All Posts Tagged With: "Education"
Benefit-to-Cost Ratio for Baldrige: 820-to-1
A new study of the net social value of the Baldrige Performance Excellence Program concludes that the program “creates great value for the U.S. economy.”
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…
19Jan2012 | Steve George | 0 comments | ContinuedThe Real Value of a Baldrige Site Visit
Of the 69 applicants for the 2011 Baldrige Award, 11 have made it to the final stage. They will receive site visits in October by a team of examiners who will verify and clarify their applications.
The finalists for the Award are:
- 6 healthcare organizations (40 submitted applications)
- 3 nonprofits/government organizations (14)
- 1 educational organization (8)
- 1 small business (2)
Two manufacturers and three service companies also submitted applications but none was awarded a site visit.
According to the press release from the Baldrige program, “examiners will provide 300 to 1,000 hours of review to each applicant receiving a site visit, and all applicants will receive a detailed report on the organization’s strengths and opportunities for improvement.”
Organizations that take integrating Baldrige seriously recognize that the site visit and resulting feedback are the real value of the Baldrige process. Sure, winning the Baldrige Award is satisfying and rewarding, a testament to the hard work you’ve been doing, but visionary leaders see the Award as recognition for the quality of their management systems while the site visit and feedback drive significant improvements to those systems. They are passionate about improving performance and a Baldrige site visit and feedback report feed that passion.
This has been true since the earliest days of…
16Sep2011 | Steve George | 0 comments | ContinuedAmerica Needs Baldrige
We want to raise awareness among our elected representatives in Washington about the value of the Baldrige program. On Thursday, September 8th, Baldrige supporters are being asked to email, fax, and/or call their Senators and Congressmen/ Congresswomen to tell them that “America Needs Baldrige.”
Over the past couple of weeks, I’ve posted articles about the results achieved by Baldrige organizations. They provide compelling evidence of the value of the program:
- A study by the European Foundation for Quality Management of 120 Award-winning companies, including 24 from the U.S., compared their financial performance to that of similar companies that had not won awards. Five years after receiving their awards, these companies outperformed the comparison companies by 77% in sales, 44% in assets, and 18% in operating income.
- Cargill has an internal Baldrige assessment process. The cumulative earnings after tax vs. budget of business units that have a high degree of deployment of the Baldrige model is 30% compared to 13% for those with partial deployment and -12% for those just starting the Baldrige journey.
- The five two-time Baldrige Award winners grew significantly between their first and second Awards: 67% in number of sites; 63% in jobs; and 93% in revenue
This Thursday, please take a few…
6Sep2011 | Steve George | 0 comments | ContinuedHow Would You Measure a Society’s Performance?
If you could apply the Baldrige model to a society, how would you measure its performance?
One way would be to identify key indicators of performance excellence. One indicator would be productivity, which many organizations include in their Baldrige applications. The following chart, from an article in Mother Jones, shows that productivity in the U.S. has improved by 80% since 1979. According to NationMaster.com, the U.S. ranks second in overall productivity behind only Luxembourg.
Some of that is due to automation and technology, but it’s also because Americans are working harder. Forty percent of professional men and 23% of middle-income men work more than 50 hours a week. In a healthy society, one would expect that the people responsible for improving productivity—and working longer and harder to do it—would benefit from their efforts. Not in the United States. As the blue line on the chart shows, average overall wages increased about 3% in 30 years. As Mother Jones reports, “If the median household income had kept pace with the economy since 1970, it would now be nearly $92,000, not $50,000.”
The red line on the chart shows where some of the value of our productivity increase has gone. More is going for corporate…
22Jun2011 | Steve George | 0 comments | ContinuedHow Can We Promote Baldrige?
The Baldrige program announced that 69 organizations have applied for the 2011 Malcolm Baldrige National Quality Award. The number is down from last year, primarily because of a significant drop in healthcare applicants (54 in 2010, 40 in 2011). The number of education applicants doubled from 7 to 14 while the number of small business applicants dropped from 7 to 2. A total of five businesses larger than 500 employees applied for the Award in both years; only seven businesses, large and small, applied for the 2011 Award.
As the chart shows, the dearth of business applicants is a long-term trend. The Baldrige program can survive by appealing to healthcare and government agencies, both of which are under pressure to get their acts together, but its roots are in business. For the first 13 years of the Baldrige program, only businesses could apply for and win the Award. It wasn’t until 2001 that three educational institutions won it and the first healthcare winner received the Award in 2002.
While a few businesses, especially at the state level, show interest in the Baldrige model, it is almost invisible on the national business stage.
How do we change that? How can we make Baldrige relevant…
15Jun2011 | Steve George | 4 comments | ContinuedWhat Process-Centered Looks Like
The journey to becoming a process-centered organization begins with all employees in the organization recognizing and focusing on their processes. All employees understand that their work is contributing to the performance of the key process.
This excerpt from Montgomery County Public Schools’ 2010 Baldrige Award-winning application could describe every Baldrige Award winner. All are process centered. A great example of what it means to be process-centered can be found in MCPS’s Road Map to Process Management and Improvement and Knowledge Management, which you can view by clicking on the title of this article or on the blue “Continued” below.
At MCPS, every office, department, and division has identified its key processes, mapped them, used a systematic and systemic model (IGOE: inputs, guides, outputs, and enablers) to identify interrelationships and interdependencies of key processes and staff, and determined how to measure process effectiveness. You can read more about IGOE and process management at MCPS in its application summary here.
All key processes have in-process measures that monitor quality such as rework and errors. And no, MCPS is not a manufacturer: It’s a school system, even though its approaches to process management sound like those of a well-run business. If rework and errors continue, a…
12Apr2011 | Steve George | 0 comments | ContinuedBaldrige Benefits the U.S.
“Our country is discussing ways to meet the economic challenges and global competition facing our nation and the necessity to make some concessions to help solve our national debt and deficit problems, and yet we already have a program that benefits the United States by driving economic development through increasing business productivity, workforce efficiency, and job creation.”
Last Friday, E. David Spong, president of the American Society for Quality, past chairman of the board of the Baldrige Foundation, and CEO of two Baldrige Award winners, testified before the House Subcommittee on Commerce, Justice, Science, and Related Agencies in support of increasing, not decreasing, funding for the Baldrige program. President Obama has proposed cutting the program’s funding from $9.6 million annually to $7.7 million.
Spong points out that “federal funding is in fact only a small measure of the total amount of hours, funding, and value contributing to the program. Yet government support is significant as it provides the integrity, consistency, and continuity the program needs; and without an efficient and effectively managed program, the entire stakeholder system would collapse.”
To those who think the purpose of the Baldrige program is the Award, Spong argues that “the intention is not to simply give out…
15Mar2011 | Steve George | 1 comment | Continued
