[Mark Graham Brown] the Pocket Guide to the Baldri(Bookos.org)

7/28/2019 [Mark Graham Brown] the Pocket Guide to the Baldri(Bookos.org)

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Mark Graham Brown

The Pocket Guide to the

BALDRIGEAWARD

CRITERIAFourteenth Edition


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Productivity PressTaylor & Francis Group270 Madison AvenueNew York, NY 10016

2008 by Mark Graham BrownProductivity Press is an imprint of Taylor & Francis Group, an Informa business

No claim to original U.S. Government worksPrinted in the United States of America on acid-free paper10 9 8 7 6 5 4 3 2 1

International Standard Book Number-13: 978-1-4200-8015-5 (Softcover)

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iii

Table of Contents

Acknowledgments iv

Introduction v

P A R T I: Questions & Answers 1

P A R T I I: The Baldrige Criteria 17

1 Leadership (120 pts) 18

2 Strategic Planning (85 pts) 22

3 Customer and Market Focus (85 pts) 26

4 Measurement, Analysis,and Knowledge Management (90 pts) 31

5 Workorce Focus (85 pts) 36

6 Process Management (85 pts) 40

7 Results (450 pts) 44

For Additional Reading 57


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iv

Acknowledgments

I would like to thank the ollowing individualsor their suggestions to improve the rst editiono this book: Carol Pletcher, Cargill; Martin Smith,New England Telephone; Ann Wole, Air Productsand Chemicals; Craig Skrivseth, Appleton Papers

I also wish to thank Jim Springer o AppletonPapers, who gave me the idea or this book, andLynn Berner-Kilbourn who did an exceptional jobo editing and ormatting the original book

I would also like to thank Michael Sinocchi,senior acquisitions editor at Productivity Press, or

his outstanding editing over the years

MGB


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v

Introduction

This guide is designed to help you understand thecriteria or the Malcolm Baldrige National QualityAward It is not about the award, or how to winit Rather, it is about how to interpret and use thecriteria to improve your organization

Most organizations that use the Baldrige criteriahave no interest in applying or, or winning, theaward The Baldrige criteria are being used bythousands o organizations around the world toevaluate their progress toward becoming the bestin their elds This guide is divided into two parts

Part I, a question and answer section, provides theanswers to the questions most commonly askedabout the award and the criteria Part II providesa brie explanation o each o the 18 items in theBaldrige criteria and lists the characteristics oorganizations that excel in each o these 18 items

I the material in this quick reerence guidesparks your interest in the Baldrige criteria or theMalcolm Baldrige National Quality Award, youcan obtain more inormation rom the sourceslisted at the end o the book


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1

P A R T IQUESTIONS &

ANSWERS


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PART I: QUESTIONS & ANSWERS

2

Answers to some o the questions requently asked

about the Malcolm Baldrige National QualityAward criteria.

Q: Why is our organization using the Baldrigecriteria to do assessments?

A: Since the award was rst established in 1988,there have been thousands o organizations thathave applied or the award Thousands more haveapplied or state quality awards, and several mil-lion copies o the criteria have been distributed toorganizations all over the world Many organiza-tions have no interest in applying or the award,but use the criteria as a model or evaluating andimproving their own perormance The criteriain the Baldrige model are the toughest and mostwidely accepted set o standards or dening a

well run organization, regardless o its size or type

The real rewards or ollowing the Baldrigemodel are:

More satised customers and stakeholdersEngaged employees

Improved nancial results and outcomesLong-term success


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Q: How does the Baldrige model ft with other

improvement initiatives like CRM (customerrelationship management), Joint Commission,Six Sigma, Balanced Scorecard, Knowledge

Management, and Lean?

A: The Baldrige criteria are much more compre-

hensive than any o the programs or initiativeslisted above Further, the Baldrige model doesnot require that you ollow or use any o theseinitiatives Baldrige should be thought o as anondenominational model that does not require

you to ollow any program or management guruHowever, you will nd that eorts made to imple-ment any o programs or initiatives listed abovewill help you on your quest to deploy the Baldrigemodel The core values and criteria used to assessorganizations in the Baldrige model are consistent

with those ound in the programs listed aboveI you nd that the programs above are workingor yougreat! I you are not doing any o thesethings, you may also end up with high scores ona Baldrige assessment by developing your own

approaches to managing customers, measure-ments, and work processes


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Q:What are the benefts o ollowing the

Baldrige model?A: There are many benets and nancial reasonsor adopting this model Baldrige winners that arepublicly traded companies have outperormed theStandard & Poors Index by up to 6 times in 10 o

the last 13 years Even companies that are goodenough to be Baldrige nalists have outperormedthe index by 2 to 1 It is hard to ignore data thatclearly indicates that adopting the Baldrige criteriagreatly increases the chance o market successI you are a school, hospital, or other nonprot

organization, or a privately owned rm, there arestill many benets In addition to improved nan-cial management and perormance, organizationsthat score high on Baldrige reveal much higheremployee satisaction and have happy and loyalcustomers and stakeholders These organizations

also tend to be successul over long periods o timeand are among the best in their respective elds


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Q:Do we have to go through the actual award

application process to fnd out how we stack upagainst the criteria?

A: Certainly not There are many ways o ndingout how you perorm against the criteria withoutwriting the ull 50-page application and apply-

ing or the award Most states have their ownBaldrige-based awards that oer condensed appli-cations, oten less than 15 pages There is also abrie questionnaire developed by the governmentcalled Are We Making Progress? You may down-load this survey at no charge rom the Baldrige

website, wwwqualitynistgov Some organiza-tions perorm ocus group assessments, listingstrengths and areas or improvement or each othe Baldrige items For additional inormation onBaldrige assessment approaches, consult my largertext: Baldrige Award Winning Quality, available

rom Productivity Press (see inside back cover othis book)

Q: How do I apply the Baldrige criteria to assessa acility or department?

A: The criteria are written to assess an entire com-pany or a single business unit To use the Baldrige


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criteria to evaluate your acility or department,

you need to translate slightly It is helpul to lookat your department or acility as a separate com-pany Imagine that everyone in your departmentlet the company and ormed an organization thatsells your services back to the company Fromthis perspective it is easier to determine who your

customers are, and what products/services youprovide or them

In the Baldrige criteria, the word customerreers to external customers Because all o yourcustomers may be inside the company, you need toapply a broader meaning to words like customer

and supplierSimilarly, when assessing areas such as human

resources or corporate citizenship, put the item inthe context o your department or acility

Q: What are the seven categories in the Baldrigecriteria, and what do they ocus on?

A: The seven categories in the Baldrige criteriaand their corresponding point values are as ollows:

1 Leadership 120 points

2 Strategic Planning 85 points


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3 Customer and Market Focus 85 points

4 Measurement, Analysis, andKnowledge Management 90 points

5 Workorce Focus 85 points6 Process Management 85 points7 Results 450 points

TOTAL 1,000 points

Fity-ve percent o the points in the Baldrigecriteria ocus on how the organization is run; theremaining 45 percent o the points ocus on theresults achieved Categories 1 through 6 (550 points)ocus on the companys approaches or systems

The criteria do not tell you the best method orrunning your business Rather, they look or evi-dence o a systematic approach that is tailored tothe needs o your business and culture Category7, Results, asks about your nancial, customer, and

employee satisaction perormance All importantresults in running a business are assessed

The seven categories o the Baldrige criteriaare subdivided into 18 items, which are ur-ther subdivided into the 32 areas that must be

addressed The gure below shows how the crite-ria are organized This guide explains each o the


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18 examination items The 32 areas to address are

not covered in detail

Q: How do the seven categories work together asa system?

A:By denition, a system is a series o processes

that are ollowed sequentially to achieve a desiredresult Each o the major components o the systemhas inputs, processes, outputs o results, and, ide-ally, eedback loops The gure on the inside rontcover shows how the Baldrige criteria work as asystem

7 Categories

18 Examination Items

32 Areas to Address

Te Baldrige Criteria


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In the Baldrige criteria as a system, the learn-

ing o customers wants and needs are the inputs(Item 31) On the basis o that input, the leadershipsets the direction o the company, and denesits mission, values, products and/or services(Category 1: Leadership)

Next, the company decides on its overall strat-

egy or success, identies perormance metrics,and sets goals or improvement (Category 2:Strategic Planning and Category 4: Measurement,Analysis, and Knowledge Management)

Once measures and plans have been developed,the company designs systems and processes

or its people (Category 5: Workorce Focus)and its customers (32 Customer Relationshipsand Satisaction), and its major work processes(Category 6: Process Management)

All o these systems should produce internal

results such as sales, prots, and high qualityproducts and services, and external results suchas customer satisaction and repeat business ormarket share (Category 7: Results)

Every item in the Baldrige criteria that asksabout approaches and the implementation o

approaches also asks about built-in eedback loopsand continuous improvement


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Q: How are the 2008 Baldrige criteria dierent

rom previous years?A:The criteria did not change rom 2007 to 2008A airly substantial rewrite was perormed in2007, so this year required little alteration Thisbiannual overhaul schedule has been the pat-

tern or many years as the criteria become moremature One area that did change is the scoringscale or results Since results are worth 45% othe points, this is worth some attention The newscoring scale or results still ranges rom 0% to100%, but the scoring bands include more specics

on scoring our dierent dimensions o peror-mance results: Levels, Trends, Comparisons, andIntegration A new acronym has been created orthe our dimensionsLeTCI (lets see)sug-gesting that the examiners want to see how wellthe organization is perorming

Q: Can you explain how the Baldrige criteriacreate a roadmap or a better organization?

A:The Baldrige criteria have become the worldsmost widely accepted model or running an

eective organization The criteria cover almost


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everything that impacts on running a successul

organization The best way to understand this isto list some very basic actors a successul orga-nization must consider, and to identiy wherethese actors are addressed in the Baldrige criteriaTable1 provides a list o activities successul com-panies typically perorm, along with the Baldrige

criteria item that corresponds to the activity

Q: How do the Baldrige criteria apply to a smallorganization?

A:The items in the criteria are relevant to a

small business as well as a big corporation Smallbusinesses must have good systems and resultsto keep them in business The basic dierencein your approach as a small organization is thelevel o ormality A small organization does notnecessarily need a ormal strategic plan or product

development and supplier management system Itdoes need at least an inormal approach to all othe elements in the Baldrige criteria, however Forexample, you might not need a structured trainingcurriculum or new employees i you only have

25 o them You might use structured on-the-jobtraining, however, as a way o bringing new hires


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Table1: The Baldrige Criteria

A Roadmap for SuccessWhat Successul

Organizations DoCorresponding Baldrige

Items

Identiy and segmentcustomers/stakeholders;dene wants and needs

31 Customer and MarketKnowledge

Establish mission, vision,and values; dene keybusiness drivers; developleadership processes toguide organization

11 Senior Leadership22 Strategy

Development

Develop goals and strate-gies based on thoroughanalysis

21 Strategy Deployment22 Strategy

Development

Identiy key peror-mance measures basedon company strategy

32 CustomerRelationships andSatisaction

41 Measurement,

Analysis, andImprovemento OrganizationalPerormance

42 Management oInormation,InormationTechnology, andKnowledge


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What Successul

Companies Do

Corresponding Baldrige

ItemsReview perormanceo all key measures,including nancial, ethi-cal, operational, supplierperormance, customersatisaction, andemployee satisaction

11 Senior Leadership71 Product and Service

Outcomes72 Customer-Focused

Outcomes73 Financial and Market

Outcomes74 Workorce Outcomes75 Process Eectiveness

Outcomes76 Leadership Outcomes

Design high qualityproducts and/or servicesthat meet current anduture customer needsDesign jobs and organ-izations to promotehigh perormance romemployees; train andmotivate employeesto continuously delightcustomers

61 Work System Design

51 WorkorceEngagement

52 WorkorceEnvironment

Dene, control, andcontinuously improve

key processes

62 Work ProcessManagement and

Improvement


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What Successul

Companies Do

Corresponding Baldrige

ItemsWork with suppliers andvendors to ensureconsistent high-qualitygoods and services

62 Work ProcessManagement andImprovement

Manage customer rela-

tionships to maintainhigh levels o satisactionon an ongoing basis

32 Customer

Relationships andSatisaction

Exhibit good corporatecitizenship; perorm wellin areas o public health,

environment, and ethics

12 Governance andSocial Responsibilitiesand Citizenship

Demonstrate excellenttrends and levels in allresults areas

71 Product and ServiceOutcomes

72 Customer-FocusedOutcomes

73 Financial and MarketOutcomes

74 Workorce Outcomes75 Process Eectiveness

Outcomes76 Leadership

Outcomes


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up to speed This training can be supplemented

with some packaged courses and training materi-als purchased rom outside vendorsA small organization also needs good nancial,

operational, and customer satisaction resultsResults are more crucial or a small organizationbecause it may not have the reserves to survive a

slow period or a loss o a major customer All othe Baldrige criteria apply to a small organiza-tion, at least in spirit Look or ways to meet theBaldrige ideals without adding too much ormal-ity to your systems and processes


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17

P A R T I ITHE BALDRIGE

CRITERIA


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PART II: THE BALDRIGE CRITERIA

18

A brie explanation o each o the 18 items in the

Baldrige criteria and the characteristics o organizationsthat excel in each o these 18 actors.

1 Leadership (120 pts.)

Strong leadership and direction are keys to

becoming a great organization This rst categoryasks how the senior leaders o an organization

dene its mission or purpose, the uture vision,

and the code o ethics or values by which the

organization will be managed The two items in

Category 1 ask about the organizations leadership

system (11 Senior Leadership) and how the orga-

nization leads in the areas o social responsibility

and corporate citizenship (12 Governance and

Social Responsibilities)

1.1 SENIOR LEADERSHIP: How do your senior

leaders lead? (70 pts.)

Describe HOW SENIOR LEADERS guide and sustain

your organization. Describe HOW SENIOR LEADERS

communicate with your workorce and encourage HIGHPERFORMANCE.


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1 LEADERSHIP

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What Does This Mean?

This item asks how clearly the senior executiveshave dened and communicated the mission othe organization, why it exists, its uture direction,and the values or which it stands Actions speaklouder than words, so emphasis should be on howthe behavior and decisions made by executivesare in alignment with the mission, vision, andvalues This item also asks about how the execu-tives ensure honesty and ethical behavior using asystem o governance This system should protectthe needs and interests o stockholders and other

stakeholders Finally, the item asks how the lead-ers review the perormance o the organization toensure that it is achieving its goals

What Excellent Organizations Do

Build a strong leadership team that is notdependent upon any one individual

Clearly communicate the mission, vision, andvalues, using plain language, not buzzwords

Ensure leaders behave and make decisions

consistent with stated ethics and values


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Create a strong culture and ensure that values

endure as the organization grows and changesOpenly and honestly communicate withemployees, customers, and other stakeholders

Continually look or uture opportunities toimprove the organization

1.2 GOVERNANCE AND SOCIALRESPONSIBILITIES: How do you governand address your social responsibilities? (50 pts.)

Describe your organizations GOVERNANCE system.

Describe HOW your organization addresses its respon-sibilities to the public, ensures ETHICAL BEHAVIOR,and practices good citizenship.


This item asks or evidence that the company hasa systematic approach to improve perormance inpublic health and saety, environmental protec-tion, and corporate citizenship Companies shouldhave goals or key aspects o perormance in theseareas, as well as plans to achieve the goals The

organization should be a leader and role model orother organizations


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1 LEADERSHIP

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It must also show leadership in corporate citizen-

ship by supportingand encouraging employeeinvolvement inschools, community groups, pro-essional associations, and charities Higher marksare given to organizations that are proactive intheir approaches to corporate citizenship

What Excellent Organizations DoEmploy a thorough system o governance tomake sure laws, rules, and values are consis-tently ollowed

Go beyond mandated perormance levels in

ethics, public saety, environmental, and otherareas o regulation

Allocate signicant resources or activities thatrelate to corporate citizenship and support oeducational, community, charity, and proes-

sional organizationsAllow employees time on the job to supportproessional and community organizations

Link corporate citizenship eorts to marketingplans and organizational image


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2 Strategic Planning (85 pts.)

Category 2 asks how an organization pursuesplanning and what its plans are Item 21 asks or adescription o the planning process and a sum-mary o the major objectives or goals Item 22 asksabout how plans are communicated, what actionplans or initiatives will be used to achieve thegoals or objectives, and or a orecast o where theorganization will be i it achieves all its goals

2.1 STRATEGY DEVELOPMENT: Howdo you develop your strategy? (40 pts.)

Describe HOW your organization determines itsSTRATEGIC CHALLENGES and advantages.Describe HOW your organization establishes itsstrategy and STRATEGIC OBJECTIVES to addressthese CHALLENGES and enhance its advantages.Summarize your organizations KEY STRATEGICOBJECTIVES and their related GOALS.


This item asks two basic questions: how youpursue planning and what are your major goals or

objectives? This item builds on the mission, vision,


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2 STRATEGIC PLANNING

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and values dened in the leadership category, and

asks how the organization addresses the chal-lenges and threats it aces and how it plans to capi-talize on its current strengths It is important thata variety o internal and external actors are con-sidered during planning It is also important thatplanning is accomplished quickly and eciently

Plans oten change, so it should be simple to makeadjustments when necessary Goals and objectivesshould be well balanced, addressing all areas operormance, including nancial outcomes andmeasures o customers, markets, products and

services, and workorceWhat Excellent Organizations Do

Complete a thorough situation analysis thatlooks at strengths, weaknesses, opportuni-ties, and threats, using a systematic model likeBaldrige

Write annual and longer-term strategic plans in1 to 2 months with minimal drats

Focus the planning process on strategic think-ing rather than creating a binder


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Develop clear and thoughtul goals or objec-

tives, linked to the vision and situationanalysis, along with additional challenges theorganization will ace

Develop plans that address all aspects operormancenot only nancial aspects

2.2 STRATEGY DEPLOYMENT: Howdo you deploy your strategy? (45 pts.)

Describe HOW your organization converts itsSTRATEGIC OBJECTIVES into ACTION PLANS.Summarize your organizations ACTION PLANS

and related KEY PERFORMANCE MEASURESor INDICATORS. Project your organizations uturePERFORMANCE on these KEY PERFORMANCEMEASURES or INDICATORS.


This item asks about how you develop specicmeasures and targets, and the strategies that willbe used to achieve those targets Annual andlonger-term targets should be specied or eachperormance measure In addition, you must pres-

ent a summary o the initiatives or action plansthat will be used to accomplish your goals and


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2 STRATEGIC PLANNING

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targets This item also asks about where you will

be in the next 3 to 5 years relative to key competi-tors and benchmark organizations i you hit allyour targets


I dentiy key success actors that dierentiateyour organization rom key competitors

Set measurable targets or each measure operormance based upon relevant data (eg,competitors, resources, customer needs, etc)

Dene specic strategies or action plans orhitting targets

Communicate plans to all levels o employeesand partners so they understand their roles inhelping the organization achieve its vision

Adapt or change targets and strategies quicklyas the business environment changes

Predict how achievement o targets will changethe organizations position in the marketplaceover the next 2 to 5 years


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3 Customer and Market Focus (85 pts.)

This category asks you to identiy customers andtheir requirements and manage relationships thatkeep them satised Item 31 asks how you identiycustomers and dene their needs Item 32 askshow you win and keep customers and addressescustomer satisaction measures

3.1 CUSTOMER AND MARKET KNOWLEDGE:How do you use customer and marketknowledge? (40 pts.)

Describe HOW your organization determines

requirements, needs, expectations, andpreferences ofCUSTOMERS and marketsto ensure the continuing relevance ofyour products and services and developnew business opportunities.

What Does This Mean?This is the rst item in the systems model o thecriteria shown on the inside cover It relates toidentiying your target markets and customersand what they want and expect rom your prod-ucts and/or services You might list the targeted

groups or market segments, and identiy theirindividual priorities It is also important to explain


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3 CUSTOmER AND mARkET fOCUS

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how you determine customer requirements and

expectations It is important not only to use sev-eral methods to identiy customer requirements,but to use them oten Customers wants andexpectations change requently

This item also asks about uture customers,and what their requirements will be These are

dicult questions to answer; however, the mostsuccessul companies today look at industrytrends and predict how they will impact theirproducts and/or services Successul companiesalso look beyond current customers and identiynew industries or types o customers

As with all Baldrige items that questionapproaches, it is important to show a trend ocontinuously evaluating and improving methodso identiying customer requirements

What Excellent Organizations DoClearly identiy customers and segment themby market, geography, or other categories

Use a variety o methods to identiy customerrequirements and priorities

Continuously evaluate and improve methods todetermine customer requirements


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Conduct research to identiy potential uture

markets or customers and their needsIdentiy the requirements o potential custom-ers and customers o competitors

3.2 CUSTOMER RELATIONSHIPS ANDSATISFACTION: How do you build relationshipsand grow customer satisaction and loyalty?(45 pts.)

Describe HOW your organization builds relationshipsto acquire, satisy, and retain CUSTOMERS and toincrease CUSTOMER loyalty. Describe also HOW

your organization determines CUSTOMER satisactionand dissatisaction.


This item concerns keeping customers happy ateryou have won their business Most organizationsspend more money to gain customers than they doto retain customers This section asks or evidenceo a proactive approach to keeping customerssatised on an ongoing basis

Another dimension o keeping customers satis-

ed is providing an easy outlet or them to seekinormation and report complaints Have a system


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3 CUSTOmER AND mARkET fOCUS

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or tracking all complaints and promptly resolve

complaints when they occur When customerscomplain, they present you with an opportunity towin back their trust and good will

Item 31 asks how you learn about customerrequirements It also relates to how you measurewhat customers think o your products and/or

services ater they are purchasedYou should have hard and sot measures o

customer satisaction Hard measures relate tomeasures o customer buying behavior Sotmeasures are opinions gathered through surveys,

interviews, and ocus groupsAlong with a good mix o hard and sot cus-tomer satisaction data, it is much better to tailormeasurements to your own markets or customertypes rather than using a generic customer satis-action survey Finally, it is important to describe

how you build loyalty rom important custom-ers, taking into account that customer needs andpriorities vary


Hire the best and brightest customer contactpeople, pay them well, train them thoroughly,


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and give them the authority to solve customer

problems without checking with managementDene measurable service standards and mea-sure perormance against them

Provide toll-ree help lines or conveniences tomake it easy or customers to get inormation

Track all complaints, no matter how minor andresolve them quickly

Accumulate inormation on customers in acentral database so that this intelligence can beused to drive improvement

Collect a good mix o hard and sot measureso customer satisaction

Dene customer satisaction levels compared tokey competitor and industry averages

Focus on measuring value and loyalty as well

as customer satisaction

Employ a systematic approach to building loy-alty rom the most valued customers


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4 mEASUREmENT, ANALySIS, AND kNOWLEDGE mGmT

31

4 Measurement, Analysis, and

Knowledge Management (90 pts.)Category 4 is a core part o the Baldrige criteriathat asks how you measure the perormance o theorganization and how you analyze perormancedata to make decisions Item 41 asks you to identiythe set o metrics you trackmany organizations

reer to this inormation as a scorecard Item 41also asks how the measures link back to goals andother important actors or overall success Item 42asks about the use o inormation technology andhow you manage organizational knowledge

4.1 MEASUREMENT, ANALYSIS, ANDIMPROVEMENT OF ORGANIZATIONALPERFORMANCE: How doyou measure, analyze, and revieworganizational perormance? (45 pts.)

Describe HOW your organization measures, ana-lyzes, aligns, and improves its PERFORMANCE dataand inormation at all LEVELS and in all parts oyour organization. Describe HOW you SYSTEMATI-CALLY use the results o your reviews to evaluateand improve PROCESSES.


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This item asks about the high-level perormancemetrics that are collected to evaluate organiza-tional perormance on a regular basis Metricsshould include nancial, customer, employee, andother categories o measures that address yourvarious stakeholders Measures should be bal-

anced to include long- and short-term indicators,metrics that relate to your mission or ongoingbusiness, and those that are more strategic andrelate to your vision

This item also asks about how you analyzeperormance based on these various measuresto set targets and make decisions about com-mitment o resources and development o strat-egies Forward-thinking organizations haveidentied correlations between measures suchas employee and customer loyalty and nancial

perormance Understanding the links among thevarious measures in your corporate dashboardis vitally important in achieving overall goalsCommunicating this inormation to appropriatepersonnel is also assessed


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Develop measures linked to the vision or strat-egy and the overall mission o the organization

Keep the number o metrics that any manageror executive reviews to no more than 20

Include a balance o measures that ocus on thepast, present, and uture, and relate the inor-mation to the needs o shareholders or owners,customers, and employees

Collect a wide variety o data about key com-petitors and comparative organizations

Conduct research to identiy links orcorrelations between leading and lagging met-rics on the company dashboard

Spend as much time ocusing on measures thatlead to uture success as on metrics that depict

past and present perormance

4.2 MANAGEMENT OF INFORMATION,INFORMATION TECHNOLOGY, ANDKNOWLEDGE: How do you manageyour inormation, inormation technology,

and organizational knowledge? (45 pts.)


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Describe HOW your organization ensures the qual-

ity and availability o needed data, inormation,sotware, and hardware or your WORKFORCE,suppliers, PARTNERS, COLLABORATORS, andCUSTOMERS . Describe HOW your organizationbuilds and manages its KNOWLEDGE ASSETS.

What Does This Mean?This item asks how you use inormation technol-ogy to provide leaders and other members o theworkorce with the data, tools, and resources theyneed to perorm their jobs In a large organizationthis might consist o the latest computer sotware

and hardware In a smaller organization, com-munication may be less dependent on technology,but is still important to use the best technologythat the organization can aord Communicationo perormance inormation in spreadsheets with

endless columns o hard-to-read numbers is arrom an ideal approachThe collective knowledge o the workorce in

most o todays organizations is ar more valu-able than any physical assets Criteria item 42also asks how you manage and document this

knowledge so that it may be transerred to othersBuilding a knowledge data base or implementing


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a knowledge management program is only part o

the answer Having access to people who have theknowledge and skills needed is ar more eectivethan pulling inormation rom a data base


Communicate up-to-date perormance data

using consistent graphics and ormats acrossthe organization

Use the best custom-designed or packagedscorecard sotware on the market to communi-cate perormance data

Make use o organization intranet sites and otherappropriate methods to communicate real-timeperormance data to all necessary personnel

Standardize data collection and reporting meth-

ods to ensure consistency and data integrityRegularly evaluate and improve sotware andhardware used or data collection, reporting,and analysis

Have a system or documenting knowledge and

best practices that is easily accessible by all whomay use it


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5 Workforce Focus (85 pts.)

Category 5 asks how you build a strong workorce,slot people in the right jobs, train them, and keepthem motivated or engaged so they consistentlyachieve high perormance The two items in thiscategory ask about workorce engagement (51)and the workorce environment (52)

5.1 WORKFORCE ENGAGEMENT: Howdo you engage your workorce to achieveorganizational and personal success? (45 pts.)

Describe HOW your organization engages,

compensates, and rewards HIGH PERFORMANCE.Describe HOW members o your WORKFORCE,including leaders, are developed to achieve HIGHPERFORMANCE. Describe how you assess yourWORKFORCE ENGAGEMENT and use theresults to achieve higher PERFORMANCE.


This item asks about designing a culture that pro-motes high perormance rom all members o yourworkorce Factors addressed include communica-

tion, goal setting, and eedback This item alsoasks how you determine what motivates dierent


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5 WORkfORCE fOCUS

37

categories and types o employees and leaders

The second actor this item assesses is how youdevelop and train your workorce It is importantto link training and development to overall orga-nizational goals and strategies Finally, this itemasks how you measure levels o workorce engage-ment or satisaction and how data on these metrics

are used to drive improvement eorts


Identiy the most important actors that moti-vate various categories and types o employees

Design reward systems and jobs to encouragehigh perormance and engagement rom allmembers o the workorce

Invest up to 5% o payroll costs on workorcetraining and development each year

Conduct systematic needs analyses to identiyknowledge and skill gaps and link these analy-ses to strategic plans

Design and implement ecient and objectivesystems or requent workorce eedback and

perormance management that go ar beyond atypical annual appraisal


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38

5.2 WORKFORCE ENVIRONMENT: How

do you build an eective and supportiveworkorce environment? (40 pts.)

Describe HOW your organization managesWORKFORCE CAPABILITY and CAPACITYto accomplish the work o the organization.Describe HOW your organization maintains a

sae, secure, and supportive work climate.


This item asks how you determine the knowl-edge, skills, and values o your current and uture

workorces and how you nd people to ll thoseneeds It also asks how you place new and existingemployees into jobs where they are most likely toexcel and how you prepare people or changes inthe nature o your business Item 52 also asks aboutworkorce saety, security, and health These actors

exert huge impacts on workorce perormance andcosts in todays organizations Finally, this item asksabout workorce benets, services, and other actorsdesigned to create positive work environments


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5 WORkfORCE fOCUS

39


Design jobs and organizational structures topromote communication, cooperation, innova-tion, and behavior consistent with the valuesand culture o the organization

Thoroughly screen potential new hires and

candidates or promotion or appropriateknowledge, skills, and values

Tailor human resources systems and practicesto the culture and mission o the organizationrather than implementing each new manage-

ment ad that comes alongImplement a prevention-based approach toworkorce health, saety, and security

Monitor preventive and lagging measures oworkorce health, saety, and security on a

regular basis and install a systematic approachor implementing action plans when datashows declines in perormance

Provide an innovative array o benets andservices or employees designed to oster theirloyalty and reduce stress


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40

6 Process Management (85 pts.)

This important category o the criteria asks aboutcompleting work, managing control, and improv-

ing major work processes The category breaks

down into two items Both ask about work sys-

tems that constitute a collection o processes that

may be perormed within or outside the organ-ization For example, selling cars is a process in

a car company work system that is perormed by

independent dealers Item 61 covers work system

design and seeks inormation on how your organ-

ization designs its major processes and decideswhich processes will be perormed internally or

externally Item 62 asks how work processes are

controlled and improved

6.1 WORK SYSTEMS DESIGN: How doyou design your work systems? (45 pts.)

Describe HOW your organization determines its CORE

COMPETENCIES and designs its WORK SYSTEMS

and KEY PROCESSES to deliver CUSTOMER VALUE,

prepare or potential emergencies, and achieve organiza-tional success and SUSTAINABILITY.


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6 PROCESS mANAGEmENT

41


The rst question relates to your core compe-tencies or areas o greatest expertiseareas inwhich the organization excels and results thatcompetitors will nd dicult to copy For exam-ple, a core competency o a company like Bose isinnovative product design A core competency o

a school may be science education The next ques-tion concerns the most important requirementsare or each o your key work processes, and howthese requirements were determined It is criti-cal to link requirements and standards back toresearch on customer requirements and processvariables that link to important outcomes Finally,this item asks how your organization prepares orvarious types o disasters that might cause devas-tation i plans are not in place

What Excellent Organizations DoHonestly identiy their own strengths or corecompetencies and arm out other processes orwork to suppliers or partners

Incorporate the best practices o benchmark

organizations when designing work systemsand processes


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42

Identiy the key requirements or each major

work process through research and analy-sis o customer requirements, and processconstraints

Design work processes to minimize cycletimeget things done as quickly and e-ciently as possible

Implement a prevention-based approach toplanning or various types o emergencies anddisasters

6.2 WORK PROCESS MANAGEMENT

AND IMPROVEMENT: How doyou manage and improve your keyorganizational work processes? (50 pts.)

Describe HOW your organization implements, man-ages, and improves its KEY work PROCESSES to

deliver CUSTOMER VALUE and achieve organiza-tional success and SUSTAINABILITY.


This item asks how you manage and controlyour key work processes What is important or

many processes in an organization is consistencyMcDonalds, or example, careully controls all o


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6 PROCESS mANAGEmENT

43

its processes to ensure that customers get the same

product rom every restaurant For other processesthat involve creativity, such as teaching cursive tothird graders, consistency is not as important asa process measure What is important or all pro-cesses is that they are properly documented andmeasured, and that measures and/or standards

link back to important measures o outcomes Thisitem also asks how your organization evaluatesand improves its processes Trying to improveall process is an expensive waste o time Rather,process improvements should be systematic andvery selective The processes chosen or improve-ment should be those that are deectivetheirimprovement will make a signicant impact onthe organizations goals


Dene and document the key work processes

involved in producing the organizations prod-ucts and/or services

Dene and track process measures that linkback to important outcome measures

Implement control strategies to ensure thatstandards are consistently met or exceeded


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44

Avoid over-engineering or controlling process

that call or innovation and creativityFocus on reducing cycle time or all keyprocesses

Link process improvement eorts to peror-mance data and strategic plans

Consider many sources o ideas or improvingwork processes, including looking outside theorganization and its industry

7 Results (450 pts.)

Category 7 is the nal and most important othe categories and is worth almost hal o thetotal points in a Baldrige assessment (450 o1000) It covers all the important results thatan organization tracksa total o six items:Section: 71, Product and Service Outcomes;Section 72, Customer-Focused Outcomes; Section73, Financial and Market Outcomes; Section74, Workorce-Focused Outcomes; Section 75,Process Eectiveness Outcomes; and Section76, Leadership Outcomes An organization is

expected to show excellent levels o perormancecompared to other organizations and trends that


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7 RESULTS

45

show stable or improving perormance over mul-

tiple years in all six areas

7.1 PRODUCT AND SERVICEOUTCOMES: What are your productservice perormance results? (100 pts.)

Summarize your organizations KEY product and ser-

vice PERFORMANCE RESULTS. SEGMENT yourRESULTS by product and service types and groups,CUSTOMER groups, and market SEGMENTS, asappropriate. Include appropriate comparative data.

What Does This Mean?This important rst item asks or data on actorssuch as quality, timeliness, and other importantmetrics that link back to customer requirementsAn airline might report on-time landings; ahospital would detail clinical outcome measures;

a school might report student test scores; and abusiness might report deects ound in productsThis section is worth slightly more points than theother ve in Category 7 because it addresses themajor reasons or an organization to exist Trends

should be shown or spans o 5 or more years; allmeasures should show comparisons o your orga-


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46

nizations perormance to competitor, benchmark,

and other relevant data

Results in Excellent Organizations

Key measures o product or service peror-mance show an improving trend over 5 ormore years or a consistently high level operormance

Comparative data show that your product orservice perormance is better than perormanceo major competitors and much better thanaverages in your industry

Results in these areas link back to importantcustomer requirements and standards

No graphs o product or service perormanceshow declining perormance trends or levelsbelow industry averages

Occasional dips in perormance have beenanalyzed and corrected

Clear links can be seen between process mea-sures and standards identied in Section 61and the outcome or output measures shown

here


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7 RESULTS

47

7.2 CUSTOMER-FOCUSED OUTCOMES:

What are your customer-ocusedperormance results? (70 pts.)

Summarize your organizations KEY CUSTOMER-ocused RESULTS, including CUSTOMER satisactionand CUSTOMER-perceived VALUE. Segment yourRESULTS by product and service types and groups,CUSTOMER groups, and market SEGMENTS, asappropriate. Include appropriate comparative data.


This item asks or graphs and perormance data

relating to customer satisaction with your prod-ucts or services over the past ew years Measurestypically reported in this section include sot mea-sures o customer opinions gathered via surveys,interviews, ocus groups, and even complaintsIt is also appropriate to include hard measureso customer behavior such as repeat business,reerrals, loyalty, increases in your business, anddecreases in competitor businesses Measures ocustomer dissatisaction should also be presentedTo evaluate levels and trends in perormance, all

graphs should include relevant competitor andcomparative data


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48


Customer satisaction data are segmented bymarket or customer type as appropriate, and allgraphs show excellent improvement trends

No graphs o customer-ocused results showfat or declining perormance; all dips in per-

ormance are satisactorily explained

All major indicators o customer dissatisactionshow declines over the past 5 or more years andoverall excellent levels o perormance

Trends over the past 3 or more years show contin-

uous improvement in hard measures o customersatisaction and internal quality measures

Levels o perormance on hard measures ocustomer satisaction show the best peror-mance in the industry on most graphs and

benchmark or world-class levels o peror-mance on several graphs

7.3 FINANCIAL AND MARKETOUTCOMES: What are your fnancialand marketplace results? (70 pts.)

Summarize your organizations KEY fnancialand marketplace PERFORMANCE RESULTS by


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7 RESULTS

49

CUSTOMER or market SEGMENTS, as appropriate.

Include appropriate comparative data.


This item asks or two types o results or data:market and nancial results Market results mayinclude gains and losses o customers or shares o

certain markets Financial results are the typicalnancial measures companies collect data on suchas sales, prots, and return on investment All keymarket and nancial measures should be identi-ed in Item 41 You should have graphs o results

on each o these measures or 5 years or more Aswith the previous item, results in this area are eval-uated by analyzing levels, trends, and variabilities


Key nancial and market results or 5 or more

years show a trend o progressive improvement

Prots show a level o perormance comparable to orbetter than the best organizations in the industry

Clear cause-and-eect data show that invest-

ments in improvement initiatives have paid oon the bottom line


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50

Market and nancial measures show benchmark

levels o perormance or at least a continuouslyimproving trend spanning 5 or more years

No graphs o market or nancial indicatorsshow perormance to be fat or worsening overthe past ew years

Dips in perormance have been thoroughly

analyzed and the actors causing these drops inperormance have been corrected

7.4 WORKFORCE-FOCUSED OUTCOMES:What are your workorce-ocused

perormance results? (70 pts.)Summarize your organizations KEY WORKFORCE-ocused RESULTS or WORKFORCEENGAGEMENT and or your WORKFORCE envi-ronment. SEGMENT your RESULTS to address the

DIVERSITY o your WORKFORCE and to addressyour WORKFORCE groups and SEGMENTS, asappropriate. Include appropriate comparative data.


This item asks or levels and trends in key

human resource measures such as saety, turn-over, employee engagement, and absenteeism


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7 RESULTS

51

This category might also include other measures

identied in Category 5, or example, trainingeectiveness measures or percentages o employeesuggestions implemented Other statistics con-cerning employee recognition and compensationmeasures might also be presented

Comparative data on how human resource

perormance compares with competitors, industryaverages, and benchmarks should also be pre-sented to aid in evaluating levels o perormance


Saety results show that impressive improve-ment trends and/or levels o perormance aresuperior to industry averages and competitors

Measures o employee satisaction and engage-ment show excellent levels and trends

Hard measures o employee dissatisactionsuch as absenteeism and voluntary turnovershow improving trends and levels above thoseo competitors

No workorce perormance measures show

declining trends or levels inerior to industryaverages or major competitors


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52

Results are presented or all key human

resource measures identied in Category 5

7.5 PROCESS EFFECTIVENESSOUTCOMES: What are your processeectiveness results? (70 pts.)

Summarize your organizations KEY operational

PERFORMANCE RESULTS that contribute to theimprovement o organizational EFFECTIVENESS,including your organizations readiness or emergen-cies. SEGMENT your RESULTS by product and ser-vice types and groups, by PROCESSES and location,and by market SEGMENTS, as appropriate. Include

appropriate comparative data.


This tends to be a large item in the Baldrige Awardapplication because it includes graphs o many

measures o perormance Typical measuresreported in Item 75 include productivity, e-ciency, cycle time, schedule perormance, pro-duction measures, and measures o supplier andpartner perormance Each industry also tendsto have its own unique metrics to report or this

item For example, an airline might report mainte-nance cost per mile fown and a hotel might report


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7 RESULTS

53

revenue per available room As with other items in

Category 7, make sure that appropriate competitorand comparative data are included on all graphs


Results are presented or all key perormancemeasures or which results are not presentedearlier

Productivity and cycle time both show impres-sive levels and improvement trends

Data on important process measures show

improvements and high levelsMost graphs should show company peror-mance to be better than perormances o mosto all key competitors

No data are missing on important measures o

operational perormanceStrong improvement trends in the perormanceo the organizations major suppliers and part-ners are evident over the past ew years

Levels o perormance compare avorably to

those o competitors and benchmark organiza-tions suppliers


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54

7.6 LEADERSHIP OUTCOMES: What

are your leadership results? (70 pts.)Summarize your organizations KEY GOVERNANCEand SENIOR LEADERSHIP RESULTS, includingevidence o strategic plan accomplishments, ETHICALBEHAVIOR, fscal accountability, legal compliance,social responsibility, and organizational citizenship.SEGMENT your RESULTS by organizational units, asappropriate. Include appropriate comparative data.


This nal item asks or results that show your

organization behaves in an ethical and sociallyresponsible manner It also asks or evidence thatshows progress toward your vision and strategicgoals Many o the measures reported here shouldhave been identied in Sections 11 and 12 Fivetypes o results are sought: (1) strategic measureslinked to vision, goals, and strategies or meet-ing key challenges or targets; (2) perormance onmeasures o ethical behavior such as increases indismissals or disciplinary actions or unethicalactions, employee opinions on real organizational

ethics, and increased use o screening techniquesor hiring and promotion; (3) measures o scal


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7 RESULTS

55

responsibility that might include measures o

risk stock perormance, links between companyperormance and executive compensation andpenalties, and increasing trends in thoroughnessand requency o nancial audits; (4) measuresshowing compliance with legal and regulatoryrequirements; (5) measures demonstrating support

o charities and other community organizations Aswith all result areas, it is important to show trendsover multiple years, targets, and comparative datato prove that your organization is not typical and isa top perormer in your industry and community


Results presented show clear progress towardvision and strategic goals

Results are presented or all key perormance

measures identied in Item 12 or elsewhere inthe application

Clear improvement trends can be seen in theorganizations level o scal responsibility

Results show excellent levels and trends in

meaningul measures o ethical behavior andstakeholder trust


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External data indicate a high level o respect

or the organizations ethics and scalresponsibility

No negative trends or results can be oundin the areas o legal and/or regulatorycompliance

Results show that the organization is a leader

in its support o community and charitablegroups


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fOR ADDITIONAL READING

57

For Additional Reading

Brown, Mark Graham Baldrige Award WinningQuality, 16th Edition New York: ProductivityPress, 2008

Brown, Mark Graham Get It, Set It, Move It, Prove

It: 60 Ways to Get Real Results in Your OrganizationNew York: Productivity Press, 2004

Garvin, David How the Baldrige Award ReallyWorks,Harvard Business Review, November/December, 1991, p 8095

Hart, Christopher WL and Christopher BoganThe Baldrige: What It Is, How Its Won, How to UseIt to Improve Quality in Your Company, New York:McGraw-Hill Inc, 1992

Hutton, David W From Baldrige to the Bottom Line: ARoadmap or Organizational Change and Improvement,Milwaukee: American Society or Quality, 2000

National Institute o Standards and Technology,

2007 Criteria or Perormance Excellence,Gaithersburg, MD: NIST, 2007


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ABOUT THE AUTHOR

Mark Graham Brown has conducted trainingand provided consulting on the applicationo the Baldrige principles since 1990 He hasworked with corporate and government clientsin the US and 15 other countries Additional

inormation on his services and other books canbe ound on his web site: markgrahambrowncom


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Identify Customers andTheir Needs/Requirements

(Customer and Market Knowledge)

Establish Mission, Vision,Values, and Leadership/Governance System

(Leadership)

Achieve Excellent Levels and Trends in Measuresof Product/Service Outcomes, Customer

Satisfaction/Loyalty, Financial/Market Performance,

Workforce Results, Process Effectiveness, andLeadership Outcomes (Results)

Define Measures ofSuccess and CollectData (Measurement,

Analysis, and KnowledgeManagement)

(Customer and MarketKnowledge)

Develop Goals, KeySuccess Factors,

and StrategiesTied to

Performance Measures(Strategic Planning)

Build Loyal Relationships withImportant Customers

(Customer Relationships and Satisfaction)

Create and Manage HumanResource Systems to Achieve High

Performance (Workforce Focus)

Define, Measure, Control, andContinuously Improve Key Work

Processes (Process Management)

DataMeasures

Processes/Systems

Results

Input

Driver

4

3.1

Goals/

Strategies

3.1

1

2

3.2

5

6

7

The Baldrige Criteria as a System


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Additional copies ofThe Pocket Guide to the

Baldrige Award Criteria may be purchased from

Productivity Press. The cover of this guide can alsobe customized. To order, or for information on

quantity discounts, please call us at (888) 319-5852.

Also Available!The Complete Baldrige Reference

Baldrige Award Winning Quality:

How to Interpret the Baldrige Criteria

for Performance Excellence

Seventeenth Edition, Covers the 2008 Criteria

This comprehensive reference guide helps

clarify and interpret the criteria for the 2008

Baldrige Award. The text details each of the

seven major categories of the Award and

explains each of the 32 Areas to Address.

Written by Mark Graham Brown, former

Malcolm Baldrige Award examiner, this book

is an invaluable guide to the Baldrige Award

Criteria. Paperback, 400 pages (est.), 2008.


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Documents

[Mark Graham Brown] the Pocket Guide to the Baldri(Bookos.org)