Pursuing Performance Excellence

Using the Baldrige Criteria

Washington DC & Maryland Metro Section

ASQ
Robert J. Scanlon
May 17, 2007

Pursuing Performance Excellence

- Agenda

The Search for Competitiveness

Understanding Systems

The Power of a Standard

The Baldrige National Quality Program

Summary

Pursuing Performance Excellence

- The Search for Quality Competitiveness
My personal Quality journey
Early 70s: Little q
Caterpillar Metallurgical Laboratory
Focus: Quality Control

Pursuing Performance Excellence

- The Search for Quality Competitiveness
My personal Quality journey
Early 80s: Big Q
Quality becomes a strategic priority
Focus changes to: Quality Improvement

Pursuing Performance Excellence

- The Search for Competitiveness
The broader context:
The US has suddenly found itself to be noncompetitive in Quality of manufactured
products
The alarm bells are sounding and everyone is
scrambling to respond successfully to the
threat
But HOW should we respond?

Pursuing Performance Excellence

- Qualitys Contribution
The Gurus:
Crosby: Marketer - Quality is Free, Quality =
Conformance to Requirements,
Cost of
Non-Conformance

Deming: Philosopher - SPC, 14 Points

Juran: Management Consultant Quality = Fitness for Use, Quality Trilogy, Cost of
Poor Quality, Resistance to Change

Fiegenbaum: Total Quality Control

Pursuing Performance Excellence

- The Search for Competitiveness
Mid 80s:
Manufacturing organizations are picking one
of the gurus to follow
There is a frantic hunt for the secret to
Japanese success
But, there is no consensus on what to do or
whether the approaches being tried will work.
So, no consensus...no standard

Pursuing Performance Excellence

- The Search for Competitiveness
Visits to Japan identify pieces of a response:
Statistical Process Control
Employee Involvement (Quality Circles)
Quality Training
Quality Improvement Teams
Workers who can stop the line
Kanban
etc., etc., etc..

Pursuing Performance Excellence

- The Search for Competitiveness
All of these elements had some value.
But, at best, they were

Necessary but Insufficient

To Assure the Success of the Enterprise
How do we know when weve got all of the right
pieces assembled?

Pursuing Performance Excellence

- The Search for Competitiveness

Q: The right pieces to what?

Pursuing Performance Excellence

- The Search for Competitiveness

Ans.: The right pieces to ...

The Management System.

Pursuing Performance Excellence

Systems Thinking

Excerpts from a talk by Dr. Russell L. Ackoff

Chairman and Professor Emeritus,
the Wharton School

Pursuing Performance Excellence

- Defining a System
A System is:

a whole consisting of two or more essential parts

and for which the parts must satisfy 3 conditions:

each part can affect the entire systems behavior or properties

the way each part affects the whole depends on what at least
one other part is doing (i.e., no part of the system has an
independent effect on the whole because they interact), and

the same applies to all subparts of all subsystems

Pursuing Performance Excellence

- Systems Thinking
Independence and Interaction:
Because the properties of any system arise
out of the interactions of its parts, the
essential properties of any system, the
properties that define the system, are
properties of the whole that none of its
parts have!
Examples:

Pursuing Performance Excellence

- Systems Thinking
The Significance of Systems Interaction:

When you improve the performance of every

part of the system taken separately, you do
NOT (necessarily) improve the performance
of the System.

Pursuing Performance Excellence

- Systems Thinking
System & Element Design:

We should not attempt to improve any part of

the Management System without
understanding its role within the larger
system.
Instead, we must approach this from the
perspective of knowing what properties we
want the entire System to have and then
designing each element to support that.

Pursuing Performance Excellence

- Systems Thinking
Reasons for TQM Failures:

Ignoring the total System

Focusing on fixing whats wrong instead of

doing the right things

Pursuing Performance Excellence

The Power of Standards

Standards and Quality

In the absence of standards, Quality is a

meaningless concept.

Types of Standards

Government
Commercial/Industrial
Business
Company
Others

Characteristics of Standards
Standards represent who we are
and what we can do!
They...
should be attainable by everyone operating the
process they apply to.
require methods and measurement systems
liberate us to focus our energy and creativity on
other things.
are a floor not a ceiling with respect to
performance.
require energy to maintain them.
are dynamic and should improve over time.

Pursuing Performance Excellence

- The Power of Standards

Standards: Confining or Liberating?

Examples:
The Dishwasher Story
VHS or Beta? Do you feel lucky?
PCs
Cell phones

Pursuing Performance Excellence

- The Power of Standards
Conclusion:
The emergence of a clear standard in a
free enterprise system eliminates
confusion and fuels economic growth.

Pursuing Performance Excellence

- The Power of Standards
But can Standards be Confining?
Standards are confining when they are not
updated and no longer represent the
capability of a well managed / operated
process.
Does this happen?

Pursuing Performance Excellence

- The Power of Standards
But can Standards be Confining?
Yes
Standards are confining when they are not
updated and no longer represent the capability
of a well managed / operated process.
Does this happen?

All the time!

Pursuing Performance Excellence

- The Power of Standards
Conclusion:
Improved competitiveness requires continuous
process improvements which in turn drive
improved standards.
Standards should be dynamic, not static.

Pursuing Performance Excellence

The Baldrige Management

System Model

Pursuing Performance Excellence

- The Malcolm Baldrige National Quality Award
From 1987 - 2006:

68 Winners of the Award

Winners have shared their experience and lessons learned with
tens of thousands to help them improve
Millions of copies of criteria distributed
42 states have Quality Awards using Criteria
Inspired the European Quality Award
Being adopted by other countries including the Japanese and
Chinese
Began with Manufacturing, Service, an Small Business in 1987
Expanded to Education and Healthcare in 1998 and the not for
profit sector in 2006

Baldrige National Quality Program

Malcolm Baldrige
National Quality Award

Criteria for Performance Excellence

Seven Categories of the

Business/Nonprofit Criteria

Leadership

Strategic Planning

Customer and Market Focus

Measurement, Analysis, and Knowledge

Management

Workforce Focus

Process Management

Results

Core Values and Concepts

Visionary Leadership
Customer-Driven Excellence
Organizational and Personal Learning
Valuing Employees and Partners
Agility
Focus on the Future
Managing for Innovation
Management by Fact
Social Responsibility
Focus on Results and Creating Value
Systems Perspective

Baldrige Criteria Framework:

A Systems Perspective

Organizational Profile
P.1 Organizational Description
P.2 Organizational Challenges

Starting point for self-assessment and

application preparation
Basis for early action planning

Category Point Values

1
2
3
4

Leadership
120
Strategic Planning
Customer and Market Focus
Measurement, Analysis, and
Knowledge Management
5 Workforce Focus
85
6 Process Management
7 Results 450
TOTAL POINTS
1,000

85
85
90
85

Keeping the Criteria Current

Changes in the 2007 Criteria (Handout)

Pursuing Performance Excellence

The Baldrige Quality Program

represents a
national management system standard
that enables the
systematic and effective pursuit of
Performance Excellence

Pursuing Performance Excellence

- Why Baldrige?

Its efficient: The Management System elements

have been determined for you

A Standard minimizes the tendency for consultants

to create their own competing approach

The common framework facilitates understanding,

and sharing

Pursuing Performance Excellence

- Why Baldrige (continued) ?

An extensive infrastructure is in place to

support you: Baldrige Foundation,
Examiners, State Awards, the Winners
It is constantly evaluated and improved
It is not prescriptive - every organization has
complete freedom to design its own
approaches
It works!

Pursuing Performance Excellence

- Summary
The Baldrige National Quality Program Criteria:
Is the culmination of the quality journey that began in
the late 70s and continued through the 80s
Is a national management system standard
Incorporate the management system attributes that
enable superior results
Is applicable and available to any organization
Provides complete freedom to develop the approaches
an organization needs to support its goals and objectives
Is designed to systematically and successfully pursue
Performance Excellence

Resources for More Information

Most Baldrige National Quality Program

(BNQP) documents are available both in hard
copy and on the BNQP Web site.

To obtain these documents,

call (301) 975-2036 or
visit www.baldrige.nist.gov.