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The Baldrige Award: Winning Isn't Everything, Improving Is
What could be more elevating for an organization than winning the acclaimed Malcolm Baldrige National Quality Award ? The answer: really using what is learned along the way to improve. Sweeping self-reflection is required of Baldrige Award applicants and the resulting 'scores' typically produce an extensive list of possible improvements. But how does one read the results? Where should one focus to improve? Identifying and acting upon a manageable number of high-leverage areas for improvement seems to be the key.
The Malcolm Baldrige National Quality Award (MBNQA), named
in honor of the former U.S. Secretary of Commerce, has played an important
role in motivating and acknowledging the accomplishments of quality organizations.
Since 1988, 648 applicants, ranging from major manufacturers to service
and technology-based firms, have participated in the Baldrige assessment
process at the national level. And studies indicate that winners not only
excel at the Baldrige criteria, they tend to be high financial performers
as well. A 1997 National Institute of Standards and Technology (NIST) study
reported that the stocks of 16 publicly-traded (1988-95) winners, as a group,
outperformed the S&P 500 by approximately three to one. But with only
a maximum of six award winners being chosen each year, the great majority
of participants are left only with their scores and a detailed assessment
report. How the findings are interpreted and acted upon is critical if the
organization is to truly benefit from its participation.
Completing the Baldrige process, applicants are better informed about what it will take to move forward with their quality efforts. However, it's easy for organizations to fail when it comes to maximizing the benefit of the assessment feedback. Why? "Companies often take on too many areas for improvement at one time," says Belville. "MBNQA feedback typically identifies about 65 - 150 areas for improvement, however, the experiences of actual participants indicates only five to 10 areas can be successfully addressed, depending on the size of the organization and the resources available at the time." When pursuing too many improvement initiatives at once, companies are disappointed to find that none or few corrective actions are actually completed. Frustrations rise and internal attitudes about the improvement effort go sour. For some, the flame of motivation gained through the process smolders under the complexities of executing changes.
So what is the right way to utilize Baldrige assessment results? Benefiting fully from the Malcolm Baldrige opportunity means utilizing the assessment results in the most advantageous manner. Richard Belville explains, "Many have discovered that the greatest long-term benefit can be gained when they focus on only a few key improvement areas and implement sound, systematic corrective action before moving on to the others." Yet a key challenge is identifying what areas for improvement will be most advantageous to address. For this, Belville suggests the following steps.
Using Assessment Results Well:
Next, do a "reality check." Ask yourselves - do the assessment scores reflect what is really happening in the business? If not, maybe there has been a lack of communication or a misunderstanding has occurred in the process. This step helps avoid the risk of expending resources on fictional problems.
Do a 'gap analysis.' This means understanding where you differ most from 'the best,' and it can help you decide where to focus the most improvement effort.
Identify potential projects by 'areas-to-address.' Organizing by area helps you group, balance and sequence the improvement effort. Importantly, this step helps you preserve the integrity of 'strengths' while you work on improving weaknesses.
Finally, prioritize and select between five and 10 'high-leverage' improvement projects. This step, usually implemented by a corporate quality council or another segment of senior management, links the assessment results with other business considerations and marketplace realities. Essentially, this step asks - how does all of this fit with our overall direction and strategy? How much can we really afford to expend on improvement efforts? The step involves considerable discussion and final management decision regarding the five to 10 action areas.
Properly understood and utilized, pursuit of the MBNQA
can, itself, be an effective tool for expediting organizational improvement.
But using the tool to maximum benefit means focusing available resources
on the right problems in the right order. The criteria is comprehensive,
complex and tells much about an organization's strengths and deficiencies.
But the information is only as valuable as it is actionable.