While the general business press devotes plenty of ink to quality techniques such as Six Sigma and its practitioners, the Baldrige Award and its winners receive little substantive coverage. In recent years, some Baldrige critics have claimed that the award process creates more paperwork than quality improvements, or that it places too little--or too much--emphasis on business results. As evidence of the Award's waning import, some point to the decline in the number of Baldrige entrants since its peak years in the early 1990s.
But a report commissioned by the National Institute of Standards and Technology (NIST), the federal agency that manages the annual Baldrige competition, paints a far different picture. The report, Economic Evaluation of the Baldrige National Quality Program, was authored by Albert N. Link and John T. Scott, economics professors at the University of North Carolina at Greensboro and Dartmouth College, respectively.
Released last October, the 68-page study makes a strong case that the Baldrige Program has produced a widespread positive impact on the quality performance of U.S. companies. Through a review of quality literature--quoting quality guru J.M. Juran, among others--Link and Scott make the case that the criteria used for judging the Baldrige competition have become the leading model defining the concepts of continuous improvement and total quality management (TQM). Consequently, they point out, the Baldrige criteria are widely used by companies nationwide to conduct self-audits, and to develop and guide their own TQM policies, whether they enter the competition or not. As evidence, the report notes that NIST has filled nearly two million requests for Baldrige application forms and criteria.
As a way to evaluate the economic impact of the Baldrige Program, the authors distributed surveys to U.S. organizational members of the American Society for Quality. The surveys asked if companies had applied for the Baldrige or used the criteria for self-assessment, and for dollar estimates of the costs and benefits of doing so. The responses, when compiled and extrapolated across the entire economy, produced startling results.
The bottom line: Link and Scott conclude that the net social benefits of the Baldrige Program to the U.S. economy from the program's inception in 1987 through 2000 amounted to $24.65 billion. The public and private cost to operate the program, by comparison, was $119 million, producing a 207-to-1 benefit-to-cost ratio. The authors call those numbers conservative. But even if the real benefits were only half those claimed, the payoff would still be stupendous.
If you'd like to try a Baldrige self-audit at your company, you can download the criteria at the NIST Baldrige Web page (www.quality.nist.gov). Or if you're attending next month's Quality Expo Detroit, you can sign up for a NIST conference session covering the topic (See p. 36). And hey, by the way, the next time someone brings up the Baldrige Award competition, show a little more respect, will ya.