Innovation And Excellence

Ways to enhance how the Baldrige framework addresses innovation

by Peter Merrill

Innovation is now an important component of the Baldrige Excellence Framework. Those tasked with championing innovation in the context of Baldrige must be aware of the points in the Baldrige criteria in which innovation is addressed.

In 2014, Baldrige introduced innovation in a significant way—using the term nearly 70 times. Today, there are 11 core values for Baldrige, and six of them directly reference innovation. I have worked through the approximately 30,000 words of the 2018 edition and extracted the elements that reference innovation. In fact, there are now 84 direct references to innovation.

At the same time, I have identified what may be regarded as gaps in the criteria from an innovation perspective, as well as statements that might be open to dispute from the innovation community.

Building the framework

The “Core Values and Concepts” section1 of the framework and the framework’s glossary2 act as the platform on which the framework’s categories are built.

Looking at the principle, “Managing for Innovation,”3 it captures the essentials of innovation and includes the critical statement: “Taking intelligent risks requires a tolerance for failure and an expectation that innovation is not achieved by initiating only successful endeavors.”4

However, the glossary provides a definition of “innovation” that could cause problems for an innovation professional: “Making meaningful change to improve your organization’s products, services, … processes, … and business model, with the purpose of creating new value for stakeholders.”5

The improvement mindset pervades the Baldrige document and the phrase “meaningful change to improve” in the definition of innovation shows a misunderstanding of innovation. Throughout the document, the term “innovation” seems watered down with adjunct text.

The remainder of the “Core Values and Concepts” section does a fine job explaining what is needed for innovation. However, the text in these areas needs scoping, structuring and rewriting to eliminate the current rambling and overlap. Read them together. To assist you, I have extracted some key points.

The definition of the term “innovation” includes:

  • Adopting an idea that is new.
  • A “breakthrough” … in results, products, or processes.
  • A willingness to pursue intelligent risks.
  • A multistep process of development and learning.

The concept “Managing for Innovation” brings out these additional points:

  • Innovation and … continuous improvement are different, but complementary.
  • Innovation is not just the purview of research and development departments.
  • Taking intelligent risks become part of the learning culture.
  • Identifying strategic opportunities involves the entire organization and partners.
  • Innovations in other industries may be adapted for a breakthrough in your industry.
  • Innovation builds on accumulated knowledge.

However, within the definition of innovation is a flaw: The statement “Innovation involves adopting an idea” fails to distinguish opportunity from concept solution. As quality professionals know too well, separation of opportunity (the problem) from the solution (the idea) is critical. Just asking for ideas will cause innovation to degenerate to suggestion schemes. I have seen this repeatedly in organizations. Innovation starts in the marketplace.

In addition, the document does not provide a definition of improvement that separates the term from innovation. There is an urgent need for these terms to be distinguished. More thought must be given with the confusion created between “innovation” and “continuous improvement.”

The other principles

The following principles are addressed far better than the innovation principle

“Organizational Learning and Agility”

  • Agility requires a capacity for rapid change …
  • Learning is focused on building and sharing knowledge …
  • A major success factor is cycle time from research to commercialization.6

“Visionary Leadership”

  • Your leaders should ensure strategies …. stimulating innovation.
  • Senior leaders should serve as role models … for innovation.7

“Valuing People”

  • Major challenges include creating an environment that encourages intelligent risk.8

Organizational description

The first significant questions to be addressed in the criteria are in “Organizational Description,” which defines the “Organizational Environment.” Extracts from the description are:

  • Product offerings. What is the relative importance of each to your success?
  • Customers and stakeholders. What are their key requirements and expectations?
  • Competitiveness changes. What key changes …create opportunities for innovation?

In this section, questions should be asked about mature products and products under pricing pressure, as well as unmet customer needs. This then opens the mind to the need for innovation. Right now, the questions are not sufficiently forward looking.

Categories 1-5

The actual Baldrige criteria are then described:

“Category 1—Leadership” asks how senior leaders’ actions … create organizational agility; cultivate organizational learning, innovation and intelligent risk taking.

This category asks the right basic questions of leaders. Read it together with this passage from the “leadership system” term: “Effective leadership … supports innovation, and appropriate risk taking; subordinates organizational structure to purpose and function; and avoids chains of command that require long decision paths.”9

That leads quite naturally into “Category 2—Strategy,” which asks: “How your organization develops strategic objectives and action plans, implements them, changes them if circumstances require, and measures progress.”10

This refers to the need to pivot when deploying an innovation plan—hence, the need for agility. It also asks,“How does your strategy development … incorporate innovation? How do you identify strategic opportunities … imagining a different future.”

Strategy notes then continue:

  • Strategic objectives might address market-changing innovation.
  • Consider significant anticipated innovations in services and technology.11

“Category 3—Customers” asks:

  • Voice of the customer: How do you listen to former customers, potential customers and competitors’ customers to obtain actionable information?
  • Customer engagement: How do you determine customer and market needs and requirements for offerings?12

This category fails to address identifying innovation opportunity. Customer engagement and the voice of the customer are critical for this. You don’t ask customers what they need. You ask, “Where do you waste time?” and “What are your hassles?” You find customer pain. This is where innovation starts.

“Category 4—Metrics, Analysis and Knowledge Management” again allows improvement and innovation to get confused. However, to its credit, Baldrige was one of the first entities to adopt knowledge management many years ago, and this is a vital platform for innovation: “How do you collect .. workforce knowledge … for use in your innovation and strategic planning?”13

Innovators should pay close attention to this often-ignored activity. One issue that’s overlooked and could be included here or in the workforce category is collective knowledge. Techniques for obtaining collective knowledge are one of the great differentiators for innovation.

“Category 5—Workforce” asks “How does your organization reinforce intelligent risk taking to achieve innovation, a customer and business focus, and achievement of your action plans? How does your learning and development system support … innovation. “Learning from failure could be a welcomed addition in this category. It is only mentioned in under “Safety”14 in “Category 6—Operations.”

On to operations

“Category 6—Operations” treats innovation too lightly after earlier promise in “Category 1—Leadership ” and “Category 2—Strategy.” It asks:

“How your organization designs, manages, improves, and innovates its products and work processes … to deliver customer value and achieve ongoing organizational success … How do you discontinue pursuing opportunities?”15

This is where the activities of defining opportunity, concept solution, working solution and solution delivery should be addressed for potential new products and services. Instead, there’s a simple note included: “Your process for managing opportunities for innovation should capitalize on strategic opportunities identified in 2.1a(2).”16

Opportunities to improve

Finally, “Category 7—Results” is a disappointment. Product and process results appear to address innovation in process effectiveness and efficiency, but not clearly in product and service:

  • “What are your product performance and process effectiveness results?”
  • “What are your current levels and trends in key measures and innovation?”
  • “Measures of work process effectiveness might include work system innovation.”17

New product introduction needs attention here. In subsection 7.2, “Customer Results,” there’s a great opportunity to address the impact of new offerings. In subsection 7.5 “Financial and Market Results” under “Marketplace Performance,” this issue should be addressed in a broader context. These issues are imperative for achieving the sustainability referenced in the framework’s introduction.18 One other point missing in the “Customer Results”19 category is that customer dissatisfaction identifies innovation opportunity.

Finally, “From Fighting Fires to Innovation: An Analogy for Learning”20 needs serious rethought. It was introduced in 2014 but fails to distinguish between improvement and innovation. Distinction between innovation and improvement is somewhat similar to the distinction between correction and prevention. It is a continuum, and the continuum deserves a better explanation.

I first encountered the Baldrige criteria in 1992 when IBM, one of my clients, used it as a framework for its market-driven quality. I first wrote about the criteria in the first edition of Do It Right the Second Time21 five years later. At that time, the criteria were on the cutting edge, and I still have the highest respect for their global impact.

I hope these observations serve as a wakeup call for the writers of the criteria and are taken in the way they are intended. Borrowing from the title of one of the bestselling business books ever, this column is in search of excellence.22


The author thanks Jane Keathley, past chair of ASQ’s Innovation Division and a former Baldrige assessor, for reviewing the column and offering feedback.


  1. Baldrige Performance Excellence Program, 2017-2018 Baldrige Excellence Framework, January 2017, p. 40.
  2. Ibid, p. 47.
  3. Ibid, p. 43.
  4. Ibid, p. 50.
  5. Ibid, p. 49.
  6. Ibid, pp. 41-42.
  7. Ibid. pp. 41-42
  8. Ibid, p. 41.
  9. Ibid, p. 7.
  10. Ibid. p. 10.
  11. Ibid, p. 11.
  12. Ibid, p. 13-15.
  13. Ibid, pp. 16-17.
  14. Ibid, pp. 24.
  15. Ibid, p. 23.
  16. Ibid, p. 24.
  17. Ibid, p. 26-27.
  18. Ibid, p. iv.
  19. Ibid, pp. 27.
  20. Ibid, p. 30-32.
  21. Robert H. Waterman Jr. and Tom Peters, In Search of Excellence, HarperCollins, 1982.
  22. Peter Merrill, Do It Right the Second Time, second edition, ASQ Quality Press, 2009.

Peter Merrill is president of Quest Management Inc., an innovation consultancy based in Burlington, Ontario. Merrill is the author of several ASQ Quality Press books, including Innovation Never Stops (2015), Do It Right the Second Time, second edition (2009), and Innovation Generation (2008). He is a member of ASQ, previous chair of the ASQ Innovation Division and current chair of the ASQ Innovation Think Tank. Merrill also is head of delegation for his country to ISO/TC 279 Innovation Management.

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