INNOVATION AND INDUS

Baldrige Per

formance

Excellence ProgramHow We

Operate,

A

dvantages an

d Ch ll a enges, 

Harr

y S. Hertz

Presentation to the NIST Visiting Committee

June 2011

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INNOVATION AND INDUS

Baldrige Business Model:

A Unique Public

‐P

Partnership

Foundation for the

Malcolm Baldrige

National Quality Award Boa

Ove

Department of Commerce

National

Institute of Baldrige

B d f E 

Institute of

Standards and

Technology

Award

Winners

Contractor

• ASQ

Boar

d

of Ex

• Judges• Senior Ex• Examiner

Cooperating Organizations

• Alliance for Performance

Excellence

• Professional Societies• Trade Associations

• State and Local Programs

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INNOVATION AND INDUS

Leveraging Private Sector Leadership for N• Senior leaders, Presidents and CEOs fro

multiple industries partner with us, incl

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INNOVATION AND IND

Baldrige Program Revenue Flow

Fed

Federal

Funds

$9.6M

Baldrige

Pro

gram

Fed

‐A

‐Crit

‐Edu

‐Su

Sales/Fees

and Fellows

Foundation

Funds

g ‐Str

Program

~$1M

Funds

(dependent on

Criteria year)

~$1.3 ‐ $2.3

M

Administrator Contract

(ASQ)

‐Award Process

‐Criteria Development

/

In‐Kind

Resources

$9 3M

‐Education

/Promotion

‐Support/Oversight

‐Strategic Initiatives

~$1.3M‐2.3M

(dependent on Criteria

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$9.3M (dependent on Criteria

year)
INNOVATION AND INDUS

FY 2012 Budget Proposal• Baldrige Performance Excellence Program (BPEP)

—

million. This funding represents

a decrease of $2.2 mi

the President’s FY 2011 re

q , uest and

a decrease of

$1

from FY 2010

‐enacted appropriations. At this propose

BPEP will evaluate alternative sources of funding and

alternative alternative cost models consistent consistent with the administ

administ

goal of transitioning the program out of federal fundFunding supports the continued development of the B

Program Criteria, dissemination of best practices, and 

annual awards process.

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INNOVATION AND INDUS

Consequences of Finding Other Fun• Baldrige Foundation would need to raise its endowment from $$200M• Impact on the public good, which is inherently

a government fu

o Health care and education organizations comprise 70% of 

for the 2011 Baldrige Award

• Impact on

a widely used public resource, The Criteria for Perfor

Excellence (which has 2.5M page views per year on the NIST web

continuously continuously referred referred to as reflecting reflecting the “leading “leading edge of valida

valida

management practice.”• Crippling the network of 38 state and local Baldrige

‐based prog

rely on BPEP• Risking the goodwill of the 91 Baldrige winning organizations th

voluntarily, and at their own expense, made over 50,000 present

sharin

g how Baldri

g

e can contribute to US com

petitiveness and

organizational success.

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INNOVATION AND INDUS

Funding Sources to Evaluate• Foundation endowment

• Award applicant fees

• A id ppropriate

d F d un

d

s

• In

‐kind support

•

“Workforce

” fees

• Criteria and other improvement tools’ fees

• Outreach

/education fees

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INNOVATION AND INDUS

Strategic Advantages

STRATEGIC ADVANTAGE EVIDENCE, EXAMPLES, EFFECTS, E

Reputation as premier quality

program

• Presidential Award• Worldwide emulation• Program ethics and integrity• Hi

g

h

profile overseers and j g ud

ges

• Association with NIST

Unique products and services • Criteria define Performance Excellence

• Criteria in public domain• Affordability of products and services• Access to examiner trai i n ng an

d d l eve opment

• Access to Baldrige network

Volunteer network • Ability to recruit volunteer workforce to operate awa

(contribute up to 220 hours/year)

• Examiner Examiner training training process process seen as high quality quality profes

profes

development

• On‐going alumni involvement

Public‐Private Partnership • Foundation support ‐ financial endowment, etc

• Federal government resources resources• Enterprise flexibility to overcome barriers• State Programs

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INNOVATION AND INDUS

Strategic Challenges

STRATEGIC CHALLENGES EVIDENCE, EXAMPLES, EFFECTS,

ETC.

Initiative

Financial viability of Baldrige

enterprise

• State and local programs at risk• Baldrige relies on current high‐

leverage funding model

• Strategy ma• Study and di

business mo

• Grants to de

materials for 

Declining participation in the Award

b f d

• <5 large manufacturing

l f h f l h

materials for 

program evaimprovemen

• Creation of t

Process

b

y Manufacturing an

d 

Service sectors

applicants for eac

h

of last three

cycles

• Growing interest in “easier”

recognition programs (Shingo

Prize, industr

y specific, etc.)

Executive Fe

• Developmen

, y p , )

• Lack of

a national face for award

• Increasing globalization

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INNOVATION AND INDUS

Baldrige is Constantly Evolving• Strategy Mapping

• Creation of the Baldrige Executive Fellows Program

• Develo

pment of Baldri

g

e 20/20

• Compilation of impact data

• Use of Lean Six

‐Sigma to improve processes and

productivity

• Expanded use of social media and online

development solutions such as Baldrige OnlineScorebook Solutions (BOSS)

• Baldrige site is second only to “standard time” 

website

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INNOVATION AND INDUS

Program Challenges and Priorities“R i e nvent

t

h

e

bi ” us ness

”

FY 2012 Budget:

consider

alternative

funding

Strategy

Mapping

Scenario

Planning

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INNOVATION AND INDUS

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INNOVATION AND INDUS

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INNOVATION AND INDUS

Impacts Appendix

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INNOVATION AND INDUS

Baldrige Im

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INNOVATION AND INDUS

Sample Baldrig

• 91 Baldrige Awards given to 86

organizations since 1988

• Winners

have ma

d

e an esti t d ma

t

e

d 50 000 ,

presentations

• 35 state Baldrige

‐based programs

• 100 international programs• Criteria used for Government programs,

Accrediting bodies, and internal internal company company

programs such as:

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INNOVATION AND INDUS

Health Care Study(20%

f GDP)

• Patient SatisfactionM 2010

(20%

o

f GDP)

Measures  ‐ 2010

Data•Preliminary Press

Ganey study reveals

statisticall

y better

performance by

Baldrige users

17
Cargill, Inc.

What We Have LearnedMeasure Business Impact

Financial Performance Results

Why Bald

Financial Performance ResultsCumulative EAT vs. budget Deployment of Baldrige: Gold = high degree

Blue=partial deployment; White=beginning with Bald

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INNOVATION AND INDUS

Net Promoter Score MetricNPS

=

% Promoter ‐

% Detractor

Examples of NPS “Stars”

Harley Davidson 81%

Baldrige NPS = 

Costco 79%SAS 66%Intuit 58%Southwest Air. 51%

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INNOVATION AND INDUS

Likely to Recommend

NPS = 67%

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