Pursuing Performance Excellence Using the Baldrige Criteria Washington DC & Maryland Metro Section ASQ Robert J. Scanlon May 17, 2007

Pursuing Performance Excellence - Agenda  The Search for Competitiveness  Understanding Systems  The Power of a Standard  The Baldrige National Quality Program  Summary

Pursuing Performance Excellence - The Search for Quality Competitiveness My personal Quality journey… Early ‘70s: Little “q”  Caterpillar Metallurgical Laboratory Focus: Quality Control

Pursuing Performance Excellence - The Search for Quality Competitiveness My personal Quality journey… Early ‘80s: Big “Q”  Quality becomes a strategic priority Focus changes to: Quality Improvement

Pursuing Performance Excellence - The Search for Competitiveness The broader context:  The US has “suddenly” found itself to be non- competitive in Quality of manufactured products  The alarm bells are sounding and everyone is scrambling to respond successfully to the threat But HOW should we respond?

Pursuing Performance Excellence - Quality’s Contribution The Gurus:  Crosby: Marketer - “Quality is Free”, Quality = Conformance to Requirements, Cost of Non-Conformance  Deming: Philosopher - SPC, 14 Points  Juran: Management Consultant - Quality = Fitness for Use, Quality Trilogy, Cost of Poor Quality, Resistance to Change  Fiegenbaum: Total Quality Control

Pursuing Performance Excellence - The Search for Competitiveness Mid ‘80s:  Manufacturing organizations are “picking” one of the gurus to follow  There is a frantic hunt for the “secret” to Japanese success  But, there is no consensus on what to do or whether the approaches being tried will work. So, no consensus...no standard

Pursuing Performance Excellence - The Search for Competitiveness Visits to Japan identify pieces of a response:  Statistical Process Control…  Employee Involvement (Quality Circles)…  Quality Training…  Quality Improvement Teams  Workers who can “stop the line”  Kanban  etc., etc., etc…..

Pursuing Performance Excellence - The Search for Competitiveness All of these elements had some value. But, at best, they were… Necessary but Insufficient… To Assure the Success of the Enterprise How do we know when we’ve got all of the right “pieces” assembled?

Pursuing Performance Excellence - The Search for Competitiveness Q: The right pieces to what?

Pursuing Performance Excellence - The Search for Competitiveness Ans.: The right pieces to... The Management System.

Pursuing Performance Excellence Systems Thinking Excerpts from a talk by Dr. Russell L. Ackoff Chairman and Professor Emeritus, the Wharton School

Pursuing Performance Excellence - Defining a System A System is:  a whole consisting of two or more essential parts  and for which the parts must satisfy 3 conditions:  each part can affect the entire system’s behavior or properties  the way each part affects the whole depends on what at least one other part is doing (i.e., no part of the system has an independent effect on the whole because they interact), and  the same applies to all subparts of all subsystems

Pursuing Performance Excellence - Systems Thinking Independence and Interaction: Because the properties of any system arise out of the interactions of its parts, the essential properties of any system, the properties that define the system, are properties of the whole that none of its parts have! Examples:

Pursuing Performance Excellence - Systems Thinking The Significance of Systems Interaction:  When you improve the performance of every part of the system taken separately, you do NOT (necessarily) improve the performance of the System.

Pursuing Performance Excellence - Systems Thinking System & Element Design:  We should not attempt to improve any part of the Management System without understanding its role within the larger system.  Instead, we must approach this from the perspective of knowing what properties we want the entire System to have and then designing each element to support that.

Pursuing Performance Excellence - Systems Thinking Reasons for TQM Failures:  Ignoring the total System  Focusing on fixing what’s wrong instead of doing the right things

Pursuing Performance Excellence The Power of Standards

Standards and Quality In the absence of standards, Quality is a meaningless concept.

Types of Standards n Government n Commercial/Industrial n Business n Company n Others…

Characteristics of Standards Standards represent who we are… and what we can do! They... n should be attainable by everyone operating the process they apply to. n require methods and measurement systems n liberate us to focus our energy and creativity on other things. n are a floor not a ceiling with respect to performance. n require energy to maintain them. n are dynamic and should improve over time.

Pursuing Performance Excellence - The Power of Standards Standards: Confining or Liberating? Examples:  The Dishwasher Story  VHS or Beta? Do you feel lucky?  PCs  Cell phones

Pursuing Performance Excellence - The Power of Standards Conclusion: The emergence of a clear standard in a free enterprise system eliminates confusion and fuels economic growth.

Pursuing Performance Excellence - The Power of Standards But can Standards be Confining? – Standards are confining when they are not updated and no longer represent the capability of a well managed / operated process. Does this happen?

Pursuing Performance Excellence - The Power of Standards But can Standards be Confining? Yes – Standards are confining when they are not updated and no longer represent the capability of a well managed / operated process. Does this happen?All the time!

Pursuing Performance Excellence - The Power of Standards Conclusion: Improved competitiveness requires continuous process improvements which in turn drive improved standards. Standards should be dynamic, not static.

Pursuing Performance Excellence The Baldrige Management System Model

Pursuing Performance Excellence - The Malcolm Baldrige National Quality Award From :  68 Winners of the Award  Winners have shared their experience and lessons learned with tens of thousands to help them improve  Millions of copies of criteria distributed  42 states have Quality Awards using Criteria  Inspired the European Quality Award  Being adopted by other countries including the Japanese and Chinese  Began with Manufacturing, Service, an Small Business in 1987  Expanded to Education and Healthcare in 1998 and the not for profit sector in 2006

Baldrige National Quality Program Criteria for Performance Excellence Malcolm Baldrige National Quality Award

Seven Categories of the Business/Nonprofit Criteria n Leadership n Strategic Planning n Customer and Market Focus n Measurement, Analysis, and Knowledge Management n Workforce Focus n Process Management n Results

Core Values and Concepts n Visionary Leadership n Customer-Driven Excellence n Organizational and Personal Learning n Valuing Employees and Partners n Agility n Focus on the Future n Managing for Innovation n Management by Fact n Social Responsibility n Focus on Results and Creating Value n Systems Perspective

Baldrige Criteria Framework: A Systems Perspective

Organizational Profile P.1 Organizational Description P.2 Organizational Challenges n Starting point for self-assessment and application preparation n Basis for early action planning

Category Point Values 1Leadership 120 2Strategic Planning 85 3Customer and Market Focus 85 4Measurement, Analysis, and Knowledge Management 90 5Workforce Focus 85 6Process Management 85 7Results450 TOTAL POINTS 1,000

Keeping the Criteria Current n Changes in the 2007 Criteria (Handout)

Pursuing Performance Excellence The Baldrige Quality Program represents a national management system standard that enables the systematic and effective pursuit of Performance Excellence

Pursuing Performance Excellence - Why Baldrige?  It’s efficient: The Management System elements have been determined for you  A Standard minimizes the tendency for consultants to create their own competing approach  The common framework facilitates understanding, and sharing

Pursuing Performance Excellence - Why Baldrige (continued) ?  An extensive infrastructure is in place to support you: Baldrige Foundation, Examiners, State Awards, the Winners  It is constantly evaluated and improved  It is not prescriptive - every organization has complete freedom to design its own approaches  It works!

Pursuing Performance Excellence - Summary The Baldrige National Quality Program Criteria:  Is the culmination of the “quality journey” that began in the late ‘70s and continued through the ’80s  Is a national management system standard  Incorporate the management system attributes that enable superior results  Is applicable and available to any organization  Provides complete freedom to develop the approaches an organization needs to support its goals and objectives  Is designed to systematically and successfully pursue Performance Excellence

Resources for More Information Most Baldrige National Quality Program (BNQP) documents are available both in hard copy and on the BNQP Web site. n To obtain these documents, call (301) or visit