Dr. Juran was a vocal advocate for the Baldrige program. I interviewed him in 1991 for my first book on the Baldrige model and he was kind enough to write a reference for the book. At the end of the interview, he not only invited me to his annual conference, then called IMPRO, but he offered to pay all of my expenses to attend. Before the conference, Dr. Juran delivered, “Making Quality Happen,” which remains one of the most informative sessions I’ve ever taken part in about the value of a systems approach to quality management and improvement.

I quoted him in my book, The Baldrige Quality System: “Prior to the Baldrige Award, any company that didn’t have a quality revolution was confused. Quality consultants were tugging them in different directions. We lost a decade that way. The criteria can become the focal point around which the renaissance can be built.”

Dr. Juran’s prediction has not come true—yet. While Baldrige still has the potential to inspire a quality and performance renaissance, it has not gained the traction enjoyed by programs such as Lean and Six Sigma, in part because Baldrige is not a program. It does not prescribe the exact path you must take to gain world-class results, but helps you understand all of the things you need to improve to achieve performance excellence. It’s a systems approach to building an effective management system that will help your organization reach its goals, now and well into the future.

Baldrige.com now offers more than 600 articles about this systems approach to world-class performance. I can’t think of a better organization to build on this foundation that the Juran Institute, which integrates the Baldrige model in the services it provides. You will want to bookmark this site and check back frequently for the insights and ideas Juran will be posting.

I want to thank you for visiting Baldrige.com. I have enjoyed sharing what I learn with you and look forward to continuing to learn from the quality leaders at the Juran Institute.

Economists Albert N. Link from the University of North Carolina and John T. Scott from Dartmouth College published their evaluation of 45 Baldrige Award applicants on December 16, 2011. The report is available here (pdf). The Baldrige program asked the 274 organizations that submitted applications from 2007 to 2010 to participate in the study and 45 accepted the invitation. Link and Scott used a counterfactual evaluation method to determine the benefit-to-cost ratio, asking what the private sector would have had to invest to achieve the same level of benefits through the Baldrige program. Benefits were realized in three areas:

• Savings to the applicants in investment costs to achieve the same level of benefits from their performance excellence strategies as they realized from the Baldrige program
• Gains by consumers in greater satisfaction from higher quality products and services
• Gains to the economy from saving scarce resources because the Baldrige Criteria were available

As I understand it, the counterfactual evaluation case made by the study is that organizations that integrate Baldrige increase demand because they offer higher quality products and services and they reduce costs because of more efficient operations. They earn more and spend less.

Link and Scott describe the methodology in their report. They concluded that the ratio of social benefits to social costs among the 45 organizations that responded to the survey was 351:1 while the ratio for all Baldrige Award applicants was 820:1. They also extrapolated these ratios by sector: 456:1 for healthcare, 357:1 for manufacturing, and 119:1 for education. While they cautioned against attaching too much significance to these numbers because of the small sample size for each sector, they emphasized that integrating Baldrige benefits all sectors, arguing that the Baldrige program’s benefits “are not specific to any one sector but reflect benefits realized across all of the sectors.”

In their concluding statement, Link and Scott state: “The Baldrige Performance Excellence Program is a public-private partnership that…creates great value that could not be replicated by private sector actions alone.”

While the public-private partnership equation is changing with the end of federal funding, the value of the program remains the driving force behind those who are working to reinvent Baldrige to continue to bring value to the U.S. economy.

The opportunities for improvement revealed by a Baldrige assessment contain the logic for acting upon them: Your results are flat or negative because this or that process is broken. Fix the process and improve your results. Measure your progress. Validate it with your customers. Repeat.

Unfortunately, the logic of the change is usually lost to everyone but the leaders who enact it, which can render it ineffective. In a recent article on Forbes, author Carol Kinsey Goman explains why human beings resist change. According to brain analysis technology, our work habits are controlled by a part of the brain called the basal ganglia. When we do things the way we’ve always done them, we feel good. Change stimulates the prefrontal cortex, which is linked to the amygdala, which controls our “fight or flight” response. When change overwhelms the prefrontal cortex, the amygdale triggers physical and psychological disorientation and pain. Even if we know logically that a change is necessary and positive, our brains can react negatively.

Goman offers six suggestions for helping your workforce handle change:

1. Trust people to see the need for change. Communicate information that shows why change is needed. Provide opportunities for people to ask questions and discuss the implications of the change. Help employees reach the conclusions that prompted you to act.
2. Make new ideas become familiar. You cannot over-communicate the reasons for change or how the changes will occur. Develop a communication strategy that uses all available mechanisms—town hall meetings, focus groups, staff meetings, shift meetings, intranet, newsletters, etc.—to talk about the change. As Goman notes, “It takes a lot of repetition to move a new or complex concept from the prefrontal cortex to the basal ganglia.”
3. KISS your communication. Keep is simple. Condense the change into two or three critical goals.
4. Never underestimate the power of a vision. Gorman writes, “I’m talking about a clearly articulated, emotionally charged, and broad picture of what the organization is trying to achieve.
5. Don’t “sugar-coat” the truth. Be honest and realistic about expectations the how the change will unfold. Any deception, whether intentional or not, will be exposed and will heighten anxiety and distrust.
6. Watch your body language. “When discussing organizational change initiatives, there are two conversations taking place, and the second, nonverbal one, can reinforce or sabotage your verbal message,” says Goman. People believe what they see more than what you say, which means you must totally believe in the change before you can convince others of its value.

Every organization must change to survive and thrive. A systematic approach to change that addresses these six suggestions and considers the way our brains are wired can help make change just another work habit.

Here are her ten insights and how they relate to the Baldrige model:

1. You gain a competitive advantage by creating unique value for customers. Customer-driven excellence is a Baldrige core value, defined as an organization’s performance and quality being judged by its customers. If customers rate your performance and quality high, you will gain a competitive advantage.
2. Your strategy must also clarify what the organization will not do. The Baldrige model asks several questions about how you develop strategies that will help you prioritize your strategies.
3. “Competition is about profits, not market share,” writes Magretta. You grow a company by increasing profits, not market share.
4. Brilliant strategies will not lead to performance excellence unless you execute them. The Baldrige Criteria devote an entire section to strategy implementation.
5. Good strategies are interconnected and build on core competencies. The Baldrige Criteria ask how your strategic objectives capitalize on your core competencies and balance short- and longer-term challenges and opportunities.
6. While it’s important to be flexible, your organization must stand for and excel at something. You must have the resources and capabilities to execute the plan
7. You need not predict the future to commit to a strategy.
8. “Vying to be the best is an intuitive but self-destructive approach to competition,” Magretta writes.
9. You need both a distinctive value proposition and a value chain tailored to deliver it. The Baldrige model promotes the development of a work system that capitalizes on your core competencies, delivers customer value, and achieves success and sustainability.
10. Your strategy should delight your most important customers while deliberately making your least important customers unhappy. The Baldrige Criteria ask which customers you intend to pursue, and why.

To read more about effective strategic planning, click on these articles:

• Revolutionary Thinking
• What Path Is Your Organization Taking?
• Effective Strategic Initiatives
• 10 Tests to Assess Your Strategies
• The Vital Few

Baldrige Award winners integrate Baldrige by performing regular—usually annual—Baldrige assessments. The process of producing assessments and prioritizing and acting on the opportunities they reveal institutionalizes a culture of continuous improvement. It keeps everyone focused on what is most important for the organization to grow and excel. It improves the alignment of people and processes with the organization’s goals, objectives, and strategies. Best of all, it delivers results, as the award application summaries of Baldrige Award winners show.

IndustryWeek recently reported on a survey it conducted with TBM Consulting about the impact of continuous-improvement programs on three financial metrics: anticipated revenue growth, operating income growth, and cash flow over the past year. “Across the board, companies with no continuous improvement programs performed worse across all three measures,” Jill Jusko concluded here:

• More than 50% of respondents with no continuous improvement program said they expect revenue growth to be 3% or less in 2012, compared to fewer than 20% of companies with mature continuous improvement programs.
• Nearly half of respondents with no continuous improvement program anticipate operating income growth of 3% or less in 2012, compared to less than half that percent from firms with continuous improvement programs.
• Slightly more than 20% of companies with no continuous improvement programs reported an increase in cash flow over the past year compared to more than 50% of companies with mature continuous improvement programs.

Dabbling in continuous improvement is like dabbling in Baldrige: You may get quick performance bump but it won’t be sustainable. The only way realize the full benefits of integrating Baldrige, which is a proven approach to continuous improvement, is to commit to annual assessments at least until your management system exemplifies the Baldrige core values.

To learn more about how to integrate Baldrige, click on these articles:

• Baldrige Gets Results
• Baldrige Core Values
• How to Integrate Baldrige
• 10 Steps to an Effective Baldrige Assessment

In “Five New Management Metrics You Need to Know,” James Slavet suggests new metrics that great teams should measure. Few are new, and even fewer could be considered metrics since they are largely unmeasurable, but being aware of them may help your team improve performance, so here they are:

1. Flow State Percentage. How many hours a day team members are “in the flow”—focused on a task without interruption—divided by the number of hours they work. According to Slavet, “studies have shown that each time flow state in disrupted it takes 15 minutes to get back into flow, if you can get back at all.” Find ways to reduce interruptions and productivity will go up.
2. Anxiety-Boredom Continuum. People are more productive when they are challenged without being overwhelmed, and they tend to be unproductive when they are bored. Observe team members for signs of boredom (low energy, showing up late and leaving early) or anxiety (reacting to setbacks with anger or frustration, getting sick a lot), ask them where they are on the continuum, and strike an effective balance.
3. Meeting Promoter Score. At the end of each meeting, “ask the participants to each rate from 1 to 10 how effective the meeting was, with one suggestion for making the meeting better,” Slavet writes. Then act on the suggestions.
4. Compound Weekly Learning Rate. The “ability to learn is like the compounding interest on an investment: after two or three years, a relentless learner stands head and shoulders above his peers,” states Slavet. One way to become a relentless learner is to integrate Baldrige. Another, proposed by Slavet, is to ask your team members how they got 1% better in the past week. What did they learn? Ask the question every week and you will help create a learning culture.
5. Positive Feedback Ratio. Strive for a positive-to-negative feedback ratio of 5:1. “Catch people doing good things,” writes Slavet. “Never miss a chance to say something nice, even if you feel a little silly.”

The problem with these “metrics” is that they are very hard to measure. I imagine an organization that sees value in one of them could find a way to measure it, but it will take some creativity and time to develop a meaningful, actionable metric. However, paying attention to all five areas will surely improve a team’s performance—even if they’re hard to measure.

UW-Stout earned the Baldrige Award in 2001. Ten years later it remains passionate about the value of integrating Baldrige. According to Sorenson and Furst-Bowe, “The most important change brought about by our Baldrige experience, which is now part of our culture, was the establishment of an inclusive planning process to ensure that, in Baldrige speak, ‘all arrows are pointing in the same direction,’ and not at cross-purposes.”

Having worked with five Baldrige Award winners, I can attest to the value of aligning processes and people with the goals, strategies, and objectives of the organization. Whether you are in business, healthcare, or education, the ability to focus all activities on shared goals dramatically improves performance and is a major reason Baldrige Award winners achieve world-class results.

Sorenson and Furst-Bowe also state that “the Baldrige model…also led to a number of important innovations, including our e-Scholar or student laptop program, our designation as Wisconsin’s polytechnic university, and our Discovery Center for applied research and economic development outreach.”

Most organizations embrace Baldrige because they want to improve quality and performance and reduce waste. Few think about being more innovative, but “managing for innovation” is a core value of the Baldrige model. As organizations understand and improve their key processes, they build a learning culture that values innovation. “Innovation should be integrated into daily work and should be supported by your performance improvement system,” according to the Baldrige Criteria. “Systematic processes for innovation should reach across your entire organization.”

UW-Stout continues to benefit from its process of integrating Baldrige that began more than a decade ago. Your organization can achieve the same success. Click on the articles below to learn more about the Baldrige model and how it can help your organization excel:

• What Is Baldrige?
• The Baldrige Criteria
• Baldrige Core Values
• How to Integrate Baldrige
• Baldrige Gets Results