For Indian companies, “business strategy rests on the social mission.” Bharti Airtel’s business strategy focuses on getting cell phones into the hands of people who have no means to communicate. ICICI Bank’s business strategy focuses on providing financial help to those with no access to banking. Dr. Reddy’s business strategy focuses on addressing the healthcare needs of the poor worldwide.

Dr. Reddy’s, a pharmaceutical company, provides for the healthcare needs of 40,000 children. Such charitable support is another characteristic of Indian leaders and their companies. Infosys has built and staffed entire hospitals in different parts of the country. Tata Group gives 65% of its profits to charities.

Cappelli points to two reasons why Indian companies are doing well by doing good. First, by raising the quality of life for people in India, they are creating consumers who will buy their products and services. Second, they are motivating their employees. U.S. employers have noticed that young workers are attracted to and inspired by a strong social mission. We want to be part of a company that helps people. As Cappelli concludes, “mission drives performance, which drives strategy, and in turn drives organizational performance.”

There are several excellent books that lay out the case for corporate social responsibility in this broader context including:

• The Fortune at the Bottom of the Pyramid by C.K. Prahalad
• Capitalism at the Crossroads by Stuart L. Hart
• Creating a World Without Poverty by Muhammad Yunus
• The Power of Unreasonable People by John Elkington and Pamela Hartigan

To read more about corporate social responsibility, click on these articles:

• How to Build a Culture of Social Responsibility
• New Guidelines for Social Responsibility
• Supporting Your Communities

The truth is, you can do all of these without outside help. I remember being asked about working with a college on its Baldrige Award application only to get a phone call telling me my services wouldn’t be needed: Someone advising the college told them they could do it without me. Which they did. And they won the Award. To me, that proves the college’s management system was very good and that they had the expertise–and the time–to tell their story well.

Those are the two things Baldrige consultants bring to the table: expertise and the ability to save the organization time. An effective assessment or application requires understanding what the Criteria are asking and what your organization does in response. Neither of these is easy. Unless you have an experienced Baldrige examiner on staff, the learning curve is steep, especially for the first assessment. A Baldrige consultant can provide training, help interpret the Criteria, guide or conduct the research, write or edit the assessment, and provide feedback on strengths and opportunities for improvement.

A good Baldrige consultant will help the people working on the assessment understand how the Criteria work and how to tell their organization’s story most effectively. Not only does this empower the organization to produce future assessments/applications with less outside assistance, but the organization also benefits from an expert’s insights into how it can integrate the Baldrige model to achieve its goals.

There will be places where your management system is at odds with the Baldrige model. A Baldrige consultant can describe how a Baldrige organization works and help you figure out how to get from where you are to where your organization needs to be to achieve performance excellence.

To read more about integrating Baldrige, click on these articles:

• If You Are New to Baldrige…
• Leading the Integration of Baldrige
• 5 Baldrige Application Mistakes
• 5 Added Values of the Baldrige Process
• Tracking Your Baldrige Journey
• How to Integrate Baldrige

Get a copy of this free report by entering your name and email address in the orange box on the right. You will read how seven Baldrige Award winners excel at process management, including the common elements you can use to create an effective approach:

• Process design or redesign includes clearly identifying customer requirements, piloting or testing to make sure the process works as planned, training or retraining for those involved in the process, and identifying key process performance measures.
• Process measurement is vital to process management and improvement.
• A person or group is responsible for every key process.
• Everyone needs to be involved in process improvement.
• Process improvement must be managed.
• Best-practice process improvements are identified and shared.

Here’s what you’re signing up for when you submit your name and email address. First, you will receive the free report, and then you will get an email with the second free report on performance management. You will receive three emails over the next three weeks that talk about information on Baldrige.com that you may not be aware of—all of which is free. Finally, you will receive email occasionally to alert you to special features on Baldrige.com, such as the next free report. Everything is free. I won’t bug you with a lot of email. I won’t share your email address with anyone (see our Privacy Policy). And you can opt out easily if you change your mind.

I’m developing and sharing these reports because I believe the Baldrige model has the power to transform the organizations in our lives. I will continue to share that information, and it will continue to be free, but I do need to make a living, which I plan to do through sponsors and advertisers. By collecting names and email addresses, I can further demonstrate the value of the site to potential sponsors/advertisers.

And all it “costs” you is your name and email address, so please subscribe and help Baldrige.com grow.

When you sign up, you will receive an email to confirm your subscription (and to make sure nobody else is using your email address). Click on the link to get your free report.

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How long does it take to win the Baldrige Award?

The Caterpillar Financial Services Corporation started using Baldrige in 1993 through the Tennessee Quality Award program. It was awarded the Tennessee Quality Excellence Award in 1999 and received the Baldrige Award in 2003. According to its Web site, it planned to apply for the Baldrige Award again this year as a worldwide organization.

You could say it took Cat Financial ten years to win the Baldrige Award. I know other organizations–granted, not many–who have done it in two.

So how long does it take to win the Baldrige Award? It depends.

It depends on your starting point. If you’re a 250-point organization (which is pretty common for first-time Baldrige assessments), it’s probably at least five years. If you’re a 500-point company, maybe a couple years if everything goes right.

It depends on senior executive commitment. If your CEO will move mountains to close the gaps in your management system, it will take less time than if senior leaders stand on the sidelines and delegate the improvement process.

It depends on how serious the gaps are. If you don’t have a strategic planning process or a performance measurement system or some other key process, it’s going to take a few years to design, deploy, and refine one.

The truth is, no matter how long it takes, the journey is what matters. Just ask Cat Financial. Building a better management system will mean more to your organization than winning an award.

Not that winning is bad: Receiving a Baldrige Award validates your journey and recognizes your efforts to create a world-class organization.

To learn more about integrating Baldrige, click on these articles:

• If You Are New to Baldrige…
• Leading the Integration of Baldrige
• 5 Baldrige Application Mistakes
• 5 Added Values of the Baldrige Process
• Tracking Your Baldrige Journey
• How to Integrate Baldrige

Checklists. A checklist at Johns Hopkins Hospital required doctors to confirm, among other things, that they had washed their hands before inserting a central line. The 10-day line-infection rate went from 11% to zero. But getting people to use checklists can be a struggle.

Behavioral Economics. Nudge patients to comply with doctors’ orders, and nudge doctors to improve care.

Patient Portals. Patients could log onto their own secure portal to access and share their medical records, check lab results, renew prescriptions, deal with insurers, and communicate with doctors and nurses.

Payment Innovations. “Any hope of affordable, quality care lies partly in payment reform.”

Evidence-Based Decision Making. Electronic medical records should help doctors make better decisions based on the best evidence.

Accountable Care Organizations. The health reform bill includes plans for a pilot ACO whose job is to keep people healthy and out of the hospital and reward doctors and hospitals when they do.

Virtual Visits. Televisiting, a la Ellen Page talking to her doctor, who is in Denmark, in the Cisco ad.

Regenerative Medicine. “Stem cells…can potentially cure an array of devastating, once intractable conditions.”

Surgical Robots. The jury is still out on whether patients do better when a robot is involved.

Genetic Medicine. Once the technical challenges are overcome, doctors will be able to replace defective genes with working ones and tailor drug treatment to your specific genetic profile.

To read more about improving healthcare, click on these articles:

• How Would You Reform Healthcare?
• A Healthcare Role Model
• Baldrige Saves Lives
• Disruptive Innovation and Healthcare
• 3 Ingredients to Improving Healthcare

Hello? I understand the whole “business-exists-to-make-a-profit-and-nothing-else-really-matters” position, but are ROA or ROE really the best ways to measure company performance? I thought the balanced scorecard came along because our obsession with financial performance wasn’t working. Apparently, a lot of folks can’t stop obsessing.

Case in point: HuffPost Business. If you visited its home page today you would find articles on Goldman Sachs, predatory lending, Hank Paulson, the Treasury Department, AIG’s bonus cutbacks, robber barons, financial crisis, financial innovation, bank bailouts, Federal Reserve, credit card blacklists, financial reform, economic oracles, Citigroup, China, more on the Federal Reserve, home sales, jobs bill, dollar vs. euro, Greece bailout, still more Federal Reserve, etc. About the only articles on the home page that weren’t about money were about health care and fast cars.

It shouldn’t be HuffPost Business; it should be HuffPost Finance. And they’re far from alone. Pick any random site that purports to tell you what’s happening in the business world and you’ll find that 90% of their articles revolve around finance. The same is true for most business magazines.

This is how the Baldrige Criteria, which define performance excellence, measures company performance:

• What are your product performance results?
• What are your customer-focused performance results?
• What are your financial and marketplace performance results?
• What are your workforce-focused performance results?
• What are your process effectiveness results?
• What are your leadership results?

Financial performance accounts for one-half of one of these items, worth 35 points—out of a thousand. Still, you would have trouble winning a Baldrige Award if you had poor financial results, but you’d have trouble if you performed poorly on any of these questions. A well-run company cannot be obsessed with financial results at the expense of these other important—some would say equally important—indicators. But what Baldrige Award winners have shown is that performing well in all of these areas stabilizes and improves their financial performance.

When Bob Galvin was chairman of Motorola (when it received one of the first Baldrige Awards), he made quality the first item on the agenda of corporate performance reviews, which were four-hour meetings held eight times a year. Quality and cycle time took up half the meetings. When the group finished discussing them, Galvin left the meeting. His message was clear: If you’re improving those factors that determine the bottom line, the bottom line will be fine.

The best way to measure company performance is with a balanced set of metrics that address those areas that are most important to current and future success. Financial performance is one of those key indicators. But it’s not the only one.

Business leaders have long sought proof that embracing the Baldrige model, implementing Total Quality Management, or applying for Baldrige Award or state quality awards pays. Does it make our company more profitable? Does it return value to our shareholders? Is it worth the effort and changes involved?

The answer to all three questions is, “Yes.”

Dr. Vinod Singhal of the Georgia Institute of Technology and Dr. Kevin Hendricks of the College of William and Mary did a five-year study of more than 600 quality award winners. They compared the financial performance of these winners with a control sample of companies similar in size and operating in the same industries. Singhal and Hendricks tracked both groups for ten years: six years before the award winners won their award and four years after.

Their study revealed that, over a five-year period starting one year before the winners won their first award, the award winners averaged significantly larger increases in several key measures of financial performance:

• 44% higher stock price return
• 48% higher growth in operating income
• 37% higher growth in sales

When Singhal and Hendricks separated the independent award winners (Baldrige and state quality award winners) from those companies winning supplier awards, the results were even more dramatic:

• 61% increase in stock returns over the control group
• 73% increase in operating income
• 33% increase in sales
• 21% increase in return on sales
• 25% increase in employment
• 49% increase in assets

Other insights from the study included:

• For the first five years of the study (up to one year before the award winners won their first award), the award winners and control groups showed little change in operating-income measures. According to Singhal and Hendricks, “this suggests that implementing an effective TQM program may not necessarily result in poor performance during the implementation stage.” In other words, the cost of implementing TQM programs may be balanced by early savings from improvements.

• Smaller companies actually performed better than larger firms, contradicting the belief that performance excellence criteria are not relevant for small companies.

• Lower capital-intensive award winners performed significantly better than higher capital-intensive award winners, reinforcing the importance of employees as the driving force for improvements.

• It can take two years after winning a quality award before a company begins to see the benefits of TQM programs in its stock price.

To read more about the impact of integrating Baldrige, click on these articles:

• Baldrige and Quality Results
• Baldrige and Workforce Results
• Baldrige and Customer Results
• Baldrige and Financial Performance