BLOGRIGE

Baldrige and the Entrepreneur - A Love Story

Posted by Bob Fangmeyer

Romance isn't a genre I would normally read, and Inc Magazine isn't where I would expect to find it, but the February 2012 issue has a love story that I can really get into--wild animals; dangerous adventures; and everyday people who overcome serious obstacles to achieve incredible feats. While the hero in this story is not like Fabio, he is arguably more passionate...not, in this case, for blondes, brunettes, or redheads, but for accuracy, precision, and near-perfection in his hobby and his business.

Editor-at-large, Leigh Buchanan, has really brought to life not only Larry Potterfield, the CEO of MidwayUSA, but the power and potential of the Baldrige criteria. I encourage you to read this story that explains how Larry is leveraging the Baldrige process to make MidwayUSA "the best run business in America."

But Sir, We Are Offering You an Upgrade!

Posted by Harry Hertz, the Baldrige Cheermudgeon

So recently most blog posts have been about Baldrige Program news and changes. With all the changes occurring in the Baldrige Program, we cannot lose sight of the fact that the Criteria for Performance Excellence remain a great guidepost for evaluating our own organizations and those that provide us products and services.

This blog post is about credit card services and is probably so typical of experiences we all have that you can only sit back and enjoy, even while it is happening to you. I got a letter from my VISA credit card supplier, with a printed note on the outside of the envelope "Loyal Customer Upgrade Inside." I must admit being the recipient of frequent mailings with promises on the outside, this made me immediately skeptical, rather than anticipating good news. My instincts were right. The letter inside said that my credit card program was being discontinued in favor of a "new and better" (uh..oh) program. The new program was offering me three points per dollar for some purchases, two points for others and one point for most purchases. The 3 point offers were for merchants I never use (and they know that from my purchase history), two points for the purchases I make most frequently with the current credit card, and one point for everything else. So my upgrade was, in essence, to two points per dollar spent for the bulk of my purchases on this card. Let's compare that to my current situation. I get one point per dollar spent, plus a 3% cash rebate. Maybe they were being silent on the cash rebate and this really was a doubling of my points?

With some assumed foreknowledge of what was coming, I called the 800 number to find out the details of the upgrade. It was as stated in the letter and no cash rebate. I said I respectfully decline the upgrade and want to stick with my current card. Not an option the representative tells me. I explain the loss associated with "the upgrade". She says but your points per dollar will double (to a value of 2% of my purchases). I explain kindly that I currently receive 4% (three in cash and one in points). 

Then the scripted response, "But sir, we are offering you an upgrade, most customers appreciate upgrades." We entered a non-sensical dialog for a few minutes. It ended with me cancelling the credit card. I would say my cancellation was 25% protest of the "upgrade" and 75% disgust with the company's customer engagement strategy (or lack thereof) and their training/empowerment of their customer representative. Please let these people have enough power to at least say, "I can't meet your old terms, this is not an upgrade for you, it is for others with different use patterns." Mind you my use of the VISA card was to purchase products associated with the company they had co-branded the VISA card with.

It is well known through published studies that a satisfied customer tells many fewer people about their experience than a dissatisfied customer. There's even a book entitled, Satisfied Customers Tell Three Friends, Angry Customers Tell 3000. (How many of you are reading this blog post?)

Customer and workforce engagement drive business results. Study the extensive research by the Gallup organization, leading to the Q12 and CE¹¹surveys of employee and customer engagement. It is why Category 3 of the Baldrige Criteria focuses on customer engagement andd loyalty strategies. It is why Category 5 of the Criteria focuses on workforce engagement, empowerment, and development strategies. It is why Baldrige organizations succeed in the marketplace!

So my advice to all organizations with customers and employees is read or reread these two categories of the Baldrige Criteria and then put yourself in your customers' shoes. Do you feel good? I hope so, but many of you are probably squirming right now. In that case, take two doses of Baldrige Criteria, exercise them with your colleagues in the morning, and start feeling better! I do after writing this blog post!

 

Baldrige Benefits the Economy, But What About CEOs?

Posted by Dawn Marie Bailey

 

In the blog Does Baldrige Benefit the Economy?, Harry Hertz presented an economic impact study that showed the Baldrige Program's benefit-to-cost ratio at 820-to-1. The economists who conducted the study arrived at this ratio by comparing the benefits received by the 273 Malcolm Baldrige National Quality Award applicants from 2007 to 2010 with the cost of operating the Baldrige Program.

So, this is great news for an economy in which the Baldrige Program is operating. But how does this news translate for CEOs? If my main interest as a CEO is my bottomline, so what?

This study directly addresses the public accountability question for public programs—namely what is the social benefit of the Baldrige Program and how does the social benefit compare with the social costs. CEOs want more specifics—they want to know what the private benefits for their companies will be given an investment in performance excellence.

According to the economists, the Baldrige CEOs reported the substantial gains they experienced by using the Baldrige Criteria for Performance Excellence versus the shortfalls had they not invested in Baldrige. The CEOs saw more benefits from use of the Baldrige Criteria and the other resources of the Baldrige Program than if they had used the best available alternatives to develop their performance excellence strategies. And it is these benefits that resulted in the 820-to-1 return for the economy.

In addition, the Baldrige Program Web site provides much more data to make the case for Baldrige to CEOs across the sectors of the U.S. economy.

So now we know that the evidence supports not only an 820-to-1 ratio to show Baldrige's benefit to the U.S. economy, but it also supports the belief that CEOs who implement Baldrige will see great gains as well.



 







 

The Importance of Community Support

Posted by Pamela Wong

One characteristic of high-performing organizations is their active support of their communities, an area to address found in item 1.2 of the Baldrige Criteria for Performance Excellence. I dare say that most, if not all, Baldrige Award winners stand out in this way; today I’d like to focus on two organizations—a new recipient and a Baldrige veteran.

The first is Schneck Medical Center (SMC), a 2011 award recipient in Seymour, Indiana. SMC collaborates with local community agencies such as the health department, Red Cross, and United Way to conduct a biannual assessment of community health needs. Through the strategic planning process, SMC analyzes the needs and prioritizes its opportunities for involvement.

One way its staff members serve the local community is through donations, which have increased 14 percent over the last three years, to the United Way. In addition, staff members have donated portions of their earnings back to the SMC Foundation, which has funded projects such as a heliport that enables rapid transporting of patients to level 1 trauma centers and $250,000 toward construction of the hospital’s cancer center. SMC also provides many no-cost health screenings, health education programs, and health fairs to residents in the local area.

Another example of community support is that of the Ritz-Carlton Hotel Company, the only service organization to receive the award twice, in 1992 and 1999. Ritz-Carlton’s Community Footprints program, formed as an actual nonprofit organization, funds its workforce’s efforts to give back to its communities all around the world. The employees focus on hunger and poverty relief, environmental conservation, and the well-being of children.

At our own Quest for Excellence Conference a few years ago, Ritz-Carlton partnered with us on a work project at Boys” Town in Washington, DC. A recent example is its partnership with America’s Promise Alliance’s Grad Nation campaign, which seeks to end our nation’s dropout crisis. The hotel company connects students to Ritz-Carlton employees through “career exploration modules” that help students understand the importance of continuing their education and provide training in life skills.

SMC and the Ritz-Carlton both serve their communities, but in different ways. What determines those ways? SMC’s mission is “to provide quality health care to all we serve.” The hospital’s community service helps fulfill that mission. The concept of strategic challenges wasn’t part of the Criteria when Ritz-Carlton won the award in 1999; however, that concept may be behind the hotel company’s involvement in education.

Service organizations often find that having a qualified workforce is a strategic challenge; by exposing high schoolers to job opportunities within the hotel industry and encouraging them to graduate, Ritz-Carlton is helping to prepare its future workforce.

Do you have examples to share of how your organization supports its key communities?

Does Baldrige Benefit the Economy?

Posted by Harry Hertz, the Baldrige Cheermudgeon

A decade ago, in 2001, the Baldrige Program commissioned a study to evaluate the net social value of the Program. In 2011, the Baldrige Foundation asked the same economists to take a new look and see if the benefit still existed and to quantify it based on actual applicant data, rather than the more general ASQ member data used in 2001.

 

An impressive benefit-to-cost ratio of 820-to-1 is the conclusion arrived at in the new study. The ratio is derived from the implementation of cost savings, gains from consumer satisfaction, and gains from increased value of sales in excess of resource costs of those organizations that have applied for the Malcolm Baldrige National Quality Award.

 

Three specific categories of social benefits were quantified from the responses of 45 Award applicants to a Web-based survey, with each category separately compared to the entire operating cost of the Baldrige Performance Excellence Program. The evaluation findings are achieved from:

 

 ·         the cost savings of the applicants because it was not necessary for them to incur the investment costs to achieve on their own the same level of benefits from their performance excellence strategies as they realized from the availability of the publicly funded Baldrige Performance Excellence Program

·         the gains to consumers from greater satisfaction from higher quality products because the Baldrige Criteria were available and used

·         the gains to the economy from saving scarce resources (because successful performance excellence strategies not only enable higher quality products or services but also lower the costs of providing them) because the Baldrige Criteria were available and used

 

The report summarizes, “The Baldrige Performance Excellence Program, with the imprimatur of national leadership and a prominent national award . . . , creates great value that could not be replicated by private sector actions alone.”

 

The economists even explain that a conservative method, a cluster approach, was used to estimate this ratio. “If the social costs were compared to the benefits for the economy as a whole, the benefit-to-cost ratio would be considerably higher,” they write.

 

The study, conducted by economists Albert N. Link of the University of North Carolina at Greensboro and John T. Scott of Dartmouth College, focuses specifically on a survey population of the 273 applicants for the Malcolm Baldrige National Quality Award since 2006. It permits a more direct analysis of benefit than the earlier 2001 study and does, again, document the value of the Baldrige Program.

You just stepped into an elevator . . .

Posted by Dawn Marie Bailey

Ever think about what you would say if you just stepped into an elevator and someone asked you what the Baldrige Criteria for Performance Excellence were all about? And more specifically, why they should even care about Baldrige?

Here are the talking points that I would try to cover. Depending on how many floors we needed to travel, I might elaborate on one or all. Here's what I would say:

"You ask, 'Why is Baldrige a good investment of your time and money?'

With Baldrige, you can

• Create jobs
• Save lives
• Increase profits
• Improve outcomes for students or patients or your business

TheBaldrige enterprise can help you learn how:

• Baldrige is a way to improve.
• Baldrige is a way to compete.
• Baldrige is a way to enable your success.
• Baldrige is a way for you to turn difficult situations around in tough economic times.

Baldrige benefits you

• In aligning your work systems in order to concentrate on engaging employees and customers
• In aligning your processes in order to focus on effective operations, student learning, or patient safety
• In aligning your entire organization for success in your marketplace
• In comparing your organization to role models across seven management categories

You can take charge and accelerate your success with Baldrige: a proven, flexible framework; an improvement model and tool; and a repository of standards and industry best practices."

What are your talking points for an elevator speech about Baldrige?

 

 

 

 

 

 





It's that Ethics Thing...Again

Posted by Harry Hertz, the Baldrige Cheermudgeon

I know I frequently write and talk about business (and other) ethics. It's because I think they are so important to reputation (customer loyalty) and to a productive economy. And ethical practices have a significant return on investment, social and financial. So why do I begin a new year with my first post being on this topic? Because the seventh biannual National Business Ethics Survey has just been released by the Ethics Resource Center. And there are some pieces of good news and some really troubling signs.

First the good news, the percentage of employees witnessing misconduct dropped to an all-time low of 45%, down from a high of 55% in 2007. And those who reported the misconduct they witnessed reached an all-time high of 63%, up from a low of 53% in 2005.

The bad news: retaliation against whistle-blowers rose significantly. 22% of employees who reported misconduct say they experienced some form of retaliation. That is up from 15% in 2009. And the percentage of employees who said they experienced pressure to compromise standards was at 13%, compared to 8% in 2009.

Senior leaders and managers set the tone by the ethics they demonstrate. And here the data were the most troubling to me. Confidence in the ethics of senior leaders dropped to 62%, down from 68% in 2009 and matching the all-time low in 2000. And 34% of employees said their direct supervisors do not disply ethical behavior, up from 24% in 2009.

Baldrige Award recipients have long been role models for ethical conduct. We have been writing about the importance of ethics for more than eleven years. And societal responsibility has been a Baldrige core value since the early days of the Baldrige Program. The Baldrige Criteria for Performance Excellence devote one out of 17 items totally to governance, legal and ethical behavior, and societal responsibilities. And a second item is totally devoted to leadership, governance, and societal responsibility results. I encourage you as you start the new year to look at all the Baldrige Criteria, but how about starting with an ethics refresher by looking at Items 1.2 and 7.4, the two items I referenced above.

I wish everyone a good and ethical new year!

What has Baldrige done for me lately?

Posted by Dawn Marie Bailey

 

I heard recently that a governor asked, "What has Baldrige done for my state?" I wish I had been present with a laptop and could have shared impacts of Baldrige by state.

I wish I also could have shared with him results that organizations have achieved by using Baldrige as a continuous improvement tool in health care, education, manufacturing, service, small business, and nonprofit/government.

I wish I could have helped to overcome his perception that Baldrige is just a quality fad or has lost its luster. I could have done that by sharing economic impact studies that show a huge return on investmentfrom using Baldrige. I wish I could have shared information about how Baldrige is part of the foundation of a strong economy.

I wish I could have shared a myriad of other results found on the Baldrige Web site and encouraged him to not just take it from me but to listen to those who are much more eloquent on results achieved with Baldrige. 

But since I was not present to make the case in person for Baldrige, I will try to do it here.

And the next time you are asked "What has Baldrige done for me lately?" perhaps you will be ready.

Dear Manufacturing CEO: All You Have to Lose is Potential Profit . . .

Posted by Dawn Marie Bailey

 

In the new year 2012, it is time to say goodbye to perceptions of the Baldrige Criteria for Performance Excellence as a total quality fad of the 1980s. It is time we introduce you to Baldrige 2.0: a Criteria for manufacturing companies of today. And don't worry; the Criteria do not have to suck up a lot of time in comprehension. Simply take a look at the questions and consider how they can help you. Here's an example.

My husband works for a prominent steel manufacturer. In today's economy, the issues that keep the CEO up at night are making payroll, ensuring safety (which is directly connected to making payroll—a poor safety reputation leads to loss of business), and ensuring a balance between quality and the cheapest bid to get the job. You wouldn't be surprised that these three issues alone are overwhelming enough to not give the CEO a lot of excess time to crack open a Criteria booklet and start reading. However, what if the manufacturing CEO approached the Criteria not as an overwhelming business model but as a starting place to learn about the results other manufacturers have achieved? Let me break it down even further for our busy manufacturing CEO.

Over lunch today, manufacturing CEO, why not take a quick look at the Baldrige Criteria, summarized for you in Baldrige 20/20: An Executive's Guide to the Criteria for Performance Excellence, if you are interested in

• Improved financial results
• Satisfied customers
• A satisfied, stable workforce
• Improved operations

Simply turn to page 4 in this book and see the results achieved by 10 manufacturing organizations that have been recognized as national role models and that have used the Baldrige Criteria as a means to guide organizational improvement. If your interest is sparked, consider looking at the Criteria themselves or attending the Quest for Excellence conference where best practices will be discussed. If your interest is further peaked, consider exploring various tools on the Baldrige Web site to help you get started.

In the words of a global manufacturing CEO, Gregory R. Page, chairman of the board and CEO of Cargill, Incorporated, "The Baldrige Criteria and methodology have been critical in helping us align our business strategy, engage our employees, and inspire our teams to constantly strive to improve every day. . . . [By exploring the Baldrige Criteria and the book Baldrige 20/20 see] how others are successfully navigating the storms of change, achieving operational effectiveness and efficiency, improving financial results, enhancing customer service, and winning new markets through application of the Baldrige Criteria."

Or don't. What do you have to lose?