The National Commission on Fiscal Responsibility and Reform (NCFRR), a bipartisan committee created by President Obama to address the country’s fiscal challenges, recently released its recommendations to reduce the nation’s debt. If put into practice, the measures are expected to make $200 billion in savings by 2015. Among the 58 recommendations, the NCFRR wants to “eliminate the Hollings Manufacturing Extension Partnership (HMEP) and the Baldrige National Quality Program (now Baldrige Performance Excellence Program),” which would save more than $120 million annually, according to the committee.
The news came as a shock to the quality community, and organizations such as the American Society for Quality (ASQ) and the California Council for Excellence (CCE) have stepped in to campaign against the program’s elimination.
The NCFRR argues that the private sector already provides similar programs and that companies should strive to maintain quality of their products without awards from the Baldrige Performance Excellence Program. In addition, the committee states that “some funding from HMEP supports inefficient companies that would otherwise go out of business.”
Conversely, the CCE board of directors states that the Baldrige program represents less than $10 million annually. Likewise, ASQ’s CEO Paul Borawski said in an open letter to the NCFRR that the Baldrige is more than just an awards program; it is a “culture of performance excellence.”
“It would send an unfortunate and misguided signal if we eliminated a program that our government has supported for more than two decades as the model in performance excellence,” Borawski wrote in the letter. “Certainly, this is not the right message to our U.S. companies that have learned firsthand how beneficial the program is. And, with the popularity the program has gained globally, it would not be a positive message to other countries.”
The end of the program would negatively affect many businesses, according to David Spong, ASQ president. Two organizations from two different sectors have won the Baldrige Award under his leadership.
“We know anecdotally that many manufacturing organizations use the criteria to facilitate continuous improvement,” says Spong. “Some use it for internal recognition programs, while others embrace best practices from recipient organizations without formally using the criteria. I believe that the Baldrige program influences manufacturing in the United States very positively, and its loss would be a disaster for U.S. manufacturing and all sectors of the economy.”
Many ASQ members are volunteer examiners for the Baldrige Performance Excellence Program and the state Baldrige-based programs, notes Spong. “Eliminating the program would reduce the opportunity to network and disseminate best practices,” he says. “Maybe most important, it would negatively affect the quality of organizations that are using the criteria to facilitate continuous improvement.”
Such is the case with successful businesses based in California. According to the CCE, there are many stories of how the Baldrige criteria led poor-performing organization to become successful enterprises, thus saving thousands of jobs.
The National Institute of Standards and Technology (NIST), which manages the Baldrige Performance Excellence Program, declined to comment directly on the matter but cites the report of the NCFRR, “The Moment of Truth,” in which the committee explains the proposed cuts in detail. Pages 12–13 of the report list “Our Guiding Principles and Values” which includes the following statement: “There is no easy way out of our debt problem, so everything must be on the table. A sensible, realistic plan requires shared sacrifice—and Washington must lead the way and tighten its belt.” The NCFRR will vote on the set of recommendations this week.
Named after Malcolm Baldrige, the 26th Secretary of Commerce, the Baldrige Award was established in 1987 and is managed by NIST in cooperation with the private sector. The Baldrige Performance Excellence Program promotes excellence in organizational performance, recognizes the achievements and results of U.S. organizations, and publicizes successful performance management strategies.