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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

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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