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Raissa Carey

Quality Insider

Eliminate Baldrige Award and Save $120M?

Bipartisan committee eyes the national quality program as part of cost-cutting measure

Published: Wednesday, December 1, 2010 - 17:01

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.

Discuss

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Raissa Carey

Comments

Cut one F35-B from the DOD budget and found Baldrige for a year!

Cost estimates for just ONE of these jets is about $200 million - what will bring more value to the USA?

Save the Baldrige Award Program!

I agree with the need to save money at the federal level by eliminating programs that are no longer useful. However, the Baldrige program is not one of those programs. The Baldridge program has been used by countless organizations to improve processes and results, to develop leaders and to spread innovation accross different business sectors. If anything this is a program that deserves more funding to expand its reach. This program has had a profound positive impact on my hospital though learning from national best practice organizations as well as the leadership development that occurs through use of the criteria.

Elimination of Baldrige Award

That thinking is a sure sign of the necessity of an orientation program for US presidents. Such awareness program should include the fundamentals of total quality management, Deming's 14 points, quality costs and so on.

Elimination of Baldrige Award

This message will be viewed differently by many organisations based on the maturity of the organization.
Type-1: Many of the Cost conscience Managements/Owners who are in to the business without understanding the real meaning and intent of Quality will straight away jump in to the P(Prevention) & A(Appraisal) Cost Cutting of the Quality function quoting this message as an example and finally land in to the F(Failure) cost which is many times more than the P & A and quickly dig the grave yard ready for the organization's future.
Type-2: Definitely the matured Management/Owners who know the very purpose of the Quality importance will behave indifferent for this message as they know very well this message will increase their opportunity in the market by killing the competition who are the above said type-1 category !
If we see the history of many quality Gurus, then we will understand that these phases have been already faced by those Great Gurus.
Let us do our quality job effectively with more rigour so that no body will give weightage to such messages !
With Regards,
Venkat

Terminating the Baldrige is short term thinking

While I applaud the NCFRR goal of reducing unnecessary spending at the Federal level, I am disappointed to see a short term focus by eliminating the Baldrige Performance Excellence Program. The Baldrige is the base for excellence programs at the international level. The long term benefits of the organizational models within the Baldrige have already been shown within publicly held organizations and now, with the inclusion of not for profit, small business and government organizations, the whole interconnected system of business at the global level.

The NCFRR mentions that there are private award programs that can take the place of the Baldrige. Actually, the state programs are based on the Dept. of Commerce/NIST guidelines and the most recognized best practice model is the Baldrige.

Reduction in waste and duplication within business is a goal of the Baldrige. The vehicle for improved performance within the business community has been the Baldrige for 23 years. True, use of the model has varied through the years. The economy certainly has influence on how many organizations take advantage of the opportunity. I agree with Dr. Spong (Retired, Boeing) that the skills transferred to examiners provides long term commitment to performance excellence as a cultural thread within the US. The long term impact of terminating the program will be a net loss to the productivity and overall economic well being of the US.

Baldrige National Quality Program & HMEP

Archie the Gopher - - Serving Education Delivering Quality

Recapturing economic opportunities & business is a primary role, & opportunity, of small businesses. Both programs are important as both how-to & support-for emerging & existing businesses.

The current budgets may need adjusting, a role for ASQ in "management" might work, & the taxing of "tax exempt" businesses may be required. For exaqmple, some university "businesses" offer everything from consulting services, sale of computer services & products, hotel services, etc., & they operate tax exempt. They may be in the same market competing for the same dollars as private, for profit, tax paying businesses.

Politics - - interesting issues as we consider economic opportunities, quality, & confirmed results.

Jerry Brong - - For Archie the Gopher

It's a good program, so the government needs to fund it.

Right.

If it is a good program, and if it can be done well by NIST, it ought to be capable of being done as well or better, and certainly cheaper, by the private sector.

If it is not a good program, and if it doesn't produce benefits that mitigate its cost, then it ought to be scrapped.

Saving the Baldrige Award

There is going to be pain as the govenment starts to take back benefits that it cannot afford to have offered in the first place.

I think the Baldrige Award has value. Perhaps most of that value can be saved if NIST and ASQ ask for half a loaf rather than ending up with none. Or, if the program has as much value as its supporters contend, then they should show the cost-benefit analysis--with hard numbers on both sides of the balance--to the NCFRR.

Jack Dearing