1 return on “investing in quality” problem – data and evidence are available that using the...
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Return on “Investing in Quality”Return on “Investing in Quality”
Problem
– Data and evidence are available that using the Baldrige Criteria and investing in Quality improves the performance of organizations, but apparently these data are not compelling!
Objective
– To develop compelling “Return on Investment” evidence that demonstrate that investment in “Quality” and using the Malcolm Baldrige Criteria is worthwhile
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Pearl RiverPearl River
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Pearl RiverSchool District 1989
1992
1994
1995
1997
1999
2001
School Reform MissionMore Effective Schools
NYS Governor’s Excelsior Award
Excelsior Award WinnerPalisades Institute Award Winner
Baldrige Education Pilot
USA Today/RIT Quality Cup
Baldrige Applicant
2000 Baldrige Applicant
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Pearl RiverSchool District
Student Achievement, Market Share, Stakeholder Satisfaction
42%
90%
71%
93%
55%
63%
35%
45%
55%
65%
75%
85%
95%
1991 2004
Regents Diploma Rate Market Share Budget Vote Plurality
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Pearl RiverSchool District
Cost EfficiencyR
ES
UL
TS Annual Per Pupil Expenditure
vs. Consumer Price Index
0.0
19
2.35.2
8 10.111.9 13.7
16.117.8
16.7
-3.3
-4.3
-4 -1
4.4
8.912.6
-10
-5
0
5
10
15
20
25
CPI 2.3 5.2 8 10.1 11.9 13.7 16.1 17.8 19
PPE 0.0 -3.3 -4.3 -4 -1 4.4 8.9 12.6 16.7
1995 1996 1997 1998 1999 2000 2001 2002 2003
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ChugachChugach
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* *
* Benchmark
High School Graduation Qualifying Exam 2000
Chugach vs Comparable Districts
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Chugach Wrangell Haines LowerYukon
Yupiit
Sophomores Who Passed
Reading Writing Math
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Consolidated District 15 Fast Facts
• Our 20 schools:– 15 elementary, 4 junior high,
1 alternative school
• Our enrollment:– 12,956 students
• 37.5% minority• 24.0% low-income• 32.0% limited English proficiency
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Lessons Learned
ITBS Second-Grade Reading
0%10%20%30%40%50%60%70%80%90%
100%
1999-00 2000-01 2001-02 2002-03 2003-04
Me
et/
Ex
cee
d G
rad
e L
eve
l
Reading Target National Avg
100% target
Good
State Top 3%
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Results
ITBS Cohort Data
50%55%60%65%70%75%80%85%90%95%
100%
Math Reading Core Total
Me
et/
Exc
ee
d G
rad
e L
ev
el
1998-99 (Grade 2) 2000-01 (Grade 4)
2002-03 (Grade 6) Target
Good
90% target
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Measurement/Results
Market Performance
Operating Cost Per Student
Overall ISAT Student Performance
Cost PerPercentage Point
Performance
D15 $9,358 83.6 $111.93
District A $9,240 77.5 $119.23
District B $9,118 76.9 $118.57
District C $8,406 68.7 $122.36
State $8,195 62.7 $130.70
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Pal’s Fast FoodPal’s Fast Food
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Higher is Better
Pal’s Fast Food - Customer CountsPal’s Fast Food - Customer Counts
1996 1997 1998 1999 2000 2001
Cu
stom
ers
PalsBest Competitor
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Pal’s Fast Food Complaints per 1000 Customers
Lower is Better
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1995 1996 1997 1998 1999 2000 2001
Pal's
BestCompetitor
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BoeingBoeing
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Before BaldrigeBefore Baldrige After BaldrigeAfter Baldrige
1992 1993
1994 1995 1996 1997 1998
$ in
Mill
ion
s
PLAN ACTUALS
C-17 Earnings Performance
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WHAT’S THE CORRELATION?WHAT’S THE CORRELATION?
200
400
450
500550
600
0
1
2
3
4
5
6
7
1992 1993 1994 1995 1996 1997 1998 1999
0
5
15
20
25
10
300
Assessment Score
RONA
Cost Of Quality ($M/unit)
It appears to correlate!
ROS
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Boeing Aerospace Support’sRevenue Performance
2000 2001 2002 2003
PLAN ACTUALS AVG GROWTH
Started Baldrige
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Boeing Aerospace Support’sEarnings Performance
2000 2001 2002 2003
PLAN ACTUALS
Started Baldrige
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20
50%
50
54
58
62
66
1999 2000 2002 20032001
EI
ESIStarted Baldrige
Boeing Aerospace Support’sBoeing Aerospace Support’semployees are more motivatedemployees are more motivated
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Baldrige Stock IndexBaldrige Stock Index
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THE BALDRIGE STOCK INDEXTHE BALDRIGE STOCK INDEX
Percent ReturnOn Shareholder
Investment
Whole CompanyRecipients 1991-01
Sites Visited 1991-01
Award Recipients
S&P 500
Baldrige Index Outperforms S&P 500by 2.94 to 1 for the Same Period
0
100
200
300
400
500
600
All Recipients 1991-01
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Georgia Tech StudyGeorgia Tech Study
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91%
43%
69%
32%
79%
37%
23%
7% 8%
0%
9% 6%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
OperatingIncome
Sales TotalAssets
Employees Return onSales
Return onAssets
Award Winners
Control Firms
Performance Measures
Per
cen
tag
e C
han
ge
GEORGIA TECH STUDY ON USE OF MBGEORGIA TECH STUDY ON USE OF MB
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So let’s Brainstorm on what else we So let’s Brainstorm on what else we can try!can try!