The Award. Eligibility
The Malcolm Baldrige National Quality Award was established in the 1987 by the U.S. Congress in order to recognize the companies that managed to implement well-functioning quality management systems. An underlying aim of the Award is to raise awareness about quality management programs and promote their introduction by the U.S. companies.
Importantly, the Award is part to the Baldrige Performance Excellence Program that is implemented by the National Institute of Standards and Technology that represents a part of the U.S. Department of Commerce. The Baldrige Program is public private-partnership that promotes companies’ performance excellence (NIST, 2016). The activities, run in terms of the Program, include raising awareness as regards performance excellence and its importance for the development of the U.S. and global economy; developing organizational assessment criteria and instruments; educating leaders from various sectors about the organizational best practices and recognize companies with the National Quality Award for distinguished achievements.
Initially only manufacturers, small businesses and service businesses were eligible for the Baldrige National Quality Award. Nowadays three awards are distributed annually by the President of the USA to organizations that demonstrated performance excellence in seven major sectors. These sectors include manufacturing, small businesses, service companies, as well as education, healthcare, public sector and nonprofit (NIST, 2016). While the companies, functioning within the education and healthcare sectors started to be eligible for the Award in 1999, the nonprofit and public sectors were added in 2007. In 2014/2015 the major aspects of excellence to be considered for the purposes of the application for the Award include lading and managing all the aspects of an organization as a unified whole; conducting change management and, finally, finding solutions to issues, dealing with data analysis, data integrity and ensuring security in the Internet (NIST, 2016).
Organizations that apply for the award are examined by the Board of Examiners, formed by the Baldrige Performance Excellence Program. The Program accepts applications from the representatives of the above-mentioned six sectors to join the Board of Examiners. Thus, coverage and balance within the mentioned sectors constitute most important requirements regarding the formation of the Board. This statement is substantiated by the fact that the Program aims to ensure the establishment of the Board, characterized by the broad representation from a significant range of industries, sectors and companies, regardless of their form of ownership (NIST, 2016).. Typical members of the Board of Examiners may include clinicians (e.g, physicians, nurses and chief medical officers), as well as individuals, who have experience in a nonprofit sector or education (e.g., K-12 administrators and principals). Financial specialists also tend to take part in the Board.
The examiners’ development is divided into two stages. The on-boarding stage of their development is concerned with a specifically elaborated coaching process that helps newly chosen examiners to go through the first year of their service. Among the tools, used during the on-boarding phase, one can mention Examiner Orientation, Online Learning and Examiner Preparation Training. The major topics, covered in terms of the above classes include the role of examiner, ethical norms, the Excellence Framework, overview of the evaluation process, as well as the ways the results of the evaluation are to be processed and delivered. Importantly, at the end of the evaluation process examiners gather together and take a chance to reflect on their experiences and celebrate the accomplishments. Furthermore, the examiners’ development represents a continuous process, and they receive an intense pre-work training prior to the examination period. After completing training, examiners get assigned to specific teams, aiming to evaluate the applications (NIST, 2016).
Before reflecting on the process Examiners follow to assess Award applications, it is necessary to refer to Baldrige Excellence Framework that contains an in-detail description of criteria that are to be met by an organization in order to qualify for prestigious Baldrige Award. Three fundamentals of the Baldrige Excellence Framework include a focus on improvement, an emphasis on core values, as well as a system’s perspective. A focus on improvement is tightly linked to a range of aspects of organizational activities, such as consistent effectiveness of organizational processes, addressing all the needs of an organization, being satisfied with the results of an organization. Learning, innovation and improvement within an organization are naturally considered in terms of the above focus (NIST, 2016).
Core values are addressed as values and beliefs that can be traced in most successful organizations. Among the core values, emphasized in terms of the Baldrige Excellence Framework, one can mention visionary leadership, customer orientation, putting value on people, management for innovation, corporate social responsibility, ethical behavior and transparency and a capability of delivering results (NIST, 2016)..
Along with the focus on improvement and core values, the Baldrige Excellence Framework tends to underline the need for systems perspective. As it is formulated by NIST (2016), a systems perspective is the most important among all the mentioned core values. It means that all the aspects of an organization are managed as a unified whole in order to get the set mission of the organization realized. In other words, a systems perspective deals with ensuring that all the plans, processes and measures are consistent (NIST, 2016).
Seven criteria the Baldrige Excellence Framework singles out to assess the applications for the Award include leadership; strategy; customers; measurement, analysis and knowledge management, as well as workforce, operations and results. Before analyzing an organization with the help of the above criteria, examiners consider an organizational profile, consisting of its environment and relations. The organizational environment includes considering product offerings, mission, vision and values of an organization, its assets (technologies, facilities and equipment) and most important regulatory requirements, affecting the activities of an organization. In turn, organizational relationships section encompasses the type of organizational structure and governance, key market segments, customer and stakeholder groups, as well as suppliers and collaborators. Furthermore, the pre-assessment stage also includes considering an organizational situation. The most important position in this regard is the data regarding competitive environment of an organization, such as the organization’s competitive position (size and growth within a given market), competitive changes (especially those, creating opportunities for innovation and cooperation) and the key sources of comparative data. The, the strategic context is examined through the lens of major opportunities an organization can use to develop and most significant challenges it encounters in the course of its activities. Finally, the organization’s performance improvement system is examined with regard to the processes, used to conduct evaluation and key organizational processes (NIST, 2016).
Transferring to a more detailed characteristic of each of the criteria, employed by the Baldrige Excellence Framework, it is necessary to mention that each criterion encompasses at least two elements. Thus, the leadership criterion deals with the way senior leaders lead the organization, as well as the interrelation between organizational governance and the fulfillment of its societal responsibilities. For example, the governance and societal responsibility subsection includes assessing the way an organization ensures responsible governance, conducts performance evaluation, anticipates public concerns, promotes ethical behavior and strengthens communities. The strategy criterion also consists of two elements, namely the way strategy is developed (with a focus on strategic planning, incorporating innovation and addressing key works systems) and implemented. Apart from looking into the way action plans are formed, examiners pay specific attention to the design of key performance indicators and measures that are used to evaluate the achievement and effectiveness of action plans (NIST, 2016).
The customer-related criterion deals with assessing the avenues an organization uses to obtain information from its customers and ensure customer engagement. It is worth mentioning that ensuring customer engagement is concerned with a variety of issues, such as elaborating product offerings, providing information and support to customers, as well as managing customer relations and customer complaints (NIST, 2016).
Measurement, analysis and knowledge management represent a key aggregate criterion in the Baldrige Excellence Framework (NIST, 2016).. Firstly, it deals with the way an organization measures, analyzes and improves organizational performance. In this regard, the design of comparisons, inclusion of customers’ opinions, review of organization and capabilities, as well as organization’s best practices are taken into account. Secondly, the design of the criterion requires considering the way the organization tends to manage knowledge-related assets, information and IT infrastructure. A crucial aspect of knowledge management is using knowledge and resources in order to enable learning. In light of current focus on data protection and sybersecurity, special attention is paid to ensuring security of sensitive and privileged data, as well as ensuring the reliability, security and user-friendliness of the utilized hardware and software.
The fifth criterion, used in terms of the Baldrige Excellence Framework, is workforce engagement (NIST, 2016). The first aspect of this criterion deals with building-up an effective and supportive working environment. It encompasses inter alia an organization and management of workforce, ensuring security, health and accessibility of a workplace, as well as supporting an organization’s workforce with the help of policies, services and benefits. Secondly, the engagement of workforce in addressed in several domains, such as singling out the key derivers for engagement, assessing engagement and designing HR learning and development system. Special attention is paid to the management of career progression in an organization.
Sixthly, operations are considered. Firstly, the key products and work processes are addressed, ranging from the way an organization determines requirements to its key products and processes to the determination of support processes and the management of innovation. Then, the effectiveness of operations’ management is studied. This dimension of the criterion includes controlling the overall costs of operations, supply chain management, designing safe operating environment and ensuring disaster and emergencies’ preparedness (NIST, 2016).
The key criterion, used by the examiners to decide whether or not an organization has the potential to be awarded, deals with their results. Organizational results are reviewed from five major standpoints, including product and process, customer-focused results of performance (e.g., customer satisfaction and dissatisfaction rates), workforce-centered results (e..g, workforce engagement, and workforce and leader development results), leadership and governance results, as well as financial and market results (NIST, 2016)..
The analysis of the way Baldrige Excellence Framework designs criteria for organizations’ qualifying for prestigious Malcolm Baldrige National Quality Award allows sharing several important observations. Firstly, it is crucial that the assessment criteria are value-centered, so that companies with greater adherence to values and best practices in the business field have better chances foe winning an award. Secondly, the peculiarity of the Award deals with the comprehensiveness of the above criteria. Making an emphasis on consistency of an organizational performance, the creators of the way Baldrige Excellence Framework managed to include all the aspects of performance into criteria and make them detailed enough to prevent misunderstandings. Thus, the above criteria represent a useful tool of assessing organizational performance, and can be also used for self-assessment.
The process of reviewing applications for the Malcolm Baldrige National Quality Award consists of three stages. The first stage is represented by an independent review. During the review an examiner produces a scorebook, summarizing his/her evaluation of an organization’s award application. Most commonly, the scorebooks are further shown to the participating organizations, so that they can review a third-party assessment of their organizations’ strengths and weaknesses. The Baldrige Excellence Framework provides for a range of tools that help examiners to fill in the scorebooks, such as step-by-step independent review. During the consensus review, examiners’ team reconsiders organizations’ strengths and weaknesses, and fills in a scorebook once more. During the site visit review stage of the process, the team of examiners creates a scorebook of an organization, detailing its strengths and opportunities for improvement, based on the observations, stemming from a site visit to an organization. Similarly to the assessment criteria, the process of assessing applications is characterized by comprehensiveness. The scorebooks, created as a result of the multistage review of applications, and relating feedback reports represent the blends of collective knowledge that is of significant use for an applicant.
Organizations’ motivation to compete for the Award
There are two major sets of reasons, underlying organizations’ willingness to compete for the Malcolm Baldrige National Quality Award. The first set of reasons related to the prestigious nature of the Award. The Award was initially established by the U.S. Congress under the National Quality Improvement Act of 1987. Importantly, it is the only way of formal recognition of organizations’ excellence, provided by the President of the U.S. Furthermore, as it was already highlighted in the previous section of the paper, the assessment criteria and application assessment processes are highly complex and encompass all the possible aspects of organizational excellence.
In view of the above, the Award is highly prestigious, and receiving it helps companies to enhance their reputation. An enhancement of reputation via receiving a prestigious excellence award is helpful for an organization in several domains. First of all, it will be able to attract new customers and ensure the loyalty of existing ones by emphasizing the formal recognition of its excellence. Similarly, an organization will become more respected by suppliers and its potential partners and collaborators. Thus, possession of a prestigious award can be viewed as an important avenue for differentiation in the relations with various stakeholders.
As it was already mentioned in the overview of the Award, the scorebooks, filled by the examiners during different stages of an application assessment process, represent a useful resource for getting to know the way an organization is perceived by a third party. First of all, they allow seeing current key strengths of an organization and the opportunities for improving its performance. As scorebooks are structured in accordance with multiple criteria, an in-detail vision of organizational strengths and opportunities can be formed. Similarly, the scorebooks can provide an organization’s owner or CEO with a vision of major weaknesses of an organization, strategic challenges it encounters and the ways to mitigate the impact of risks. Thus, the information, contained in the scorebooks, distributed to the applicants for the Award, is of great use for the development of their organizations due to containing an in-detail complex third-party analysis of an organization’s performance.
Recipients of the Award
In 2014, the Award was granted to four recipients. In category “Services” the company PricewaterhouseCoopers (Public Sector practice) was recognized due to a range of factors. Among them one can mention customer engagement and satisfaction improvement techniques, senior leadership and knowledge management, smooth operational processes, smart strategic planning and quality workforce (NIST, 2016). Having demonstrated a steady growth over the period from 2011-2014, the PwC continues to grow. Its revenue in 2015 constituted $34.5 billion (PwC, 2016). As it stems from the official information, provided at the website of the company, over the period of last two years the PwC Public sector unit supported a range of important governmental programs, such as “Internal Controls Tools Development and Process Improvement Support Services” and “A Journey from Quality Control to Quality Assurance”. While implementing these projects, PwC Public Sector practice adheres to a range of principles, such as aligning costs with business strategies, transforming human capital, considering risks and regulatory complexity, securing assets etc (PwC, 2016). While it is evidently hard to find out whether receiving the Award served as a direct cause of improving the functioning of the Public Sector practice of the PwC consultancy, the choice of the recipient is to be well-based, and it has been successfully functioning at the market both before and after being awarded.
The entity that received the Award in the nonprofit nomination was the Elevations Credit Union. While the Union has been recognized as “Best Financial Institution” by the individuals, reading Boulder Daily Camera for 15 years before, the Award, it received similar recognition in 2015. Furthermore, the Credit Union was named “Best Customer Service” and “Best Mortgage Company” by the readers of several other media, such as Colorado Daily and Boulder Weekly in 2015. The foundations for awarding the Elevations Credit Union with the Malcolm Baldrige National Quality Award included strategic use of several tools to enhance customer engagement and loyalty, building-up customer relations with the help of most modern media tools, the quality of the Union’s financial instruments, as well as its HR development strategy and solid ties with communities (NIST, 2016). Since having received the Award, the Elevations Credit Union managed to broaden the range of services it offers to customers and solidified the ties with communities, offering more consultancy services for free (Elevations Credit Union, 2016). Similar to the case of the previous Award recipient, it is rather complicated to determine an extent to which being granted an Award influenced the entity’s success.
It shall be stated that only a well-established business/ non-profit organization can qualify for the Award. Therefore, receiving the Award is just a step (through, important) in company’s development, rather than an event, significantly changing the way the business is functioning. Such effect would be reached, if the Award targeted start-ups, rather than established businesses.
References
Elevations Credit Union (2016). Official website. Retrieved 12 February 2016 from https://www.elevationscu.com/
National Institute of Standards and Technology (2016). Baldrige Performance Excellence Program. Retrieved 12 February 2016 from http://www.nist.gov/baldrige/
PricewaterhouseCoopers (2016). Official website. Retrieved 12 February 2016 fromhttp://www.pwc.com/
