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The Malcolm Baldrige National Quality Award is given by the United States National Institute of Standards and Technology.
It was established by the Malcolm Baldrige National Quality Improvement Act of 1987 - Public Law 100-107 and named for Malcolm Baldrige, who served as United States Secretary of Commerce during the Reagan administration from 1981 until his 1987 death in a rodeo accident.
The program aims to reward quality in the business, health care, education, and nonprofit sectors and was inspired by the ideas of Total Quality Management or TQM. This is the only quality award that is actually awarded by the President of the United States .
This award and the Ron Brown Award are the two U.S. presidential awards given to corporations.
The seven categories of the criteria are:
- Leadership
- Strategic Planning
- Customer & Market Focus
- Measurement, Analysis and Knowledge Management
- Workforce Focus
- Process Management
Results
The maximum attainable score is 1000.
Criteria & Scorecard
1 Leadership (120 pts.)
1.1 Organizational Leadership (70 pts.)
1.2 Social Responsibility (50 pts.)
2 Strategic Planning (85 pts.)
2.1 Strategy Development (40 pts.)
2.2 Strategy Deployment (45 pts.)
3 Customer and Market Focus (85 pts.)
3.1 Customer and Market Knowledge (40 pts.)
3.2 Customer Relationships and Satisfaction (45 pts.)
4 Measurement, Analysis, Knowledge Management (90 pts.)
4.1 Measurement and Analysis of Organizational Performance (45 pts.)
4.2 Information and Knowledge Management (45 pts.)
5 Human Resource Focus (85 pts.)
5.1 Work Systems (35 pts.)
5.2 Employee Learning and Motivation (25 pts.)
5.3 Employee Well-Being and Satisfaction (25 pts.)
6 Process Management (85 pts.)
6.1 Value Creation Processes (50 pts.)
6.2 Support Processes (35 pts.)
7 Business Results (450 pts.)
7.1 Customer-Focused Results (75 pts.)
7.2 Product and Service Results (75 pts.)
7.3 Financial and Market Results (75 pts.)
7.4 Human Resource Results (75 pts.)
7.5 Organizational Effectiveness Results (75 pts.)
7.6 Governance and Social Responsibility Results (75 pts.)
Leadership
Organizational Leadership
"Leadership is nothing but understanding people and involving them to help you do a job. That takes all of the good characteristics, like integrity, dedication of purpose, selflessness, knowledge, skill, implacability, as well as determination not to accept failure” as per Burke.
In today’s increasingly segmented and competitive business environment, organizations need leaders who understand the importance of focus. A leader is interpreted as someone who sets direction in an effort and influences people to follow that direction. How they set that direction and influence people depends on a variety of factors. It takes a lot of different meanings in terms of “Organizational Leadership”. Let’s try to figure out leadership in organization.
The few key factors that made a perfect organizational leader are
- Ability to change loosely practices so called traditions with negative impacts ,
- Integrate,
- Personality & Character,
- Influencing skills,
- Learning, Knowledge of Techniques & Styles,
- Motivating others,
- Visionary,
- Solving problems without afraid of failures & learning from failures
- Courage
- Innovation
- Dedication
Peter Drucker says “Every organization must be prepared to abandon everything it does to survive in the future”.
With strong forecasting skills; organization needs to deal & live with tomorrow. Leader’s task is to create organizations that are sufficiently flexible and versatile that they can take our imperfect plans and make them work in execution. Manager lives in today and Leader thinks of tomorrow.
Leadership is doing right things. “Nearly all men can stand adversity, but if you want to test a man's character, give him power.” said Abraham Lincoln.
Leadership is nothing but influence. Simultaneously leader should own techniques and styles to win. Tell others what to do and surprise them with great results. With guidance and sharing your knowledge a leader must know an art of getting someone else to do something you want done.
Many a times leader falls in situation where he needs to take action against market watch or leader’s advice. At this time; leader must have courage to do so. Ultimate task should be solving problems.
Social Responsibility
Social responsibility is a set of guidelines that claims that an entity whether it is state, government, corporation, organization or individual has a responsibility to society. Social responsibility is about going above and beyond what is called for by the law. It is in the ideal that acting to a problem is better then reacting to a problem. Social responsibility means eliminating corrupt, irresponsible or unethical behavior that might bring harm to community, people, or the environment before it happens. Corporations have an implicit responsibility to give back to society. That is also known as “Corporate Social Responsibility”.
So what should be defined?
Describe your organization’s governance system.
Describe how your organization addresses its responsibilities to the public, ensures ethical behavior, and practices good citizenship.
Define how an organization ensures that all its decisions, actions, and stakeholder interactions conform to the organization’s moral and professional principles. These principles should support all applicable laws and regulations and are the foundation for the organization’s culture and values. They define “right” from “wrong.”
Strategic Planning
Strategy Development
Business strategy is the development and utilization of specific qualities and characteristics that set your business apart from the other businesses within your industry.
Your business strategy defines your position in the marketplace and distinguishes you from your competition. It determines your market identity, reflects the core values of your business, and drives what actions you must take to maintain and support your competitive advantage. A viable and compelling business strategy is the result of a comprehensive decision-making process.
You must be specialized in the development of skills, techniques and higher thinking processes essential to setting and achieving strategic priorities and goals and to setting and executing strategic decision-making within change environments.
Your "competitive advantage" is the reason why a customer chooses your products and services over your competitors. What makes your business different from the competition? Why would a customer choose to use your product or service over someone else’s? How do you manage your business in order to distinguish it from the competition? These are some of the most challenging questions business leaders will ever need to answer. The answers to these questions lead to a clearly defined business strategy. A business strategy is created by identifying and investing in a few specific characteristics and capabilities, which distinguish your company from the other businesses in your industry.
Strategy development and its successful implementation is key to survival for any organization in long term. You can follow strategic models and their processes to make it happen. 5 forces model by Porter (P5F), BCG, 7S McKinsey, ANSOFF, SWOT, PEST, ARC and Mintzberg are few of them to support your variety of analysis & decision making process. Define your goals and objectives, target audiences, the outcomes you expect.
So what should be defined?
Describe how your organization establishes its strategy and strategic objectives, including
How you address your strategic challenges.
Summarize your organization’s key strategic objectives and their related goals.
Strategy Deployment
Strategy Deployment is a process that ties senior leadership into enterprise-wide business-improvement practices. Strategy deployment, also called policy deployment, is a process that ties senior leadership and business strategy to enterprise-wide business-improvement practices. It is an annual planning process that develops enterprise-wide improvement plans, and includes a monthly review process
Strategy Deployment originated with "Hoshin Kanri" which was a core part of the leadership-control practices of TQM (Total Quality Management). The name Hoshin Kanri is variously translated as Hoshin Planning/Policy Deployment/Managementby-Policy. At its core it is an annual planning process that develops enterprise-improvement plans, and then includes a monthly review process.
Integrating performance management methods such as Economic Profit (EP) and Balanced Scorecard (BSC) with Business Intelligence (BI) can help organizations deploy strategy effectively and generate strategic advantage.
Organizations need to understand and target particular customer segments with appropriate and profitable products and services. To be competitive, organizations must manage and reduce operational costs to drive operational efficiencies.
Toyota has demonstrated an exceptional ability to differentiate between the forest and the trees, and the company's approach to measurement is typical and innovative. Other than measures relating to totally new products or services, Toyota 's True North metrics cover all aspects of improvement-and impact all the key lines on income statements and balance sheets-while focusing on only four key metric areas. The four key areas are: Human Development, Quality, Cycle Time, and Cost/Productivity. Human Development (HD) is encompassed in the Toyota phrase "we build people, before we build cars."
So what should be defined?
Describe how your organization converts its strategic objectives into action plans.
Summarize your organization’s action plans and related key performance measures or indicators.
Project your organization’s future performance on these key performance measures or indicators.
Customer and Market Focus
Customer & Market Knowledge
You must be clear on your customer and market understanding. Understanding customer needs and market segmentation is crucial for any business.
In broad terms you need to identify customer needs and customer expectations and find out if you are able to satisfy them. Customer needs may be defined as the goods or services a customer requires to achieve specific goals. Different needs are of varying importance to the customer. Customer expectations are influenced by cultural values, advertising, marketing, and other communications, both with the supplier and with other sources.
Both customer needs and expectations may be determined through interviews, surveys, conversations, data mining or other methods of collecting information. Customers at times do not have a clear understanding of their needs. Assisting in determining needs can be a valuable service to the customer. In the process, expectations may be set or adjusted to correspond to known product capabilities or service
Market segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. Because each segment is fairly homogeneous in their needs and attitudes, they are likely to respond similarly to a given marketing strategy.
Try to figure out your market segmentation and customer needs on following criterias.
Geographic variables
Region of the world or country, East, West, South, North, Central, coastal, hilly, etc.
Country size/country size : Metropolitian Cities, small cities, towns.
Density of Area Urban, Semi-urban, Rural.
Climate Hot, Cold, Humid, Rainy.
Demographic variables
Age
Gender male and female
Sexual orientation
Family size
Family life cycle
Education primary, high school, secondary, college, universities.
Income
Occupation
Education
Socioeconomic status
Religion
Nationality/race
Language
Psychographic variables
Personality
Life style
Value
Attitude
Behavioural variables
Benefit sought
Product usage rate
Brand loyalty
Product end use
Readiness-to-buy stage
Decision making unit
So what should be defined?
Describe how your organization determines requirements, needs, expectations, and preferences of customers and markets to ensure the continuing relevance of your products and services and to develop new business opportunities.
Measurement, Analysis, and Knowledge Management
Customer Relationships & Satisfaction
Customer Relationship
Customer is considered as “God”. Everyone of organization must understand that they are their only because of their customers. Customer relationship management should be considered as strength of any organization and not a weakness. This criterion is very important in wining points.
Customer relationship management (CRM) is a broad term that covers concepts used by companies to manage their relationships with customers, including collecting, storing and analyzing customer information.
Customer relationship management software is defined as business management and automation of the front-office divisions of an organization. CRM software is essentially meant to address the needs of Marketing, Sales & Distribution and Customer Service and Support divisions within an organization and allow the three to share data on prospects, customers, partners, competitors and employees.
A lot of software are available in market to implement CRM in organization. But one must understand that technology only can not sort out issues. Human presentation and relationship with customer is crucial irrespective of successful CRM implementation.
So what should be defined?
1 Describe how your organization builds relationships to acquire, satisfy, and retain customers; to increase customer loyalty; and to develop new opportunities.
Customer Satisfaction
Customer satisfaction, commonly abbreviated CS, is a business term which is used to capture the idea of measuring how satisfied an enterprise's customers are with the organization's efforts in a marketplace. It is seen as a key business performance indicator and is part of the four perspectives of a Balanced Scorecard.
Measuring customer satisfaction is really not straight and simple task for any organization. Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service.
Work done by Berry, Brodeur between 1990 and 1998 defined ten 'Quality Values' which influence satisfaction behavior, further expanded by Berry in 2002 and known as the ten domains of satisfaction.
These ten domains of satisfaction include:
- Quality,
- Value,
- Timeliness,
- Efficiency,
- Ease of Access,
- Environment,
- Inter-departmental Teamwork,
- Front line Service Behaviors,
- Commitment to the Customer and
- Innovation.
These factors are emphasized for continuous improvement and organizational change measurement and are most often utilized to develop the architecture for satisfaction measurement as an integrated model.
So what should be defined?
1 Describe also how your organization determines customer satisfaction.
Measurement, Analysis, and Knowledge Management
Measurement & Analysis of Organizational Performance
Organizational performance comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives).
Specialists in many fields are concerned with organizational performance including strategic planners, operations, finance, legal, and organizational development.
In recent years, many organizations have attempted to manage organizational performance using the balanced scorecard methodology where performance is tracked and measured in multiple dimensions such as:
- Financial performance (e.g. shareholder return)
- Customer service
- Social responsibility (e.g. corporate citizenship, community outreach)
- Employee stewardship
So what should be defined?
Describe how your organization measures, analyzes, aligns, reviews, and improves its performance at all levels and in all parts of your organization.
Information and Knowledge Management
Information, communication & knowledge enabled organization progress far better than their competitors. Using IT & IT enabled services organizations have been able to achieve growth in information & knowledge sharing. This is not limited to people in organization but also extend to organization’s suppliers and partners, collaborators, and customers.
Knowledge management comprises a range of practices used by organisations to identify, create, represent, and distribute knowledge for reuse, awareness, and learning across the organisations.
Knowledge Management programs attempt to manage the process of creation or identification, accumulation, and application of knowledge or intellectual capital across an organisation. Knowledge Management, therefore, attempts to bring under one set of practices various strands of thought and practice relating to:
- Intellectual capital and the knowledge worker in the knowledge economy
- The idea of the learning organization;
- Various enabling organizational practices such as communities of practice and corporate yellow page directories for accessing key personnel and expertise;
- Various enabling technologies such as knowledge bases and expert systems help desks, corporate intranets and extranets, Content Management, wikis, and Document Management.
So what should be defined?
1 Describe how your organization ensures the quality and availability of needed data and information for employees, suppliers and partners, collaborators, and customers.
2 Describe how your organization builds and manages its knowledge assets.
Human Resource Focus
Work Systems
Define your organization & work management, organization culture, employee performance management and employee career progression system.
Focus on organization culture. As per Johnson organization culture can be defined by following elements.
The Paradigm: What the organization is about; what it does; its mission; its values.
Control Systems: The processes in place to monitor what is going on. Role cultures would have vast rulebooks. There would be more reliance on individualism in a power culture.
Organizational Structures: Reporting lines, hierarchies, and the way that work flows through the business.
Power Structures: Who makes the decisions, how widely spread is power, and on what is power based?
Symbols: These include organizational logos and designs, but also extend to symbols of power such as parking spaces and executive washrooms.
Rituals and Routines: Management meetings, board reports and so on may become more habitual than necessary.
Stories and Myths: build up about people and events, and convey a message about what is valued within the organization.
Other aspect is employee development. Employee development is the strategic investment, by an organization, in the training of its members. This covers new hire orientation, on-the-job training, coaching, mentoring and performance appraisal.
So what should be defined?
1 Describe how your organization’s work and jobs enable employees and the organization to achieve high performance.
2 Describe how compensation, career progression, and related workforce practices enable employees and the organization to achieve high performance.
Employee Learning & Motivation
Human resource management is considered as very important part while awarding scores.
Employee Learning
In organizational development, the related field of training and development (T & D) deals with the design and delivery of learning to improve performance within organizations.
List out anything which relates to your organization in terms of employee learning for example;
Coaching
Continuing Professional Development
E-learning Online Learning, Distance Learning, Web-Based Learning
Instructional Animation
Instructional Design
Instructional Strategies
Knowledge Management
Mentoring
Organizational Learning
Structured Training
Teaching Method
Training Within Industry
Outbound Management Development Programmes
Blended Learning
Employee Motivation
In psychology, motivation refers to the initiation, direction, intensity and persistence of behavior. Jot down if your organization is successful to satisfy relevancy of employee’s following needs.
Physiological Needs
Safety and security Needs
Social Needs
Self esteem Needs
Self actualization Needs
At lower levels of Maslow's hierarchy of needs, such as Physiological needs, money is a motivator; however it tends to have a motivating effect on staff that lasts only for a short period (in accordance with Herzberg's two-factor model of motivation).
At higher levels of the hierarchy, praise, respect, recognition, empowerment and a sense of belonging are far more powerful motivators than money, as both Abraham Maslow and Douglas McGregor's Theory X and theory Y have demonstrated vividly.
So what should be defined?
Describe how your organization’s employee education and training, and development support the achievement of your overall objectives and contribute to high performance.
Describe how your organization’s education and training, and career development build employee knowledge, skills, and capabilities.
Employee Well-Being and Satisfaction
Job satisfaction describes how content an individual is with his or her job. It is a relatively recent term since in previous centuries the jobs available to a particular person were often predetermined by the occupation of that person's parent.
There are a variety of factors that can influence a person's level of job satisfaction; some of these factors include the level of pay and benefits, the perceived fairness of the promotion system within a company, the quality of the working conditions, leadership and social relationships, and the job itself
The Job Descriptive Index (JDI), created by Smith, Kendall, & Hulin (1969), is a specific questionnaire of job satisfaction that has been widely used. It measures one’s satisfaction in five facets: pay, promotions and promotion opportunities, coworkers, supervision, and the work itself.
So what should be defined?
Describe how your organization maintains a work environment and an employee support climate that contribute to the well-being, satisfaction, and motivation of all employees.
Process Management
Value Creation Processes & Support Processes
Measure value created from your each single process. It would be easier to map out processes via Value Chain.
The value chain categorizes the generic value-adding activities of an organization.
The "primary activities" include:
Inbound logistics,
Operations (production),
Outbound logistics,
Marketing and sales, and
Services (maintenance).
The "support activities" include:
Administrative infrastructure management,
Human resource management,
R&d, and
Procurement.
The costs and value drivers are identified for each value activity. The value chain framework quickly made its way to the forefront of management thought as a powerful analysis tool for strategic planning. Its ultimate goal is to maximize value creation while minimizing costs.
So what should be defined?
Describe how your organization identifies and manages its key value creation processes for delivering customer value and achieving organizational success and growth.
Describe how your organization manages its key processes that support your value creation processes.
Describe your processes for financial management and continuity of operations in an emergency.
Business Results
Customer-Focused Results
Summarize your organization’s key product and service performance results.
Segment your results by product and service types and groups, customer groups, and market segments, as appropriate.
Include appropriate comparative data.
Product & Service Results
Summarize your organization’s key customer-focused results, including customer satisfaction and customer-perceived value.
Segment your results by product and service types and groups, customer groups, and market segments as appropriate.
Financial & Market Results
Summarize your organization’s key financial and marketplace performance results by customer or market segments, as appropriate.
Human Resource Results
Summarize your organization’s key human resource results, including work system performance and employee learning, development, well-being, and satisfaction.
Segment your results to address the diversity of your workforce and the different types and categories of employees, as appropriate.
Organizational Effectiveness Results
Summarize your organization’s key operational performance results that contribute to the improvement of organizational effectiveness.
Segment your results by product and service types and groups and by market segments, as appropriate.
Governance & Social Responsibility Results
Summarize your organization’s key governance, senior leadership, and social responsibility results, including evidence of ethical behavior, fiscal accountability, legal compliance, and organizational citizenship.
Segment your results by business units, as appropriate. Include appropriate comparative data.
Further reading - http://www.baldrige21.com
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