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CHAPTER 10
The Baldrige Framework for Performance Excellence
Teaching Notes
This chapter focuses on the Malcolm Baldrige National Quality Improvement Act which was
signed into law (Public Law 100-107) on August 20, 1987, and on the quality award which was
instituted as a result of the Act. The focus of the program was defined as:
o Helping to stimulate American companies to improve quality and productivity for the pride
of recognition while obtaining a competitive edge through increased profits;
o Recognizing the achievements of those companies that improve the quality of their goods
Key learning objectives for this chapter should be to:
• To learn that in 2010, via an act of Congress, the Program changed its name to the
Baldrige Performance Excellence Program, dropping the term “quality” to signify its
broader mission: to improve the competitiveness and performance of U.S. organizations,
rather than improvement of quality, which many people associate primarily with goods
and services. The award’s name also changed to simply the Malcolm Baldrige Award.
• To become aware of the Malcolm Baldrige Award as one which recognizes U.S.
companies that excel in performance excellence practices and results that achieve the
highest levels of customer and stakeholder satisfaction. The seven Baldrige Award
criteria define key practices in categories of: leadership; strategic planning; customer
focus; workforce focus; measurement, analysis and knowledge management; operations
focus; and results.
The Baldrige Framework for Performance Excellence 2
• To know that the award examination is based upon a rigorous set of criteria, called the
Criteria for Performance Excellence, designed to encourage companies to enhance
their competitiveness through an aligned approach to organizational performance
management
• To study the Baldrige Award process, in which each item in categories 1-6 of the Criteria
is evaluated on four factors: approach, deployment, learning, and integration. In
addition, Category 7 addresses results, which refers to an organization’s outputs and
outcomes.
• To learn that many organizations use the Baldrige Criteria for self-assessment or internal
recognition programs, even if they do not intend to apply for the award. The Baldrige
Award has had a significant economic impact, and has generated a phenomenal amount
of interest, and many companies use its criteria as a basis for internal assessment of their
quality systems. A study of the social impacts of Baldrige, done in 2011, concluded that
the benefit-to-cost ratio for the group of surveyed applicants was 820 to 1.
The Baldrige Framework for Performance Excellence 3
ANSWERS TO QUALITY IN PRACTICE KEY ISSUES
Leveraging Baldrige at AtlantiCare
1. The nine strategic challenges AtlantiCare identified as keys to organizational success
were:
Healthcare delivery
• Engaging physicians in new models of collaboration and partnership.
• Creating sustainable growth outside of the primary service area.
recruitment.
Health engagement
• Developing new business and care models to support and grow primary care.
• Identifying and improving critical success factors for community health and
wellness.
Health information
• Increasing quality of care through clinical communication and transparency.
• Using technology to improve patient safety and clinical quality.
Operational
• Recruiting, training and retaining a highly skilled workforce.
• Succeeding in an environment of decreasing reimbursement and access to capital,
and a growing uninsured population.
These can be related to the seven Baldrige criteria of:
• Leadership: This category examines how an organization’s senior leaders
personal actions guide and sustain the organization. The key questions are:
How do your senior leaders lead? Also, how do you govern and fulfill your
societal responsibilities? By addressing the Healthcare Delivery issues, listed
The Baldrige Framework for Performance Excellence 4
a. "Developing new business and care models to support and grow primary
care.” and
b. “Identifying and improving critical success factors for community health
and wellness.”
• Customer Focus: This category examines the question of “How do you obtain
• Measurement, Analysis, and Improvement of Organizational Performance: This
category seeks to answer the questions of: How does the organization measure,
analyze, review, and improve its performance through the use of data and
information at all levels and in all parts of the organization? In a related question,
• Operations Focus: This category asks How do you design, manage, and improve
your work systems? Also asked are How do you design, manage, and improve
your key work processes? Key strategic issues of increasing quality of care
through clinical communication and transparency, use of technology to improve
patient safety and clinical quality, recruiting, training and retaining a highly
skilled workforce and work on succeeding in an environment of decreasing
reimbursement and access to capital, and a growing uninsured population must be
addressed in achieving operations excellence.
• Results: This category asks questions related to an organization’s performance
results in key business areas – What are your product performance and process
effectiveness outcomes, your customer-focused outcomes, your workforce-
The Baldrige Framework for Performance Excellence 5
2. Other organizations can learn a number of lessons from AtlantiCare’s experience. First,
applying for, and winning a Baldrige award are often separated by several years of hard
work. Even their first site visit resulted in disappointment, when they did not receive the
Branch-Smith Printing Division’s Baldrige Journey
1. Baldrige Core Values and Concepts are reflected in the strength and opportunity for
improvement comments cited in this case. They include:
• Visionary Leadership - Branch-Smith Printing Division collects inputs, either directly
or indirectly, from customers, employees, suppliers, peer groups within the industry,
professional organizations, and benchmark organizations outside of the industry.
Senior leaders use that information to set short-range and longer-range objectives
that align with each of its four major goals.
• Customer-Driven Excellence – BSPD had both strengths and OFI’s as indicated by:
Branch-Smith Printing Division has an extensive system for collecting performance
data in its Quality Improvement Database (QID) for daily monitoring of
Examiners also pointed to some weaknesses (opportunities for improvement) such as:
Branch-Smith Printing Division does not provide results information about several areas
that seem important to its success. These areas include market share, the level of errors
and the level of errors that reach customers, the effectiveness of its education and
training programs, customer loyalty and referral, results measuring responsibility to the
public other than VOC emissions.
• Organizational and Personal Learning – In 2001, an examiner said: There are no
major gaps in deployment, and a commitment exists to organizational learning and
sharing.
The Baldrige Framework for Performance Excellence 6
• Focus on the Future – Branch-Smith appeared to have an early strength in its
understanding and leading in technological areas, but needed to focus on the future in
changes in the marketplace. Development of Branch-Smith Printing Division’s design
• Managing for Innovation – Similar to the Focus on the Future, by 2001, the
company’s deployment of innovation approaches was described as: There are no
major gaps in deployment, and a commitment exists to organizational learning and
sharing. Improvement trends and/or good performance are reported for most areas of
importance.
• Management by Fact – Early on, a Texas Quality Award examiner said: Branch-
Smith Printing Division uses a fact-based systematic planning process throughout the
• Societal Responsibility – although only explicitly mentioned in the examiner’s
comments in the year 2000, in terms of an OFI, societal responsibility has no doubt
been a vital component in BSPD’s successful bid for a Baldrige Award. The examiner
said: Branch-Smith Printing Division does not provide results information about
• Focus on Results and Creating Value – Branch-Smith’s focus on results was critiqued
as: [The scoring] range is indicative of organizations that have effective approaches
The Baldrige Framework for Performance Excellence 7
• Systems Perspective – the systems perspective is obvious throughout Branch-Smith’s
operations. For example, Branch-Smith Printing Division has an extensive system for
collecting performance data in its Quality Improvement Database (QID) for daily
2. David Branch, the CEO, became an award examiner. Then, using the Quality Texas
feedback as well as the experience of participating in site visits, David gained
ANSWERS TO REVIEW QUESTIONS
1. The purposes of the Malcolm Baldrige Award are to:
• Help stimulate American companies to improve quality and productivity for the pride
of recognition while obtaining a competitive edge through increased profits.
• Recognize the achievements of those companies that improve the quality of their
goods and services and provide an example to others.
2. The seven categories in the Baldrige Criteria for Performance Excellence and the key
issues that are addressed include:
• Leadership: This category examines how an organization’s senior leaders personal
actions guide and sustain the organization. Also examined are an organization’s
governance system and how the organization fulfills its ethical, legal, and societal
responsibilities, and supports its key communities.
The Baldrige Framework for Performance Excellence 8
• Measurement, Analysis, and Improvement of Organizational Performance: This
category examines how an organization selects, gathers, analyzes, manages, and
improves its data, information, and knowledge assets, and how it manages its
information technology. Also examined is how the organization reviews and uses
reviews to improve its performance.
• Workforce Focus: This category examines how an organization engages, manages,
and develops its workforce to utilize its full potential in alignment with the
organization’s overall mission, strategy, and action plans. Also examined is the
organization’s ability to assess workforce capability and capacity needs and to build a
workforce environment conducive to high performance.
3. The Baldrige Award framework (see the Baldrige Model and other details in the Bonus
Materials on the Premium website) has three basic elements, as part of an integrated
system:
The Baldrige Framework for Performance Excellence 9
resource decisions and alignment of measures for all work units to ensure customer
satisfaction and market success
• The system: comprises a set of well-defined and well-designed processes and a
human resource focus for meeting the company's customer and performance
• Measurement, analysis and knowledge management: are critical to effective
management of the organization and to a fact-based system for improving
performance and competitiveness. Measurement, analysis and knowledge
management serve as the foundation for the performance management system.
4. The Baldrige criteria are based on a set of key principles, or Core Values and Concepts:
• Visionary Leadership
• Customer-Driven Excellence
• Organizational and Personal Learning
• Valuing Workforce Members and Partners
The Baldrige Framework for Performance Excellence 10
5. Organizational sustainability refers to an organization’s ability to address current
business needs and to have the agility and strategic management to prepare successfully
6. Organizations that apply for the Award submit a 50-page application responding to the
questions in the criteria. The Baldrige Award evaluation and selection process is rigorous,
and designed to be objective and tamper proof against political pressures. In the first
stage, each application is thoroughly reviewed by approximately 7 examiners chosen
from among leading professionals in business, education, healthcare, and nonprofits (all
of whom are volunteers). Examiners evaluate the applicant’s response to each
Category 7 addresses results. Results refers to an organization’s outputs and outcomes.
The factors used to evaluate results include current performance levels; the rate and
breadth of performance improvements; performance relative to appropriate comparisons
and benchmarks; and the extent to which results measures address important customer,
product, market, process, and action plan performance requirements; include valid
indicators of future performance; and are harmonized across process and work units to
support organization-wide goals.
The examiner team conducts a consensus process in which they discuss variations in
individual scores and comments, and arrive at a consensus for each item. A national
Panel of Judges then selects the applicants that they believe have the potential to be a
recipient for site visits. At this point, an examiner team visits the company for up to a
The Baldrige Framework for Performance Excellence 11
7. Approach refers to the methods used to accomplish the process, the appropriateness of
the methods to the item requirements and the organization’s operating environment, the
effectiveness of the use of the methods, and the degree to which the approach is
repeatable and based on reliable data and information (i.e., systematic). Deployment
refers to the extent to which the approach is applied in addressing item requirements
relevant and important to the organization, the approach is applied consistently, and the
approach is used (executed) by all appropriate work units. Learning refers to refining the
8. Organizations that receive the Baldrige Award are highly-regarded role models for
others. Characteristics that distinguish them from other organizations – even those that
reach the site visit stage but are not selected for the Award – are:
• Achievement in Results These organizations achieved significant results across all
areas: product (e.g., health care outcomes) and process, customers, workforce,
leadership and governance, and financials and marketplace. Results were trended over
• Entrepreneurism and Innovation These organizations use innovative approaches to
serve their customers’ current needs and guide them with enticing products and
services that address their not-yet-articulated needs. They provide products, services,
and opportunities that lead their marketplace. They take intelligent risks to sustain
• Agility These organizations are strategic in their decision making and in their ability
to adjust strategy. When conditions change or are anticipated to change, they are
ready to adapt, look for new markets, and adjust to sustain themselves and their
The Baldrige Framework for Performance Excellence 12
track the execution of their plans with metrics, and the ability to make change is part
of the execution process.
• Governance and Leadership Metrics These organizations have leadership and
governance systems in place that provide them with sound guidance. They measure
the performance of their leadership and governance teams—which is not common
• Work Systems and Work Processes This is probably the most challenging concept to
master. These organizations understand their work. They know their core
competencies. They make intelligent decisions on their staff-performed work
processes, capitalize on their core competencies to decide on those processes, and
marketplace, even when competitors do not.
9. Many organizations use the Baldrige Criteria for self-assessment or internal recognition
programs, even if they do not intend to apply for the award. The benefits of using the
criteria for self-assessment include accelerating improvement efforts, energizing
employees, and learning from feedback—particularly if external examiners are involved.
The approaches used for self-assessment vary. They may include simple questionnaires
10. An economic evaluation study of the Baldrige program by the U.S. Department of
Commerce released in December 2011 estimated the net social value of the Baldrige
Performance Excellence Program. The study concluded that the benefit-to-cost ratio for
the group of surveyed applicants was 820 to 1, supporting the belief that the program
creates great value for the U.S. economy. More importantly, the program changed the
way in which many organizations around the world manage their operations, and helped
significantly to bring the principles of TQ into the daily culture of these organizations.
The true benefactors are the customers and other stakeholders who received better
products and services.
Many U.S. states have developed award programs similar to the Baldrige Award. State
award programs generally are designed to promote an awareness of productivity and
quality, foster an information exchange, encourage firms to adopt quality and
The Baldrige Framework for Performance Excellence 13
11. The Baldrige Criteria support Deming’s 14 Points by emphasizing the central importance
of leadership, organization-wide quality management, customer focus and feedback,
attention to employee well-being, satisfaction, and teamwork through a human resource
focus, and continuous improvement of processes. The detailed explanation of the criteria
include the need for management commitment to quality improvement, and the need for
training of all employees in quality and other techniques in order to attain performance
excellence.
12. In comparing the frameworks of the European Quality Award with the framework of the
Baldrige award, several key differences are apparent.
For both the Baldrige and the European Quality Award, results -- including customer
satisfaction, people (employee) satisfaction, and impact on society -- are important, but
13. A study of national cultural differences can help to understand and explain why the
MBNQA has been adapted in various ways in various countries. Research has shown
that the Baldrige award is better suited to some national cultures than to others.
Receptiveness to change differs greatly among cultures, suggesting the need for countries
to adapt their quality award programs to local conditions to ensure effectively
implementing them. Perhaps surprisingly, Baldrige is a better fit to the national culture
of Japan than it is to the U.S. Some of the reasons for this are that the Baldrige
framework was initially influenced heavily by Japanese quality management practices,
and that changes to the criteria over the years are focused on changing U.S. management
The Baldrige Framework for Performance Excellence 14
14. The three frameworks are all process-focused, data-based, and management-led, but each
offers a different emphasis in helping organizations improve performance and increase
customer satisfaction. The Baldrige framework focuses on performance excellence for
the entire organization in an overall management framework, identifying and tracking
important organizational results; ISO focuses on product and service conformity for
guaranteeing equity in the market place and concentrates on fixing quality system
problem and product and service nonconformities; and Six Sigma concentrates on
measuring product quality and driving process improvement and cost savings throughout
the organization.
15. As pointed out in the chapter, many organizations have successfully blended ISO 9000,
Six Sigma, and/or Baldrige in their practices. Honeywell used the analogy of taking a
ANSWERS TO DISCUSSION QUESTIONS
1. Obviously, students may take either side of this debate. Some, who favor eliminating
“waste” in government may applaud the savings of some $3 million from the federal
budget. In this same vein, others may say the award has not been proven to save U.S.
jobs, even if it has saved millions or billions of dollars for companies who follow the
Baldrige precepts. For those who are fans of Baldrige (and your authors are admittedly
and unashamedly in that that camp) Baldrige has proven its worth as an approach to
performance excellence which is, and will be, virtually impossible to duplicate. It has
The Baldrige Framework for Performance Excellence 15
2. Student answers will vary, but based on our experience, some of the “top 10” most
difficult questions typically are:
Category 1 – How do senior leaders create a sustainable organization?
Category 2 – How do you determine your core competencies, strategic challenges, and
strategic advantages? What are your performance projections for both your short- and
longer-term planning time horizons?
Category 3 – How do you market, build, and manage relationships with customers to
increase their engagement with you?
Category 4 – How do you ensure that your performance measurement system is able to
respond to rapid or unexpected organizational or external changes?
Category 5 – How do you determine the key elements that affect workforce engagement?
Category 6 – How do you design and innovate your overall work systems? How do you
minimize the costs of inspections, tests, and process or performance audits, as
appropriate?
Item 7.4 Leadership and Governance outcomes are also generally difficult for
organizations to respond to.
3. Refer to the example of how K&N Management addressed some of the questions in the
Senior Leadership category of the Baldrige Criteria in this chapter. Explain what
practices address each of the specific questions:
a. How do senior leaders set your organization’s vision and values?
b. How do senior leaders deploy your organization’s vision and values through your
leadership system, to the workforce, to key suppliers and partners, and to customers and
other stakeholders, as appropriate?
c. How do senior leaders’ actions reflect a commitment to the organization’s values?
a. At K&N, the senior leadership team (SLT) and managers set the mission, vision, and
KBDs [key business drivers] as a result of a benchmarking visit to Pal's Sudden Service
b. The core values were set by senior leaders with input from team members about what
they felt was most fundamentally important about the organization’s culture. Their
passion for guest delight is integrated into their values, which are thoroughly deployed
throughout the organization. Senior leaders refer to the mission, vision, values, and KBDs
The Baldrige Framework for Performance Excellence 16
4. As indicated in the answer to review question #4, the Core Values and Concepts
summarize the essentials of the Criteria. They help to define a high performance culture
by promoting an awareness of productivity and quality, fostering information exchange,
encouraging firms to adopt quality and productivity improvement strategies, providing
5. There are many ways to answer this; here is one:
Baldrige
Category
Traditional Management
Practices
Growing
Awareness of Quality
Quality Management
System
World-Class
Quality Management
1
• Senior leaders’ job is to
maintain the status quo
• Senior leaders’ job is to
ensure that quality
• Senior leaders’ job is to
define and manage
• Senior leaders’ job is to
develop vision and
The Baldrige Framework for Performance Excellence 17
2
• Senior leaders develop
goals and pass down to
lower levels
• Goals are zero-sum
• Senior leaders develop
goals in consultation
with
middle managers
• Senior leaders and lower
level managers develop
goals and resolve
through give and take.
• Senior leaders develop
mission and vision on
which stretch goals are
based and use a
accomplishment
3
• Customers are outsiders
in the domain of
marketing and sales
• Customers have no
impact on product
design
• Complaints are only
reacted to
• Customers needs are the
focus of marketing and
sales
• Customers have some
impact on product
design
• Complaints are taken as
a signal of quality
problems
• Customer/supplier
dialogs on quality
sometimes occur
• Customers are surveyed
to determine satisfaction
• Customers/suppliers are
consulted in product
design decisions
• Complaints are handled
system-atically and used
for product/process
improvement
• Customers are insiders
in the domain of design,
production, and
marketing
• Customers have a major
impact on product
design
• Complaints are only a
part of a complete
customer management
process
4
• Control is achieved by
pre-established
inflexible responsive
patterns
• Information is generally
considered to be secret
• Control is achieved by
somewhat flexible
responsive patterns
• Information is generally
considered to be
confidential, but
available
• Control is achieved by
cooperative team efforts
to improve processes
• Information is
considered to be widely
available to those inside
the organization
• Control is achieved by
alignment with goals
• Information is
interlinked and is
considered to be openly
available unless
proprietary or personally
sensitive
5
• People are an
interchangeable
• People often have
valuable unique skills
• People should be
encouraged to work in
• People should be
empowered to work
The Baldrige Framework for Performance Excellence 18
6
• Processes are seen as a
collection of separate,
specialized units, in a
functional hierarchy.
• Suppliers are pitted
against each other to
obtain the lowest price
• Processes are seen as a
collection of separate
units, in a functional
hierarchy, but cross-
functional activities
require a coordinative
mechanism.
• Reorganization of
processes of some
separate units, out of the
functional hierarchy, is
seen as advantageous
• Suppliers are consulted
for critical design
• Processes are seen as a
system of
interdependent sub-
processes linking the
organization to
customers and suppliers
• Suppliers are partners
7
• Results are primarily
stated financially
• Any negative deviation
is a cause for corrective
• Results are primarily
stated in financial and
market terms
• Any negative deviation
• Results are stated in
financial, market,
operating, quality
“metrics”
• Results are stated as a
“balanced scorecard”
• Benchmarking and
historical comparisons
6. In a sense, all of the Baldrige criteria pertain to the concept of sustainability. Within the
Baldrige framework, sustainability refers to an organization’s ability to address current
business needs and to have the agility and strategic management to prepare successfully
for the future, and to prepare for real-time or short-term emergencies. Recently, concepts
of workforce and customer engagement have been integrated within the Baldrige criteria.
In particular, senior leaders are charged with the responsibility of developing a
7. As in many areas or types of organization, the Baldrige process can be effective in
developing high-quality e-commerce organizations.
The Baldrige Framework for Performance Excellence 19
Leadership: Leaders (Category 1) such as Bill Gates, Michael Dell, and Jeff Bezos
possess strong corporate visions. They seem to have the ability to transform existing
business models into strategic frameworks that will create and deliver value. The real test
will come in determining whether those models have “staying power” during an
economic downturn. Innovation must be balanced with performance, and performance
measures must be developed and used to assess the quality of e-business results.
Strategic planning and strategy development (Category 2) are two areas in which e-
Customer and market focus (Category 3) requires an understanding of the power of the
customer in the e-marketplace. Building relationships with customers is harder than ever
in e-commerce, but more vital to the health of the business. Mass customization, market
segmentation, value-added service, and customer relationship management are all
essential to healthy e-business.
Category 4, Information and analysis, is almost too obvious to mention in relation to e-
commerce. The challenge is to turn data into information. It doesn’t matter if an e-
8. Process items in the Baldrige Criteria are assessed on four dimensions: approach,
deployment, learning, and integration. The following are opportunities for improvement
that an examiner team identified in the Leadership Category for a Baldrige applicant. The
