Malcolm Baldrige National Quality Award

Professor: Hank SobahGRBUS 611

MBNQA Criteria for Performance Excellence

• The Baldrige Criteria for Performance Excellence provide the framework and an assessment tool for understanding organizational strengths and opportunities for improvement.

• Performance excellence refers to an integrated approach to organizational performance management that results in:– Delivery of ever-improving value to customers and

stakeholders, contributing to organizational sustainability– Improvement of overall organizational effectiveness and

capabilities– Organizational and personal learning

Framework for Performance Excellence

The Baldrige Criteria are a framework for performance management that addresses all key areas of a nonprofit organization and is compatible with other performance improvement initiatives, such as ISO 9000, Lean, and Six Sigma.

The Criteria serve two main purposes

• Identify Baldrige Award recipients to serve as role models for other organizations

• Help organizations assess their improvement efforts, diagnose their overall performance management system, and identify their strengths and opportunities for improvement

MBNQA Criteria Drives Performance Excellence

The Criteria are the basis for conducting organizational self-assessments, for making Awards, and for giving feedback to applicants. In addition, the Criteria have three important roles in strengthening U.S. competitiveness:•help improve organizational performance practices,•capabilities, and results•facilitate communication and sharing of information on best practices among U.S. organizations of all types•to serve as a working tool for understanding and managing performance and for guiding organizational planning and opportunities for learning

Core Values and ConceptsThe Criteria are built on the following set of interrelated Core Values and Concepts:•Visionary leadership•Customer-driven excellence•Organizational and personal learning•Valuing workforce members and partners•Agility•Focus on the future•Managing for innovation•Management by fact•Societal responsibility•Focus on results and creating value•Systems perspective

Three Versions of the Award

• Business / Non-Profit –Manufacturing, Government, Service

Organizations, Small Business, Charities• Education–Organizations such as business schools;

community colleges; centuries-old universities; and K-12 school districts

• Health Care– Service providers, single hospitals, and large

health systems nationwide

Three Measures• Approach– refers to the methods used by anorganization to

address the Baldrige Criteria requirements.

• Deployment– refers to the extent to which an approach is applied

• Results– refers to outputs and outcomes achieved by an

organization in addressing the requirements of a Baldrige Criteria

MBNQA Return on Investmentat Recent Winner, Cargill

• According to Jerry Rose, VP Cargill, there is a huge return on your investment in using Baldrige

• Cargill color-codes its businesses based upon their degree of deployment of the Baldrige Criteria. – Gold represents businesses with a high degree of

deployment– Blue represents businesses with partial deployment– White represents businesses beginning the Baldrige

journey.• The next slide shows that Cargill businesses with

varying degrees of deployment

MBNQA Return on Investmentat Recent Winner, Cargill

MBNQA 7 Categories

• Leadership – 120 Points• Strategic planning - 85 Points• Customer focus – 85 Points• Measurement, analysis, and knowledge

management - 90 Points• Workforce focus – 85 Points• Process management - 85 Points• Results – 450 Points

Criteria are Nonprescriptive and Adaptable• The focus is on results, not on procedures, tools, or organizational

structure. Organizations are encouraged to develop and demonstrate creative, adaptive, and flexible approaches for meeting requirements.

• Nonprescriptive requirements are intended to foster incremental and major (“breakthrough”) improvements, as well as meaningful change through innovation.

• The selection of tools, techniques, systems, and organizational structure usually depends on factors such as the organization type and size, organizational relationships, your organization’s stage of development, and the capabilities and responsibilities of your workforce.

• A focus on common requirements, rather than on common procedures, fosters understanding, communication, sharing, alignment, and integration, while supporting innovation and diversity in approaches.

Criteria for Performance Excellence Framework

Starts with Organizational Profile• The Organizational Profile is a snapshot of

your organization, the KEY influences on HOW you operate, and the KEY challenges you face.

• Helps identify potential gaps in key information and focus on key performance requirements and results

• If you identify topics for which conflicting, little, or no information is available, the Organizational Profile can serve as an assessment you can use for action planning.

Organizational Profile Defines

• Your Organizational Environment and Culture• Your Organizational Relationships• Your Competitive Environment, Opportunities

and Limitations• Your Organization’s Strategic Context• Your Performance Improvement System

Organizational Description

• Organizational Environment: your product offerings; mission, vision, and values; core competencies; workforce; technologies; equipment/facilities; and regulatory/legal environment

• Organizational Relationships: your governance system, key customer groups/market segments, key product and customer-support service requirements, and key suppliers

Organizational Situation

• Competitive Environment: your competitive position, relative size and growth, and competitors

• Strategic Context: your key business, operational, and human resource strategic challenges and advantages

• Performance Improvement System: your approach to evaluation and learning

Organizational Performance Areas

• Product outcomes• Customer-focused outcomes• Financial and market outcomes• Workforce-focused outcomes• Process effectiveness outcomes, including

keyoperational performance results• Leadership outcomes, including governance

and societal responsibility results

Performance Improvement CyclesImprovement cycles have four, clearly defined stages:– Planning, including design of processes, selection of

measures, and deployment of requirements (approach)– Executing plans (deployment)– Assessing progress and capturing new knowledge,

including seeking opportunities for innovation (learning)– Revising plans based on assessment findings,

harmonizing processes and work unit operations, and selecting better measures (integration)

Systems Perspective• The Baldrige Criteria provide a systems perspective for

managing your organization and its key processes• Building Blocks and Integrating Mechanism for the system

is based on– Baldrige Criteria Categories– The Core Values– The Scoring Guidelines

• Success is dependant on– Organization-specific attributes, competencies, objectives,

action plans, and work systems– Alignment and consistency within each category– Integration of the entire management system

• Systems Perspective means managing your whole organization, as well as its components, to achieve success

Action Oriented Improvement CyclesImprovement cycles have four, clearly defined stages:1. Planning, including design of processes, selection of

measures, and deployment of requirements (approach)

2. Executing plans (deployment)3. Assessing progress and capturing new knowledge,

including seeking opportunities for innovation (learning)

4. Revising plans based on assessment findings, harmonizing processes and work unit operations, and selecting better measures (integration)

Leadership Category – 120 Points

• Examines HOW your organization’s Senior Leaders’ personal actions guide and sustain your organization.– Vision, Values, and mission– Communication and Organizational Performance– Organizational governance– Legal and ethical Behavior– Societal Responsibilities and Support of key

Communities

Strategic Planning – 85 Points

• Examines HOW your organization develops Strategic Objectives and action plans.– Strategy Development Process– Strategic Objectives–Action Plan Development and Deployment–Performance Projection

Customer Focus – 85 Points

• Examines how your organization engages its customers for long-term marketplace success.– Includes HOW your organization builds a

CUSTOMER-focused culture– HOW your organization listens to the voice of its

CUSTOMERS– Product Offerings and Customer Support– Determination of Customer Satisfaction and

engagement– Analysis and use of Customer Data

Measurement, Analysis, and Knowledge Management – 90 Points• Examines HOW your organization selects,

gathers, analyzes, manages, and improves its:– Data – Information– Knowledge Assets– Information Technology– Use of data to improve performance• Performance Measurement, Analysis, Review, and

Performance Improvement

Workforce Focus – 85 Points• Examines HOW your organization engages,

manages, and develops your WORKFORCE to utilize its full potential in alignment with your organization’s overall Mission, Strategy, and Action Plans. – Workforce Enrichment– Workforce and Leadership Development– Assessment of Workforce Engagement– Knowledge of Workforce Capability and Capacity– Overall Workforce Climate

Process Management – 85 Points

• Examines HOW your organization designs its Work Systems and Processes

• How it designs, manages, and improves its Processes for implementing Work Systems that – Deliver CUSTOMER value – Achieve organizational success and Sustainability

• How you ensure Work System and workplace preparedness for disasters or emergencies

Results – 450 Points• Examines your organization’s PERFORMANCE and

improvement in all KEY areas– Product outcomes– CUSTOMER-focused outcomes– Financial and Market Outcomes– WORKFORCE-focused outcomes– PROCESS Effectiveness outcomes– Leadership outcomes

• Performance Levels are examined relative to those of competitors and other organizations with similar product offerings.

Results• Product Outcomes: What are your product

performance results?• Customer-Focused Outcomes: What are your

customer-focused performance results? • Financial and Market Outcomes: What are your

financial and marketplace performance results?• Workforce-Focused Outcomes: What are your

workforce-focused performance results?• Process Effectiveness Outcomes: What are your

process effectiveness results?• Leadership Outcomes: What are your leadership

results?

Baldrige, ISO9000, & Six Sigma• Your needs drive the choice– It shouldn’t be “either/or.” It can be “one, two, and/or three”– To ensure the overall future development and success of an

organization, you need a systems approach and Baldrige provides that

• You need an overall organizational approach if you are looking for guidance in how to link the product approach with such organization functions as strategic planning, customer satisfaction, and staff and supplier satisfaction.

• Baldrige Criteria for Performance Excellence– focus on performance excellence for the ntire organization in an overall

management framework.– identify and track all-important organizational results: customer,

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

• 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.

• Six Sigma– concentrates on measuring product quality and improving process

engineering.– drives process improvement and cost savings.

Sometimes its not a choice• The Baldrige Criteria lay the foundation for the

entire organizational process by encouraging review of its approach.

• ISO addresses systems that have direct influence in product quality and customer satisfaction, without suggesting tools for analysis, prioritization, or evaluation.

• Six Sigma addresses a project oriented, data driven, statistical philosophy for continuous improvement

Richard Pieranunzi, President, STMicroelectronics, Inc.–Region Americas, Baldrige Winner :

“Regardless of which tools suit the organization’s needs, best-in-class companies continue to use them in their pursuit of performance excellence and their commitment to never be satisfied. In fact, all are mutually complementary and have their place in Total Quality Management…”

Dr Seuss

• Sometimes the questions are complicated and the answers are simple.”

• “The more that you read, the more things you will know. The more that you learn, the more places you'll go.”

• “I have heard there are troubles of more than one kind. Some come from ahead and some come from behind. But I've bought a big bat. I'm all ready you see. Now my troubles are going to have troubles with me!”

More Seuss

• “Think left and think right and think low and think high. Oh, the things you can think up if only you try!”

• “You have brains in your head. You have feet in your shoes. You can steer yourself in any direction you choose. You're on your own. And you know what you know. You are the guy who'll decide where to go.”

• Don't cry because it's over. Smile because it happened.”

• “Today is your day! Your mountain is waiting. So... get on your way.”