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? The Baldrige Award is given by the President of the United States to businesses—manufacturing and service, small and large—and to education and health care organizations that apply and are judged to be outstanding in seven areas: leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management, and business results.
Congress established the award program in 1987 to recognize U.S. organizations for their achievements in quality and 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 companies 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 Baldrige Award winners 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 more than 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:
Leadership —Examines how senior executives guide the organization and how the organization addresses its responsibilities to the public and practices good citizenship.
Strategic planning —Examines how the organization sets strategic directions and how it determines key action plans.
Customer and market focus —Examines how the organization determines requirements and expectations of customers and markets; builds relationships with customers; and acquires, satisfies, and retains customers.
Measurement, analysis, and knowledge management —Examines the management, effective use, analysis, and improvement of data and information to support key organization processes and the organization’s performance management system.
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.
Process management —Examines aspects of how key production/delivery and support processes are designed, managed, and improved.
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, operational performance, and governance and social responsibility. 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. Several 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?
·2003—Medrad, Inc., Boeing Aerospace Support, Caterpillar Financial Services Corp., Stoner Inc., Community Consolidated School District 15, Baptist Hospital, Inc., and Saint Luke’s Hospital of Kansas City
·2002—Motorola Inc. Commercial, Government and Industrial Solutions Sector, Branch Smith Printing Division, and SSM Health Care
·2001—Clarke American Checks, Incorporated, Pal’s Sudden Service, Chugach School District, Pearl River School District, and University of Wisconsin-Stout
·2000—Dana Corp.-Spicer Driveshaft Division, KARLEE Company, Inc., Operations Management International, Inc., and Los Alamos National Bank
·1999—STMicroelectronics, Inc.-Region Americas, BI, The Ritz-Carlton Hotel Co., L.L.C., and Sunny Fresh Foods
·1998—Boeing Airlift and Tanker Programs, Solar Turbines Inc., and Texas Nameplate Co., Inc.
·1997—3M Dental Products Division, Solectron Corp., Merrill Lynch Credit Corp., and Xerox Business Services
·1996—ADAC Laboratories, Dana Commercial Credit Corp., Custom Research Inc., and Trident Precision Manufacturing Inc.
·1995—Armstrong World Industries Building Products Operation and Corning Telecommunications Products Division
·1994—AT&T Consumer Communications Services, GTE Directories Corp., and Wainwright Industries Inc.
·1993—Eastman Chemical Co. and Ames Rubber Corp.
·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.
·1991—Solectron Corp., Zytec Corp., and Marlow Industries
·1990—Cadillac Motor Car Division, IBM Rochester, Federal Express Corp., and Wallace Co. Inc.
·1989—Milliken & Co. and Xerox Corp. Business Products and Systems
·1988—Motorola Inc., Commercial Nuclear Fuel Division of Westinghouse Electric Corp., and Globe Metallurgical Inc.
When were the education and health care categories established? Both categories were introduced in 1999. Since then, a total of 66 applications have been submitted in the education category and 61 in the health care category.
Any for-profit or not-for-profit public or private organization that provides educational or health care services in the United States or its territories is eligible to apply for the award. That includes elementary and secondary schools and school districts; colleges, universities, and university systems; schools or colleges within a university; professional schools; community colleges; technical schools; and charter schools. In health care, it includes hospitals, HMOs, long-term-care facilities, health care practitioner offices, home health agencies, health insurance companies, or medical/dental laboratories.
As in the other three categories, applicants must show achievements and improvements in seven areas: leadership; strategic planning; customer and market focus (for education: student, stakeholder, and market focus; for health care: focus on patients, other customers, and markets); information and analysis; human resource focus (for education: faculty and staff focus; for health care: staff focus); process management; and business results (for both education and health care: organizational performance results).
Many education and health care organizations are using the Baldrige criteria to good effect. For example:
·The New Jersey Department of Education permits school systems to use the New Jersey Quality Achievement Award criteria—based on the Baldrige Award criteria—as an alternative to its state assessment criteria. Other states are considering a similar approach.
·The National Alliance of Business and the American Productivity and Quality Center have developed the Baldrige In Education Initiative, a national program to improve the management systems of education organizations and educational outcomes.
·In April 2000, the National Education Goals Panel (NEGP) held a nationwide teleconference, “Creating a Framework for High Achieving Schools,” to focus on the Baldrige criteria in education. In the foreword to a report issued in conjunction with the teleconference, then-Governor Tommy G. Thompson of Wisconsin and 2000 chair for the NEGP, said the Baldrige criteria for education “can provide educators with a framework and strategies for improving their schools and helping all children to reach high standards.”
·At the teleconference, Bob Chase, president of the National Education Association (NEA), said, “The Baldrige process and what I call ‘new unionism’ are a quality match. Most crucially, NEA’s new unionism and the Baldrige process share the same bottom line, improving student achievement.”
·Dr. Michael Wood, CEO, Mayo Foundation and Clinic, hosted a Baldrige Health Care Summit on June 29, 2000, involving 10 leading health care institutions in the United States.
·Special sessions on Baldrige in health care were held at the Institute for Health Care Improvement conferences in December 1999 and December 2000.
·Motorola University hosted 120 health care leaders for a one-week course on Baldrige and Quality Improvement in Health Care in February 2001.
·Richard Norling, CEO, Premier Inc., a leading distributor of health care supplies, is serving as president of the private-sector Baldrige Foundation during 2001.
Why are categories in education and health care needed? Since its creation in 1987, the Malcolm Baldrige National Quality Award has played an important role in helping thousands of U.S. companies improve not only their products and services, their customers’ satisfaction, and their bottom line, but also their overall performance.
Now, organizations in other sectors vital to the U.S. economy—education and health care—are recognizing that the Baldrige Award’s tough performance excellence standards can help stimulate their improvement efforts as well. Just as it has for U.S. businesses, a Baldrige Award program can help these organizations improve performance and foster communication, sharing of “best practices,” and partnerships among schools, health care organizations, and businesses.
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.
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 $5,000 for large organizations to $500 for non-profit education institutions, 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.
Is the number of applications for the award an indicator of 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, 44 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.
Internationally, nearly 60 quality programs 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:
·focuses more on results and service,
·relies upon the involvement of many different professional and trade groups,
·provides special credits for innovative approaches to quality,
·includes a strong customer and human resource focus, and
·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 develops and promotes measurements, standards, and technology to enhance productivity, facilitate trade, and improve the quality of life. 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.

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