Continuous Improvement -- Beating The Baldrige Blues

You won't find any one-hit wonders among the 2003 winners.

Does anyone care about the Malcolm Baldrige Award anymore?" a friend asked when I told him I was considering attending the Quest for Excellence conference this year. I couldn't honestly say. So I decided to go and find out. With 2003 winners in all five categories -- manufacturing, service, small business, health care, and education -- the American Society for Quality (ASQ), which coordinates the annual conference in Washington, D.C., and helps the National Institute of Standards and Technology administer the Baldrige competition itself, reports that the March event attracted almost 1,200 people, several hundred more than it has in recent years. Such a turnout to hear the stories of the seven winning organizations says something about the ongoing relevance of the award. Talking to attendees and winners alike, however, it became clear that the real question isn't the relevancy of the award, but the relevancy of the performance excellence criteria itself. Can a 16-year-old set of guidelines -- a free, widely distributed, non-proprietary methodology for running an effective organization -- still provide a path to world-class organizational performance and even, for the for-profit organizations, drive superior market results? "Yes!" The 2003 winners would instantly reply. Still reveling in their accomplishment, managers of the winning organizations often were asked where they were setting their sights next. And how they were going to overcome the performance plateau -- the "Baldrige blues" in this case -- that can follow any significant achievement. Different leaders talked about setting new goals, pursuing other awards, and how they had already begun to work on their opportunities for improvement, known as "o-fees" in Baldrige speak. (All participants, even the award winners, receive a feedback report from examiners to guide future improvement efforts.) But none of them seemed too worried. Over the six, eight and 10 years that they have been applying the criteria to how they run their businesses, schools and hospital systems, it has become an integral part of what they do. These organizations have defined processes for everything, beginning with market research to continually assess customers' needs. They have set appropriate goals and identified their key success factors, which they track religiously. Their strategic plans are aligned with their people's skills, their training programs and their compensation schemes. And they're driven to constantly get better. If performance starts to lag, the employees of these organizations will be the first to notice and respond. One presenter summed it up, saying, "We do Baldrige every day." That says a lot about the relevance of the criteria. Over the course of the conference, it became clear that there's no secret sauce here. Sure, the award application process has its peculiarities, and a mini-industry has grown up to help organizations with the assessment process, but no organization gets very far if it hasn't made a genuine and systematic commitment to performance excellence. John Friel, president and CEO of 2003 winner Medrad Inc., views the Baldrige as a framework for driving continuous improvement. It has served his organization well. Based near Pittsburgh, Medrad makes and markets medical devices that enhance imaging of the human body to aid diagnosis. Since 1998 it's achieved an average annual growth rate of 15%, growing to $294 million in 2003. Medrad applied for the award five times, beginning in 1996. When asked about the criteria's relevance, Friel pauses and patiently reels off a list of questions: Do you want happy customers? Do you want to make quality products? Do you want to empower and energize our employees? Is market leadership important? Is profit leadership important? If you care about those things, he believes, and there are many who would agree, the Baldrige can help you achieve them. David Drickhamer is IndustryWeek's Editorial Research Director. He also coordinates the IW Best Plants award program.

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