Cost“I’m often asked how much this effort costs. My reply is that it is not a cost; on the contrary, it makes us money.
Since we have been involved in the Baldrige process, our growth and earnings have doubled from the previous five-year period.”
Bill Enloe, CEO & Chairman of the Board,Los Alamos National BankBaldrige Award Recipient, 2000
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The Relationship Between
Other Performance Management Systems
andBaldrige
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But We’re Already Accredited ….
ISO 9000 registrars
Health care accreditors, such as JCAHO
Education accreditors, such as the North Central Association of Colleges and Schools
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Basic difference:
Excellent Performance!
Vs.
acceptable performance
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Demonstrated, Sound Management Framework
4Measurement, Analysis, and Knowledge Management
5Human
ResourceFocus
3Customer &
Market Focus
2StrategicPlanning
1Leadership
6Process
Management
ORGANIZATIONAL PROFILE: ENVIRONMENT, RELATIONSHIPS, AND
CHALLENGES
7Organizational
Results
Baldrige-Based Model – a Systems Perspective
ISO 9000:2001Lean/Six SigmaJCAHO
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ISO 9001:2000 Applicable to manufacturing companies as well
as other organizations
Based on eight quality management principles
Focused on process management and relationships across an organization
Emphasis on quality systems, the monitoring of customer perception, supplier and regulatory compliance, and continuous improvement
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Lean Mfg./Process Improvement Systematic elimination of waste from all
aspects of organizational operations Methods include:
– Kaizen– Value Stream Mapping– JIT/Kaban– Six Sigma
Tools in an overall systems approach
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How Does Baldrige Differ from ISO and Lean Mfg.?
Offers an overall systems framework Focuses on the future
Emphasizes organizational and personal learning and knowledge sharing
Emphasizes corporate governance and ethics
Baldrige
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The Joint Commission on Accreditation of Healthcare
Organizations (JCAHO)
Established in 1951
Evaluates and accredits nearly 19,000 health care organizations and programs in the United States
Health care organizations benefit from JCAHO accreditation as a qualification to operate
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Baldrige and JCAHO Similarities
Focus on continuous improvement
Based on a set of core values
Means for self-assessment
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Baldrige and JCAHO Differences
JCAHO
Patient care focus
All organizations can qualify
Has the same expectations for all orgs. & prescribes compliance to those expectations
Baldrige
Overall organizational focus, including focus on patients
Role model performance
Considers individual factors and strategic challenges
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North Central Association (NCA)
Representing 19 states and the Department of Defense Dependents Schools overseas
NCA CASI has adopted Baldrige-compatible criteria as the basis of its new District and School Accreditation frameworks.
The NCA Higher Learning Commission has created the NCA Academic Quality Improvement Project (AQIP).
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Show Me the Money!!!
Results, Results, Results
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Do We Get Business Results?
You bet…OMI wins almost 66% of the projects it pursues, compared to our competitors’ average of only 30%. And we have a contract renewal rate of nearly 100% and surpass our competitors in customer satisfaction!”
Roger B. Quayle, Executive Vice PresidentQuality and Technology, OMI, Inc. 2000 Baldrige Award Recipient in Service
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Boeing Aerospace Support2003 Baldrige Award Recipient in Service
2000 2001 2002 2003
PLAN ACTUALS AVG GROWTH
Started Baldrige
Revenue Performance
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Boeing Aerospace Support2003 Baldrige Award Recipient in Service
2000 2001 2002 2003
PLAN ACTUALS
Started Baldrige
Earnings Performance
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More Results …
Boeing Aerospace Support Improved its supplier on-time delivery rate
from approx. 68% to 95% (1999-2003)
Its quality of supplier deliverables– above 99.5 % (1999-2002)– 99.7% (2003)
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Customer Satisfaction
The Ritz-Carlton Hotel Company, L.L.C. (1992 and 1999 Baldrige Award Recipient in Service), reports that 75% of its customers would not use a competitor regardless of the offer.
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The Bottom Line: Results Improved customer satisfaction and
loyalty
Higher return on assets
Greater employee productivity and satisfaction
Increased market share
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The Bottom Line: Results
Reduced cycle time
Decreased time to market
Lowered costs
Increased revenue
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Okay …
But Does It Really, Really Work?
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Sunny Fresh Food1999 & 2005 Award Recipient in Manufacturing
Revenues are up 93%
Market share has increased while competitors’ has decreased by > 10%
Customer satisfaction has remained near 100% since 2001
Sales and profit per stakeholder (employee) have increased by 19%
Since receiving the 1999 Baldrige Award
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Long-Term Success
“It amazes me that U.S. businesses spend so much money on ‘how-to’ books and coursework to teach leaders how to build successful organizations.
My recommendation: implement the Baldrige-based Criteria in your business. No other single document can help build a long-term successful organization.”
Jerry Rose, PresidentSunny Fresh Foods Baldrige Award Recipient, 1999 & 2005
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Texas Nameplate1998 & 2004 Award Recipient in Small Business
Nonconformity to specs as a % of sales has dropped to 0.5% vs. industry avg. of 2%
Profitability has increased to > 40%
Trimmed its production cycle from 14 days to 8 days
Reduced its quote response time from 6 hours to < 2 hours
Since receiving the Award in 1998,
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Texas Nameplate, Inc.2004 Award Recipient in Small Business
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“If it weren’t for the state Baldrige award process, Texas Nameplate would not be celebrating its 60th year in business as a small manufacturer. I strongly advocate the state award programs to any organization wanting to focus and improve its business performance.”
Dale Crownover, President & CEOTexas Nameplate Company, Inc.
Improve Performance
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No False Promises Not pushing “Snake Oil,”—this is not a “Silver
Bullet”
Baldrige is not “aspirin for all ailments” or a “cookbook” approach
Long-term Leadership Commitment is critical
There are options for management teams pursuing excellence
Baldrige is a proven performer. Those who use it outperform!
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Not Just Another Fad
Criteria are almost 20 years old
> 2 million copies distributed
Expanded to health care, education, and non-profit
More than 40 state & local award programs
Dynamic management model based on continuous improvement
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Want More Information?
CPExwww.coloradoexcellence.org
Baldrige National Quality Award Programwww.quality.nist.gov
The Alliance for Performance Excellencewww.networkforexcellence.org