Baldrige National Quality Program CEO Issue Sheet

BALDRIGE: Performance Excellence 

Delivers World-Class Results

You have heard about companies in

crisis using a Baldrige assessment to

begin a turnaround. But why would

a good U.S. business undertake a

Baldrige self-assessment? To become

better—and to get better results. In

today’s rapidly changing marketplace

with ever-increasing competition,

being results-focused is essential.

Senior leaders are responsible for

cultivating a results-driven environment.

Senior leaders who understand

organizational performance excellence

know that business results must

create and balance value for all

their organization’s key stakeholders,

including its customers, stockholders,

employees, suppliers and partners,

and the public and community. The

seven, comprehensive Categories of

the Baldrige Criteria for Performance

Excellence are designed to help

organizations capitalize on their

unique strengths and identify their

opportunities for improvement. When

organizations effectively develop

and deploy strategies in each of the

Baldrige Categories, they can expect

these linked processes to drive better

business results. 

The seventh Category of the Baldrige

Criteria is called Business Results.

This Category examines a business’s

performance and improvement in

key areas—product and service

outcomes, customer satisfaction,

financial and marketplace performance,

human resource results, operational

performance, and leadership and

social responsibility. Baldrige Award

recipients have proven to be

world-class organizations that measure

their performance for all their key

business results, and know where

they stand on each relative to

their competitors’.

Baldrige Award recipients strive to deliver product and service quality that leads

to customer satisfaction, loyalty, and positive referral. Performance results of Baldrige

Award recipients have shown what it means to deliver ever-improving value to customers.

• Technology and training have led to dramatic improvements in production for

Texas Nameplate Company, Inc., (1998 and 2004 Award Recipient in Small Business).

Between 1998 and 2004, the company’s incidence of product nonconformity

to specifications, as a percentage of sales, dropped from 1.4 percent to about

0.5 percent, significantly lower than the Industry Week median (2 percent).

For more information, contact John L. Darrouzet, Vice President and General

Counsel, (214) 428-8341; ext. 112.

• Boeing Aerospace Support (now known as Logistics Support Systems; 2003 Award

Recipient in Service) has determined that the key factors to its success are commitment

to customer satisfaction, performance-to-plan, and on-time delivery of quality

products and services. Since 1999, on-time delivery of maintenance and modification

products and services, significant hardware, and other products has been between

95 and 99 percent. Quality ratings for the maintenance of C-17 aircraft have been

near 100 percent since 1998 compared to Boeing Aerospace’s competitors, which

trail at 70 percent in 2002 and 90 percent in 2003. For more information, contact

Ronald Aarns, Business Excellence Director, (314) 233-9373.

Have a Positive Customer Impact: 

Product and Service Outcomes

Baldrige Award recipients understand that customer-driven excellence is a strategic

concept, directed toward customer retention and loyalty, market share gain, and growth.

• The Bama Companies, Inc., (2004 Award Recipient in Manufacturing)

understands what its customers need to succeed in their markets. The company

has tailored its services to meet customer requirements in critical areas such as

assured supply, precision manufacturing, and value pricing. Since 2001, Bama

has achieved 98 percent on-time delivery of products to customers, with 99

percent of orders completely filled on the initial shipment. Customer satisfaction

for the company’s major national accounts has increased from 75 percent in

2001 to 100 percent in 2004, considerably higher than the manufacturing

industry benchmark of 85 percent. For more information, contact Mike Frihart,

Six Sigma Black Belt, (918) 732-2103.

• Branch-Smith Printing Division (2002 Award Recipient in Small Business) is

focused on the importance of quality and on meeting customer needs. This is

highlighted in its strategic objectives: to continuously improve business results,

become the partner of choice for its customers, and become the employer of

choice. From 1996 to 2002, ratings for customers’ satisfaction with product quality,

a key differentiator for Branch-Smith Printing, exceeded those for competitors.

The company’s ratings ranged from 8.3 to 8.7, while competitors rated 7.9 to 8.1.

For more information, contact David Branch, President, (817) 882-4199.

Exceed Expectations: Customer-Focused Results

Validating Key Results 
An organization that values its employees is committed to

their satisfaction, development, and well-being. Baldrige

Award recipients are focused on creating and maintaining

a productive learning and caring work environment for

all employees.

• Pal’s Sudden Service (2001 Award Recipient in Small

Business) aims to provide the “quickest, friendliest, most

accurate service available.” Achieving this objective is a

real challenge in a fast food industry with annual employee

turnover rates of more than 200 percent. Since 1995, the

turnover rate at Pal’s has decreased from nearly 200

percent to 127 percent in 2000, and it continues to fall.

For more information, contact Thom Crosby, President/

CEO (423)246-3801.

• An employee survey conducted by the Hogan Center for

Performance Excellence shows that Stoner, Inc., (2003

Award Recipient in Small Business) scored in the top 10

percent of companies surveyed. Overall morale of Stoner

team members has increased from 64.6 percent of team

members who are enthusiastic about their jobs in January

2002, to 74.5 percent in July 2003, exceeding the

benchmark of 60.5 percent. For more information, contact

Harry Zechman, Technology Manager, (717) 786-7355;

ext. 3514.

Achieve Significant Gains: Financial and Market Results

Know Your Strongest Assets: Human Resource Results

Operate as a Leader: Organizational Effectiveness Results

Senior leaders are responsible for tracking financial and market

results on an ongoing basis to assess their organization’s

performance. Baldrige Award recipients seek to understand

their organization’s financial sustainability and marketplace

challenges and opportunities.

• Clarke American Checks, Incorporated, (2001 Award

Recipient in Manufacturing) competes in an industry that

has undergone massive consolidation. The annual growth in

company revenues increased from a rate of 4.2 percent in

1996 to 16 percent in 2000, compared to the industry’s

average annual growth rate of less than 1 percent over the

5-year period. For more information, contact Karen

Hollingsworth, VP Performance Excellence, (210) 694-1596.

• From 1998 to mid-2003, Caterpillar Financial Services

Corporation U.S. (CFSC; 2003 Award Recipient in Service)

increased assets by 34 percent and profit by 54 percent

while industry performance has declined 21 percent

and 35 percent, respectively. For more information, contact

Cesar Aguilar, Continuous Improvement Manager,

(615) 341-1031.

Baldrige Award recipients strive to achieve organizational

effectiveness and process efficiency by developing and tracking

key business and operational performance measures that are

relevant and important. 

• Boeing Aerospace Support has improved its supplier

on-time delivery rate from approximately 68 percent in

1999 to about 95 percent in 2003, matching best-inBoeing results. Its quality of supplier deliverables has been

above 99.5 percent from 2001 to 2003 and was at 99.7

percent for 2003.

• MEDRAD, Inc., (2003 Award Recipient in manufacturing) is

committed to sustaining its market leadership in existing and

newly created markets, and to do this, patents are critical to

the company. Since 1993, MEDRAD has dramatically

increased the number of patents generated by its research and

development activities. From 1999 to 2003, MEDRAD

received nearly three times more patents worldwide

than its closest competitor. For more information, contact

Rose Almon-Martin, Vice President, Performance Excellence

and Marketing Services, (412) 767-2400, ext. 3545.

Be a Role Model: Leadership and Social Responsibility Results

Baldrige Award recipients’ senior leaders understand the

value of serving as role models and of reinforcing ethics,

values, and expectations while they build leadership,

commitment, and initiative throughout their organizations

and in their communities.

• Motorola Inc. Commercial, Government and Industrial

Solutions Sector (CGISS, 2002 Award Recipient in

Manufacturing), the leading worldwide supplier of two-way

radio communications, demonstrates that corporate

responsibility and marketplace success can go hand-in-hand.

CGISS recycled 57 percent of its non-hazardous waste and

has reduced emissions by 88 percent since 1996. For more

information, contact Martin Swarbrick, Vice President,

Office of Business Excellence, (847) 576-7554.

• The Bama Companies, Inc., is committed to its community.

The number of hours Bama employees have donated to

organizations such as Meals on Wheels, Habitat for

Humanity, Domestic Violence Intervention Services,

Emergency Infant Services, and others increased from 500

in 2000 to nearly 7,000 in 2004. Bama is the third largest

contributor to the Tulsa Area United Way (Manufacturing

Division), contributing $150,000 in 2004 alone. In addition,

the company each year contributes an average of 6 percent

of its pre-tax income (over $2.6 million since 2000) to

local organizations that provide essential social, educational,

cultural, and health services.

For more information about Baldrige, contact the Baldrige National Quality Program, (301) 975-2036 or nqp@nist.gov. 

Visit the Baldrige Program’s Web site at www.baldrige.nist.gov for a general overview.