| Frequently Asked Questions and Answers about
the Malcolm Baldrige National Quality Award
Who was Malcolm Baldrige?
What is the Malcolm Baldrige National
Quality Award?
Why was the award established?
How is the Baldrige Award achieving its goals?
What are the Baldrige criteria?
Which organizations have received the award?
How are recipients selected?
Does quality pay?
Is it tougher for small organizations to receive the
award?
Can only U.S. organizations receive the award?
Do the award criteria take into account an
organization’s financial performance?
Does the award amount to a product or service endorsement
for the award recipients?
Why are the Baldrige Award recipients asked to share their
successful strategies?
To what extent are they asked to share their
strategies?
Do advertising and publicity diminish the image and
prestige of the award?
Are organizations simply chasing after the award and ignoring
the lessons of performance improvement?
If this is a federal government program, why are organizations
charged a fee to apply?
May an organization hire a consultant to help prepare
answers for the Baldrige application?
Is it a conflict of interest for members of the Board
of Examiners to work as consultants?
Does a decline in applications for the award indicate
a decline in interest about quality and the Baldrige Award?
How does the Baldrige Award differ from ISO 9000?
Is the Baldrige Award a U.S. version of Japan’s Deming
award?
Why was NIST selected by Congress to manage the award and
what is the role of ASQ?
Who was Malcolm Baldrige?
Malcolm Baldrige was Secretary of Commerce from 1981 until his death in a
rodeo accident in July 1987. Baldrige was a proponent of quality management
as a key to this country’s prosperity and long-term strength. He took
a personal interest in the quality improvement act that was eventually named
after him and helped draft one of the early versions. In recognition of his
contributions, Congress named the award in his honor.
What
is the Malcolm Baldrige National Quality Award?
Congress established the award program in 1987 to recognize U.S. organizations
for their achievements in quality and business performance and to raise awareness
about the importance of quality and performance excellence as a competitive
edge. The award is not given for specific products or services. Three awards
may be given annually in each of these categories: manufacturing, service,
small business, and, starting in 1999, education and health care.
While the Baldrige Award and the Baldrige recipients are the very visible
centerpiece of the U.S. quality movement, a broader national quality program
has evolved around the award and its criteria. A report, Building on Baldrige:
American Quality for the 21st Century, by the private Council on Competitiveness,
said, “More than any other program, the Baldrige Quality Award is
responsible for making quality a national priority and disseminating best
practices across the United States.”
The U.S. Commerce Department’s National Institute of Standards and
Technology (NIST) manages the Baldrige National Quality Program in close
cooperation with the private sector.
Why was the award established?
In the early and mid-1980s, many industry and government leaders saw that
a renewed emphasis on quality was no longer an option for American com-panies
but a necessity for doing business in an ever expanding, and more demanding,
competitive world market. But many American businesses either did not believe
quality mattered for them or did not know where to begin. The Baldrige Award
was envisioned as a standard of excellence that would help U.S. organizations
achieve world-class quality.
How is the Baldrige Award achieving its
goals?
The criteria for the Baldrige Award have played a major role in achieving
the goals established by Congress. They now are accepted widely, not only
in the United States but also around the world, as the standard for performance
excellence. The criteria are designed to help organizations enhance their
competitiveness by focusing on two goals: delivering ever improving value
to customers and improving overall organizational performance.
The award program has proven to be a remarkably successful government and
private-sector team effort. The annual government investment of about $5
million is leveraged by a contribution of over $100 million from private-sector
and state and local organizations, including $10 million raised by private
industry to help launch the program and the time and efforts of hundreds
of largely private-sector volunteers.
The cooperative nature of this joint government/private-sector team is perhaps
best captured by the award’s Board of Examiners. Each year, more than
300 experts from industry, educational institutions, governments at all levels,
and non-profit organizations volunteer many hours reviewing applications
for the award, conducting site visits, and providing each applicant with
an extensive feedback report citing strengths and opportunities to improve.
In addition, board members have given thousands of presentations on quality
management, performance improvement, and the Baldrige Award.
The 41 award-winning companies also have taken seriously their charge to
be quality advocates. Their efforts to educate and inform other companies
and organizations on the benefits of using the Baldrige Award framework and
criteria have far exceeded
expectations. To date, the recipients have given approximately 30,000
presentations reaching thousands of organizations.
What are the Baldrige criteria?
The Baldrige performance excellence criteria are a framework that any
organization can use to improve overall performance. Seven categories make
up the award criteria:
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Leadership—Examines how senior executives
guide the organization and how the organization addresses its responsibilities
to the public and practices good citizenship.
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Strategic planning—Examines how the organization
sets strategic directions and how it determines key action plans.
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Customer and market focus—Examines how the
organization determines requirements and expectations of customers and
markets.
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Information and analysis—Examines the
management, effective use, and analysis of data and information to support
key organization processes and the organization’s performance management
system.
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Human resource focus—Examines how the
organization enables its workforce to develop its full potential and how
the workforce is aligned with the organization’s objectives.
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Process management—Examines aspects of how
key production/delivery and support processes are designed, managed, and
improved.
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Business results—Examines the
organization’s performance and improvement in its key business areas:
customer satisfaction, financial and marketplace performance, human resources,
supplier and partner performance, and operational performance. The category
also examines how the organization performs relative to competitors.
The criteria are used by thousands of organizations of all kinds for
self-assessment and training and as a tool to develop performance and business
processes. Almost 2 million copies have been distributed since the first
edition in 1988, and heavy reproduction and electronic access multiply that
number many times.
For many organizations, using the criteria results in better employee relations,
higher productivity, greater customer satisfaction, increased market share,
and improved profitability. According to a report by the Conference Board,
a business membership organization, “A majority of large U.S. firms
have used the criteria of the Malcolm Baldrige National Quality Award for
self-improvement, and the evidence suggests a long-term link between use
of the Baldrige criteria and improved business performance.”
Which organizations have received the
award?
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2000—Dana Corp.-Spicer Driveshaft Division, KARLEE Company, Inc., Operations
Management International, Inc., and Los Alamos National Bank
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1999—STMicroelectronics, Inc.-Region Americas, BI, The Ritz-Carlton
Hotel Co., L.L.C., and Sunny Fresh Foods
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1998—Boeing Airlift and Tanker Programs, Solar Turbines Inc., and Texas
Nameplate Co., Inc.
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1997—3M Dental Products Division, Solectron Corp., Merrill Lynch Credit
Corp., and Xerox Business Services
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1996—ADAC Laboratories, Dana Commercial Credit Corp., Custom Research
Inc., and Trident Precision Manufacturing Inc.
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1995—Armstrong World Industries Building Products Operation and Corning
Telecommunications Products Division
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1994—AT&T Consumer Communications Services, GTE Directories Corp.,
and Wainwright Industries Inc.
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1993—Eastman Chemical Co. and Ames Rubber Corp.
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1992—AT&T Network Systems Group/ Transmission Systems Business Unit,
Texas Instruments Inc. Defense Systems & Electronics Group, AT&T
Universal Card Services, The Ritz-Carlton Hotel Co., and Granite Rock Co.
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1991—Solectron Corp., Zytec Corp., and Marlow Industries
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1990—Cadillac Motor Car Division, IBM Rochester, Federal Express Corp.,
and Wallace Co. Inc.
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1989—Milliken & Co. and Xerox Corp. Business Products and Systems
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1988—Motorola Inc., Commercial Nuclear Fuel Division of Westinghouse
Electric Corp., and Globe Metallurgical Inc.
How are recipients
selected?
Organizations that are headquartered in the United States may apply for the
award. Applications for the award are evaluated by an independent Board of
Examiners composed of primarily private-sector experts in quality and business.
Examiners look for achievements and improvements in all seven categories.
Organizations that pass an initial screening are visited by teams of examiners
to verify information in the application and to clarify questions that come
up during the review. Each applicant receives a written summary of strengths
and areas for improvement in each area addressed by the criteria.
“The application and review process for the Baldrige Award is the best,
most cost-effective and comprehensive business health audit you can get,”
says Arnold Weimerskirch, former chair of the Baldrige Award panel of judges
and vice president of quality, Honeywell, Inc.
Does quality pay?
Studies by NIST, universities, business organizations, and the U.S. General
Accounting Office have found that investing in quality principles and performance
excellence pays off in increased productivity, satisfied employees and customers,
and improved profitability—both for customers and investors. For example,
NIST has tracked a hypothetical stock investment in Baldrige Award winners
and applicants receiving site visits. The studies have shown that these companies
soundly outperform the Standard & Poor’s 500.
Is it tougher for small
organizations to receive the award?
The Baldrige Award’s small business recipients have proven that any
U.S. organization can improve by using the criteria’s performance excellence
framework. But, given the importance of smaller businesses to the U.S. economy,
NIST is mapping out ways to strengthen awareness of the award program and
criteria among these organizations.
One promising vehicle for tapping into the nation’s small and mid-sized
organizations is through the Manufacturing Extension Partnership, another
NIST-managed program. Offering services in all 50 states and Puerto Rico,
the MEP is a nationwide system of services and support for smaller manufacturers
giving them unprecedented access to new technologies, resources, and expertise.
In surveys of MEP clients, quality management and improvement are among the
most requested areas for assistance. A Baldrige expert is working with directors
of the locally managed MEP centers to inform and educate them about the benefits
of quality for smaller manufacturers.
Can only U.S. organizations receive the
award?
Any for-profit organization headquartered in the United States or its territories
may apply for the award, including U.S. subunits of foreign companies.
Do the award criteria take into account an organization’s
financial performance?
Yes. The criteria include many factors that contribute to financial performance,
including business decisions and strategies that lead to better market
performance, gains in market share, and customer retention and satisfaction.
Organizations are urged to use financial information, including profit trends,
in analyzing and reporting on improved overall performance and to look for
the connection between the two.
Does the award amount to a product or
service endorsement for the award recipients?
No. The award is given because an organization has shown it has an outstanding
system for managing its products, services, human resources, and customer
relationships. As part of the evaluation, an organization is asked to describe
its system for assuring the quality of its goods and services. It also must
supply information on quality improvement and customer satisfaction efforts
and results. That does not mean that a recipient’s products or services
are endorsed.
Why are the Baldrige Award recipients asked
to share their successful strategies?
One of the main purposes of the award is to pass on information about the
recipient’s performance excellence strategies that other organizations
can tailor for their own needs. Representatives from the award recipients
willingly have shared their organizations’ performance strategies and
methods with thousands.
To what extent are they asked to share
their strategies?
The managers of each recipient must decide how much time and effort to devote
to activities such as speaking engagements and tours of facilities. The
requirements of the award program are minimal. Recipients are asked to
participate in the award’s
annual conference and several co-sponsored regional conferences, to provide
basic materials to those who request it on their organization’s performance
strategies and methods, and to answer news media inquiries.
Do advertising and publicity diminish
the image and prestige of the award?
The law establishing the award states that an award recipient may publicize
its receipt of such award and use the award in its advertising. Promoting
public and business awareness of quality improvement is one of the prime
goals of the program, and advertising is one way to meet this goal. Guidelines
help organizations assure their advertising is appropriate in representing
their Baldrige Award recognition.
Are organizations simply chasing after
the award and ignoring the lessons of performance improvement?
The perception by some that receiving the award is the goal of U.S. organizations
is not supported by the facts. Says Earnest Deavenport, chairman and chief
executive officer of Eastman Chemical Company, “Eastman, like other
Baldrige Award winners, didn’t apply the concepts of total quality
management to win an award. We did it to win customers. We did it to grow.
We did it to prosper and to remain competitive in a world marketplace.”
Thousands of organizations are using Baldrige Award performance excellence
criteria to assess their organization and to improve. The program has helped
to stimulate an amazing movement to improve U.S. organizations, including
companies; academic institutions; and federal, state, and local government
agencies.
If this is a federal government program,
why are organizations charged a fee to apply?
Federal funding for this program is about $5 million annually and is used
by NIST to manage the program. The application fees are charged to cover
expenses associated with distribution and review of applications and development
of feedback reports. The application and review process is considered to
be a very cost-effective and comprehensive business health audit. For an
application fee ranging from $4,500 for large organizations to $300 for
non-profits, organizations receive at least 300 hours of review by a minimum
of eight business and quality experts. Site-visited organizations receive
over 1,000 hours of in-depth review. Every applicant receives an extensive
feedback report highlighting strengths and areas to improve. An article in
the Journal for Quality and Participation said, “The Baldrige feedback
report is arguably the best bargain in consulting in America.”
May an organization hire a consultant
to help prepare answers for the Baldrige application?
Applicants for the award are asked to supply facts and data to substantiate
their claims concerning their management practices. Consultants, including
members of the Board of Examiners, may provide services on performance management
issues as well as the Baldrige award process. However, since there are no
secret answers or even right or wrong answers to the Baldrige application,
the award cannot be received by hiring someone to fill in the blanks.
An organization must show through facts and data that it has a world-class
management system in place and that it is continually looking for ways to
improve.
As a final check before recommending recipients, members of the Board of
Examiners visit the more outstanding candidates for the award. During these
site visits, examiners interview employees and review pertinent records and
data. The objective is to verify the information provided in the application
and to answer questions raised during the board’s review. An organization
that hired someone to fill out its application would never make it through
this rigorous review if its performance management system was not supported
by facts and data.
Is it a conflict of interest for members
of the Board of Examiners to work as consultants?
No. Members of the Board of Examiners are experts in evaluating performance
management systems. They are in demand as speakers, as information resources,
and as consultants. These activities serve as a way to make more people aware
of performance improvement techniques and the Baldrige Award.
However, since the examiners and judges on the board review applications
for the award and are involved in recommending award recipients, precautions
are taken to prevent a conflict of interest or even the appearance of conflict.
Rigorous rules are followed at every stage of the review.
Primarily, this means all members of the board must abide by a code of ethics
requiring, among other things, that they disclose all business affiliations
that might create a conflict. In such cases, they cannot review an application,
comment on it, or make any judgments that could affect it. It is a violation
of the code for board members even to ask for information on applications
other than those to which they are assigned.
Other safeguards and checks also are built into the four-step review process.
For example, during the first step, each application is evaluated independently
by at least eight different examiners. By the time the review is over, some
applicants will have gone through over 1,000 hours of evaluation.
Does a decline in applications for the
award indicate a decline in interest about quality and the Baldrige
Award?
The number of applicants for the national Baldrige Award is not an indicator
of overall interest in quality or the award program. Interest continues to
grow both nationwide and internationally.
For example, participation in state and local award programs has increased
steadily. In 1991, fewer than 10 states had award programs. Now, 43 states
have or are establishing award programs. Most are modeled after the Baldrige
Award, and many organizations opt to compete for them first before considering
a Baldrige Award application. Many of the Baldrige Award recipients also
have won state quality awards. In 1998, state and local quality award programs
received 830 applications.
Internationally, nearly 60 quality awards are in place. Most have been
established within the past several years, and many are based on the Baldrige
Award. In Japan, home of the Deming Prize, an award that closely resembles
the Baldrige Award has been established.
Also, it is important to remember the award program is much more than a contest.
While recognizing organizations that have successful performance management
systems is the most visible part of the program, its intent is much broader.
Equally important is the award’s role in raising awareness about quality
by encouraging all U.S. businesses and organizations to set up performance
improvement programs whether or not they intend, or are even eligible, to
apply for the award.
How does the Baldrige Award differ from
ISO 9000?
The purpose, content, and focus of the Baldrige Award and ISO 9000 are very
different. The Baldrige Award was created by Congress in 1987 to enhance
U.S. competitiveness. The award program promotes quality awareness, recognizes
quality achievements of U.S. organizations, and provides a vehicle for sharing
successful strategies. The Baldrige Award criteria focus on results and
continuous improvement. They provide a framework for designing, implementing,
and assessing a process for managing all business operations.
ISO 9000 is a series of five international standards published in 1987 by
the International Organization for Standardization (ISO), Geneva, Switzerland.
Companies can use the standards to help determine what is needed to maintain
an efficient quality conformance system. For example, the standards describe
the need for an effective quality system, for ensuring that measuring and
testing equipment is calibrated regularly and for maintaining an adequate
record-keeping system. ISO 9000 registration determines whether a company
complies with its own quality system.
Overall, ISO 9000 registration covers less than 10 percent of the Baldrige
Award criteria.
Is the Baldrige Award a U.S. version of
Japan’s Deming award?
The basic purposes of both awards are the same: to promote recognition of
quality achievements and to raise awareness of the importance and techniques
of quality improvement. However, the Baldrige Award:
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focuses more on results and service,
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relies upon the involvement of many different professional and trade groups,
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provides special credits for innovative approaches to quality,
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includes a strong customer and human resource focus, and
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stresses the importance of sharing information.
Why was NIST selected by Congress to manage
the award and what is the role of ASQ?
NIST is a non-regulatory agency of the Commerce Department’s Technology
Administration. NIST strengthens the U.S. economy and improves the quality
of life by working with industry to develop and apply technology, measurements,
and standards through four partnerships: the Baldrige National Quality Program,
the Measurement and Standards Laboratories, the Advanced Technology Program,
and the Manufacturing Extension Partnership. NIST was selected by Congress
to design and manage the award program because of its role in helping U.S.
organizations compete, its world-renowned expertise in quality control and
assurance, and its reputation as an impartial third party.
ASQ—the American Society for Quality—assists NIST with the application
review process, preparation of award documents, publicity, and information
transfer. ASQ is a professional, non-profit association serving more than
80,000 individual and 700 corporate members in the United States and 62 other
nations.
Source : NIST |
