Get Better, or Get Beaten: The Baldrige Performance Excellence Program
By: Mark Frasco
“For U.S. industry, the message is clear. Get better or get beaten.” – a June 8, 1987, Business Week special report on quality
In April 2016, three of our COACT leaders earned the position of membership on the Board of Examiners of the Baldrige Foundation. They spent nearly six months preparing for their responsibilities, which culminated just two weeks ago, each on their own business case. They finished a deep examination and report-out of an organizational operating system.
I can’t tell you how proud I am of them and excited I am for their learning and sharing in the COACT system.
Life Before the Baldrige Performance Excellence Program
I started a new sales job in May 1987. One year later, I was made the general manager of a $40 million wholesale distributor. Generally, America had lost its edge. We were no longer known for producing quality products or supplying the highest levels of service.
In 1987, there were no American-made cars in the top ten on the 20 Best Cars and Truck List for reliability and durability – zero, in fact. There were only two in the top 20.
In 1950, W. Edwards Deming began his work in Japan, helping rebuild their devastated economy. Deming was a trained electrical engineer and studied mathematical physics. He taught the Japanese PDSA (Plan-Do-Study-Act) and Statistical Process Control. The most prestigious quality award in Japan is the Deming Prize, first awarded in 1951.
The American automotive industry was hemorrhaging. In the 1980s, losses were totaling in the several billions of dollars per year.
Deming, “Out of Crisis” & the Baldrige Award
Deming returned to the United States and entered into a consulting agreement with Ford in 1981. By 1986, Ford had become the most profitable domestic automotive manufacturer – the first time since the 1920s.
In 1982, Deming wrote the transcendent “Out of Crisis” (renamed such in 1986; reviewed in this edition).
I read Out of Crisis in 1987. It lit a fire inside me that has never been extinguished. That year, after his untimely death, Malcolm Baldrige, the Secretary of Commerce and good friend of Ronald Reagan, was honored by Congress naming a new award in his honor – The Malcolm Baldrige National Quality Award.
Reagan’s subcommittee wrote:
“Improving quality requires nothing less than an upheaval in corporate culture…. Truly improving quality is a long, hard slog, and it frequently carries a steep up-front cost…. But the initial investment in equipment and training is well worth making. Eventually, the savings from not having to make repairs or to pay off warranties or to settle liability suits far exceed the costs of a quality program. And the biggest returns by far come when productivity, market share, and profits rise.”
As one of its publications states:
“In its first 25 years, the Baldrige Program has much evidence of its return on investment. Analysis of data from two-time Baldrige Award winners shows that the median growth in number of sites was 67%, median growth in revenue was 94%, and median growth in jobs was 63%; the median growth in jobs was nearly 20 times greater than matched industries and time periods, according to the Bureau of Economic Analysis and the Bureau of Labor Statistics, which indicated a comparative average job growth of 3.2%.”
The Baldrige Performance Excellence Framework
At the core of the Baldrige philosophy is the organization’s mission, vision and core values. The Baldrige framework is built on:
- Approach – everything an organization does should have a clearly defined approach to everything they do.
- Deployment – is making sure the approach to a process is fully deployed and addressing any gaps that may exist in the deployment of a process.
- Learning – An organization should be creating cycles of learning in their process to have continuous improvement in the organization’s system.
- Integration – is harmonizing the process across the entire organization to achieve the goals set.
As a result of implementing these philosophies, we had record sales and profitability each year – 1988, 1989, and 1990.
Each year before that period in the 1980s were declining years, in both measures.
At COACT, we are not just recently beginning our quality journey, but for those of you in our family, I think you will notice even higher levels of performance and quality in the future.
*Note: This article was originally published in April 2016 and has been updated and revised for relevance.
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