The Malcolm Baldrige National Quality Award was established in 1987, when Congress
passed the Malcolm Baldrige National Quality Improvement Act. The award is named after
the former Secretary of Commerce,Malcolm Baldrige, and is intended to reward and
stimulate quality initiatives. It is designed to recognize companies that establish and
demonstrate high quality standards. The award is given to no more than two companies
in each of three categories: manufacturing, service, and small business. Past winners include
Motorola Corporation, Xerox, FedEx, 3M, IBM, and the Ritz-Carlton.
To compete for the Baldrige Award, companies must submit a lengthy application,
which is followed by an initial screening. Companies that pass this screening move to
the next step, in which they undergo a rigorous evaluation process conducted by certified
Baldrige examiners. The examiners conduct site visits and examine numerous
company documents. They base their evaluation on seven categories, which are
shown in Figure 5-11. Let’s look at each category in more detail.
The first category is leadership. Examiners consider commitment by top management,
their effort to create an organizational climate devoted to quality, and their active involvement
in promoting quality. They also consider the firm’s orientation toward meeting customer
needs and desires, as well as those of the community and society as a whole.
The second category is strategic planning. The examiners look for a strategic plan
that has high quality goals and specific methods for implementation. The next category,
customer and market focus, addresses how the company collects market and customer
information. Successful companies should use a variety of tools toward this
end, such as market surveys and focus groups. The company then needs to demonstrate
how it acts on this information.
The fourth category is information and analysis. Examiners evaluate how the company
obtains data and how it acts on the information. The company needs to demonstrate
how the information is shared within the company as well as with other parties,
such as suppliers and customers.
The fifth and sixth categories deal with management of human resources and
management of processes, respectively. These two categories together address the issues
of people and process. Human resource focus addresses issues of employee involvement.
This entails continuous improvement programs, employee training, and
functioning of teams. Employee involvement is considered a critical element of quality.
Similarly, process management involves documentation of processes, use of tools
for quality improvement such as statistical process control, and the degree of process
integration within the organization.
The last Baldrige category receives the highest points and deals with business
results. Numerous measures of performance are considered, from percentage of defective
items to financial and marketing measures. Companies need to demonstrate progressive
improvement in these measures over time, not only a one-time improvement.
The Baldrige criteria have evolved from simple award criteria to a general framework
for quality evaluation. Many companies use these criteria to evaluate their own
performance and set quality targets even if they are not planning to formally compete
for the award.
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