the baldrige award roadmap to performance excellence · pdf filethe baldrige award roadmap to...

Baldrige National Quality Program 2007Baldrige National Quality Program

Overview for the Office of the Public Sector Development CommissionBangkok, Thailand, 16 October 2007

The Baldrige Award Roadmap to Performance

Excellence

Dr. Luis Maria R. CalingoFulbright Senior Specialist, Chulalongkorn University

Baldrige National Quality Program 2007

Outline of Lecture

Overview of the Baldrige National Quality ProgramHistory of the Malcolm Baldrige National Quality AwardCriteria for Performance Excellence– Core Values and Concepts– Criteria Categories and Items– Evaluation System

Open Forum


Part 1

Overview of the BaldrigeNational Quality Program


What Is the Baldrige National Quality Program?

A unit of the National Institute of Standards and Technology, U.S. Department of CommerceManages the Malcolm Baldrige National Quality Award Operates as a public-private partnershipDisseminates information Provides global leadership in promoting performance excellence


What Is Performance Excellence?

An integrated approach to organizational performance management that results in:

delivery of ever-improving value to customers and stakeholders, contributing to organizational sustainability; improvement of overall organizational effectiveness and capabilities;organizational and personal learning.


What Is the History of the Program?

The Malcolm Baldrige National Quality Improvement Act of 1987, Public Law 100-107

Created Award program to:– identify/recognize role model businesses– establish criteria for evaluating improvement

efforts– disseminate/share best practices

Expanded to health care and education (1998)Expanded to not-for-profit sector (2005)


Who Can Apply for the Baldrige Award?Since 1988

ManufacturingServiceSmall business (manufacturing or service)

Added in 1998EducationHealth care

Added in 2007Not-for-profits, including government agencies


Program Participants

67 Award recipients (71 Awards)1,139 Baldrige Award applicationsMore than 4,400 trained ExaminersWidespread participationPrivate sector contributions provide over 90% of Program support


Increase competitiveness of U.S. organizationsGive presentations to all sectors Give presentations at The Quest for Excellence® and the regional conferencesInfluence customers/suppliersHost seminars and workshopsWrite articles

Award Recipients’ Contributions


Award Recipients’ Results

The 2006 Award recipients report dramatic results from their investment in performance excellence.


Premier Inc.


MESA Products, Inc.


North Mississippi Medical Center


3M Dental Products Division (1997)AT&T Transmission Systems Business Unit (1992)Boeing Airlift & Tanker Programs (1998)Clarke American Checks, Inc. (2001)Milliken & Company (1989)Motorola CGISS (2002)Motorola, Inc. (1988)

Solar Turbines Inc. (1998)Solectron Corporation (1991 and 1997)Texas Instruments Defense Systems & Electronics Group (1992)Westinghouse Commercial Nuclear Fuel Division (1988)Xerox Business Products & Systems (1989)

Some Baldrige Award Recipients in Manufacturing (26)


Business Award Recipients in Service (15)

AT&T Consumer Communications Services (1994)AT&T Universal Card Services (1992)BI (1999)Boeing Aerospace Support (2003)Caterpillar Financial Services U.S. (2003)Dana Commercial Credit Corporation (1996)DynMcDermott Petroleum Operations (2005)

Federal Express Corporation (1990)GTE Directories Corporation (1994)Merrill Lynch Credit Corporation (1997)Operations Management International, Inc. (2000)Premier Inc. (2006)The Ritz-Carlton Hotel Company, LLC (1992 and 1999)Xerox Business Services (1997)


Business Award Recipients in Small Business (17)

Ames Rubber Corporation (1993)Branch-Smith Printing Division (2002)Custom Research Inc. (1996)Globe Metallurgical Inc. (1988)Granite Rock Company (1992)Los Alamos National Bank (2000)Marlow Industries, Inc. (1991)MESA Products, Inc. (2006)

Pal’s Sudden Service (2001)Park Place Lexus (2005)Stoner, Inc. (2003)Sunny Fresh Foods (1999)Texas Nameplate Co., Inc. (1998 & 2004)Trident Precision Manufacturing, Inc. (1996)Wainwright Industries, Inc. (1994)Wallace Co., Inc. (1990)


Baldrige Award Recipients in Education (7) and Health Care (6)

Chugach School District (2001)Community Consolidated School District 15 (2003)Jenks Public Schools (2005)Kenneth W. Monfort College of Business (2004)Pearl River School District (2001)Richland College (2005)University of Wisconsin—Stout (2001)

Baptist Hospital, Inc. (2003)Bronson Methodist Hospital (2005)North Mississippi Medical Center (2006)Robert Wood Johnson University Hospital Hamilton (2004)Saint Luke’s Hospital of Kansas City (2003)SSM Health Care (2002)


In Summary, What Has the Baldrige Program Achieved?

Created a national and international standard Produced role modelsGenerated award programsRaised the competitiveness of American industryEstablished outreach and education systems


Asia Pacific National Quality and Business Excellence Awards


Part 2

History of the Malcolm BaldrigeNational Quality Award


Origin of Baldrige National Quality Program

The Malcolm Baldrige National Quality Improvement Act of 1987, Public Law 100-107Operates as a public-private partnershipManages the Malcolm Baldrige National Quality AwardProvides global leadership in promoting performance excellenceDisseminates information


Findings Cited in the Enabling Legislation

U.S. product and process leadership challenged by foreign competitionNation’s productivity growth improved

less than competitors over last 20 years.Strategic planning for quality and

commitment to excellence are essential to economy and ability to effectively compete in global marketplace.


Further Findings

Fundamental Change may be necessary.Management led quality programsFocus on the customerWorker involvement in qualityImproved management understanding of factory floorGreater emphasis on statistical process control to reduce variation in outputs


What is the Purpose of the Baldrige Program?

The award program was created to:establish criteria for evaluating improvement effortsobjectively identify role model organizationsrecognize role model organizationsdisseminate/share best practicesthrough feedback and conferences


Who Are the Baldrige Partners?

Department of Commerce

TechnologyAdministration

Department of Commerce

TechnologyAdministration

Foundation for the

Malcolm BaldrigeNational Quality Award

Foundation for the

Malcolm BaldrigeNational Quality Award

Board ofOverseersBoard of

Overseers

NationalInstitute of

Standards andTechnology

NationalInstitute of

Standards andTechnology

Contractor• ASQ

Contractor• ASQ

Board of Examiners• Judges• Senior Examiners• Examiners

Board of Examiners• Judges• Senior Examiners• Examiners

BaldrigeAward

Recipients

BaldrigeAward

Recipients

Cooperating Organizations• Alliance for Performance Excellence• Professional Societies• Trade Associations• State and Local Programs

Cooperating Organizations• Alliance for Performance Excellence• Professional Societies• Trade Associations• State and Local Programs

____________


Partners ─ Government

United States Department of Commerce→ National Institute of Standards and

Technology (responsibilities include product standards, laboratory research, and U.S. standard time)→ Baldrige National Quality

Program


Partners ─ Contracted

American Society for Quality (ASQ)– Law requires Director to be assisted in

duties by not-for-profit leading quality organization under contract with NIST

– Manages application materials– Manages logistics for volunteers

(Examiners and Judges)– Manages expense reimbursement


Partners ─ Private

Foundation for the MB National Quality Award–Law allows private funds in support –Board from prominent organizations–Raises funds to endow (~$20mm)–Pays for nongovernmental expenses

* Award ceremony * Criteria printing

* Examiner expense * Award administration

* K-12 site visit cost * Subsidies for SME


Partners ─ Volunteer

Board of OverseersLaw requires advisory panel .Leaders in American organizationsMeets at least annually (now two times)Reviews the work of contractorsSuggests improvements to processMakes report to NIST Director each year


Partners ─ Volunteer

Board of ExaminersLaw requires Board of Examiners.NIST Director relies on intensive review by Examiners to applicant organizations.Verify accuracy through site visit review.Encompass all aspects of quality improvements and provision for future goalsProvides applicant feedback for review by Panel of Judges


Partners ─ Volunteers

Panel of JudgesNot named in the lawEffectively highest-level ExaminersLeaders in quality management fieldDetermines cut-points for advancementReviews site visit reports of ExaminersRecommends role-model recipients to Director of NIST


Partners ─ Recipients

Baldrige Award RecipientsLaw requests specific guidance to help other organizations with detailed information about how winners changed cultures and achieved success.Publish application summary (non-proprietary information, no trade secrets).Share at Quest for Excellence and other venues where invited.


Other Partners

Cooperating OrganizationsState and Local Programs– Mirror programs with same criteria– Flexible achievement levels

Alliance for Performance Excellence– Idea sharing among state award bodies

Trade associationsProfessional societies (ASQ)


Program Origin

President Reagan 1982-84 Task Force on Productivity suggests a government award without result.Afterward:– American Productivity and Quality Center

wants award.– Florida Power and Light benchmarks

Deming award winner Kensai Electric.– Xerox finds less defects in Japan unit.– Motorola focuses on structured approach.


Legislation put together in 1986– National Science Foundation to

manage– NIST was not involved.– NIST was interested in taking on role

because quality movement has been driven by measurement.

– NIST Director Ray Kammer arranges for NIST to have lead in quality award effort.

Program Origin


Legislation reintroduced spring 1987– Not going anywhere when Secretary of

Commerce was assigned primary responsibility.

– Commerce Secretary Malcolm Baldrige killed on July 25, 1987. Naming award for him adds clout.

– Going to pass legislation and fast!– Desire for President Reagan to give award

in 1988

Program Origin


Legislation was passed but not funded.Dr. Curt Reimann (NIST quality guru) highest rank available, so given chargeReimann team goes 24/7 consulting many people 10-12 hours/dayDr. Reimann concurrently begins process of lining up examiners and creating award criteria Key meeting on December 11, 1987 of 30 industry invitees

Program Origin


Review structure based on measurementIndependent review at multiple levelsInitially 3 Examiners per team, but increased due to variability among ExaminersNeed consensus process led by Senior ExaminersLaw called for site visits, but not all needed site visitsJune 1988 practice run with Dana Corp. letting itself be guinea pig

Program Requirements


Difficulty in preventing conflicts of interestVariation among Examiners in assessing applicant organizationsThe field did not have a knowledge structure. [Dr. Reimann described the Criteria as the knowledge structure.]The quality field had divergent viewpoints with strong personalities.

Dr. Curt Reimann’s Concerns


Quality gurus Joseph Juran and Armand Feigenbaumpositive but not pushy – both served on Board of OverseersQuality gurus W. Edwards Deming and Phil Crosby less supportiveBusiness schools not interested in topic, despite Xerox’s forums for themThe Conference Board had great network and was early sponsor of regional Quests for Excellence.ASQ and APQC involved early

Examples of Early Opinions


How customer needs and quality functionintegrated with corporate planning and executionHow leaders effect thisNot the broad business as a system

1988 Criteria Emphasis


1988 Criteria Categories

1. Leadership – 150 pts.2. Information and Analysis – 75 pts.3. Strategic Quality Planning – 75 pts.4. Human Resource Planning – 150 pts.5. Quality Assurance of Products and

Services – 150 pts.6. Results from Quality Assurance of

Products and Services – 100 pts.7. Customer Satisfaction – 300 pts.


Stated “Scoring Criteria” built into 42 items much like multiple requirements –no matrix for scoring item or overall bandsSome trends in results expected within Category responses such as absenteeism or training ratesNo specific request for financial results or organizational strategic plans

1988 Initial Criteria


Unformatted “Abstract” of the application highlighting important quality achievements and indicators of customer satisfaction, which predates 1989 “Business Overview”Limit of 75 pages plus multiple supplements per major quality system or product line up to 50 pages eachSmall business must have 25 employeesand limited to 50 pages (no supplements)

1988 Initial Application


Application fee $1500 plus $1000 per supplementUnspecified site visit fee to cover expensesEarly process had Examiners at Stage 1 (Independent Review) score only 13 key items comprising 510 of the 1000 points.

1988 Application Review


1988: 42 Items 2007: 18 Items1988: Manufacturing Model2007: Organizational Systems Model“The Criteria Should Always Reflect the Leading Edge of Validated Management Practice.”

Arnold WeimerskirchVP Corporate Quality, Honeywell Chair, Panel of Judges 1993-1994

Criteria Evolution


2001 Economic Impact Study (www.nist.gov/director/prog-ofc/report01-3.pdf)

“The conservative estimate of the present value (in constant 2000 dollars) of social benefits associated with the Baldrige National Quality Program is $24.65 billion.. . .from an evaluation perspective for the economy as a whole, the benefit-to-cost ratio characterizing the Baldrige National Quality Program is conservatively 207-to-1.”

Economic Evaluation of Baldrige, September 2001

Albert N. Link, UNC and John T. Scott, Dartmouth


Number of Printed Criteria Distributed Baldrige National 1988-2006

0

50,000

100,000

150,000

200,000

250,000

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

HC

Educ

Bus


Number of State, Regional, and Local Criteria Distributed, 1991-2005

4625

30500

58565

70765

7849081786

84886

6502970428

65463

48449

4086635542

43294

24976

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

This total does not include the number of Criteria distributed through the Internet .Data for any given year may not be complete.2005 figures reflect data reported by 43 out of 45 state, regional, and local quality award programs.


Part 3

Criteria for Performance Excellence


The Criteria for Performance Excellence – Core Values

Visionary LeadershipCustomer Driven ExcellenceOrganizational and Personal LearningValuing Employees and PartnersAgility

A set of beliefs and behaviors found in high performing organizations which are embedded into the Criteria. They include:

Focus on the FutureManaging by InnovationManagement by FactSocial ResponsibilityFocus on Results and Creating ValueSystems Perspective


The Criteria for PerformanceExcellence


The Criteria for Performance Excellence

Are the foundation of the Baldrige National Quality Program Define performance excellenceAre globally recognized Can be used by diverse organizations


Criteria—Key Characteristics

Focus on results

Are nonprescriptive and adaptable

Support a systems perspective

Support goal-based diagnosis


Category Point Values

1 Leadership 1202 Strategic Planning 853 Customer and Market Focus 854 Measurement, Analysis, and

Knowledge Management 905 Workforce Focus 856 Process Management 857 Results 450

TOTAL POINTS 1,000


Addresses Senior Leaders’ Roles, Governance, and Citizenship

1.1 Senior Leadership (70 points)

1.2 Governance and Social Responsibilities (50)

1. Leadership (120 pts.)


Addresses Strategic and Action Planning and Deployment of Plans

2.1 Strategy Development (40 pts.)

2.2 Strategy Deployment (45 pts.)

2. Strategic Planning (85 pts.)


Addresses How an Organization Seeks Knowledge, Satisfaction, and Loyalty of Customers

3.1 Customer and Market Knowledge (40 pts.)

3.2 Customer Relationships and Satisfaction (45)

3. Customer and Market Focus (85 pts.)


Addresses Analysis, Review, and Improvement of Organizational Performance and Management of Data, Knowledge, and Information Resources

4.1 Measurement, Analysis, and Improvement of Organizational Performance (45 pts.)

4.2 Management of Information, InformationTechnology, and Knowledge (45 pts.)

4. Measurement, Analysis, and Knowledge Management (90 pts.)


Addresses How an Organization Engages, Develops, and Manages Its Workforce and Builds an Effective Workforce Environment

5.1 Workforce Engagement (45 pts.)

5.2 Workforce Environment (40 pts.)

5. Workforce Focus (85 pts.)


Addresses How an Organization Designs Its Work Systems, Prepares for Emergencies, and Manages and Improves Its Work Processes

6.1 Work Systems Design (35 pts.)

6.2 Work Process Management and Improvement (50 pts.)

6. Process Management (85 pts.)


7.1 Product and Service Outcomes (100 pts.) 7.2 Customer-Focused Outcomes (70 pts.)7.3 Financial and Market Outcomes (70 pts.)7.4 Workforce-Focused Outcomes (70 pts.)7.5 Process Effectiveness Outcomes (70 pts.)7.6 Leadership Outcomes (70 pts.)

7. Results (450 pts.)

Addresses an Organization’s Performance and Improvement in Key Areas and Includes Current Performance Levels, Trends, and Comparative Data


The Scoring System

Scoring Guidelines

Importance to the applicant’s organization

Two dimensions– Process– Results


How are Process Items Evaluated?

Approach (A)Deployment (D)Learning (L)Integration (I)


Approach

“Approach” refers to:Appropriateness of methods– Do they fit the organization’s circumstances, as

described in the Organizational Profile?Effectiveness of the methods– Do they work, or will we have measurements to

demonstrate that they work?The degree to which the approach is repeatable and based on reliable data and information– Are they orderly, repeatable, and data-based?


Item 3.1 – Approach


Park Place Lexus - Approach3.1a(2) Determine needs of customers

Lexus is our primary source of formal information about clients and their needs and expectations. They utilize the Gallup CE11 survey based on a scientific model of factors that provide the greatest influence on clients’ purchasing behavior. Our Listening and Learning process shown in Figure 3.1A was designed to formalize our activities in receiving input from clients…This process begins with providing a variety of access points to collect feedback from our various customer segments as shown in Figure 3.1B…As new features, such as upgraded technology in vehicles, service offerings and new financing options are added to our products, the Listening and Learning process is used to collect feedback on these new features…


Deployment“Deployment” refers to the extent to which:

the approach applied in addressing the Item requirements is relevant and important to the organization

the approach is applied consistently

– This includes whether the Item collects and uses all data and information elements that the Criteria require for the Item.

the approach is used by all appropriate work units

– Implemented in all applicable products, services, processes, locations, segments, etc.


Park Place Lexus – Deployment 3.1a(2) Determine needs of customers…We validate the results of the Lexus survey for our specific clients and ensure that we get information from former, current, and potential clients about how we run our business…Focus groups...are conducted to help us understand the impressions that clients have of our dealerships, products, and services…We ensure that these groups contain former, existing, and potential clients…


LearningLearning refers to:

Refining the approach through cycles of evaluation and improvement– Evidence of PDCA cycle, resulting in

incremental improvementsEncouraging breakthrough change to the approach through innovation– Breakthrough improvements

Sharing refinements and innovations with other work units and processes in your organization– Knowledge management system in place


Park Place Lexus – Learning

Keeping listening and learning current

Our Listening and Learning process includes a step to evaluate its own effectiveness. We use this evaluation step each month to ensure we continue to use the most effective approaches to listen to our clients.


Integration

Integration refers to the extent to which:The approach is aligned with the organizational needs identified in the Organizational ProfileMeasures, information, and improvement systems are complementary across processes and work unitsPlans, processes, results, analyses, learning, and actions, are harmonized across processes and work units to support organization-wide goals.


AlignmentConsistency of plans, processes, information, resource decisions, actions, results, and analysis supporting key organization-wide goals.


Scoring System and Guidelines

Each category and item is assigned a maximum point value.Scoring Guidelines describe percentage ranges of the point value based on the Evaluation Factors.The Examiner selects a scoring range that is “most descriptive of the organization’s achievement level” for each Item.Within the range, the Examiner will assign the appropriate score.


Scoring Guidelines

Process items are evaluated using four factors: A-D-L-I.

Assessed to make determinations regarding the effectiveness and maturity of the processes

Scoring ranges provide gradations of maturity for an applicant's processes.


How Should We Report Results?

Expected ResultsAppropriate ComparisonsImportant Segmentation


Expected Results

Responses to Process Criteria Questions (Categories 1-6) should provide:– Process outputs and outcomes – Performance measures used to

manage and improve processesKey Product and Service Descriptions (Item 3.1) should provide:– features important to customers


Item 7.2 – Expected Results


Park Place Lexus –Expected Results


Expected Results –Park Lexus


Item 7.6 – Expected Results


Appropriate Comparisons

“Performance is examined relative to competitors and/or other organizations providing similar products and services.”“Include appropriate comparative data”– Being at national average is not good

enough.


Appropriate Comparisons


DynMcDermott –Appropriate Comparisons


“Segment your results . . .”

Important Segmentation


DynMcDermott – Important Segmentation


How are Data Evaluated?

ImportancePerformance Level/Relative

PerformanceRate of Improvement (Trend)Coverage


How are Results Items Scored?


Bronson Methodist Hospital –Reporting Levels


Bronson Methodist Hospital –Reporting Comparisons


Bronson Methodist Hospital –Reporting Trends


Bronson Methodist Hospital –Appropriate Horizon for Trends


Richland College –Favorable Levels But No Trends


Favorable Trends ButNo Comparisons


20

30

40

50

60

70

Leadership

Information & Analysis

Strategic Planning

HR Development & Management

Process Management

Performance Results

Customer Focus & Satisfaction

Categories

Perc

ent S

core

Service

Health Care

Education

1995 Average Category Scores


30

40

60

Leadership

Strategic P

lanning

Customer a

nd Market F

ocus

Measurement, Analys

is, and

Knowledge Management

Human Resource

Focus

Process Management

Results

Categories

Perc

ent S

core

Service

2006 Average Category Scores

Nonprofit

Education

50

70

Health Care


How Can I Learn More About the Baldrige Program?

Visit the Web site at www.baldrige.nist.govContact the Secretariat of the Thailand Quality Award.Attend a Thailand Quality Award Winners’Conference.Become an Assessor for the Thailand Quality Award.


How Can I Learn More About Self-Assessment Tools?

Easy Insight (online tool) Getting Started brochureWhy Apply? brochureAre We Making Progress? questionnaireAre We Making Progress as Leaders? questionnaireCriteria for Performance Excellence


Breaking Barriers

May 6, 1954 – Dr. Roger Bannister broke the then-impossible four-minute-mile barrier (03:59.6). Within a year, at least 30 other runners broke the barrier.


The Main Thing …

August 7, 1954Roger Bannister vs. John Landy


About the Resource PersonFounding Dean, School of Business and Leadership, Dominican University of California, USAPreviously Business Dean at John Carroll University (Ohio) and California State University at Long Beach, 2000-2007Examiner, Malcolm Baldrige National Quality Award, 1997-presentDeveloper and Instructor, ASQ Baldrige Award Self-Assessment Training for Education, 1998-2003APO Technical Expert– National Quality and Business Excellence Awards (since

1996) – Indonesia, Mongolia, Pakistan, Philippines, Sri Lanka, Thailand, and Vietnam

– Infusion of Quality Management in Higher Education (since 1995) – Philippines and Thailand

MBA, Ph.D., University of Pittsburgh, 1981, 1984; BSIE, MURP, University of the Philippines, 1971, 1976

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