• The Program
• The Criteria
• Why Baldrige
• Relationship between the Baldrige Criteria and Accrediting Organizations
• Baldrige and the Bottom Line

• The Program
• What do the following successful and well-known organizations have in common: AlliedSignal, Chevron, Federal Express, IBM, Intel, Motorola, Ritz-Carlton, Xerox Corporation? All of these companies are using a special type of organizational assessment process to improve performance, and have been doing so for years. The assessment process common to all these companies is the Malcolm Baldrige National Quality Award Criteria.
• In the 1980s many industry and governmental leaders saw that an emphasis on quality was necessary for survival in the U.S. Marketplace and for business in an ever-expanding, more demanding, highly competitive global market. Since its creation in 1987, the Baldrige National Quality Program has played an important role in helping thousands on U.S. organizations improve their products and services, their customers’ satisfaction, their bottom line, and their overall performance.
• In times of challenge, achieving success in the marketplace involves leadership, vision, high ethics, and agility - as well as product and service quality. Over the 15 years of the Baldrige National Quality program, the Criteria for Performance Excellence have evolved significantly toward comprehensive coverage of strategy-driven performance and alignment of management systems to adapt to the ever-changing conditions every successful business faces.

• The Criteria
• The Criteria for Performance Excellence help implement the Core Values of the Baldrige National Quality Program. They define the critical factors that drive organizational success, and serve as the basis for evaluating and diagnosing an organization’s overall performance management system. They are non-prescriptive in nature, providing a common language to facilitate the sharing of best practices among U.S. organizations. Applicable to all business segments, both large and small, service and manufacturing, healthcare and education, for profit and not-for-profit, the Criteria is divided into seven, interwoven categories:
• Leadership
• Strategic Planning
• Customer/Market Focus
• Information & Analysis
• Human Resource Management
• Process Management
• Organizational Performance Results

• Why Baldrige
• The Baldrige National Quality Program has been extremely successful in promoting performance excellence across the country and around the world. Through the sharing of best practices and knowledge of the Baldrige Criteria, organizations have helped increase their business competitiveness in several ways. First, the use of the Criteria has helped organizations improve their processes related to customers and suppliers, and their relationships with these groups. In addition, some organizations have encouraged the supplier organizations to use the criteria to improve their business results.
• To further illustrate the effectiveness of the criteria in improving business performance, the National Institutes of Standards and Technology tracks the performance of Baldrige Award recipients. The “Baldrige Index” is a fictitious stock fund made up of publicly traded U.S. companies that received the Malcolm Baldrige National Quality Award between 1991 and 2001. A hypothetical $1000 is invested in the common stock each of these companies. The same total hypothetical dollar amount is invested in the Standard & Poor’s (S&P) 500 on the same days. In each of the previous 7 years this group of award winners has outperformed the S&P index. This year, the publicly traded award recipients, as a group, outperformed the S&P 500 by approximately 4.5 to 1. They achieved a 512% return on investment, compared to a 115% return for the S&P 500.
• Other studies have also found that organizations receiving quality awards (like the Malcolm Baldrige National Quality Award) show long-lasting improvements to their bottom-line results. Fro example, professors form the Georgia Institute of Technology and the University of Western Ontario studied more than 600 recipients of various quality awards. This five-year study showed that the award recipients experiences a 44% higher stock price return, a 48% higher growth in operating income, and 37% higher growth in sales as a whole than the control group, consisting of firms similar in size and operating in the same industries. Award recipients also experience a significant improvement in employment, and asset growth, and return on sales.
• The number of local, state, and regional award programs based on the Malcolm Baldrige National Quality Award Criteria has grown tremendously. Today there are 54 state and local quality award programs. In addition, more than 50 international quality awards (most based on the Malcolm Baldrige National Quality Award Criteria) have been established. This growth in the number of programs indicates increased acceptance, both nationally and internationally, of the Baldrige principles. The Malcolm Baldrige National Quality Award Criteria has truly become a global benchmark – a worldwide standard for performance excellence.

• The Relationship Between The Baldrige Criteria And Accrediting Organizations
• Many accrediting organizations were established prior to and independent of passage of The Malcolm Baldrige National Quality Award in 1987. Recent iterations of all of these organizations’ standards have been more similar to the Baldrige Criteria. Indeed, a Baldrige application is compatible with or, in some cases, may be substituted for the organization’s assessment. Several accrediting organizations (e.g. the national Committee on the Quality Assurance And the Southern Association of Colleges and Schools) are expanding their procedures to become more performance based and systematic in their evaluation – after the Malcolm Baldrige National Quality Award Criteria. The basic difference between the Baldrige Criteria and accreditation is that Baldrige focuses on achieving performance excellence while accreditation focuses on achieving acceptable performance.

• ISO 9000

	Baldrige Criteria	ISO 9000
Product/Service Oriented		Y
Concentrates on fixing quality system defects		Y
Prescriptive	N	Y
Non Prescriptive	Y	N
Focus on performance Excellence	Y	N
Tracks important organizational results	Y	N
Role Model Performance	Y	N
Considers Individual Factors & Strategic Challenges	Y	N

• Joint Commission on Accreditation of Healthcare Organizations
• Healthcare organizations benefit from JCAHO accreditation as a qualification to operate, but JCAHO does not represent a framework for achieving overall performance excellence.