Malcolm Baldrige Malcolm Baldrige National Quality National Quality

AwardAwardSCM 494SCM 494

Dr. Ron Tibben-LembkeDr. Ron Tibben-Lembke

Malcolm Malcolm BaldrigeBaldrige

August 20, 1987 – Award createdAugust 20, 1987 – Award created 1981-87 Malcolm Baldridge secretary of 1981-87 Malcolm Baldridge secretary of

Commerce. Died in rodeo accidentCommerce. Died in rodeo accident Proponent of quality management as key to US Proponent of quality management as key to US

economic survivaleconomic survival Helped draft early version of quality actHelped draft early version of quality act

Champion roper – National Cowboy Hall Champion roper – National Cowboy Hall of Fameof Fame July 25, 1987 N. California rodeoJuly 25, 1987 N. California rodeo Horse threw him, fell on him, and crushed himHorse threw him, fell on him, and crushed him

CategoriesCategories

ManufacturingManufacturing ServiceService Small BusinessSmall Business Education (added 1999)Education (added 1999) Health Care (added 1999)Health Care (added 1999) Nonprofit (2005)Nonprofit (2005)

Why Apply?Why Apply?

Fame and fortuneFame and fortune 300 hours spent looking at your 300 hours spent looking at your

application?application? 50 page report: strengths, weaknesses50 page report: strengths, weaknesses

““Free” consulting from really good Free” consulting from really good peoplepeople $2,000 application fee$2,000 application fee $20k for site visit expenses$20k for site visit expenses

Companies that have oneCompanies that have one

Wallace Co., won in 1990, bankruptcy Wallace Co., won in 1990, bankruptcy protection in 1992protection in 1992 Houston, TX, pipes, valves for oil & chemical Houston, TX, pipes, valves for oil & chemical

plantsplants 2 competitors closed up, customers bought 2 competitors closed up, customers bought

their inventorytheir inventory Highly leveragedHighly leveraged

1991 – IBM Rochester bad year in 19921991 – IBM Rochester bad year in 1992 1990 – Cadillac – closed plants over low 1990 – Cadillac – closed plants over low

sales, labor costssales, labor costs

WinnersWinners

1992 AT&T Universal Card – 2 years old 1992 AT&T Universal Card – 2 years old 3-5 years of data?3-5 years of data?

Nuclear plant with history of safety Nuclear plant with history of safety violationsviolations

Solectron won twiceSolectron won twice

Application processApplication process

Self-Assessment, Application turned inSelf-Assessment, Application turned in Consensus Review: Initial screen by Consensus Review: Initial screen by

independent Board of Examiners (8)independent Board of Examiners (8) Site Visit Review by teams of examinersSite Visit Review by teams of examiners

Verify information, get questions answeredVerify information, get questions answered Written summary of strengths, areas for Written summary of strengths, areas for

improvementimprovement 300 volunteer examiners300 volunteer examiners U.S.-Based companies onlyU.S.-Based companies only Winners agree to spread the word about Winners agree to spread the word about

qualityquality

Preparing the Preparing the ApplicationApplication

Organizational profile describes org. Organizational profile describes org. and challengesand challenges Maybe need more information, Maybe need more information,

identified problems, work on those firstidentified problems, work on those first Category teams: info & data on areaCategory teams: info & data on area

Action plan for improvementAction plan for improvement Senior leaders, champions, teams Senior leaders, champions, teams

evaluate how to improve process for evaluate how to improve process for futurefuture

10-step Process10-step Process1.1. Boundaries of org. to be assessedBoundaries of org. to be assessed

2.2. Champions for each areaChampions for each area

3.3. Decide format & scope for self-assessmentDecide format & scope for self-assessment

4.4. Senior leaders, champions prepare Org. Senior leaders, champions prepare Org. ProfileProfile

Organizational profile describes org. and Organizational profile describes org. and challenges & environmentchallenges & environment

Common understanding of what is importantCommon understanding of what is important System for improvement, strategic challengesSystem for improvement, strategic challenges Go directly to 9 – develop & implement Go directly to 9 – develop & implement

improvement planimprovement plan

10-step process10-step process

5.5. Practice self-assessment with championsPractice self-assessment with champions Use Item 1.1 Use Item 1.1 Criteria for Performance ExcellenceCriteria for Performance Excellence See if meeting goals, on trackSee if meeting goals, on track

6.6. Champions select category teamsChampions select category teams 3-5 enthusiastic team members, different levels3-5 enthusiastic team members, different levels Maybe outside organization being studiedMaybe outside organization being studied Read the criteria, gather data, write an analysisRead the criteria, gather data, write an analysis Explain how approaches used throughout org.Explain how approaches used throughout org.

10-step process10-step process

7.7. Share findings among teams, stengths & Share findings among teams, stengths & weaknessesweaknesses

8.8. Prioritize key strengths and areas to Prioritize key strengths and areas to improveimprove

9.9. Develop and implement action plan for Develop and implement action plan for improvementimprovement

Who will lead each step, what is to be Who will lead each step, what is to be accomplished, progress dates, how progress will accomplished, progress dates, how progress will be measuredbe measured

10.10. Evaluate and improve your self-assessment Evaluate and improve your self-assessment and action processand action process

Core Values and Core Values and ConceptsConcepts

Visionary leadership (and ethics)Visionary leadership (and ethics) Customer-driven excellenceCustomer-driven excellence Organizational and personal learningOrganizational and personal learning Valuing employees and partnersValuing employees and partners AgilityAgility Focus on the futureFocus on the future Managing for innovationManaging for innovation Management by factManagement by fact Social responsibilitySocial responsibility Focusing on results and creating valueFocusing on results and creating value Systems perspectiveSystems perspective

AreasAreas

LeadershipLeadership Strategic PlanningStrategic Planning Customer and Market FocusCustomer and Market Focus Measurement, Analysis, and Measurement, Analysis, and

knowledge managementknowledge management Human Resource FocusHuman Resource Focus Process ManagementProcess Management Business ResultsBusiness Results

2004 Categories and Items Point Values

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

905 Human Resource Focus 856 Process Management 857 Business Results 450

7.1Customer -Focused Results 757.2 Product and Service Results 757.3 Financial and Market Results 757.4 Human Resource Results 757.5 Organizational Effectiveness Results 757.6 Governance and Social Responsibility Results 75

TOTAL POINTS 1000

LeadershipLeadership

Examines how senior executives Examines how senior executives guide the company and how the guide the company and how the company addresses its company addresses its responsibilities to the public and responsibilities to the public and practices good citizenship.practices good citizenship.1.1 Organizational Leadership 70

1.2 Social Responsibility 50

Strategic planningStrategic planning

Examines how the company sets Examines how the company sets strategic directions and how it strategic directions and how it determines key action plans.determines key action plans.

2.1Strategy Development 40 2.2 Strategy Deployment 45

Customer and market Customer and market focusfocus

Examines how the company Examines how the company determines requirements and determines requirements and expectations of customers and expectations of customers and markets.markets.

3.1Customer and Market Knowledge 40

3.2 Customer Relationships and Satisfaction 45

Information and analysisInformation and analysis

Examines the management, effective Examines the management, effective use, and analysis of data and use, and analysis of data and information to support key company information to support key company processes and the company’s processes and the company’s performance management system.performance management system.

4.1Measurement and Analysis of Organizational Performance 45

4.2 Information and Knowledge Management 45

Human resource focusHuman resource focus

Examines how the company enables its Examines how the company enables its workforce to develop its full potential workforce to develop its full potential and how the workforce is aligned with and how the workforce is aligned with the company’s objectives.the company’s objectives.

5.1 Work Systems 35 5.2 Employee Learning and Motivation

25 5.3 Employee Well-Being and

Satisfaction 25

Process managementProcess management

Examines aspects of how key Examines aspects of how key production/delivery and support production/delivery and support processes are designed, managed, processes are designed, managed, and improved.and improved.

6.1V alue Creation Processes 50 6.2 Support Processes 35

Business resultsBusiness results Examines the company’s performance and Examines the company’s performance and

improvement in its key business areas: improvement in its key business areas: customer satisfaction, customer satisfaction, financial and marketplace performance, financial and marketplace performance, human resources, human resources, supplier and partner performance, and supplier and partner performance, and operational performance. operational performance.

The category also examines how the The category also examines how the company performs relative to competitors.company performs relative to competitors. better market performance, gains in market better market performance, gains in market

share, and customer retention and satisfaction share, and customer retention and satisfaction

Quality Competitions in Quality Competitions in JapanJapan

Deming Prize (Japan)Deming Prize (Japan)• Named after noted quality Named after noted quality

expertexpert• Established in 1950Established in 1950 Florida Light & Power, Florida Light & Power,

AT&TAT&T

New prize in JapanNew prize in Japan

Other AwardsOther Awards

Rajiv Ghandi award – India, 1991Rajiv Ghandi award – India, 1991 40+ US states have prizes40+ US states have prizes Many state winners win BNQAMany state winners win BNQA

Is Baldrige a U.S. version of Is Baldrige a U.S. version of Japan’s Deming award?Japan’s Deming award?

The basic purposes of both awards are the The basic purposes of both awards are the same: same: to promote recognition of quality achievements and to promote recognition of quality achievements and to raise awareness of the importance and techniques to raise awareness of the importance and techniques

of quality improvement.of quality improvement. However, the Baldrige Award:However, the Baldrige Award:

focuses more on results and service,focuses more on results and service, relies upon the involvement of many different relies upon the involvement of many different

professional and trade groups, professional and trade groups, provides special credits for innovative approaches to provides special credits for innovative approaches to

quality, quality, includes a strong customer and human resource includes a strong customer and human resource

focus, and focus, and stresses the importance of sharing information. stresses the importance of sharing information.

Baldrige vs. ISO 9000Baldrige vs. ISO 9000

Purpose of MBNQA to enhance US Purpose of MBNQA to enhance US competitivenescompetitivenes

Promotes quality awareness, Promotes quality awareness, recognizes achievements of US recognizes achievements of US companiescompanies

Vehicle for sharing success strategiesVehicle for sharing success strategies ISO covers less thatn 10 percent of the ISO covers less thatn 10 percent of the

Baldrige award criteriaBaldrige award criteria Many apply, few are selectedMany apply, few are selected MBNQA not required for business MBNQA not required for business

Six Sigma, ISO, BNQA Six Sigma

concentrates on measuring product quality and improving process engineering.

drives process improvement and cost savings. ISO 9001:2000 Registration

is a product/service conformity model for guaranteeing equity in the marketplace.

concentrates on fixing quality system defects and product/service nonconformities.

Baldrige Criteria for Performance Excellence focus on performance excellence for the entire

organization in an overall management framework. identify and track all-important organizational results:

customer, product/service, financial, human resource, and organizational effectiveness.