2011 2012 Business Nonprofit Criteria

20112012
Criteria for
Performance
Excellence
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Baldrige Performance Excellence Program
National Institute of Standards and Technology
United States Department of Commerce
Administration Building, Room A600
100 Bureau Drive, Stop 1020
Gaithersburg, MD 20899-1020
Telephone: (301) 975-2036 Fax: (301) 948-3716
E-Mail: baldrige@nist.gov Web Site: http://www.nist.gov/baldrige
The National Institute of Standards and Technology (NIST), an agency of the U.S. Department of Commerce, manages
the Baldrige Performance Excellence Program. NIST has a 100-plus-year track record of serving U.S. industry, science,
and the public with a mission and approach unlike any other agency of government. That mission is to promote U.S.
innovation and industrial competitiveness by advancing measurement science, standards, and technology in ways that
enhance economic security and improve our quality of life. NIST carries out its mission in four cooperative programs,
including the Baldrige Performance Excellence Program. The other three are the NIST laboratories, conducting research
that advances the nations technology infrastructure and is needed by U.S. industry to continually improve products and
services; the Hollings Manufacturing Extension Partnership, a nationwide network of local centers offering technical
and business assistance to smaller manufacturers; and the Technology Innovation Program, which provides cost-shared
awards to industry, universities, and consortia for research on potentially revolutionary technologies that address critical
national and societal needs.
Call the Baldrige Program or visit our Web site for
tools to help you improve the performance of your organization
information on applying for the Baldrige Award
information on becoming a Baldrige examiner
profiles of Baldrige Award recipients
individual copies of the Criteria for Performance ExcellenceBusiness/Nonprofit, Education, and Health Care
case studies and other Baldrige educational materials
American Society for Quality
600 North Plankinton Avenue
Milwaukee, WI 53203
Telephone: (800) 248-1946 Fax: (414) 272-1734
E-Mail: asq@asq.org Web Site: http://www.asq.org
By making quality a global priority, an organizational imperative, and a personal ethic, the American Society for Quality
(ASQ) becomes the community for all who seek quality technology, concepts, or tools to improve themselves and their
world. ASQ administers the Malcolm Baldrige National Quality Award under contract to NIST.
Contact ASQ to order
bulk copies of the Criteria
award recipients DVDs
T1535
Te Malcolm Baldrige National Quality Award was created by Public Law 100-107 and signed into law on August 20, 1987. Public
Law 100-107 led to the creation of a new public-private partnership. Principal support for the program comes from the Foundation for the
Malcolm Baldrige National Quality Award, established in 1988.
Te award is named for Malcolm Baldrige, who served as secretary of commerce from 1981 until his death in 1987. His managerial excel-
lence contributed to long-term improvement in the eciency and eectiveness of government.
In 2010, as a result of a branding study, the programs name was changed to the Baldrige Performance Excellence Program.
THE BALDRIGE PERFORMANCE EXCELLENCE PROGRAM AND ITS IMPACTS
On August 20, 1987, President Ronald W. Reagan signed the
Malcolm Baldrige National Quality Improvement Act of 1987,
establishing a program that many credit with making quality
a national priority and helping to revitalize the U.S. economy
during the 1990s. Today, the Baldrige Performance Excellence
Program and the Baldrige Award recipients are imitated and
admired worldwide. More than 30 states and many countries,
including Japan, have programs modeled after Baldrige. In
particular, the Baldrige Criteria for Performance Excellence are
widely used as an assessment and improvement tool. Millions of
print and electronic copies of the Criteria have been distributed.
In 1999, categories for education and health care were added to
the original three categories: manufacturing, service, and small
business. In 2007, a nonprot category was added.
Impacts of the program have been far-reaching:
Since the Baldrige Programs inception in 1987, there have
been nearly 1,500 applicants for the Malcolm Baldrige
National Quality Award. Tese applicants have received vigor-
ous evaluations by the Board of Examiners, using the Criteria
for Performance Excellence.
Trough 2009, 84 award recipients have been selected across
six categories: 28 manufacturing companies, 15 service compa-
nies, 19 small businesses, 8 education organizations, 11 health
care organizations, and 3 nonprot organizations.
Tere are more than 35 active state and local, regional,
and sector-specic quality award programs based in states
throughout the country. All of these programs are modeled
to some degree after the Baldrige Performance Excellence
Program, and their award criteria are based on the Criteria for
Performance Excellence.
From 1996 to 2009, 45 of the 60 Baldrige Award recipients
were previous winners in state award programs.
Since 1991, there have been nearly 11,800 applications for
state and local quality awards.
Since 1988, the Baldrige Program has trained about 8,800
examiners. Since 1991, the state and local programs have
trained more than 39,000 examiners.
Te Quest for Excellence conferences have reached
approximately 21,300 attendees over the Baldrige Programs
history.
The Baldrige Program thanks the following 2008 and 2009 award recipients for the use of the photographs in
this booklet: Cargill Corn Milling (2008, manufacturing); Honeywell Federal Manufacturing & Technologies, LLC
(2009, manufacturing); MidwayUSA (2009, small business); and the VA Cooperative Studies Program Clinical
Research Pharmacy Coordinating Center (2009, nonprot).
Cover art Havlin Levente/Shutterstock
THE MALCOLM BALDRIGE NATIONAL QUALITY AWARD
A Public-Private Partnership
Building active partnerships in the public sectorand among the
private sector and all levels of governmentis fundamental to
the success of the Baldrige Performance Excellence Program in
improving national competitiveness. Private-sector support for the
program in the form of funds, volunteer eorts, and participation
in public outreach continues to grow.
To ensure the continued growth and success of these partnerships,
each of the following organizations plays an important role.
Foundation for the Malcolm Baldrige
National Quality Award
Te Foundation for the Malcolm Baldrige National Quality
Award was created to foster the success of the program. Te
foundations main objective is to raise funds to permanently
endow the award program.
Prominent leaders from U.S. organizations serve as foundation
trustees to ensure that the foundations objectives are accom-
plished. A broad cross section of organizations throughout the
United States provides nancial support to the foundation.
National Institute of Standards
and Technology
Te National Institute of Standards and Technology (NIST),
an agency of the U.S. Department of Commerce, manages the
Baldrige Performance Excellence Program. NIST promotes
U.S. innovation and industrial competitiveness by advancing
measurement science, standards, and technology in ways that
enhance economic security and improve our quality of life. NIST
carries out its mission in four cooperative programs, including
the Baldrige Performance Excellence Program. Te other three
are the NIST laboratories, conducting research that advances the
nations technology infrastructure and is needed by U.S. industry
to continually improve products and services; the Hollings
Manufacturing Extension Partnership, a nationwide network
of local centers oering technical and business assistance to
smaller manufacturers; and the Technology Innovation Program,
which provides cost-shared awards to industry, universities, and
consortia for research on potentially revolutionary technologies
that address critical national and societal needs.
Te American Society for Quality (ASQ) assists in administering
the award program under contract to NIST. ASQs vision is to
make quality a global priority, an organizational imperative, and
a personal ethic and, in the process, to become the community
for all who seek quality concepts, technology, or tools to improve
themselves and their world.
Board of Overseers
Te Board of Overseers advises the Department of Commerce
on the Baldrige Performance Excellence Program. Te board is
appointed by the secretary of commerce and consists of distin-
guished leaders from all sectors of the U.S. economy.
Te board evaluates all aspects of the program, including the
adequacy of the Criteria and processes for determining award
recipients. An important part of the boards responsibility is to
assess how well the program is serving the national interest and, as
needed, recommend changes and improvements to the secretary
of commerce and to the director of NIST.
Board of Examiners
Te Board of Examiners evaluates award applications and prepares
feedback reports. Te Panel of Judges, part of the Board of
Examiners, makes award recommendations to the director of
NIST. Te board consists of leading experts from U.S. businesses
and education, health care, and nonprot organizations. NIST
selects members through a competitive application process. Te
current board consists of more than 575 members. Of these, 12
(who are appointed by the secretary of commerce) serve as judges,
and approximately 90 serve as senior examiners. All members of
the board must take part in an Examiner Preparation Course.
Board members also play a signicant role in sharing information
about the program. Teir membership in hundreds of profes-
sional, trade, community, and state organizations helps them
disseminate this information.
Award Recipients
Award recipients are required to share information on their
successful performance strategies with other U.S. organizations.
However, recipients are not required to share proprietary informa-
tion, even if such information was part of their award application.
Te principal mechanism for sharing information is Te Quest for
Excellence Conference, held annually. Two regional conferences
are also held annually to oer additional forums for sharing the
applicants best practices.
For more than 20 years, award recipients have demonstrated their
commitment to improving U.S. competitiveness and furthering
the U.S. pursuit of performance excellence by also generously
sharing information with hundreds of thousands of companies,
education organizations, health care organizations, government
agencies, nonprot organizations, and others. Tis sharing far
exceeds expectations and program requirements. Tese eorts
have encouraged many other organizations in all sectors of the
U.S. economy to undertake their own performance improvement
eorts.
The Alliance for Performance Excellence
Te Alliance for Performance Excellence (http://www.baldrigepe
.org/alliance), a nonprot national network, aims to enhance the
success and sustainability of its member Baldrige-based programs.
Te Alliances member organizations promote the use of the
Baldrige Criteria; disseminate information on the Baldrige Award
process and Baldrige concepts; serve as a feeder system for the
national program, providing a signicant number of examiners
and award applicants; network with the Baldrige Performance
Excellence Program and each other; and receive and use the
Baldrige Criteria for Performance Excellence and other program
and training materials from the national program.
National Institute of Standards and Technology Department of Commerce
To: U.S.Organizations
From: HarryS.Hertz,Director
BaldrigePerformanceExcellenceProgram
Subject: WhyIsBaldrigeImportantforYouNow?
BecausetheBaldrigeCriteriaforPerformanceExcellenceareaboutyou!Becausetheyareaboutsurvivalandsustainability
inyourmarketplacewithahigh-performing,high-integrityorganization.BecausetheBaldrigeCriteriaaskyouallthe
rightquestions.
IsaddressingalltheBaldrigeCriteriaeasy?No!Butneitherisachievingsustainableresultsintodayschallengingenvironment.
WilltheCriteriahelpyouthinkandactstrategically?Yes.Willtheyhelpyoualignyourprocessesandyourresources?Yes.
Willtheyhelpyouengageyourworkforceandyourcustomers?Yes.Aretheseworthwhilegoals?Youdecide.
Whetheryourorganizationissmallorlarge;isinvolvedinservice,manufacturing,government,ornonprotwork;andhas
onelocationorsitesacrosstheglobe,theCriteriaprovideavaluableframeworkthatcanhelpyouplan,perform,andmeasure
resultsinanuncertainenvironment.TeCriteriacanhelpyoudecideontoolssuchasISO9000,Lean,aBalancedScorecard,
andSixSigma.
HowtobeginthatrstBaldrigeassessment?TakeafewminutesandscanthequestionsintheOrganizationalProleon
pages46.AdiscussionoftheanswerstothesequestionsmightbeyourrstBaldrigeassessment.Foradditionalguidance,
refertoourfreebookletYour Guide to Performance Excellence.
Doyouneedtoknowwhatyouremployeesandyourseniorleadersthink?Ordoyoubelieveyouhavebeenmakingprogress
butwanttoaccelerateorbetterfocusyoureorts?TryusingoursimpleAre We Making Progress? andAre We Making Progress
as Leaders? questionnaires.OrganizedbythesevenBaldrigeCriteriacategories,theywillhelpyoucheckyourprogresson
organizationalgoalsandcanimprovecommunicationamongyourworkforcemembersandyourleadershipteam.
EvenifyoudontexpecttoreceivetheBaldrigeAward,submittinganawardapplicationhasvaluablebenets.Everyapplicant
receivesadetailedfeedbackreportbasedonarigorousevaluationconductedbyapanelofspeciallytrainedexperts.
TeCriteriaareinyourhands...soisanincredibleopportunity.Whynottakeadvantageofthatopportunity?Whenyou
turnthesepages,youturnthecornertowardperformanceexcellence.Ifyouwantmoreinformation,pleasecontactmeat
baldrige@nist.gov.
Need some useful tools to begin the Baldrige challenge? Try using
Getting Started with the Baldrige Criteria,
available on our Web site at http://www.nist.gov/baldrige/enter/self_started.cfm
easyInsight: Take a First Step toward a Baldrige Self-Assessment,
available at http://www.nist.gov/baldrige/publications/easy_insight.cfm
Are We Making Progress? and Are We Making Progress as Leaders?
available at http://www.nist.gov/baldrige/publications/progress.cfm
Optional Self-Analysis Worksheet (Word fle to download),
available at http://www.nist.gov/baldrige/publications/business_nonproft_criteria.cfm
Besides using these resources from the Baldrige Performance Excellence Program, visit
http://www.baldrigepe.org/alliance to get support from Baldrige-based programs in your state or local area.
Baldrige Performance Excellence Program NIST Administration Building, Room A600 100 Bureau Drive, Stop 1020 Gaithersburg, MD 20899-1020
Telephone: (301) 975-2036 Fax: (301) 948-3716 E-Mail: baldrige@nist.gov Web Site: http://www.nist.gov/baldrige
THE QUEST FOR EXCELLENCE
The 23rd and 24th Annual
Quest for Excellence
Conferences
Eachyear,TeQuestforExcellence,theocialconfer-
enceoftheMalcolmBaldrigeNationalQualityAward,
providesaforumforBaldrigeAwardrecipientstoshare
theirexceptionalperformancepracticeswithworldwide
leadersinbusiness,education,healthcare,andnonprot
organizations.Te23rdQuestforExcellencewill
showcasetheyear2010awardrecipients,andthe24th
AnnualQuestforExcellencewillfeaturetheyear2011
awardrecipients.
Since1988,executives,managers,andotherleadershave
cometothisconferencetolearnhowtheserole-model
organizationshaveachievedperformanceexcellence.
Chiefexecutiveocers(CEOs)andotherleadersfrom
theawardrecipientorganizationsgivepresentations
coveringallsevencategoriesoftheBaldrigeCriteria,
theirjourneytoperformanceexcellence,andtheir
lessonslearned.Atthisthree-dayconferencedesigned
tomaximizelearningandnetworkingopportunities,
attendeeswillbeabletointeractwithawardrecipients.
TeconferenceswillbeheldApril36,2011,atthe
MarriottWardmanParkHotelinWashington,D.C.,
andApril1518,2012,atthesamelocation.For
furtherinformation,contacttheBaldrigeProgramby
mail:BaldrigePerformanceExcellenceProgram,NIST,
AdministrationBuilding,RoomA600,100Bureau
Drive,Stop1020,Gaithersburg,MD20899-1020;tele-
phone:(301)975-2036;fax:(301)948-3716;ore-mail:
baldrige@nist.gov.ForageneraloverviewoftheBaldrige
PerformanceExcellenceProgram,visittheBaldrigeWeb
site:http://www.nist.gov/baldrige.
The Malcolm Baldrige
TePresidentoftheUnitedStatestraditionallypresentsthe
awardataspecialceremonyinWashington,D.C.Teaward
crystal,composedoftwosolidcrystalprismaticforms,stands
14inchestall.Tecrystalisheldinabaseofblackanodized
aluminum,withtheawardrecipientsnameengravedonthe
base.A22-karatgold-platedmedallioniscapturedinthefront
sectionofthecrystal.Temedallionbearsthenameofthe
awardandTeQuestforExcellenceononesideandthe
PresidentialSealontheother.
Crystal by Steuben
The MalcolmBaldrigeNationalQualityAwardlogoandthephrases
TheQuestforExcellenceandPerformanceExcellencearetrademarksand
service marks of the National Institute of Standards and Technology.
20112012 Criteria for Performance Excellence ii
CONTENTS
The 20112012 Criteria for Performance Excellence
1 CriteriaforPerformanceExcellenceFramework
3 CriteriaforPerformanceExcellenceItemListing
4 CriteriaforPerformanceExcellence
4 Preface:OrganizationalProfile
7 1 Leadership
10 2 StrategicPlanning
13 3 CustomerFocus
16 4 Measurement,Analysis,andKnowledgeManagement
18 5 WorkforceFocus
21 6 OperationsFocus
23 7 Results
About the Criteria
27 Changesfromthe20092010Criteria
29 CriteriaResponseGuidelines
34 CategoryandItemDescriptions
49 CoreValuesandConcepts
55 KeyCharacteristicsoftheCriteria
56 GlossaryofKeyTerms
Scoring
66 ScoringSystem
68 ProcessScoringGuidelines
69 ResultsScoringGuidelines
Application Information
71 ApplyingfortheMalcolmBaldrigeNationalQualityAward
72 Feesforthe2011and2012AwardCycles
73 SummaryofEligibilityRequirements
74 HowtoObtainBaldrigePerformanceExcellenceProgramMaterials
76 IndexofKeyTerms
Education and health care organizations should use the appropriate Criteria
booklets for their respective sectors. See pages 7475 for ordering information.
If you plan to apply for the award in 2011 or 2012, you also will need the Baldrige Award Application
Forms, which can be downloaded at http://www.nist.gov/baldrige/publications/Award_Application.cfm.
The award application process consists of two steps: the frst is to provide a completed
EligibilityCertifcationPackage,andthesecondistosubmitacompletedAwardApplicationPackage.
See pages 7173 for due dates and other information.
We are easy to reach. Our Web site is http://www.nist.gov/baldrige.
Contents iii
Baldrige Criteria for Performance Excellence Framework
A Systems Perspective
2
Strategic
Planning
1
Leadership
3
Customer
Focus
5
Workforce
Focus
7
Results
6
Operations
Focus
4
Measurement, Analysis, and Knowledge Management
Organizational Profile:
Environment, Relationships, and Strategic Situation
20112012 Criteria for Performance Excellence iv
CRITERIA FOR PERFORMANCE EXCELLENCE FRAMEWORK
TerequirementsoftheCriteriaforPerformanceExcellence
areembodiedinsevencategories,asfollows:
1 Leadership
2 Strategic Planning
3 Customer Focus
4 Measurement, Analysis, and Knowledge
Management
5 Workforce Focus
6 Operations Focus
7 Results
Tegureonpageivprovidestheframeworkconnectingand
integratingthecategories.
Fromtoptobottom,theframeworkhasthefollowing
basicelements.
Organizational Profle
YourOrganizationalProle(topofgure)setsthecontextfor
thewayyourorganizationoperates.Yourorganizationsenvi-
ronment,keyworkingrelationships,andstrategicsituation
includingcompetitiveenvironment,strategicchallengesand
advantages,andperformanceimprovementsystemserve
asanoverarchingguideforyourorganizationalperformance
managementsystem.
Performance System
TeperformancesystemiscomposedofthesixBaldrige
categoriesinthecenterofthegurethatdeneyourprocesses
andtheresultsyouachieve.
Leadership(category1),StrategicPlanning(category2),
andCustomerFocus(category3)representtheleadership
triad.Tesecategoriesareplacedtogethertoemphasizethe
importanceofaleadershipfocusonstrategyandcustomers.
Seniorleaderssetyourorganizationaldirectionandseekfuture
opportunitiesforyourorganization.
WorkforceFocus(category5),OperationsFocus(category6),
andResults(category7)representtheresultstriad.Your
organizationsworkforceandkeyoperationalprocessesaccom-
plishtheworkoftheorganizationthatyieldsyouroverall
performanceresults.
AllactionspointtowardResultsacompositeofproductand
processoutcomes,customer-focusedoutcomes,workforce-
focusedoutcomes,leadershipandgovernanceoutcomes,and
nancialandmarketoutcomes.
Tehorizontalarrowinthecenteroftheframeworklinksthe
leadershiptriadtotheresultstriad,alinkagecriticaltoorgani-
zationalsuccess.Furthermore,thearrowindicatesthecentral
relationshipbetweenLeadership(category1)andResults
(category7).Tetwo-headedarrowsindicatetheimportance
offeedbackinaneectiveperformancemanagementsystem.
System Foundation
Measurement,Analysis,andKnowledgeManagement
(category4)arecriticaltotheeectivemanagementofyour
organizationandtoafact-based,knowledge-drivensystemfor
improvingperformanceandcompetitiveness.Measurement,
analysis,andknowledgemanagementserveasafoundationfor
theperformancemanagementsystem.
Criteria Structure
TesevenCriteriacategoriesshowninthegurearesubdi-
videdintoitemsandareastoaddress.
Items
Tereare17processandresultsitems,eachfocusingona
majorrequirement.Itemtitlesandpointvaluesaregivenon
page3.Teitemformatisshownonpage29.
Areas to Address
Itemsconsistofoneormoreareastoaddress(areas).
Organizationsshouldaddresstheirresponsestothespecic
requirementsoftheseareas.
Criteria for Performance Excellence Framework 1
Honors the 2008 Award Recipients
OnDecember2,2009,ataceremonyinWashington,D.C.,the
three2008BaldrigeAwardrecipientswerehonored:CargillCorn
MillingNorthAmerica(CCM)ofWayzata,Minnesota(manufactur-
ing);Iredell-StatesvilleSchools(I-SS)ofStatesville,NorthCarolina
(education);andPoudreValleyHealthSystem(PVHS)ofFort
Collins,Colorado(healthcare).Clockwisefromtheupperleft,the
photographsshow(1)U.S.VicePresidentJoeBiden;(2)U.S.Secre-
taryofCommerceGaryLocke;(3)SecretaryLocke,I-SSChairmanof
theBoardofEducationDavidW.Cash,I-SSSuperintendentBrady
Johnson,andFoundationfortheMalcolmBaldrigeNationalQuality
AwardChairJoeAlexander;(4)MalcolmHollensteiner,nephewof
MalcolmBaldrige;(5)SecretaryLocke,PVHSDirectorofProcess
ImprovementPriscillaJ.Nuwash,PVHSPresident/CEORulonF.
Stacey,andJoeAlexander;and(6)SecretaryLocke,CCMPresident
AlanWillits,Cargill,Inc.ChairmanandChiefExecutiveOcer
GregPage,andJoeAlexander.
20112012 Criteria for Performance Excellence 2
CRITERIA FOR PERFORMANCE EXCELLENCEITEM LISTING
P Preface: Organizational Profle
P.1 OrganizationalDescription
P.2 OrganizationalSituation
Categories and Items Point Values
1 Leadership 120
1.1 SeniorLeadership 70
1.2 GovernanceandSocietalResponsibilities 50
2 Strategic Planning 85
2.1 StrategyDevelopment 40
2.2 StrategyImplementation 45
3 Customer Focus 85
3.1 VoiceoftheCustomer 45
3.2 CustomerEngagement 40
4 Measurement, Analysis, and Knowledge Management 90
4.1 Measurement,Analysis,andImprovementof
OrganizationalPerformance 45
4.2 ManagementofInformation,Knowledge,and
InformationTechnology 45
5 Workforce Focus 85
5.1 WorkforceEnvironment 40
5.2 WorkforceEngagement 45
6 Operations Focus 85
6.1 WorkSystems 45
6.2 WorkProcesses 40
7 Results 450
7.1 ProductandProcessOutcomes 120
7.2 Customer-FocusedOutcomes 90
7.3 Workforce-FocusedOutcomes 80
7.4 LeadershipandGovernanceOutcomes 80
7.5 FinancialandMarketOutcomes 80
TOTAL POINTS 1,000
Note: The scoring system used with the Criteria items
in a Baldrige assessment can be found on pages 6670.
Criteria for Performance ExcellenceItem Listing 3

1
CRITERIA FOR PERFORMANCE EXCELLENCE
The Importance of Beginning with Your Organizational Profle
YourOrganizationalProleiscriticallyimportantbecause
it is the most appropriate starting point for self-assessmentandforwritinganapplication;
it helps you identify potential gaps inkeyinformationandfocusonkeyperformancerequirementsandresults;
it is used by the examiners and judges in application review, including the site visit, to understand your organization
andwhatyouconsiderimportant(youwillbeassessedusingtheCriteriarequirementsinrelationtoyourorganizations
environment,relationships,inuences,andchallenges,aspresentedinyourOrganizationalProle);and
it also may be used by itself for an initial self-assessment.Ifyouidentifytopicsforwhichconicting,little,orno
informationisavailable,itispossiblethattheOrganizationalProlecanserveasyourcompleteassessment,andyoucan
usethesetopicsforactionplanning.
P Preface: Organizational Profle
Environment, Relationships and Strategic Situation
2
Strategic
5
Planning
1
Leadership
3
Focus
Customer
Focus
Operations
Workforce
7
Results
6
Focus
4
TeOrganizational Proleisasnapshotofyourorganization,thexi\inuencesonuow
youoperate,andthexi\challengesyouface.
P.1 Organizational Description: What are your key organizational characteristics?
Describe your organizations operating environment and your KEY relationships with CUSTOMERS, suppliers, PARTNERS, and
STAKEHOLDERS.
Withinyourresponse,includeanswerstothefollowingquestions:
a.Organizational Environment
(1)Product Oerings Whatareyourorganizationsmainproductoerings(seenote1below)?Whatistherelative
importanceofeachtoyourorganizationalsuccess?Whatmechanismsdoyouusetodeliveryourproducts?
(2)VISION and MISSION Whatarethedistinctivecharacteristicsofyourorganizationalculture?Whatareyourstated
iuiiosi,visiox,vaiuis,andxissiox?Whatareyourorganizationscoiicoxiirixciisandtheirrelationshiptoyour
xissiox?
(3)WORKFORCE Prole Whatisyourwoixioiciprole?Whatareyourwoixioicioremployeegroupsandsicxixrs?
Whataretheireducationlevels?Whatarethexi\elementsthatengagetheminaccomplishingyourxissioxand
visiox?Whatareyourorganizationswoixioiciandjoboiviisir\,organizedbargainingunits,xi\woixioici
benets,andspecialhealthandsafetyrequirements?
(4)Assets Whatareyourmajorfacilities,technologies,andequipment?
(5)Regulatory Requirements Whatistheregulatoryenvironmentunderwhichyourorganizationoperates?Whatarethe
applicableoccupationalhealthandsafetyregulations;accreditation,certication,orregistrationrequirements;industry
standards;andenvironmental,nancial,andproductregulations?
b. Organizational Relationships
(1)Organizational Structure Whatareyourorganizationalstructureandcoviixaxcisystem?Whatarethereporting
relationshipsamongyourcoviixaxciboard,sixioiiiaoiis,andparentorganization,asappropriate?
(2)CUSTOMERS and STAKEHOLDERS Whatareyourxi\marketsicxixrs,cusroxiigroups,andsraxiuoioiigroups,
asappropriate?Whataretheirxi\requirementsandexpectationsforyourproducts,cusroxiisupportservices,and
operations?Whatarethedierencesintheserequirementsandexpectationsamongmarketsicxixrs,cusroxii
groups,andsraxiuoioiigroups?
(3)Suppliers and PARTNERS Whatareyourxi\typesofsuppliers,iairxiis,andcoiianoiarois?Whatroledothese
suppliers,iairxiis,andcoiianoiaroisplayintheproductionanddeliveryofyourxi\productsandcusroxii
supportservices?Whatareyourxi\mechanismsforcommunicatingwithsuppliers,iairxiis,andcoiianoiarois?
Whatrole,ifany,dotheseorganizationsplayinimplementingixxovarioxsinyourorganization?Whatareyourxi\
supply-chainrequirements?
Notes:
N1.Productoeringsandproducts(P.1a[1])referto services.Stakeholdergrouprequirementsmightinclude
thegoodsandservicesthatyourorganizationoersinthe sociallyresponsiblebehaviorandcommunityservice.For some
marketplace.Mechanismsforproductdeliverytoyourend-use nonprofit organizations, requirements also might include admin-
customersmightbedirectorthroughdealers,distributors,col- istrative cost reductions, at-home services, and rapid response to
laborators,orchannelpartners.Nonprofit organizations might emergencies.
refer to their product offerings as programs, projects, or services.
N6.Communicationmechanisms(P.1b[3])shouldbe
N2.Corecompetencies(P.1a[2])referstoyourorganiza- two-wayandinunderstandablelanguage,andtheymightbe
tionsareasofgreatestexpertise.Yourorganizationscore inperson,viae-mail,Web-based,orbytelephone.Formany
competenciesarethosestrategicallyimportantcapabilitiesthat organizations,thesemechanismsmaychangeasmarketplace,
arecentraltofulllingyourmissionorprovideanadvantagein customer,orstakeholderrequirementschange.
yourmarketplaceorserviceenvironment.Corecompetencies
N7.Many nonprofit organizations rely heavily on volunteers
frequentlyarechallengingforcompetitorsorsuppliersand
to accomplish their work. These organizations should include
partnerstoimitate.Also,corecompetenciesfrequentlypreserve
volunteers in the discussion of their workforce (P.1a[3]).
yourcompetitiveadvantage.
N8.For nonprofit organizations, industry standards (P.1a[5])
N3.Workforceoremployeegroupsandsegments(including
might include industrywide codes of conduct and policy guidance.
organizedbargainingunits;P.1a[3])mightbebasedonthe
The term industry is used throughout the Criteria to refer to
typeofemploymentorcontractreportingrelationship,loca-
the sector in which you operate. For nonprofit organizations, this
tion,tourofduty,workenvironment,family-friendlypolicies,
sector might be charitable organizations, professional associations
orotherfactors.
and societies, religious organizations, or government entitiesor a
N4.Customergroups(P.1b[2])mightbebasedoncommon subsector of one of these.
expectations,behaviors,preferences,orproles.Withina
N9.For some nonprofit organizations, governance and reporting
grouptheremaybecustomersegmentsbasedondierences
relationships (P.1b[1]) might include relationships with major
andcommonalities.Yourmarketsmightbesubdivided
agency, foundation, or other funding sources.
intomarketsegmentsbasedonproductlinesorfeatures,
distributionchannels,businessvolume,geography,orother
N10.Customers (P.1b[2]) include the users and potential users
factorsthatyourorganizationusestodenerelatedmarket
of your products. In some nonprofit organizations, customers
characteristics.
might include members, taxpayers, citizens, recipients, clients,
and beneficiaries. Market segments might be referred to as
N5.Customergroupandmarketsegmentrequirements
constituencies.
(P.1b[2])mightincludeon-timedelivery,lowdefectlevels,
safety,security,ongoingpricereductions,leveragingof
Foradditionaldescriptionofthisitem,seepages3435.
technology,rapidresponse,after-salesservice,andmultilingual
Information for Understanding All Criteria Items
For denitions of key terms presented throughout the Criteria and scoring guidelines text in SMALL CAPS, see the
Glossary of Key Terms on pages 5664.
Frequently, several questions are grouped under one number (e.g., P.1a[3]). Tese questions are related and do
not require separate responses. Tese multiple questions serve as a guide in understanding the full meaning of the
information being requested.
Te items in the Baldrige Criteria are divided into three groups: the Preface, which denes your organizational
environment; categories 16, which dene your organizations processes; and category 7, which contains your
results for your organizations processes. Only responses to the last two groups are scored during a Baldrige
Award evaluation of an organization; the Organizational Prole items are used to provide context for the
evaluation.
Item notes serve three purposes: (1) to clarify terms or requirements presented in an item, (2) to give instructions
and examples for responding to the item requirements, and (3) to indicate key linkages to other items. In all
cases, the intent is to help you respond to the item requirements.
A number of item notes include guidance specicallyfor nonprotorganizations. Tisinformation appears in italics.
Preface: Organizational Profle 5
P.2 Organizational Situation: What is your organizations strategic situation?
Describe your organizations competitive environment, your KEY STRATEGIC CHALLENGES and ADVANTAGES, and your system
for PERFORMANCE improvement.
a. Competitive Environment
(1) Competitive Position Whatisyourcompetitiveposition?Whatareyourrelativesizeandgrowthinyourindustryor
marketsserved?Whatarethenumbersandtypesofcompetitorsforyourorganization?
(2) Competitiveness Changes Whatareanyxi\changestakingplacethataectyourcompetitivesituation,including
opportunitiesforixxovarioxandcollaboration,asappropriate?
(3) Comparative Data Whatareyourxi\availablesourcesofcomparativeandcompetitivedatafromwithinyour
industry?Whatareyourxi\availablesourcesofcomparativedatafromoutsideyourindustry?Whatlimitations,ifany,
aectyourabilitytoobtainthesedata?
b. Strategic Context
Whatareyourxi\business,operational,societalresponsibility,andhumanresourcesriariciccuaiiixcisand
aovaxracis?
c. PERFORMANCE Improvement System
Whatarethexi\elementsofyouriiiioixaxciimprovementsystem,includingyourevaluation,organizationaliiaixixc,
andixxovarioxiiocissis?
Notes:
N1.Strategicchallengesandadvantages(P.2b)mightrelateto
technology,products,youroperations,yourcustomersupport,
yourindustry,globalization,yourvaluechain,andpeople.
Strategicadvantagesmightincludedierentiatorssuchasyour
priceleadership,designservices,innovationrate,geographic
proximity,accessibility,andwarrantyandproductoptions.For
some nonprofit organizations, differentiators also might include
your relative influence with decision makers, ratio of administra-
tive costs to programmatic contributions, reputation for program
or service delivery, and wait times for service.
N2.Performanceimprovement(P.2c)throughlearningand
integrationisanassessmentdimensionusedinthescoring
systemtoevaluatethematurityoforganizationalapproaches
anddeployment(seepages6670).Tisquestionisintended
tohelpyouandtheBaldrigeexaminerssetanoverallcontext
foryourapproachtoperformanceimprovement.Approaches
toperformanceimprovementthatarecompatiblewiththe
systemsapproachprovidedbytheBaldrigeframeworkshould
berelatedtoyourorganizationsneedsandmightinclude
implementingaLeanEnterpriseSystem,applyingSixSigma
methodology,usingISOstandards(e.g.,9000or14000),or
employingotherprocessimprovementandinnovationtools.
Agrowingnumberoforganizationshaveimplementedspecic
processesformeetinggoalsinproductandprocessinnovation.
N3.Nonprofit organizations frequently are in a highly
competitive environment; they often must compete with other
organizations and with alternative sources for similar services to
secure financial and volunteer resources, membership, visibility in
appropriate communities, and media attention.
N4.For nonprofit organizations, the term business (P.2b) is
used throughout the Criteria to refer to your main mission area or
enterprise activity.
Foradditionaldescriptionofthisitem,seepage35.
Page Limit
ForBaldrigeAwardapplicants,theOrganizationalProleislimitedtovepages.Tesepagesarenotcountedin
theoverallapplicationpagelimit.TypingandformattinginstructionsfortheOrganizationalProlearethesameas
fortheapplication.TeseinstructionsaregivenintheBaldrige Award Application Forms,whichcanbedownloaded
athttp://www.nist.gov/baldrige/publications/Award_Application.cfm.
2
Strategic
Planning
3
Customer
ocus
5
Workforce
Focus
7
Results
6
Operations
Focus
4
Stra
Plan
1
Cus
Fo
Leadership (120 pts.) 1
TeLeadership categoryexaminesuowyourorganizationssixioiiiaoiispersonal
actionsguideandsustainyourorganization.Alsoexaminedareyourorganizationscovii-
xaxcisystemanduowyourorganizationfulllsitslegal,ethical,andsocietalresponsibili-
tiesandsupportsitsxi\communities.
1.1 Senior Leadership: How do your senior leaders lead? (70 pts.)
Process
Describe HOW SENIOR LEADERS actions guide and sustain your organization. Describe HOW SENIOR LEADERS communicate
with your WORKFORCE and encourage HIGH PERFORMANCE.
a. VISION, VALUES, and MISSION
(1) VISION and VALUES Howdosixioiiiaoiissetyourorganizationsvisioxandvaiuis?Howdosixioiiiaoiis
oiiio\yourorganizationsvisioxandvaiuisthroughyouriiaoiisuiis\srix,tothewoixioici,toxi\suppliers
andiairxiis,andtocusroxiisandothersraxiuoioiis,asappropriate?Howdosixioiiiaoiisactionsreecta
commitmenttotheorganizationsvaiuis?
(2) Promoting Legal and ETHICALBEHAVIOR Howdosixioiiiaoiisactionsdemonstratetheircommitmenttolegal
andiruicainiuavioi?Howdotheypromoteanorganizationalenvironmentthatrequiresit?
(3) Creating a SUSTAINABLE Organization Howdosixioiiiaoiiscreateasusraixaniiorganization?Howdosixioi
iiaoiisachievethefollowing?
createanenvironmentfororganizational iiiioixaxciimprovement,theaccomplishmentofyourxissioxand
sriaricicon;icrivis,ixxovariox,iiiioixaxcileadership,andorganizationalagility
createa woixioiciculturethatdeliversaconsistentlypositivecusroxiiexperienceandfosterscusroxii
ixcacixixr
createanenvironmentfororganizationaland woixioiciiiaixixc
developandenhancetheirleadershipskills
participateinorganizational iiaixixc,successionplanning,andthedevelopmentoffutureorganizationalleaders
b. Communication and Organizational PERFORMANCE
(1) Communication Howdosixioiiiaoiiscommunicatewithandengagetheentirewoixioici?Howdosixioi
iiaoiisachievethefollowing?
encouragefrank,two-waycommunicationthroughouttheorganization
communicate xi\decisions
takeanactiveroleinrewardandrecognitionprogramstoreinforce uicuiiiioixaxciandacusroxiiand
businessfocus
(2) Focus on Action Howdosixioiiiaoiiscreateafocusonactiontoaccomplishtheorganizationsobjectives,
improveiiiioixaxci,andattainitsvisiox?Howdosixioiiiaoiisidentifyneededactions?Howdosixioi
iiaoiisincludeafocusoncreatingandbalancingvaiuiforcusroxiisandothersraxiuoioiisintheirorganiza-
tionaliiiioixaxciexpectations?
Notes:
N1.Organizationalvision(1.1a[1])shouldsetthecontextfor
strategicobjectivesandactionplans,whicharedescribedin
items2.1and2.2.
N2.Asustainableorganization(1.1a[3])iscapableof
addressingcurrentbusinessneedsandpossessestheagilityand
strategicmanagementtopreparesuccessfullyforitsfuture
business,market,andoperatingenvironment.Bothexternal
andinternalfactorsareconsidered.Inthiscontext,theconcept
ofinnovationincludesbothtechnologicalandorganizational
innovationtohelptheorganizationsucceedinthefuture.
Asustainableorganizationalsoensuresasafeandsecure
environmentfortheworkforceandotherkeystakeholders.
Anorganizationscontributionstoenvironmental,social,and
economicsystemsbeyondthoseofitsworkforceandimmedi-
atestakeholdersareconsideredinitssocietalresponsibilities
(item1.2).
N3.Afocusonaction(1.1b[2])considersthestrategy,the
workforce,theworksystems,andtheassetsofyourorganiza-
tion.Itincludestakingintelligentrisksandimplementing
innovationsandongoingimprovementsinproductivitythat
Criteria for Performance Excellence: Leadership 7
maybeachievedthrougheliminatingwasteorreducingcycle N5.For nonprofit organizations that rely on volunteers to
time;itmightusetechniquessuchasSixSigmaandLean.It accomplish their work, responses to 1.1b(1) also should discuss
alsoincludestheactionstoaccomplishyourorganizations your efforts to communicate with and engage the volunteer
strategicobjectives(see2.2a[1]). workforce.
N4.Yourorganizationalperformanceresultsshouldbe
reportedinitems7.17.5.
1.2 Governance and Societal Responsibilities: How do you govern and
fulfll your societal responsibilities? (50 pts.)
Process
Describe your organizations GOVERNANCE system and APPROACH to leadership improvement. Describe HOW your organiza-
tion ensures legal and ETHICAL BEHAVIOR, fullls its societal responsibilities, and supports its KEY communities.
a. Organizational GOVERNANCE
(1)GOVERNANCE System Howdoesyourorganizationreviewandachievethefollowingxi\aspectsofyourcoviixaxci
system?
accountabilityforthemanagementsactions
scalaccountability
transparencyinoperationsandselectionofanddisclosurepoliciesforcoviixaxciboardmembers,asappropriate
independenceininternalandexternalaudits
protectionofsraxiuoioiiandstockholderinterests,asappropriate
(2)PERFORMANCE Evaluation Howdoyouevaluatetheiiiioixaxciofyoursixioiiiaoiis,includingthechief
executive?Howdoyouusetheseiiiioixaxcievaluationsindeterminingexecutivecompensation?Howdoyou
evaluatetheiiiioixaxciofmembersofyourcoviixaxciboard,asappropriate?Howdosixioiiiaoiisandyour
coviixaxciboardusetheseiiiioixaxcireviewstoadvancetheirdevelopmentandimproveboththeirpersonal
leadershipiiiicrivixissandthatofyourboardandiiaoiisuiis\srix,asappropriate?
b. Legal and ETHICAL BEHAVIOR
(1)Legal and Regulatory Behavior Howdoyouaddressanyadverseimpactsonsocietyofyourproductsandoperations?
Howdoyouanticipatepublicconcernswithcurrentandfutureproductsandoperations?Howdoyouprepareforthese
impactsandconcernsinaproactivemanner,includingconservingnaturalresourcesandusingiiiicrivisupply-chain
managementiiocissis,asappropriate?Whatareyourxi\complianceiiocissis,xiasuiis,andcoaisforachieving
andsurpassingregulatoryandlegalrequirements,asappropriate?Whatareyourxi\iiocissis,xiasuiis,andcoais
foraddressingrisksassociatedwithyourproductsandoperations?
(2)ETHICALBEHAVIOR Howdoesyourorganizationpromoteandensureiruicainiuavioiinallinteractions?Whatare
yourxi\iiocissisandxiasuiisorixoicaroisforenablingandmonitoringiruicainiuavioiinyourcoviixaxci
structure,throughoutyourorganization,andininteractionswithcusroxiis,iairxiis,suppliers,andothersraxi-
uoioiis?Howdoyoumonitorandrespondtobreachesofiruicainiuavioi?
c. Societal Responsibilities and Support of KEY Communities
(1)Societal Well-Being Howdoyouconsidersocietalwell-beingandbenetaspartofyourstrategyanddailyopera-
tions?Howdoyoucontributetothewell-beingofyourenvironmental,social,andeconomicsystems?
(2)Community Support Howdoesyourorganizationactivelysupportandstrengthenyourxi\communities?Whatare
yourxi\communities?Howdoyouidentifythesecommunitiesanddetermineareasfororganizationalinvolvement,
includingareasrelatedtoyourcoiicoxiirixciis?Howdoyoursixioiiiaoiis,inconcertwithyourwoixioici,
contributetoimprovingthesecommunities?
Notes:
N1.Societalresponsibilitiesinareascriticaltoyourorganiza-
tionsongoingmarketplacesuccessalsoshouldbeaddressed
inStrategyDevelopment(item2.1)andinOperationsFocus
(category6).Keyresults,suchasresultsrelatedtoregulatory
andlegalrequirements(includingtheresultsofmandated
nancialaudits);reductionsinenvironmentalimpactsthrough
theuseofgreentechnology,resource-conservingactivities,
orothermeans;orimprovementsinsocialimpacts,suchasthe
globaluseofenlightenedlaborpractices,shouldbereportedas
LeadershipandGovernanceOutcomes(item7.4).
N2.Transparencyinoperationsofyourgovernancesystem
(1.2a[1])shouldincludeyourinternalcontrolsongovernance
processes.For some nonprofit organizations, an external advisory
board may provide some or all of the governance board functions.
For those nonprofit organizations that serve as stewards of public
funds, stewardship of those funds and transparency in operations
are areas of emphasis.
N3.Leadershipperformanceevaluation(1.2a[2])mightbe
supportedbypeerreviews,formalperformancemanage-
mentreviews,andformalorinformalworkforceandother
stakeholderfeedbackandsurveys.For some nonprofit and
government organizations, external advisory boards might evaluate
the performance of senior leaders and the governance board.
N4.Measuresorindicatorsofethicalbehavior(1.2b[2])
mightincludethepercentageofindependentboardmembers,
measuresofrelationshipswithstockholderandnonstockholder
constituencies,instancesofethicalconductbreachesand
responses,surveyresultsonworkforceperceptionsoforgani-
zationalethics,ethicshotlineuse,andresultsofethicsreviews
andaudits.Teyalsomightincludeevidencethatpolicies,
workforcetraining,andmonitoringsystemsareinplacewith
respecttoconictsofinterestandproperuseoffunds.
N5.Areasofsocietalcontributionsandcommunitysupport
appropriatefor1.2cmightincludeyoureortstoimprovethe
environment(e.g.,collaborationtoconservetheenvironment
ornaturalresources);strengthenlocalcommunityservices,
education,andhealth;andimprovethepracticesoftrade,
business,orprofessionalassociations.
N6.Tehealthandsafetyofyourworkforcearenotaddressed
initem1.2;youshouldaddresstheseworkforcefactorsin
item5.1.
N7.Nonprofit organizations should report in 1.2b(1), as appro-
priate, how they address the legal and regulatory requirements and
standards that govern fundraising and lobbying activities.
N8.For some charitable organizations, societal contributions and
support of key communities (1.2c) may occur totally through the
mission-related activities of the organization. In such cases, it is
appropriate to respond with any extra efforts through which you
support these communities.
Assessment of Item Responses
ItemresponsesareassessedbyconsideringtheCriteriaitemrequirements;yourkeybusinessfactorspresentedin
yourOrganizationalProle;andthematurityofyourapproaches,breadthoftheirdeployment,andstrengthof
yourimprovementprocessandresultsrelativetothescoringsystem.Refertothescoringsysteminformationon
pages6670.
I see the Baldrige process as a powerful set of mechanisms for disciplined people engaged in disciplined
thought and taking disciplined action to create great organizations that produce exceptional results.
JimCollins,authorofGood to Great:
Why Some Companies Make the Leap . . . and Others Dont
Criteria for Performance Excellence: Leadership 9
ofile:
and Strategic Situation
1
Leadership
Focus
5
orkforce
Focus
7
Results
6
Operations
Focus
4
Organizational Profi
E i Environ t R ment, R l t elationships, ships hips, and Str
rsh p
3
Customer
Focus
Wo
Op
Strategic Planning (85 pts.) 2
TeStrategic Planning categoryexaminesuowyourorganizationdevelopssriaricicon;ic-
rivisandacrioxiiaxs.Alsoexaminedareuowyourchosensriaricicon;icrivisandacriox
iiaxsareimplementedandchangedifcircumstancesrequire,anduowprogressismeasured.
2.1 Strategy Development: How do you develop your strategy? (40 pts.)
Process
Describe HOW your organization establishes its strategy to address its STRATEGIC CHALLENGES and leverage its STRATEGIC
ADVANTAGES. Summarize your organizations KEY STRATEGIC OBJECTIVES and their related GOALS.
a.Strategy Development PROCESS
(1)Strategic Planning PROCESS Howdoesyourorganizationconductitsstrategicplanning?Whatarethexi\iiociss
steps?Whoarethexi\participants?Howdoesyouriiocissidentifypotentialblindspots?Howdoyoudetermine
yourcoiicoxiirixciis,sriariciccuaiiixcis,andsriaricicaovaxracis(identiedinyourOrganizational
Prole)?Whatareyourshort- andlonger-termplanningtimehorizons?Howarethesetimehorizonsset?Howdoes
yourstrategicplanningiiocissaddressthesetimehorizons?
(2)Strategy Considerations Howdoyouensurethatstrategicplanningaddressesthexi\elementslistedbelow?Howdo
youcollectandanalyzerelevantdataandinformationpertainingtothesefactorsaspartofyourstrategicplanningiiociss?
yourorganizationsstrengths,weaknesses,opportunities,andthreats
earlyindicationsofmajorshiftsintechnology,markets,products,cusroxiipreferences,competition,theeconomy,
andtheregulatoryenvironment
long-termorganizationalsusraixaniiir\,includingneededcoiicoxiirixciis,andiio;icrioxsofyourfuture
iiiioixaxciandyourcompetitorsorcomparableorganizationsfutureiiiioixaxci
yourabilitytoexecutethestrategicplan
b.STRATEGIC OBJECTIVES
(1)KEY STRATEGIC OBJECTIVES Whatareyourxi\sriaricicon;icrivisandyourtimetableforaccomplishingthem?
Whatareyourmostimportantcoaisforthesesriaricicon;icrivis?
(2)STRATEGIC OBJECTIVE Considerations Howdoyoursriaricicon;icrivisachievethefollowing?
addressyoursriariciccuaiiixcisandsriaricicaovaxracis
addressyouropportunitiesforixxovarioxinproducts,operations,andyourbusinessmodel
capitalizeonyourcurrentcoiicoxiirixciisandaddressthepotentialneedfornewcoiicoxiirixciis
balanceshort- andlonger-termchallengesandopportunities
considerandbalancetheneedsofallxi\sraxiuoioiis
enhanceyourabilitytoadapttosuddenshiftsinyourmarketconditions
Notes:
N1.Strategydevelopmentreferstoyourorganizations
approachtopreparingforthefuture.Strategydevelopment
mightutilizevarioustypesofforecasts,projections,options,
scenarios,knowledge(see4.2aforrelevantorganizational
knowledge),orotherapproachestoenvisioningthefuturefor
purposesofdecisionmakingandresourceallocation.Strategy
developmentmightinvolveparticipationbykeysuppliers,
distributors,partners,andcustomers.For some nonprofit
organizations, strategy development might involve participation by
organizations providing similar services or drawing from the same
donor population or volunteer workforce.
N2.Tetermstrategyshouldbeinterpretedbroadly.
Strategymightbebuiltaroundorleadtoanyorallofthe
following:newproducts;redenitionofkeycustomergroups
ormarketsegments;intelligentrisks;newcorecompetencies;
revenuegrowthviavariousapproaches,includingacquisitions,
grants,andendowments;divestitures;newpartnerships
andalliances;andnewemployeeorvolunteerrelationships.
Strategymightbedirectedtowardbecomingapreferred
supplier,alocalsupplierineachofyourmajorcustomersor
partnersmarkets,alow-costproducer,amarketinnovator,or
aproviderofahigh-endorcustomizedproductorservice.It
alsomightbedirectedtowardmeetingacommunityorpublic
need.
N3.Yourorganizationsstrengths,weaknesses,opportunities,
andthreats(2.1a[2])shouldaddressallfactorsthatarekeyto
yourorganizationsfuturesuccess,includingthefollowing,as
appropriate:yourcustomerandmarketrequirements,expecta-
tions,andopportunities;youropportunitiesforinnovation
androle-modelperformance;yourcorecompetencies;your
competitiveenvironmentandyourperformancenowandin
thefuturerelativetocompetitorsandcomparableorganiza-
tions;yourproductlifecycle;technologicalandotherkey
innovationsorchangesthatmightaectyourproductsand
servicesandhowyouoperate,aswellastherateofinnovation;
yourworkforceandotherresourceneeds;yourabilityto
capitalizeondiversity;youropportunitiestoredirectresources
tohigher-priorityproducts,services,orareas;nancial,
societal,ethical,regulatory,technological,security,andother
potentialrisksandopportunities;yourabilitytopreventand
respondtoemergencies,includingnaturalorotherdisasters;
changesinthenationalorglobaleconomy;requirementsfor
andstrengthsandweaknessesofyourpartnersandsupply
chain;changesinyourparentorganization;andotherfactors
uniquetoyourorganization.
N4.Yourabilitytoexecutethestrategicplan(2.1a[2])should
addressyourabilitytomobilizethenecessaryresourcesand
knowledge.Italsoshouldaddressyourorganizationalagility
basedoncontingencyplansor,ifcircumstancesrequire,ashift
inplansandrapidexecutionofneworchangedplans.
N5.Strategicobjectivesthataddresskeychallenges
andadvantages(2.1b[2])mightincluderapidresponse,
customization,co-locationwithmajorcustomersorpartners,
workforcecapabilityandcapacity,specicjointventures,
virtualmanufacturing,rapidinnovation,ISOqualityor
environmentalsystemsregistration,societalresponsibility
actionsorleadership,Web-basedsupplierandcustomer
relationshipmanagement,andproductandservicequality
enhancements.Responsestoitem2.1shouldfocusonyour
specicchallengesandadvantagesthosemostimportantto
yourongoingsuccessandtostrengtheningyourorganizations
overallperformance.
N6.Item2.1addressesyouroverallorganizationalstrategy,
whichmightincludechangesinproductoeringsand
customerengagementprocesses.However,theitemdoesnot
addressproductdesignorcustomerengagementstrategies;
youshouldaddressthesefactorsinitems3.2and6.1,as
appropriate.
2.2 Strategy Implementation: How do you implement your
strategy? (45 pts.)
Process
Describe HOW your organization converts its STRATEGIC OBJECTIVES into ACTION PLANS. Summarize your organizations
ACTION PLANS, HOW they are DEPLOYED, and KEY ACTION PLAN PERFORMANCE MEASURES or INDICATORS. Project your organiza-
tions future PERFORMANCE relative to KEY comparisons on these PERFORMANCE MEASURES or INDICATORS.
a. ACTION PLAN Development and DEPLOYMENT
(1)ACTION PLAN Development Howdoyoudevelopyouracrioxiiaxs?Whatareyourxi\short-andlonger-term
acrioxiiaxsandtheirrelationshiptoyoursriaricicon;icrivis?Whatarethexi\plannedchanges,ifany,inyour
products,yourcusroxiisandmarkets,yoursuppliersandiairxiis,andhowyouwilloperate?
(2)ACTION PLAN Implementation Howdoyouoiiio\acrioxiiaxsthroughouttheorganizationtoyourwoixioici
andtoxi\suppliersandiairxiis,asappropriate,toachieveyourxi\sriaricicon;icrivis?Howdoyouensurethat
thexi\outcomesofyouracrioxiiaxscanbesustained?
(3)Resource Allocation Howdoyouensurethatnancialandotherresourcesareavailabletosupporttheaccomplish-
mentofyouracrioxiiaxs,whilemeetingcurrentobligations?Howdoyouallocatetheseresourcestosupportthe
accomplishmentoftheplans?Howdoyoumanagethenancialandotherrisksassociatedwiththeplanstoensurethe
nancialviabilityofyourorganization?
(4)WORKFORCE Plans Whatareyourxi\humanresourceorwoixioiciplanstoaccomplishyourshort-andlonger-
termsriaricicon;icrivisandacrioxiiaxs?Howdotheplansaddresspotentialimpactsonyourwoixioici
membersandanypotentialchangestowoixioicicaianiiir\andcaiacir\needs?
(5)PERFORMANCE MEASURES Whatareyourxi\iiiioixaxcixiasuiisorixoicaroisfortrackingtheachievement
andiiiicrivixissofyouracrioxiiaxs?Howdoyouensurethatyouroverallacrioxiiaxmeasurementsystem
reinforcesorganizationalaiicxxixr?Howdoyouensurethatthemeasurementsystemcoversallxi\oiiio\xixr
areasandsraxiuoioiis?
(6)ACTION PLAN Modication Howdoyouestablishandimplementmodiedacrioxiiaxsifcircumstancesrequirea
shiftinplansandrapidexecutionofnewplans?
b. PERFORMANCE PROJECTIONS
Forthexi\iiiioixaxcixiasuiisorixoicaroisidentiedin2.2a(5),whatareyouriiiioixaxciiio;icrioxsfor
bothyourshort-andlonger-termplanningtimehorizons?Howdoesyourprojectediiiioixaxcionthesexiasuiis
orixoicaroiscomparewiththeprojectediiiioixaxciofyourcompetitorsorcomparableorganizations?Howdoesit
comparewithxi\nixcuxaixs,coais,andpastiiiioixaxci,asappropriate?Iftherearecurrentorprojectedgapsin
iiiioixaxciagainstyourcompetitorsorcomparableorganizations,uowwillyouaddressthem?
Criteria for Performance Excellence: Strategic Planning 11
Notes:
N1.Strategyandactionplandevelopmentanddeploymentare
closelylinkedtootheritemsintheCriteria.Tefollowingare
examplesofkeylinkages:
item1.1forhowyourseniorleaderssetandcommuni-
cateorganizationaldirection
category3forgatheringcustomerandmarketknowledge
asinputtoyourstrategyandactionplansandfor
deployingactionplans
category4formeasurement,analysis,andknowledgeman-
agementtosupportyourkeyinformationneeds,support
yourdevelopmentofstrategy,provideaneectivebasis
foryourperformancemeasurements,andtrackprogress
relativetoyourstrategicobjectivesandactionplans
category5formeetingyourworkforcecapability
andcapacityneeds,forworkforcedevelopmentand
learningsystemdesignandneeds,andforimplementing
workforce-relatedchangesresultingfromactionplans
category6forchangestocorecompetencies,work
systems,andworkprocessrequirementsresultingfrom
youractionplans
item7.1forspecicaccomplishmentsrelativetoyour
organizationalstrategyandactionplans
N2.Measuresandindicatorsofprojectedperformance(2.2b)
mightincludechangesresultingfromnewventures;organi-
zationalacquisitionsormergers;newvaluecreation;market
entryandshifts;newlegislativemandates,legalrequirements,
orindustrystandards;andsignicantanticipatedinnovations
inproductsandtechnology.
Te Baldrige Award Program is still one of the best in the entire maelstrom of awards. Teres the
Nobel Prize, the Oscars, and all that, but the Baldrige Award is right up there! Its inspiring.
Its exciting. It makes us proud.
LetitiaBaldrige,etiquetteexpert,former
chiefofstaforJacquelineKennedy,andsisterofMalcolmBaldrige
3 Customer Focus (85 pts.)
2
Strategic
Planning
1
Leadership
5
Workforce
Focus
7
Results
6
Operations
Focus
and Knowledge Management
Planning
sh p
Op
4
Measurement, Analysis, and Knowle
TeCUSTOMER Focus categoryexaminesuowyourorganizationengagesitscusroxiisfor
long-termmarketplacesuccess.Tisixcacixixrstrategyincludesuowyourorganization
listenstothevoicioiirscusroxiis,buildscusroxiirelationships,andusescusroxii
informationtoimproveandidentifyopportunitiesforixxovariox.
3.1 Voice of the Customer: How do you obtain information
from your customers? (45 pts.)
Process
Describe HOW your organization listens to your CUSTOMERS and gains satisfaction and dissatisfaction information.
a. CUSTOMER Listening
(1) Listening to Current CUSTOMERS Howdoyoulistentocusroxiistoobtainactionableinformation?Howdo
yourlisteningmethodsvaryfordierentcusroxiis,cusroxiigroups,ormarketsicxixrs?Howdoyouusesocial
mediaandWeb-basedtechnologiestolistentocusroxiis,asappropriate?Howdoyourlisteningmethodsvaryacross
thecusroxiilifecycle?Howdoyoufollowupwithcusroxiisonthequalityofproducts,cusroxiisupport,and
transactionstoreceiveimmediateandactionablefeedback?
(2) Listening to Potential CUSTOMERS Howdoyoulistentoformercusroxiis,potentialcusroxiis,andcusroxiis
ofcompetitorstoobtainactionableinformationandtoobtainfeedbackonyourproducts,cusroxiisupport,and
transactions,asappropriate?
b. Determination of CUSTOMER Satisfaction and ENGAGEMENT
(1) Satisfaction and ENGAGEMENT Howdoyoudeterminecusroxiisatisfactionandixcacixixr?Howdothese
determinationmethodsdieramongcusroxiigroupsandmarketsicxixrs,asappropriate?Howdoyourmeasure-
mentscaptureactionableinformationforuseinexceedingyourcusroxiisexpectationsandsecuringyourcusroxiis
ixcacixixr?
(2) Satisfaction Relative to Competitors Howdoyouobtaininformationonyourcusroxiissatisfactionrelativeto
theirsatisfactionwithyourcompetitors?Howdoyouobtaininformationonyourcusroxiissatisfactionrelativeto
thesatisfactioniiviisofcusroxiisofotherorganizationsprovidingsimilariiooucrsortoindustrynixcuxaixs,
asappropriate?
(3) Dissatisfaction Howdoyoudeterminecusroxiidissatisfaction?Howdoyourmeasurementscaptureactionable
informationforuseinmeetingyourcusroxiisrequirementsandexceedingtheirexpectationsinthefuture?
Notes:
N1.Tevoiceofthecustomerreferstoyourprocessfor
capturingcustomer-relatedinformation.Voice-of-the-customer
processesareintendedtobeproactiveandcontinuously
innovativetocapturestated,unstated,andanticipated
customerrequirements,expectations,anddesires.Tegoalis
toachievecustomerengagement.Listeningtothevoiceofthe
customermightincludegatheringandintegratingvarioustypes
ofcustomerdata,suchassurveydata,focusgroupndings,
blogcommentsandothersocialmediadata,warrantydata,
marketingandsalesinformation,andcomplaintdatathat
aectcustomerspurchasingandengagementdecisions.
N2.UseofsocialmediaandWeb-basedtechnologiestolisten
tocustomers(3.1a[1])providesanewermodeofgathering
insightintocustomerperceptionsofallaspectsofyour
involvementwiththem.Useofsocialmediamayincludeblogs
moderatedbyyourorganizationandunsolicitedopportunities
tolearnbasedonsocialmediaoutletsyourorganizationdoes
notcontrol,suchaswikis,onlineforums,andblogsnot
moderatedbyyourorganization.
N3.Tecustomerlifecycle(3.1a[1])beginsintheproduct
conceptorpre-saleperiodandshouldincludeallstagesofyour
involvementwiththecustomer.Tismightincluderelation-
shipbuilding,theactivebusinessrelationship,andanexit
strategy,asappropriate.
N4.Determiningcustomersatisfactionanddissatisfaction
(3.1b)mightincludetheuseofanyorallofthefollowing:
surveys,formalandinformalfeedback,customeraccount
histories,complaints,eldreports,win/lossanalysis,customer
referralrates,andtransactioncompletionrates.Information
mightbegatheredontheWeb,throughpersonalcontactor
athirdparty,orbymail.Determiningcustomerdissatisfac-
tionshouldbeseenasmorethanreviewinglowcustomer
satisfactionscores.Dissatisfactionshouldbeindependently
Criteria for Performance Excellence: Customer Focus 13
determinedtoidentifyrootcausesandenableasystematic mayinvolvedeterminingwhycustomerschoseyourcompeti-
remedytoavoidfuturedissatisfaction. torsoveryou.
N5.Determiningrelativecustomersatisfaction(3.1b[2])may N6.For additional considerations on products and the business
involvecomparisonswithcompetitors,comparisonswithother of nonprofit organizations, see item P.1, note 1, and item P.2,
organizationsthatdeliversimilarproductsinanoncompetitive note 4.
marketplace,orcomparisonsachievedthroughtradeorother
organizations.Determiningrelativecustomersatisfactionalso Foradditionaldescriptionofthisitem,seepages3940.
3.2 Customer Engagement: How do you engage customers to serve
their needs and build relationships? (40 pts.)
Process
Describe HOW your organization determines product oerings and communication mechanisms to support CUSTOMERS.
Describe HOW your organization builds CUSTOMER relationships.
a. Product Offerings and CUSTOMER Support
(1)Product Oerings Howdoyouidentifycusroxiiandmarketrequirementsforproductoeringsandservices?How
doyouidentifyandinnovateproductoeringstomeettherequirementsandexceedtheexpectationsofyourcusroxii
groupsandmarketsicxixrs(identiedinyourOrganizationalProle)?Howdoyouidentifyandinnovateproduct
oeringstoenternewmarkets,toattractnewcusroxiis,andtoprovideopportunitiesforexpandingrelationshipswith
existingcusroxiis,asappropriate?
(2)CUSTOMER Support Howdoyouenablecusroxiistoseekinformationandcusroxiisupport?Howdoyouenable
themtoconducttheirbusinesswithyouandprovidefeedbackonyourproductsandyourcusroxiisupport?Whatare
yourxi\meansofcusroxiisupport,includingyourxi\communicationmechanisms?Howdotheyvaryfordierent
cusroxiis,cusroxiigroups,ormarketsicxixrs?Howdoyoudetermineyourcusroxiisxi\supportrequire-
ments?Howdoyouensurethatcusroxiisupportrequirementsareoiiio\iotoallpeopleandiiocissisinvolvedin
cusroxiisupport?
(3)CUSTOMER Segmentation Howdoyouusecusroxii,market,andproductoeringinformationtoidentifycurrent
andanticipatefuturecusroxiigroupsandmarketsicxixrs?Howdoyouconsidercusroxiisofcompetitorsand
otherpotentialcusroxiisandmarketsinthissegmentation?Howdoyoudeterminewhichcusroxiis,cusroxii
groups,andmarketsicxixrstopursueforcurrentandfutureproducts?
(4)CUSTOMER Data Use Howdoyouusecusroxii,market,andproductoeringinformationtoimprovemarketing,
buildamorecusroxii-focusedculture,andidentifyopportunitiesforixxovariox?
b. Building CUSTOMER Relationships
(1)Relationship Management Howdoyoumarket,build,andmanagerelationshipswithcusroxiistoachievethe
following?
acquirecusroxiisandbuildmarketshare
retaincusroxiis,meettheirrequirements,andexceedtheirexpectationsineachstageofthecusroxiilifecycle
increasetheirixcacixixrwithyou
(2)Complaint Management Howdoyoumanagecusroxiicomplaints?Howdoesyourcusroxiicomplaint
managementiiocissensurethatcomplaintsareresolvedpromptlyandiiiicrivii\?Howdoesyourcusroxii
complaintmanagementiiocissenableyoutorecoveryourcusroxiiscondenceandenhancetheirsatisfactionand
ixcacixixr?
Notes:
N1.Customerengagementreferstoyourcustomersinvest-
mentinyourbrandandproductoerings.Characteristicsof
engagementincludecustomerretentionandloyalty,customers
willingnesstomakeaneorttodobusinessandincrease
theirbusinesswithyourorganization,andcustomers
willingnesstoactivelyadvocateforandrecommendyourbrand
andproductoerings.
N2.Productoeringsandproductsrefertothegoodsand
servicesthatyouoerinthemarketplace.Productoerings
(3.2a)shouldconsideralltheimportantcharacteristicsof
productsandservicesandtheirperformancethroughouttheir
fulllifecycleandthefullconsumptionchain.Tefocus
shouldbeonfeaturesthataectcustomerpreferenceand
loyaltyforexample,thosefeaturesthatdierentiateyour
productsfromcompetingoeringsorotherorganizations
services.Tosefeaturesmightincludeprice,reliability,value,
delivery,timeliness,easeofuse,requirementsfortheuseand
disposalofhazardousmaterials,customerortechnicalsupport,
andthesalesrelationship.Keyproductfeaturesalsomighttake
intoaccounthowtransactionsoccurandfactorssuchasthe
privacyandsecurityofcustomerdata.Yourresultsonper-
formancerelativetokeyproductfeaturesshouldbereported
initem7.1,andthoseconcerningcustomerperceptionsand
actions(outcomes)shouldbereportedinitem7.2.
N3.Tegoalofcustomersupport(3.2a[2])istomakeyour
organizationeasytodobusinesswithandresponsivetoyour
customersexpectations.
N4.Buildingcustomerrelationships(3.2b)mightincludethe
developmentofpartnershipsorallianceswithcustomers.
Te veteran is the benefactor of what we provide . . . and I think that the Baldrige Program
actually enabled us to transform the organization from being good to a great organization,
one that is very high-performing.
MikeSather,directorof2009BaldrigeAwardrecipient
VACooperativeStudiesProgramClinicalResearchPharmacyCoordinatingCenter
We didnt apply the [Baldrige] concepts . . . to win an award. We did it to win customers. We did
it to grow. We did it to prosper.
EarnestDeavenport,chairmanandCEOof
1993BaldrigeAwardrecipientEastmanChemicalCompany
Criteria for Performance Excellence: Customer Focus 15
Strategic Workforce
Planning Focus
1
2 5
Leadership
3 6
Customer Operations
Focus Focus
7
Results
Measurement, Analysis, and
Knowledge Management (90 pts.) 4
TeMeasurement, ANALYSIS, and Knowledge Management categoryexaminesuowyour
organizationselects,gathers,analyzes,manages,andimprovesitsdata,information,and
xxowiiociassirsanduowitmanagesitsinformationtechnology.Tecategoryalso
examinesuowyourorganizationusesreviewndingstoimproveitsiiiioixaxci.
4.1 Measurement, Analysis, and Improvement of Organizational Performance:
How do you measure, analyze, and then improve organizational
performance? (45 pts.)
Process
Describe HOW your organization measures, analyzes, reviews, and improves its PERFORMANCE through the use of data and
information at all levels and in all parts of your organization.
a. PERFORMANCE Measurement
(1)PERFORMANCE MEASURES Howdoyouselect,collect,align,andintegratedataandinformationfortrackingdaily
operationsandoverallorganizationaliiiioixaxci,includingprogressrelativetosriaricicon;icrivisandacriox
iiaxs?Whatareyourxi\organizationaliiiioixaxcixiasuiis,includingxi\short-termandlonger-termnancial
xiasuiis?Howfrequentlydoyoutrackthesexiasuiis?Howdoyouusethesedataandinformationtosupport
organizationaldecisionmakingandixxovariox?
(2)Comparative Data Howdoyouselectandensuretheiiiicriviuseofxi\comparativedataandinformationto
supportoperationalandstrategicdecisionmakingandixxovariox?
(3)CUSTOMER Data Howdoyouselectandensuretheiiiicriviuseofvoici-oi-rui-cusroxiidataandinformation
(includingcomplaints)tosupportoperationalandstrategicdecisionmakingandixxovariox?
(4)Measurement Agility Howdoyouensurethatyouriiiioixaxcimeasurementsystemisabletorespondtorapidor
unexpectedorganizationalorexternalchanges?
b. PERFORMANCE ANALYSIS and Review
Howdoyourevieworganizationaliiiioixaxciandcapabilities?Howdoyouuseyourxi\organizationaliiiioixaxci
xiasuiisinthesereviews?Whataxai\sisdoyouperformtosupportthesereviewsandensurethatconclusionsarevalid?
Howdoyouusethesereviewstoassessorganizationalsuccess,competitiveiiiioixaxci,nancialhealth,andprogress
relativetosriaricicon;icrivisandacrioxiiaxs?Howdoyouusethesereviewstoassessyourorganizationsabilityto
respondrapidlytochangingorganizationalneedsandchallengesinyouroperatingenvironment?
c. PERFORMANCE Improvement
(1)Best-Practice Sharing Howdoyouuseiiiioixaxcireviewndingstosharelessonslearnedandbestpractices
acrossorganizationalunitsandwoixiiocissis?
(2)Future PERFORMANCE Howdoyouuseiiiioixaxcireviewndingsandxi\comparativeandcompetitivedatato
projectfutureiiiioixaxci?
(3)Continuous Improvement and INNOVATION Howdoyouuseorganizationaliiiioixaxcireviewndingstodevelop
prioritiesforcontinuousimprovementandopportunitiesforixxovariox?Howaretheseprioritiesandopportunities
oiiio\iotoworkgroupandfunctional-leveloperationsthroughoutyourorganization?Whenappropriate,uoware
theprioritiesandopportunitiesoiiio\iotoyoursuppliers,iairxiis,andcoiianoiaroistoensureorganizational
aiicxxixr?
Notes:
N1.Performancemeasurement(4.1a)isusedinfact-based
decisionmakingforsettingandaligningorganizational
directionsandresourceuseattheworkunit,keyprocess,
departmental,andorganizationallevels.
N2.Comparativedataandinformation(4.1a[2])areobtained
bybenchmarkingandbyseekingcompetitivecomparisons.
Benchmarkingreferstoidentifyingprocessesandresultsthat
representbestpracticesandperformanceforsimilaractivities,
insideoroutsideyourorganizationsindustry.Competitive
comparisonsrelateyourorganizationsperformancetothatof
competitorsandotherorganizationsprovidingsimilarproducts
andservices.
N3.Organizationalperformancereviews(4.1b)shouldbe
informedbyorganizationalperformancemeasurementand
byperformancemeasuresreportedthroughoutyourCriteria
itemresponses,andtheyshouldbeguidedbythestrategic
objectivesandactionplansdescribedinitems2.1and2.2.Te
reviewsalsomightbeinformedbyinternalorexternalBaldrige
assessments.
N4.Performanceanalysis(4.1b)includesexamining
performancetrends;organizational,industry,andtechnology
projections;andcomparisons,cause-eectrelationships,
andcorrelations.Performanceanalysisshouldsupportyour
performancereviews,helpdeterminerootcauses,andhelpset
prioritiesforresourceuse.Accordingly,suchanalysisdraws
onalltypesofdata:customer-related,nancialandmarket,
operational,andcompetitive.
N5.Teresultsoforganizationalperformanceanalysisand
reviewshouldcontributetoyourorganizationalstrategic
planningincategory2.
N6.Yourorganizationalperformanceresultsshouldbe
reportedinitems7.17.5.
4.2 Management of Information, Knowledge, and Information Technology:
How do you manage your information, organizational knowledge,
and information technology? (45 pts.)
Process
Describe HOW your organization builds and manages its KNOWLEDGE ASSETS. Describe HOW your organization ensures the
quality and availability of needed data, information, software, and hardware for your WORKFORCE, suppliers, PARTNERS,
COLLABORATORS, and CUSTOMERS.
a. Data, Information, and Knowledge Management
(1)Properties Howdoyoumanageyourorganizationaldata,information,andknowledgetoensurethefollowing
properties?
accuracy
integrityandreliability
timeliness
securityandcondentiality
(2)Data and Information Availability Howdoyoumakeneededdataandinformationavailabletoyourwoixioici,
suppliers,iairxiis,coiianoiarois,andcusroxiis,asappropriate?
(3)Knowledge Management Howdoyoumanageorganizationalknowledgetoaccomplishthefollowing?
thecollectionandtransferofwoixioiciknowledge
thetransferofrelevantknowledgefromandtocusroxiis,suppliers,iairxiis,andcoiianoiarois
therapididentication,sharing,andimplementationofbestpractices
theassemblyandtransferofrelevantknowledgeforuseinyourixxovarioxandstrategicplanningiiocissis
b. Management of Information Resources and Technology
(1)Hardware and Software Properties Howdoyouensurethathardwareandsoftwarearereliable,secure,and
user-friendly?
(2)Emergency Availability Intheeventofanemergency,uowdoyouensurethecontinuedavailabilityofhardware
andsoftwaresystemsandthecontinuedavailabilityofdataandinformationtoiiiicrivii\servecusroxiisand
businessneeds?
Note:
N1.Dataandinformationaccess(4.2a[2])mightbevia
electronicorothermeans.
Criteria for Performance Excellence: Measurement, Analysis, and Knowledge Management 17
,
5 Workforce Focus (85 pts.)
Organizational Pr
Environment, Relationships,
2
Strategic
Planning
1
Leadership
3
Customer
Focus
Results
Focus
4
F
rganizational Profile:
elationships hips hips, and Strategic Situation
c
g
er
7
Result
6
Operations
TeWORKFORCE Focus categoryexaminesyourabilitytoassesswoixioicicaianiiir\and
caiacir\needsandbuildawoixioicienvironmentconducivetouicuiiiioixaxci.
Tecategoryalsoexaminesuowyourorganizationengages,manages,anddevelopsyour
woixioicitoutilizeitsfullpotentialinaiicxxixrwithyourorganizationsoverall
xissiox,strategy,andacrioxiiaxs.
5.1 Workforce Environment: How do you build an effective and
supportive workforce environment? (40 pts.)
Process
Describe HOW your organization manages WORKFORCE CAPABILITY and CAPACITY to accomplish the work of the organization.
Describe HOW your organization maintains a safe, secure, and supportive work climate.
a. WORKFORCE CAPABILITY and CAPACITY
(1) CAPABILITY and CAPACITY Howdoyouassessyourwoixioicicaianiiir\andcaiacir\needs,includingskills,
competencies,andstanglevels?
(2) New WORKFORCEMembers Howdoyourecruit,hire,place,andretainnewmembersofyourwoixioici?Howdoyou
ensurethatyourwoixioicirepresentsthediverseideas,cultures,andthinkingofyourhiringandcusroxiicommunity?
(3) Work Accomplishment Howdoyouorganizeandmanageyourwoixioicitoachievethefollowing?
accomplishtheworkofyourorganization
capitalizeontheorganizations coiicoxiirixciis
reinforcea cusroxiiandbusinessfocus
exceed iiiioixaxciexpectations
addressyour sriariciccuaiiixcisandacrioxiiaxs
(4) WORKFORCE Change Management Howdoyouprepareyourwoixioiciforchangingcaianiiir\andcaiacir\
needs?Howdoyoumanageyourwoixioici,itsneeds,andyourneedstoensurecontinuity,preventwoixioici
reductions,andminimizetheimpactofwoixioicireductions,iftheydobecomenecessary?Howdoyoupreparefor
andmanageperiodsofwoixioicigrowth?
b. WORKFORCE Climate
(1) Workplace Environment Howdoyouaddressworkplaceenvironmentalfactors,includingaccessibility,toensureand
improvewoixioicihealth,safety,andsecurity?Whatareyouriiiioixaxcixiasuiisandimprovementcoaisfor
eachofthesewoixioicineeds?Whatareanysignicantdierencesinthesefactorsandiiiioixaxcixiasuiisor
targetsfordierentworkplaceenvironments?
(2) WORKFORCE Policies and Benets Howdoyousupportyourwoixioiciviapolicies,services,andbenets?uoware
thesetailoredtotheneedsofadiversewoixioicianddierentwoixioicigroupsandsicxixrs?
Notes:
N1.Workforcereferstothepeopleactivelyinvolvedin
accomplishingtheworkofyourorganization.Itincludesyour
organizationspermanent,temporary,andpart-timepersonnel,
aswellasanycontractemployeessupervisedbyyourorganiza-
tion.Itincludesteamleaders,supervisors,andmanagersatall
levels.Peoplesupervisedbyacontractorshouldbeaddressed
incategory6aspartofyourlargerworksystems.For nonprofit
organizations that also rely on volunteers, workforce includes
these volunteers.
N2.Workforcecapability(5.1a)referstoyourorganizations
abilitytoaccomplishitsworkprocessesthroughtheknowl-
edge,skills,abilities,andcompetenciesofitspeople.Capability
mayincludetheabilitytobuildandsustainrelationshipswith
yourcustomers;innovateandtransitiontonewtechnologies;
developnewproducts,services,andworkprocesses;andmeet
changingbusiness,market,andregulatorydemands.
Workforcecapacity(5.1a)referstoyourorganizations
abilitytoensuresucientstanglevelstoaccomplishits
workprocessesandsuccessfullydeliveryourproductstoyour
customers,includingtheabilitytomeetseasonalorvarying
demandlevels.
N3.Workforcecapabilityandcapacityshouldconsidernot
onlycurrentneedsbutalsofuturerequirementsbasedonyour
strategicobjectivesandactionplansreportedincategory2.
N4.5.1a(2)addressesonlynewworkforcemembers.The frequentcommunication,considerationsofworkforceemploy-
retentionofexistingworkforcemembersisconsideredinitem mentandemployability,careercounseling,andoutplacement
5.2,WorkforceEngagement. andotherservices.
N5.Preparingyourworkforceforchangingcapabilityand
capacityneeds(5.1a[4])mightincludetraining,education,
5.2 Workforce Engagement: How do you engage your workforce to
achieve organizational and personal success? (45 pts.)
Process
Describe HOW your organization engages, compensates, and rewards your WORKFORCE to achieve HIGH PERFORMANCE.
Describe HOW you assess WORKFORCE ENGAGEMENT and use the results to achieve higher PERFORMANCE. Describe HOW
members of your WORKFORCE, including leaders, are developed to achieve HIGH PERFORMANCE.
a.WORKFORCE PERFORMANCE
(1)Elements of ENGAGEMENT Howdoyoudeterminethexi\elementsthataectwoixioiciixcacixixr?Howdo
youdeterminethexi\elementsthataectwoixioicisatisfaction?Howaretheseelementsdeterminedfordierent
woixioicigroupsandsicxixrs?
(2)Organizational Culture Howdoyoufosteranorganizationalculturethatischaracterizedbyopencommunication,
uicu-iiiioixaxciwoix,andanengagedwoixioici?Howdoyouensurethatyourorganizationalculturebenets
fromthediverseideas,cultures,andthinkingofyourwoixioici?
(3)PERFORMANCE Management Howdoesyourwoixioiciiiiioixaxcimanagementsystemachievethefollowing?
supportuicu-iiiioixaxciwoixandwoixioiciixcacixixr
considerwoixioicicompensation,reward,recognition,andincentivepractices
reinforceacusroxiiandbusinessfocusandachievementofyouracrioxiiaxs
b. Assessment of WORKFORCE ENGAGEMENT
(1)Assessment of ENGAGEMENT Howdoyouassesswoixioiciixcacixixr?Whatformalandinformalassess-
mentmethodsandxiasuiisdoyouusetodeterminewoixioiciixcacixixrandwoixioicisatisfaction?
Howdothesemethodsandxiasuiisdieracrosswoixioicigroupsandsicxixrs?Howdoyouuseother
ixoicarois,suchaswoixioiciretention,absenteeism,grievances,safety,andiiooucrivir\,toassessandimprove
woixioiciixcacixixr?
(2)Correlation with Business RESULTS Howdoyourelateyourwoixioiciixcacixixrassessmentndingstoxi\
businessiisuirsreportedincategory7toidentifyopportunitiesforimprovementinbothwoixioiciixcacixixrand
businessiisuirs?
c.WORKFORCE and Leader Development
(1)LEARNING and Development System Howdoesyouriiaixixcanddevelopmentsystemaddressthefollowingfactors
foryourwoixioicimembersandleaders?
yourorganizationscoiicoxiirixciis,sriariciccuaiiixcis,andaccomplishmentofitsacrioxiiaxs,both
short-termandlong-term
organizationaliiiioixaxciimprovementandixxovariox
ethicsandethicalbusinesspractices
cusroxiifocus
theiriiaixixcanddevelopmentneeds,includingthosethatareself-identiedandthoseidentiedbysupervisors,
managers,andsixioiiiaoiis
thetransferofknowledgefromdepartingorretiringwoixioicimembers
thereinforcementofnewknowledgeandskillsonthejob
(2)LEARNING and Development EFFECTIVENESS Howdoyouevaluatetheiiiicrivixissandeciencyofyouriiaixixc
anddevelopmentsystem?
(3)Career Progression Howdoyoumanageiiiicrivicareerprogressionforyourentirewoixioici?uowdoyou
accomplishiiiicrivisuccessionplanningformanagementandleadershippositions?
Criteria for Performance Excellence:Workforce Focus 19
Notes:
N1.Workforceengagementreferstotheextentofworkforce
commitment,bothemotionalandintellectual,toaccomplish-
ingthework,mission,andvisionoftheorganization.
N2.Techaracteristicsofhigh-performanceworkenviron-
ments(5.2a[2]and5.2a[3]),inwhichpeopledotheirutmost
forthebenetoftheircustomersandforthesuccessofthe
organization,arekeytounderstandinganengagedworkforce.
Tesecharacteristicsaredescribedindetailinthedenitionof
high-performanceworkonpage58.
N3.Compensation,recognition,andrelatedrewardand
incentivepractices(5.2a[3])includepromotionsandbonuses
thatmightbebasedonperformance,skillsacquired,andother
factors.In some government organizations, compensation systems
are set by law or regulation. However, since recognition can
include monetary and nonmonetary, formal and informal, and
individual and group mechanisms, reward and recognition systems
do permit flexibility.
N4.Identifyingimprovementopportunities(5.2b[2])might
drawonyourworkforce-focusedresultspresentedinitem
7.3andmightinvolveaddressingworkforce-relatedproblems
basedontheirimpactonyourorganizationalresultsreported
inresponsetoothercategory7items.
N5.Yourorganizationmayhaveuniqueconsiderations
relativetoworkforcedevelopment,learning,andcareer
progression.Ifthisisthecase,yourresponseto5.2cshould
includehowyouaddresstheseconsiderations.Yourresponse
shouldalsoconsiderthebreadthofdevelopmentopportunities
yourorganizationmightuse,includingeducation,training,
coaching,mentoring,andwork-relatedexperiences.
If youre considering your own Baldrige quest, please do that. I would encourage you to get your team and
your leadership behind such a journey. Its a very rewarding journey. It really brings your team together, all
of your employees. It builds upon success and allows you to strive for continuous improvement in delivering
for your customer and then internally driving employee satisfaction and engagement.
AnthonyBrancato,III,presidentof2009BaldrigeAwardrecipient
HoneywellFederalManufacturing&Technologies,L.L.C.
When we open a new store we give every hourly employee 120 hours of training. Someone said, What if
you spend all that money and time and they leave? And I said, What if you dont and they stay?
PalBarger,chairmanandfounderof
2001BaldrigeAwardrecipientPalsSuddenService
6 Operations Focus (85 pts.)
TeOPERATIONS FOCUS categoryexaminesuowyourorganizationdesigns,manages,and
improvesitswoixs\srixsandwoixiiocissistodelivercusroxiivaiuiandachieve
organizationalsuccessandsusraixaniiir\.Alsoexaminedisyourreadinessforemergencies.
6.1 Work Systems: How do you design, manage, and
improve your work systems? (45 pts.)
Process
2
Strategic
Planning
1
Leadership
3
Customer
Focus
5
Workforce
Focus
Results
Measurement, Analysis,
ocus g
er
F
7
Result
4
ysis, and Knowledge Management
6
Operations
Focus
Describe HOW your organization designs, manages, and improves its WORK SYSTEMS to deliver CUSTOMER VALUE, prepare for
potential emergencies, and achieve organizational success and SUSTAINABILITY.
a. WORK SYSTEM Design
(1)Design Concepts Howdoyoudesignandinnovateyouroverallwoixs\srixs?Howdoyoucapitalizeonyour
coiicoxiirixciis?Howdoyoudecidewhichiiocissiswithinyouroverallwoixs\srixswillbeinternaltoyour
organization(yourxi\woixiiocissis)andwhichwilluseexternalresources?
(2)WORK SYSTEM Requirements Howdoyoudeterminexi\woixs\srixrequirements,incorporatinginputfrom
cusroxiis,suppliers,iairxiis,andcoiianoiarois,asappropriate?Whatarethexi\requirementsforthese
woixs\srixs?
b. WORK SYSTEM Management
(1)WORK SYSTEM Implementation Whatareyourorganizationswoixs\srixs?Howdoyoumanageandimproveyour
woixs\srixstodelivercusroxiivaiuiandachieveorganizationalsuccessandsusraixaniiir\?
(2)Cost Control Howdoyoucontroltheoverallcostsofyourwoixs\srixs?Howdoyoupreventdefects,service
errors,andreworkandminimizewarrantycostsorcusroxiisiiooucrivir\losses,asappropriate?Howdoyou
minimizethecostsofinspections,tests,andiiocissoriiiioixaxciaudits,asappropriate?
c. Emergency Readiness
Howdoyouensurewoixs\srixandworkplacepreparednessfordisastersoremergencies?Howdoesyourdisasterand
emergencypreparednesssystemconsiderprevention,management,continuityofoperations,andrecovery?
Notes:
N1.Worksystemsreferstohowtheworkofyourorganiza-
tionisaccomplished.Worksystemsinvolveyourworkforce,
yourkeysuppliersandpartners,yourcontractors,your
collaborators,andothercomponentsofthesupplychain
neededtoproduceanddeliveryourproductsandbusinessand
supportprocesses.Yourworksystemscoordinatetheinternal
workprocessesandtheexternalresourcesnecessaryforyouto
develop,produce,anddeliveryourproductstoyourcustomers
andtosucceedinyourmarketplace.
N2.Disastersandemergencies(6.1c)mightbeweather-
related,utility-related,security-related,orduetoalocalor
nationalemergency,includingpotentialpandemics.Emer-
gencyconsiderationsrelatedtoinformationtechnologyshould
beaddressedinitem4.2.
To get the process exactly right is going to be cheaper and is going to be better.
BobGalvin,chairmanof1988BaldrigeAwardrecipientMotorola
Criteria for Performance Excellence: Operations Focus 21
6.2 Work Processes: How do you design, manage, and improve
your key work processes? (40 pts.)
Process
Describe HOW your organization designs, manages, and improves its KEY WORK PROCESSES to deliver CUSTOMER VALUE and
achieve organizational success and SUSTAINABILITY.
a. WORK PROCESS Design
(1)Design Concepts Howdoyoudesignandinnovateyourwoixiiocissistomeetallthexi\requirements?Howdo
youincorporatenewtechnology,organizationalknowledge,productexcellence,andthepotentialneedforagilityinto
theseiiocissis?Howdoyouincorporatec\ciirixi,iiooucrivir\,costcontrol,andothereciencyandiiiicrivi-
xissfactorsintotheseiiocissis?
(2)WORK PROCESS Requirements Howdoyoudeterminexi\woixiiocissrequirements?Whatareyourorganizations
xi\woixiiocissis?Whatarethexi\requirementsforthesewoixiiocissis?
b. WORK PROCESS Management
(1)KEYWORK PROCESS Implementation Howdoyourxi\woixiiocissisrelatetoyourwoixs\srixs?Howdoes
yourday-to-dayoperationoftheseiiocissisensurethattheymeetxi\iiocissrequirements?Whatareyourxi\
iiiioixaxcixiasuiisorixoicaroisandin-processxiasuiisforthecontrolandimprovementofyourwoix
iiocissis?
(2)Supply-Chain Management Howdoyoumanageyoursupplychain?Howdoyouensurethatsuppliersyouselect
arequaliedandpositionedtoenhanceyouriiiioixaxciandcusroxiisatisfaction?Howdoyouevaluatesupplier
iiiioixaxci?Howdoyoudealwithpoorlyperformingsuppliers?
(3)PROCESS Improvement Howdoyouimproveyourwoixiiocissistoachievebetteriiiioixaxci,reducevari-
ability,andimproveproducts?
Notes:
N1.Yourkeyworkprocesses(6.2a[2])areyourmost
importantinternalvaluecreationprocessesandmightinclude
productdesignanddelivery,customersupport,supply-chain
management,business,andsupportprocesses.Yourkeywork
processesarethosethatinvolvethemajorityofyourorganiza-
tionsworkforcemembersandproducecustomer,stakeholder,
andstockholdervalue.Projectsareuniqueworkprocesses
intendedtoproduceanoutcomeandthengooutofexistence.
Projectmanagementalsomaybeappliedtoaworksystem
challengeoropportunity.
N2.Toimproveprocessperformance(6.2b[3])andreduce
variability,yourorganizationmightimplementapproaches
suchasaLeanEnterpriseSystem,theSixSigmamethodol-
ogy,ISOqualitysystemstandards,thePlan-Do-Check-Act
methodology,orotherprocessimprovementtools.Tese
approachesmightbepartofyourperformanceimprovement
systemdescribedinresponsetoP.2cintheOrganizational
Prole.
N3.Teresultsofimprovementsinproductandprocess
performanceshouldbereportedinitem7.1.
Te economic environment is dicult for Cargill Corn Milling, as it is dicult for many manufacturing
companies today. But . . . by utilizing the processes and tools that weve learned from Baldrige, were able
to not only meet these challenges but actually excel in them.
AlanWillets,presidentof
2008BaldrigeAwardrecipientCargillCornMilling
f
7 Results (450 pts.)
2
Strategic
Planning
1
Leadership
3
Customer
Focus
5
Workfor
Focus
6
Operations
Focus
4
orce
us
ions
us
TeRESULTS categoryexaminesyourorganizationsiiiioixaxciandimprovementinall
xi\areasproductandiiocissoutcomes,cusroxii-focusedoutcomes,woixioici-
focusedoutcomes,leadershipandcoviixaxcioutcomes,andnancialandmarket
outcomes.Piiioixaxciiiviisareexaminedrelativetothoseofcompetitorsandother
organizationswithsimilarproductoerings.
7.1 Product and Process Outcomes: What are your product performance
and process effectiveness results? (120 pts.)
Results
Summarize your organizations KEY product PERFORMANCE and PROCESS EFFECTIVENESS and eciency RESULTS. Include
PROCESSES that directly serve CUSTOMERS, strategy, and operations. SEGMENT your RESULTS by product oerings, by CUSTOMER
groups and market SEGMENTS, and by PROCESS types and locations, as appropriate. Include appropriate comparative data.
Providedataandinformationtoanswerthefollowingquestions:
a. CUSTOMER-Focused Product and PROCESS RESULTS
Whatareyourcurrentiiviisandriixosinxi\xiasuiisorixoicaroisofproductandiiocissiiiioixaxcithatare
importanttoanddirectlyserveyourcusroxiis?Howdotheseiisuirscomparewiththeiiiioixaxciofyourcompeti-
torsandotherorganizationswithsimilaroerings?
b. Operational PROCESS EFFECTIVENESS RESULTS
(1)Operational EFFECTIVENESS Whatareyourcurrentiiviisandriixosinxi\xiasuiisorixoicaroisofthe
operationaliiiioixaxciofyourxi\woixs\srixsandiiocissis,includingiiooucrivir\,c\ciirixi,andother
appropriatexiasuiisofiiocissiiiicrivixiss,eciency,andixxovariox?
(2)Emergency Preparedness Whatareyourcurrentiiviisandriixosinxi\xiasuiisorixoicaroisoftheiiiic-
rivixissofyourwoixs\srixandworkplacepreparednessfordisastersoremergencies?
c. Strategy Implementation RESULTS
Whatareyouriisuirsforxi\xiasuiisorixoicaroisoftheaccomplishmentofyourorganizationalstrategyandacriox
iiaxs,includingbuildingandstrengtheningcoiicoxiirixciis?
Notes:
N1.Resultsreportedinitem7.1shouldprovidekeyinforma-
tionforanalysisandreviewofyourorganizationalperformance
(item4.1);demonstrateuseoforganizationalknowledge(item
4.2);andprovidetheoperationalbasisforcustomer-focused
outcomes(item7.2)andnancialandmarketoutcomes
(item7.5).
N2.Productandprocessresultsreportedin7.1ashouldrelate
tothekeycustomerrequirementsandexpectationsidentied
inP.1b(2),basedoninformationgatheredinitems3.1and
3.2.Temeasuresorindicatorsshouldaddressfactorsthat
aectcustomerpreference,suchasthoseincludedinitemP.1,
note5,anditem3.2,note2.
N3.Resultsreportedin7.1bshouldaddressyourkeyopera-
tionalrequirementsaspresentedintheOrganizationalProle
andinitems6.1and6.2.
N4.Appropriatemeasuresandindicatorsofoperational
processeectiveness(7.1b)mightincludeaudit,just-in-time
delivery,andacceptanceresultsforexternallyprovided
products,services,andprocesses;supplierandpartnerperfor-
mance;product,service,andworksysteminnovationratesand
results;simplicationofinternaljobsandjobclassications;
worklayoutimprovements;changesinsupervisoryratios;
responsetimesforemergencydrillsorexercises;andresultsfor
workrelocationorcontingencyexercises.
N5.Measuresorindicatorsofstrategyandactionplanaccom-
plishment(7.1c)shouldaddressyourstrategicobjectivesand
goalsidentiedin2.1b(1)andyouractionplanperformance
measuresandprojectedperformanceidentiedin2.2a(5)and
2.2b,respectively.
N6.For some nonprofit organizations, product or service per-
formance measures might be mandated by your funding sources.
These measures should be identified and reported in your response
to this item.
Criteria for Performance Excellence: Results 23
7.2 Customer-Focused Outcomes: What are your customer-focused
performance results? (90 pts.)
Results
Summarize your organizations KEY CUSTOMER-focused RESULTS for CUSTOMER satisfaction, dissatisfaction, and ENGAGEMENT.
SEGMENT your RESULTS by product oerings, CUSTOMER groups, and market SEGMENTS, as appropriate. Include appropriate
comparative data.
a. CUSTOMER-Focused RESULTS
(1)CUSTOMER Satisfaction Whatareyourcurrentiiviisandriixosinxi\xiasuiisorixoicaroisofcusroxii
satisfactionanddissatisfaction?Howdotheseiisuirscomparewiththecusroxiisatisfactioniiviisofyourcompeti-
torsandotherorganizationsprovidingsimilarproducts?
(2)CUSTOMER ENGAGEMENT Whatareyourcurrentiiviisandriixosinxi\xiasuiisorixoicaroisofcusroxii
ixcacixixr,includingrelationshipbuilding?Howdotheseiisuirscompareoverthecourseofyourcusroxiilife
cycle,asappropriate?
Notes:
N1.Customersatisfaction,dissatisfaction,engagement,and N2.Measuresandindicatorsofcustomerssatisfaction
relationship-buildingresultsreportedinthisitemshouldrelate withyourproductsrelativetocustomerssatisfactionwith
tothecustomergroupsandmarketsegmentsdiscussedin competitorsandcomparableorganizations(7.2a[1])might
P.1b(2)andcategory3andtothelisteninganddetermination includeinformationanddatafromyourcustomersandfrom
methodsanddatadescribedinitem3.1. independentorganizations.
7.3 Workforce-Focused Outcomes: What are your workforce-focused
performance results? (80 pts.)
Results
Summarize your organizations KEY WORKFORCE-focused RESULTS for your WORKFORCE environment and for WORKFORCE
ENGAGEMENT. SEGMENT your RESULTS to address the DIVERSITY of your WORKFORCE and to address your WORKFORCE groups and
SEGMENTS, as appropriate. Include appropriate comparative data.
a. WORKFORCE RESULTS
(1)WORKFORCE CAPABILITY and CAPACITY Whatareyourcurrentiiviisandriixosinxi\xiasuiisofwoixioici
caianiiir\andcaiacir\,includingstanglevelsandappropriateskills?
(2)WORKFORCE Climate Whatareyourcurrentiiviisandriixosinxi\xiasuiisorixoicaroisofyourwoixioici
climate,includingwoixioicihealth,safety,andsecurityandwoixioiciservicesandbenets,asappropriate?
(3)WORKFORCE ENGAGEMENT Whatareyourcurrentiiviisandriixosinxi\xiasuiisorixoicaroisofwoixioici
ixcacixixrandwoixioicisatisfaction?
(4)WORKFORCE Development Whatareyourcurrentiiviisandriixosinxi\xiasuiisorixoicaroisofwoixioici
andleaderdevelopment?
Notes:
N1.Resultsreportedinthisitemshouldrelatetoprocesses
describedincategory5.Yourresultsshouldberesponsiveto
keyworkprocessneedsdescribedincategory6andtoyour
organizationsactionplansandhumanresourceorworkforce
plansdescribedinitem2.2.
N2.Responsesto7.3a(3)shouldincludemeasuresand
indicatorsidentiedinresponseto5.2b(1).
N3.Nonprofit organizations that rely on volunteers should
include results for their volunteer workforce, as appropriate.
7.4 Leadership and Governance Outcomes: What are your
senior leadership and governance results? (80 pts.)
Results
Summarize your organizations KEY SENIOR LEADERSHIP and GOVERNANCE RESULTS, including those for scal accountability,
legal compliance, ETHICAL BEHAVIOR, societal responsibility, and support of KEY communities. SEGMENT your RESULTS by
organizational units, as appropriate. Include appropriate comparative data.
a. Leadership, GOVERNANCE, and Societal Responsibility RESULTS
(1)Leadership Whatareyouriisuirsforxi\xiasuiisorixoicaroisofsixioiiiaoiiscommunicationand
engagementwiththewoixioicitooiiio\visioxandvaiuis,encouragetwo-waycommunication,andcreateafocus
onaction?
(2)GOVERNANCE Whatareyourxi\currentndingsandriixosinxi\xiasuiisorixoicaroisofcoviixaxciand
scalaccountability,internalandexternal,asappropriate?
(3)Law and Regulation Whatareyouriisuirsforxi\xiasuiisorixoicaroisofachievingandsurpassingregulatory
andlegalrequirements?
(4)Ethics Whatareyouriisuirsforxi\xiasuiisorixoicaroisofiruicainiuavioiandofsraxiuoioiitrustin
yourorganizationssixioiiiaoiisandcoviixaxci?Whatareyouriisuirsforxi\xiasuiisorixoicaroisof
breachesofiruicainiuavioi?
(5)Society Whatareyouriisuirsforxi\xiasuiisorixoicaroisofyourorganizationsfulllmentofitssocietal
responsibilitiesandyourorganizationssupportofitsxi\communities?
Notes:
N1.Responsesto7.4a(1)shouldaddresscommunication
processesidentiedinitem1.1.
N2.Responsesto7.4a(2)mightincludenancialstatement
issuesandrisks,importantinternalandexternalauditor
recommendations,andthemanagementsresponsestothese
matters.For some nonprofit organizations, results of IRS 990
audits also might be included.
N3.Regulatoryandlegalresults(7.4a[3])shouldaddress
requirementsdescribedin1.2b.Workforce-relatedoccupa-
tionalhealthandsafetyresults(e.g.,OccupationalSafetyand
HealthAdministration[OSHA]reportableincidents)should
bereportedin7.3a(2).
N4.Forexamplesofmeasuresofethicalbehaviorandstake-
holdertrust(7.4a[4]),seeitem1.2,note4.
N5.Responsesto7.4a(5)shouldaddressyourorganizations
societalresponsibilitiesdescribedin1.2b(1)and1.2c(1),as
wellassupportofthekeycommunitiesdescribedin1.2c(2).
Measuresofcontributionstosocietalwell-beingmightinclude
reducedenergyconsumption;theuseofrenewableenergy
resources,recycledwater,andalternativeapproachesto
conservingresources(e.g.,increasedaudioandvideoconfer-
encing);andtheglobaluseofenlightenedlaborpractices.
One of the big things about process is you measure everything and you nd youre not quite as good as what
you thought you were. But more importantly, you nd out specically the areas you need to improve.
EdwardSchultz,chairmanandCEOof
1996BaldrigeAwardrecipientDanaCommercialCreditCorporation
Criteria for Performance Excellence: Results 25
7.5 Financial and Market Outcomes: What are your fnancial and
marketplace performance results? (80 pts.)
Results
Summarize your organizations KEY nancial and marketplace PERFORMANCE RESULTS by market SEGMENTS or CUSTOMER
groups, as appropriate. Include appropriate comparative data.
a. Financial and Market RESULTS
(1)Financial PERFORMANCE Whatareyourcurrentiiviisandriixosinxi\xiasuiisorixoicaroisofnancial
iiiioixaxci,includingaggregatexiasuiisofnancialreturn,nancialviability,orbudgetaryiiiioixaxci,as
appropriate?
(2)Marketplace PERFORMANCE Whatareyourcurrentiiviisandriixosinxi\xiasuiisorixoicaroisofmarketplace
iiiioixaxci,includingmarketshareorposition,marketandmarketsharegrowth,andnewmarketsentered,as
appropriate?
Notes:
N1.Responsesto7.5a(1)shouldincludeaggregatemeasuresof
nancialreturn,suchasreturnoninvestment(ROI),operat-
ingmargins,protability,orprotabilitybymarketsegment
orcustomergroup.Responsesalsoshouldincludemeasures
ofnancialviability,suchasliquidity,debt-to-equityratio,
dayscashonhand,assetutilization,andcashow.Measures
shouldrelatetothenancialmeasuresreportedin4.1a(1)and
thenancialmanagementapproachesdescribedinitem2.2.
For nonprofit organizations, additional measures might include
performance to budget, reserve funds, cost avoidance or savings,
administrative expenditures as a percentage of budget, and the cost
of fundraising versus funds raised.
N2. For nonprofit organizations, responses to 7.5a(2) might
include measures of charitable donations or grants and the number
of new programs or services offered.
If you want sustainability in an organization, and you want to go from great to really, really great,
youve got to have some kind of a model . . . and Baldrige is that model! . . . MidwayUSA has benetted
tremendously from the Baldrige Criteria: Our sales are up over 20 percent per year over the last ve years.
Our prots are up over 40 percent per year for that same time. Customer satisfaction at 93 percent is at an
all-time high. Employee satisfaction at 82 percent is at an all-time high also. All the winds are blowing in
the right direction at MidwayUSA and its all because of our eorts in engaging the Baldrige Criteria.
LarryPottereld,CEOof
2009BaldrigeAwardrecipientMidwayUSA
For seven years in a row, weve improved customer satisfaction, weve improved occupancy, weve
improved employee satisfaction, weve lowered employee departures [and] turnover, and we improved
annually our prot.
HorstSchulze,presidentandCEOof
1999BaldrigeAwardrecipientTeRitz-CarltonHotelCompany,L.L.C.
CHANGES FROM THE 20092010 CRITERIA
TeCriteriaforPerformanceExcellencehaveevolved
signicantlyovertimetohelporganizationsaddressadynamic
environment,focusonstrategy-drivenperformance,and
addressconcernsaboutcustomerandworkforceengagement,
governanceandethics,societalresponsibilities,andlong-term
organizationalsustainability.TeCriteriahavecontinuallypro-
gressedtowardacomprehensive,integratedsystemsperspective
oforganizationalperformancemanagement.
Teyear-to-yearchangestotheBaldrigeCriteriahavebeen
evolutionary.However,sincetheBaldrigeProgramsinception
over20yearsago,thechangestotheCriteriahavebeen
revolutionary.Teyhaveevolvedfromhavingaspecicfocus
onmanufacturingqualitytohavingacomprehensivestrategic
focusonoverallorganizationalperformance,competitiveness,
andsustainability.WitheachupdateoftheCriteria,the
BaldrigeProgrammustbalancetwoimportantstakeholder
considerations.Ononehand,thereisaneedfortheCriteria
tobeattheleadingedgeofvalidatedmanagementpractice
tohelpusersaddresstheincreasinglycomplexchallenges
theyface;ontheotherhand,thereisadesirefortheCriteria
toremainstableinordertoprovideuserswithabasisfor
continuityintheirperformanceassessments.Startingin2009,
theBaldrigeProgrammovedtoaformaltwo-yearrevision
cyclefortheCriteria.Sincethattwo-yearcyclecontinuesto
meetthedualdemandsontheCriteriastatedabove,wehave
decidedtoretainthatapproach,makingthesethe20112012
CriteriaforPerformanceExcellence.
TemostsignicantrevisionstotheCriteriathisyearaddress
twoareasofimportance:(1)dealingwithcomplexityin
enterpriseleadershipandmanagement,and(2)customer
engagement.
Complexityisafactoforganizationallife.Tosucceedin
todaysglobal,competitive,uncertainenvironment,organiza-
tionsmustacceptcomplexity.TeBaldrigeCriteriaare
complexbecauseachievingorganizationalsustainabilityina
globaleconomyiscomplex.However,theCriteriaprovidea
holisticframeofreference.WhiletheCriteriarequirecomplex
thinking,theyalsoprovidethepathtoclearidentication
ofanorganizationsrelevantissuesandstrategicadvantages,
followedbyidenticationofkeydata,andthenanalysesfor
decisionmaking.Handlingcomplexityrequiresagilityand
theabilitytoexecutewithasucientdegreeofsimplicity.
Oneofthekeyfociforthecurrentrevisionsistohelpyour
organizationachievethatsimplicityinexecution.Eachgroup
ofquestions(thenumberedparagraphsineachitem)now
hasasubheadthatsummarizesthecontent.Withtheoutline
formedbythecategoryanditemtitles,titlesfortheareasto
address,andthesesubheads,Criteriausersnowhaveasimple
guidetoperformanceexcellence.Allthesignicantaspects
ofaperformancemanagementsystemarecoveredinthis
outline,andtheindividualquestionsprovideaddedguidance
anddetailswhenyouneedthose.Wealsohavestrengthened
the line of sight from strategic challenges and advantages to core
Changes from the 20092010 Criteria
competencies, to strategy, and then to work systems and work
processes.Tisclearsetoflinkagesshouldmoveanorganization
fromthestrategicenvironmentinwhichitfunctionstothe
executionofitsoperationsinalogicalsequence.Whileeach
oftheseconceptsiscomplex,thelineofsightshouldsimplify
theexecution.Strategydevelopmentinourglobalmarketplace
willincreasinglyrequiresomedegreeofintelligentrisktaking,
whichisintroducedasanewconsiderationin2011toplaceall
importantconsiderationsintheCriteriauserspurview.
Teconceptofcustomerengagementhascontinuedtoreceive
increasingattentionasorganizationscompeteintheglobal
marketplaceandincompetitivelocalmarkets.Wehave
reorganizedtheowoflogicinthecustomerfocuscategoryto
addressthisconceptbetter.Teresponsibilityforestablishing
anorganizationalculturethatfosterscustomerengagementfor
mutualsuccessandcustomerloyaltybeginswiththesenior
leadershipandisapartofcreatingasustainableorganization.
Wehaveplacedtheresponsibilityforacustomer-focused
cultureintheseniorleadershipitem.Listeningandlearning
fromandaboutthecustomerhastakenonnewdimensions
withtheadventofwide-scaleuseofsocialmedia.Tisconcept
hasbeenaddedtoquestionsonhowyourorganizationlistens
tocustomers.
TemostsignicantchangesintheCriteriaitemsandthe
Criteriabookletaresummarizedasfollows:
Tenumberofareastoaddresshasbeenreducedfrom
41to40,andthenumberofCriteriaitemshasbeen
reducedfrom18to17,plus2inthePreface:Organiza-
tionalProlesection.
Tequestionthatappearedinnumerousitemsabout
keepingsystemscurrentwithchangingbusinessneeds
anddirectionshasbeenremovedfromtheCriteria.Tis
topicshouldbecoveredinstrategicplanningandalso
isasignoforganizationalmaturity,whichisreected
inthescoringguidelinesasafunctionoflearning
andintegration.
Preface: Organizational Profle
ItemP.1,Organizational Description,nolongerasks
aboutmanagingsupplierandpartnerrelationships.
Supply-chainmanagementisnowaddressedinitem6.2.
ItemP.2,Organizational Situation,nowincludes
societalresponsibilityasafactortoconsiderinyour
strategicchallengesandadvantages.
Category 1: Leadership
Item1.1,Senior Leadership,nowincludesafocus
oncreatingaworkforceculturethatfosterscustomer
engagementasaleadershipresponsibility.
Item1.2,Governance and Societal Responsibilities,

askshowseniorleaderperformanceevaluationsareused
indeterminingexecutivecompensation.
27
Category 2: Strategic Planning
Tiscategoryhasanenhancedfocusonorganizational
agilitytoaddressachangingstrategicenvironment.
Item2.1,Strategy Development,nowaskshowyour
strategicplanningprocessconsidersprojectionsofyour
andyourcompetitorsfutureperformance.Teitem
alsoasksquestionsaboutyourabilitytoadapttosudden
shiftsinyourmarketconditions.
Item2.2,nowStrategy Implementation,specically
asksabouttherelationshipofyouractionplanstoyour
strategicobjectives.
Category 3: Customer Focus
Tiscategoryhasbeenredesignedtoenhancetheow
oflogicandincorporatetheuseofsocialmediaasa
mechanismforlisteningtocustomers.
Item3.1,nowVoice of the Customer,asksabouthow

youlistentocurrentandpotentialcustomersandhow
youdeterminecustomersatisfaction,dissatisfaction,
andengagement.
Item3.2,nowCustomer Engagement,asksaboutyour
productoerings,customersupport,customersegmenta-
tion,anduseofcustomerdata.Teseareimportantto
buildingcustomerrelationships,whichisaddressedin
thesecondpartoftheitem.
Category 4: Measurement, Analysis,
and Knowledge Management
Item4.1,Measurement, Analysis, and Improvement

of Organizational Performance,nowincludesvoice-of-
the-customerdataasakeycomponentoforganizational
performancemeasurement.Useofcustomerdata
waspreviouslyaddressedasastand-alonefactorin
category3.Performanceimprovementquestions
nowaskaboutbest-practicesharingandaboutuseof
performancereviewndingsandcomparativedatato
projectfutureperformance.
Category 5: Workforce Focus
Tiscategoryhasbeenreconguredandsimpliedto
enhancetheowoflogic.
Item5.1,nowWorkforce Environment,includes
preparingforperiodsofworkforcegrowthaspartof
managingworkforcecapacityandcapability.
Item5.2,nowWorkforce Engagement,includes
customerfocusasanelementofworkforceand
leaderdevelopment.
Category 6: Operations Focus
Tiscategory,nowOperations Focus,hasbeen
renamedtofocusontheoperationsthatproduceand
supportthedeliveryofyourproductoerings.
Item6.1,Work Systems,hasbeensimpliedtofocus
exclusivelyonworksystems,includingcontrollingcosts
ofthosesystems.
Item6.2,Work Processes,specicallyasksabout
therelationshipofyourworkprocessestoyourwork
systems.Teitemalsoasksaboutyoursupply-chain
managementprocesses.
Category 7: Results
Tiscategoryhasbeenalignedwiththechangesin
categories16toencouragethemeasurementof
importantandappropriateresultsandalsohasbeen
reducedfromsixitemstove.
Item7.1,nowProduct and Process Outcomes,

resultsfromthecombinationofformeritemsdealing
withproductoutcomesandprocessoutcomes.Tis
changehasbeenmadeforseveralreasons:(1)inservice
environmentsinparticular,itisfrequentlydicultfor
organizationstoseparateprocessoutcomesfromthe
productoutcomes,whicharethemselvesprocesses;(2)it
isimportanttorelateprocessestotheultimategoalof
organizationalsustainabilitythroughthedeliveryofyour
currentandfutureproductoerings;and(3)thereis
adesiretodrivethinkingoncause-eectrelationships
betweenstrategicandoperationalprocessesand
productoutcomes.
Item7.3,nowWorkforce-Focused Outcomes,hasbeen
realignedtofollowtheowoflogicincategory5.
Item7.4,nowLeadership and Governance Outcomes,

moreexplicitlydetailsleadershipresponsibilitiesfor
deliveringkeyresults.
Item7.5,nowFinancial and Market Outcomes,

placesthisitemlastasthebottomlinefor
manyorganizations.
Glossary of Key Terms
SeveralwordsintheGlossaryofKeyTermssection
havehadslightlyupdateddenitions.Terehas
beenaparticulareorttoclarifythedenitionof
performanceprojections.
Results Scoring Guidelines
Teresultsscoringguidelineshavebeenmodiedto
alignbetterwiththeitemformatandorganizational
maturitybyaddressingthebasic,overall,andmultiple
requirementsofresultsitems.Also,performanceprojec-
tionexpectationsarenowincludedonlyinthe90100%
scoringrange.
23
7 Results (450 pts.)
TeRESULTS categoryexaminesyourorganizationsiiiioixawciandimprovementinall
xi\areasproductandiiocissoutcomes,cusroxii-focusedoutcomes,woixioici-
focusedoutcomes,leadershipandcoviiwawcioutcomes,andnancialandmarket
outcomes.Piiioixawciiiviisareexaminedrelativetothoseofcompetitorsandother
organizationswithsimilarproductoerings.
2
Strategic
Planning
1
Leadership
3
Customer
Focus
5
Workforce
Focus
7
Results
6
Operations
Focus
4
force
us
7
Results
tions
us
Criteria for Performance Excellence: Results
7.1 Product and Process Outcomes: What are your product performance
and process effectiveness results? (120 pts.)
Summarize your organizations KEY product PERFORMANCE and PROCESS EFFECTIVENESS and eciency RESULTS. Include
PROCESSES that directly serve CUSTOMERS, strategy, and operations. SEGMENT your RESULTS by product oerings, by CUSTOMER
groups and market SEGMENTS, and by PROCESS types and locations, as appropriate. Include appropriate comparative data.
a. CUSTOMER-Focused Product and PROCESS RESULTS
Whatareyourcurrentiiviisandriiwosinxi\xiasuiisoriwoicaroisofproductandiiocissiiiioixawcithatare
importanttoanddirectlyserveyourcusroxiis?Howdotheseiisuirscomparewiththeiiiioixawciofyourcompeti-
torsandotherorganizationswithsimilaroerings?
b. Operational PROCESS EFFECTIVENESS RESULTS
(1) Operational EFFECTIVENESS Whatareyourcurrentiiviisandriiwosinxi\xiasuiisoriwoicaroisofthe
operationaliiiioixawciofyourxi\woixs\srixsandiiocissis,includingiiooucrivir\,c\ciirixi,andother
appropriatexiasuiisofiiocissiiiicriviwiss,eciency,andiwwovariow?
(2) Emergency Preparedness Whatareyourcurrentiiviisandriiwosinxi\xiasuiisoriwoicaroisoftheiiiic-
riviwissofyourwoixs\srixandworkplacepreparednessfordisastersoremergencies?
c. Strategy Implementation RESULTS
Whatareyouriisuirsforxi\xiasuiisoriwoicaroisoftheaccomplishmentofyourorganizationalstrategyandacriow
iiaws,includingbuildingandstrengtheningcoiicoxiiriwciis?
Results
Notes:
N1.Resultsreportedinitem7.1shouldprovidekeyinforma- products,services,andprocesses;supplierandpartnerperfor-
tionforanalysisandreviewofyourorganizationalperformance mance;product,service,andworksysteminnovationratesand
(item4.1);demonstrateuseoforganizationalknowledge(item results;simplicationofinternaljobsandjobclassications;
4.2);andprovidetheoperationalbasisforcustomer-focused worklayoutimprovements;changesinsupervisoryratios;
outcomes(item7.2)andnancialandmarketoutcomes responsetimesforemergencydrillsorexercises;andresultsfor
(item7.5). workrelocationorcontingencyexercises.
N2.Productandprocessresultsreportedin7.1ashouldrelate N5.Measuresorindicatorsofstrategyandactionplanaccom-
tothekeycustomerrequirementsandexpectationsidentied plishment(7.1c)shouldaddressyourstrategicobjectivesand
inP.1b(2),basedoninformationgatheredinitems3.1and goalsidentiedin2.1b(1)andyouractionplanperformance
3.2.Temeasuresorindicatorsshouldaddressfactorsthat measuresandprojectedperformanceidentiedin2.2a(5)and
aectcustomerpreference,suchasthoseincludedinitemP.1, 2.2b,respectively.
note5,anditem3.2,note2.
N6.For some nonprofit organizations, product or service per-
N3.Resultsreportedin7.1bshouldaddressyourkeyopera- formance measures might be mandated by your funding sources.
tionalrequirementsaspresentedintheOrganizationalProle These measures should be identified and reported in your response
andinitems6.1and6.2. to this item.
N4.Appropriatemeasuresandindicatorsofoperational
processeectiveness(7.1b)mightincludeaudit,just-in-time
delivery,andacceptanceresultsforexternallyprovided
CRITERIA RESPONSE GUIDELINES
TeguidelinesgiveninthissectionareoeredtoassistCriteria
usersinrespondingmosteectivelytotherequirementsofthe
17processandresultsCriteriaitems.Fororganizationswriting
anapplicationfortheBaldrigeAward,respondinginvolves
addressingtheserequirementsin50orfewerpages.
Teguidelinesarepresentedinthreeparts:
(1) generalguidelinesregardingtheCriteriabooklet,
includinghowtheitemsareformatted
(2) guidelinesforrespondingtoprocessitems
(3) guidelinesforrespondingtoresultsitems
To respond most effectively to the Criteria items, your organiza-
tion also will find it important to refer to the scoring guidelines
(pages 6869), which describe how organizations can demonstrate
increasing accomplishment and improvement relative to the
requirements of the Criteria items.
General Guidelines
1. Read the entire Criteria booklet.
Temainsectionsofthebookletprovideafullorientation
totheCriteria,includinghowresponsesaretobeevaluated
forself-assessmentorbyBaldrigeexaminers.Youshould
becomethoroughlyfamiliarwiththefollowingsections:
ScoringSystem(pages6670)
GlossaryofKeyTerms(pages5664)
CategoryandItemDescriptions(pages3448)
2. Review the item format and understand how to
respond to the item requirements.
Teitemformat(seegurebelow)showsthedierent
partsofitems,theroleofeachpart,andwhereeachpartis
placed.Itisespeciallyimportantforyoutounderstandthe
multiplerequirementscontainedintheareastoaddress.
Teitemnotesfollowingtheitemrequirementsareanaid
tounderstandingtheareastoaddress.Eachitemandarea
toaddressisdescribedingreaterdetailintheCategoryand
ItemDescriptionssection(pages3448).
Eachitemisclassiedaseitherprocess orresults,depend-
ingonthetypeofinformationrequired.Guidelinesfor
respondingtoprocessitemsaregivenonpages3031.
Guidelinesforrespondingtoresultsitemsaregivenon
pages3233.
Itemrequirementsarepresentedinquestionformat.Some
oftherequirementsintheareastoaddressincludemultiple
questions.Responsestoanitemshouldcontaininformation
CriteriaforPerformanceExcellence(pages426)
Item Format
Itemnumber Itemtitle
Itempointvalue
Typesofinformationusersareexpectedtoprovidein
responsetothisitem
Basicitemrequirements
expressedinitemtitle
Overallitemrequirements
expressedasspecictopics
usersneedtoaddress
Areastoaddress
Multiplerequirements
expressedasindividual
Criteriaquestions
Nonprot-specicitemnote
(initalics)
Locationofitem
description
Subheadssummarizing
multiplerequirements
Itemnoteshavethe
followingpurposes:
clarifykeyterms
andrequirements
giveinstructions
indicate/clarify
importantlinkages
Criteria Response Guidelines 29
thataddressesallquestions;however,eachquestionneed
notbeansweredseparately.Responsestomultiplequestions
withinasingleareatoaddressmaybegrouped,asappropri-
atetoyourorganization.Tesemultiplequestionsserveasa
guideinunderstandingthefullmeaningoftheinformation
beingrequested.
3. Refer to the scoring guidelines.
Teevaluationofprocessandresultsitemresponses
includesareviewoftheCriteriaitemrequirementsin
combinationwiththescoringguidelines(pages6869).
Specically,asacomplementtorequirementsoftheprocess
items(categories16),thescoringguidelinesaddressthe
maturityofyourapproaches,thebreadthofdeployment,
theextentoflearning,andintegrationwithotherelements
ofyourperformancemanagementsystem.Similarly,asa
complementtorequirementsoftheresultsitems(category
7),thescoringguidelinesfocusontheactualperformance
levels,thesignicanceoftheresultstrends,relevant
comparativedata,integrationwithimportantelementsof
yourperformancemanagementsystem,andthestrengthof
theimprovementprocess.Terefore,youneedtoconsider
boththeCriteriaandthescoringguidelinesasyouprepare
yourresponsestoallitems.
4. Understand the meaning of key terms.
ManyofthetermsusedintheCriteriahavemeaningsthat
maydiersomewhatfromstandarddenitionsordeni-
tionsusedinyourorganization.Termsprintedinsxaii
caiscanbefoundintheGlossaryofKeyTermsbeginning
onpage56.Understandingthesetermscanhelpyou
accuratelyself-assessyourorganizationandcommunicate
yourprocessesandresultstothosereviewingyourresponses
andplanningyourimprovementeorts.
5. Start by preparing the Organizational Profle.
TeOrganizationalProleisthemostappropriatestarting
point.TeOrganizationalProleisintendedtohelp
everyoneincludingorganizationsusingtheCriteriafor
self-assessment,applicationwriters,andreviewersunder-
standwhatismostrelevantandimportanttoyourorganiza-
tionsbusinessandmissionandtoitsperformance.Te
questionsintheOrganizationalProleareonpages46.
TeOrganizationalProleisdescribedingreaterdetailon
pages3435.
Guidelines for Responding to Process Items
AlthoughtheCriteriafocusonkeyorganizationalperfor-
manceresults,theseresultsbythemselvesoerlittlediagnostic
value.Forexample,ifsomeresultsarepoororareimproving
atratesslowerthanyourcompetitorsorcomparableorganiza-
tions,itisimportanttounderstandwhythisissoandwhat
mightbedonetoaccelerateimprovement.
Tepurposeofprocessitemsistopermitdiagnosisofyour
organizationsmost important processestheonesthat
contributemosttoorganizationalperformanceimprovement
andcontributetokeyoutcomesorperformanceresults.
Diagnosisandfeedbackdependheavilyonthecontentand
completenessofyouritemresponses.Forthisreason,itis
importanttorespondtotheseitemsbyprovidingyourkey
processinformation.Guidelinesfororganizingandreviewing
suchinformationfollow.
1. Understand the meaning of how.
Processitemsincludequestionsthatbeginwiththeword
how.Responses should outline your key process information
that addresses approach, deployment, learning, and integration
(see Scoring System, page 66). Responseslackingsuchinfor-
mation,ormerelyprovidinganexample,arereferredtoin
thescoringguidelinesasanecdotalinformation.
2. Understand the meaning of what.
Twotypesofquestionsinprocessitemsbeginwiththe
wordwhat.Tersttypeofquestionrequestsbasic
informationonkeyprocessesandhowtheywork.Although
itishelpfultoincludewho performsthework,merely
statingwho doesnotpermitdiagnosisorfeedback.Te
secondtypeofquestionrequestsinformationonwhat your
keyndings,plans,objectives,goals,ormeasuresare.Tese
latterquestionssetthecontextforshowingalignmentand
integrationinyourperformancemanagementsystem.For
example,whenyouidentifykeystrategicobjectives,your
actionplans,someofyourperformancemeasures,andsome
resultsreportedincategory7areexpectedtorelatetothe
statedstrategicobjectives.
3. Write and review responses with the following
guidelines and comments in mind.
Showthatapproaches aresystematic.
Systematicapproachesarerepeatableandusedata
andinformationtoenablelearning.Inotherwords,
approachesaresystematiciftheybuildintheoppor-
tunityforevaluation,improvement,innovation,and
knowledgesharing,therebyenablingagaininmaturity.
Showdeployment.
Deploymentinformationshouldsummarizehowyour
approachesareimplementedindierentpartsofyour
organization.Deploymentcanbeshowncompactlyby
usingtables.
Showevidenceoflearning.
Processesshouldincludeevaluationandimprovement
cycles,aswellasthepotentialforbreakthroughchange.
Processimprovementsshouldbesharedwithother
appropriateunitsoftheorganizationtoenableorganiza-
tionallearning.
Showintegration.
Integrationshowsalignmentandharmonizationamong
processes,plans,measures,actions,andresultsthat
generateorganizationaleectivenessandeciencies.
Showfocusandconsistency.
Terearefourimportantconsiderationsregardingfocus
andconsistency:(1)theOrganizationalProleshould
makeclearwhatisimportanttoyourorganization;(2)
theStrategicPlanningcategory(category2),including
thestrategicobjectives,actionplans,andcorecompeten-
cies,shouldhighlightareasofgreatestfocusanddescribe
howdeploymentisaccomplished;(3)thedescriptions
oforganizational-levelanalysisandreview(item4.1)
shouldshowhowyourorganizationanalyzesandreviews
performanceinformationtosetpriorities;and(4)the
OperationsFocuscategory(category6)shouldhighlight
theworksystemsandworkprocessesthatarekeytoyour
overallperformance.Showing focus and consistency in the
process items and tracking corresponding measures in the
results items should improve organizational performance.
Respondfullytoitemrequirements.
Missinginformationwillbeinterpretedasagapinyour
performancemanagementsystem.Allareastoaddress
shouldbeaddressed.Individualquestionswithinanarea
toaddressmaybeaddressedindividuallyortogether.
4. Cross-reference when appropriate.
Asmuchaspossible,eachitemresponseshouldbe
self-contained.However,responsestodierentitemsalso
shouldbemutuallyreinforcing.Itisappropriatetorefer
totheotherresponsesratherthanrepeatinformation.In
suchcases,keyprocessinformationshouldbegiveninthe
itemrequestingthisinformation.Forexample,workforce
developmentandlearningsystemsshouldbedescribedin
item5.2.Discussionsaboutworkforcedevelopmentand
learningelsewhereinyourapplicationwouldthenreference
butnotrepeatdetailsgiveninyouritem5.2response.
5. Use a compact format.
Applicantsshouldmakethebestuseofthe50applica-
tionpagespermitted.Applicantsareencouragedtouse
owcharts,tables,andbulletstopresentinformation
concisely.Te50-pageapplicationlimitisdesignedtoforce
yourorganizationtoconsiderwhatismostimportantin
managingyourenterpriseandreportingyourresults.
Guidelines for Responding
to Results Items
TeCriteriaplaceamajoremphasisonresults.Tefollowing
information,guidelines,andexamplerelatetoeectiveand
completereportingofresults.
1. Focus on the most critical organizational
performance results.
Resultsreportedshouldcoverthemostimportantrequire-
mentsforyourorganizationssuccess,highlightedinyour
OrganizationalProleandintheLeadership,Strategic
Planning,CustomerFocus,WorkforceFocus,andOpera-
tionsFocuscategories.
2. Note the meaning of the four key requirements
from the scoring guidelines for effective reporting
of results data:
performance levels thatarereportedonameaningful

measurementscale
trends toshowdirectionsofresults,ratesofchange,
andtheextentofdeployment
comparisons toshowhowresultscomparewiththose
ofother,appropriatelyselectedorganizations
integration toshowthatallimportantresultsare
includedandsegmented(e.g.,byimportantcus-
tomer,workforce,process,andproduct-linegroups)
3. Include trend data covering actual periods for
tracking trends.
Nominimumperiodoftimeisspeciedfortrenddata.
However,aminimumofthreehistoricaldatapointsgener-
allyisneededtoascertainatrend.Trendsmightspanve
ormoreyearsforsomeresults.
Trendsshouldrepresenthistoric
andcurrentperformanceandnot
relyonprojected(future)perfor-
mance.Timeintervalsbetween
datapointsshouldbemeaningful
forthespecicmeasure(s)
reported.Forimportantresults,
newdatashouldbeincludedeven
iftrendsandcomparisonsarenot
yetwellestablished.
4. Use a compact format
graphs and tables.
Manyresultscanbereported
compactlybyusinggraphsand
tables.Graphsandtablesshould
belabeledforeasyinterpretation.
Resultsovertimeorcompared
withothersshouldbenormal-
ized(i.e.,presentedinaway,
suchasusingratios,thattakes
intoaccountsizefactors).Forexample,reportingsafety
trendsintermsoflostworkdaysper100employeeswould
bemoremeaningfulthantotallostworkdaysifthenumber
ofemployeeshasvariedoverthetimeperiodorifyouare
comparingyourresultstothoseoforganizationsdiering
insize.
5. Incorporate results into the body of the text.
Discussionofresultsandtheresultsthemselvesshould
beclosetogetherinaBaldrigeAwardapplication.Trends
that show a signicant benecial or adverse change should be
explained. Usegurenumbersthatcorrespondtoitems.For
example,thethirdgureforitem7.1wouldbegure7.1-3.
(Seetheexampleinthegureonpage33.)
Tegraphshownonpage33illustratesdataanorganization
mightpresentaspartofaresponsetoitem7.1,Product
andProcessOutcomes.IntheOrganizationalProle,the
organizationhasidentiedSixSigmaasakeyelementof
itsperformanceimprovementsystem.Defectspermillion
opportunitiesisoneofitsmeasures.
Tegraphillustratesanumberofcharacteristicsofclearand
eectiveresultsreporting:
Agurenumberisprovidedforreferencetothe
graphinthetext.
Bothaxesandunitsofmeasureareclearlylabeled.
Datalevelsandtrendsarereportedforakeyperfor-
mancemeasuredefectspermillionopportunities.
Resultsarepresentedforseveralyears.
Anarrowindicatesthatadownwardtrendisgoodfor
thismeasure.
Product Line C Product Line B Product Line A
World-ClassLevel OverallCompany BestCompetitor
Figure 7.1-3 Defects per Million Opportunities
D
e
f
e
c
t
s
p
e
r
M
i
l
l
i
o
n
O
p
p
o
r
t
u
n
i
t
i
e
s
3.4
(6 )
50
45
40
35
30
25
20
15
10
5
0
Good
2006 2007 2008 2009 2010 2011 2012
Appropriatecomparisonsareshownclearly.
Teorganizationshows,usingasinglegraph,thatits
threeproductlinesareseparatelytracked.
Teorganizationprojectsimprovedperformance,
includingdiscontinuousorbreakthrough
improvementin2011relativetopriorperformance
forProductLineB.Tetextshouldexplainthis
breakthroughchangeandmightrefertocritical
learningfromProductLineAasthebasisforthe
projectedchange.
Tohelpinterpretthescoringguidelinesforresultsitems
(page69),thefollowingcommentsonthegraphedresults
wouldbeappropriate:
Tecurrentoverallorganizationalperformancelevel
isexcellent.Tisconclusionissupportedbythe
comparisonwithindustrycompetitorsandwitha
world-classlevel.
Teoverallorganizationshowsbenecialimprove-
menttrendssustainedovertime.
Product Line C
Product Line B
Product Line A
World-ClassLevel
OverallCompany
BestCompetitor
ProductLineAisthecurrentperformanceleader
showingsustainedhighperformance(atapproxi-
mately5defectspermillion)andaslightlybenecial
trendsince2007.ProductLineBshowsrapid
improvement.Itsperformanceisnearthatofthebest
industrycompetitorbuttrailsProductLineA.
ProductLineCidentiedintheapplicationasa
newproductishavingearlyproblemswithdefects
butisprojectingaturnaround.(Teorganization
shouldbrieyexplaintheseproblems.)
Teorganizationhasprojectedimprovementsinthe
defectratesofallitsproductlines.ProductLineC
continuestolagbehindtheothers;ProductLine
AisprojectedtomeetitsSixSigmagoalsbythe
year2012.
CATEGORY AND ITEM DESCRIPTIONS
Preface: Organizational Profle
TeOrganizationalProleprovidesanoverviewofyour
organization.Teproleaddressesyouroperatingenviron-
ment,yourkeyorganizationalrelationships,yourcompetitive
environmentandstrategiccontext,andyourapproachto
performanceimprovement.YourOrganizationalProle
providesaframeworkforunderstandingyourorganization.It
helpstheBaldrigeexaminersandjudgeswhenreviewingyour
applicationtounderstandwhatyouconsiderimportant.Italso
helpsyoutoguideandprioritizetheinformationyoupresent
inresponsetotheCriteriaitemsincategories17.
TeOrganizationalProleprovidesyourorganizationwith
criticalinsightintothekeyinternalandexternalfactorsthat
shapeyouroperatingenvironment.Tesefactors,suchas
thevision,values,mission,corecompetencies,competitive
environment,andstrategicchallengesandadvantages,impact
thewayyourorganizationisrunandthedecisionsyoumake.
Assuch,theOrganizationalProlehelpsyourorganization
betterunderstandthecontextinwhichitoperates;thekey
requirementsforcurrentandfuturebusinesssuccessand
organizationalsustainability;andtheneeds,opportunities,and
constraintsplacedonyourorganizationsmanagementsystems.
P.1 Organizational Description: What are your key
organizational characteristics?
Purpose
Tisitemaddressesthekeycharacteristicsandrelationships
thatshapeyourorganizationalenvironment.Italsoaddresses
yourorganizationsgovernancesystem.Teaimistosetthe
contextforyourorganizationandforyourresponsestothe
Criteriarequirementsincategories17.
Comments

Teuseofsuchtermsaspurpose,vision,values,
mission,andcorecompetenciesvariesdependingon
theorganization,andsomeorganizationsmaynotuseone
ormoreoftheseterms.Nevertheless,youshouldhavea
clearunderstandingoftheessenceofyourorganization,
whyitexists,andwhereyourseniorleaderswanttotake
theorganizationinthefuture.Tisclarityenablesyouto
makeandimplementstrategicdecisionsaectingthefuture
ofyourorganization.

Aclearidenticationandthoroughunderstandingof
yourorganizationscorecompetenciesarecentralto
organizationalsustainabilityandcompetitiveperformance.
Executingyourcorecompetencieswellisfrequentlya
marketplacedierentiator.Keepingyourcorecompetencies
currentwithyourstrategicdirectionscanprovideastrategic
advantage,andprotectingintellectualpropertycontainedin
yourcorecompetenciescansupportsustainability.

Teregulatoryenvironmentinwhichyouoperateplaces
requirementsonyourorganizationandimpactshowyou
runyourorganization.Understandingthisenvironmentis
keytomakingeectiveoperationalandstrategicdecisions.
Further,itallowsyoutoidentifywhetheryouaremerely
complyingwiththeminimumrequirementsofapplicable
laws,regulations,andstandardsofpracticeorexceeding
them,ahallmarkofleadingorganizations.

Leadingorganizationshavewell-denedgovernance
systemswithclearreportingrelationships.Itisimportant
toclearlyidentifywhichfunctionsareperformedbysenior
leadersand,asapplicable,byyourgovernanceboard
andyourparentorganization.Boardindependenceand
accountabilityfrequentlyarekeyconsiderationsinthe
governancestructure.

Insupplier-dependentorganizations,suppliersplaycritical
rolesinprocessesthatareimportanttorunningthebusiness
andtomaintainingorachievingasustainablecompetitive
advantage.Supply-chainrequirementsmightinclude
on-timeorjust-in-timedelivery,exibility,variablestang,
researchanddesigncapability,processandproductinnova-
tion,andcustomizedmanufacturingorservices.
P.2 Organizational Situation: What is your organizations
strategic situation?
Purpose
Tisitemaddressesthecompetitiveenvironmentinwhich
yourorganizationoperates,includingyourkeystrategic
challengesandadvantages.Italsoaddresseshowyouapproach
performanceimprovement,includingorganizationallearning
andinnovationprocesses.Teaimistounderstandyourkey
organizationalchallengesandyoursystemforestablishingand
preservingyourcompetitiveadvantage.
Comments

Knowledgeofanorganizationsstrengths,vulnerabilities,
andopportunitiesforimprovementandgrowthisessential
tothesuccessandsustainabilityoftheorganization.With
thisknowledge,youcanidentifythoseproducts,processes,
competencies,andperformanceattributesthatareunique
toyourorganization;thosethatsetyouapartfromother
organizations;thosethathelpyoutopreserveyourcompeti-
tiveadvantage;andthosethatyoumustdeveloptosustain
orbuildyourmarketposition.

Understandingwhoyourcompetitorsare,howmanyyou
have,andtheirkeycharacteristicsisessentialfordetermin-
ingwhatyourcompetitiveadvantageisinyourindustry
andmarketplace.Leadingorganizationshaveanin-depth
understandingoftheircurrentcompetitiveenvironment,
includingkeychangestakingplace.

Sourcesofcomparativeandcompetitivedatamightinclude
industrypublications,benchmarkingactivities,annual
reportsforpubliclytradedcompaniesandpublicorganiza-
tions,conferences,localnetworks,andindustryassociations.

Operatingyourorganizationintodayshighlycompetitive
marketplacemeansyouarefacingstrategicchallengesthat
canaectyourabilitytosustainperformanceandmaintain
yourcompetitiveposition.Tesechallengesmightinclude
youroperationalcosts(e.g.,materials,labor,orgeographic
location);expandingordecreasingmarkets;mergersor
acquisitionsbyyourorganizationandbyyourcompetitors;
economicconditions,includinguctuatingdemandand
localandglobaleconomicdownturns;thecyclicalnature
ofyourindustry;theintroductionofneworsubstitute
products;rapidtechnologicalchanges;ornewcompetitors
enteringthemarket.Inaddition,yourorganizationmay
facechallengesrelatedtotherecruitment,hiring,andreten-
tionofaqualiedworkforce.

Aparticularlysignicantchallenge,ifitoccurstoyour
organization,isbeingunpreparedforadisruptivetechnol-
ogythatthreatensyourcompetitivepositionoryour
marketplace.Inthepast,suchtechnologieshaveincluded
personalcomputersreplacingtypewriters,cellphoneschal-
lengingtraditionalandpayphones,faxmachinescapturing
businessfromovernightdeliveryservices,ande-mailand
socialmediachallengingallothermeansofcommunication.
Today,organizationsneedtobescanningtheenvironment
insideandoutsidetheirimmediateindustrytodetectsuch
challengesattheearliestpossiblepointintime.
Leadership (Category 1)
Leadershipaddresseshowyourseniorleadersactionsguide
andsustainyourorganization,settingorganizationalvision,
values,andperformanceexpectations.Attentionisgivento
howyourseniorleaderscommunicatewithyourworkforce,
enhancetheirleadershipskills,participateinorganizational
learninganddevelopfutureleaders,createafocusonaction,
andestablishanenvironmentthatencouragesethicalbehavior
andhighperformance.Tecategoryalsoincludesyourorgani-
zationsgovernancesystemandhowyourorganizationfullls
itslegal,ethical,andsocietalresponsibilitiesandsupportsits
keycommunities.
1.1 Senior Leadership: How do your senior leaders lead?
Purpose
Tisitemexaminesthekeyaspectsofyourseniorleaders
responsibilities.Itexamineshowyourseniorleaderssetand
communicatetheorganizationsvisionandvaluesandhow
theypracticethesevalues.Itfocusesonyourseniorleaders
actionstocreateasustainable,high-performingorganization
withabusiness,customer,andcommunityfocus.
Category and Item Descriptions 35
Comments

Seniorleaderscentralroleinsettingvaluesand
directions,communicating,creatingandbalanc-
ingvalueforallstakeholders,andcreatingan
organizationalfocusonactionarekeyelementsof
thisitem.Successrequiresastrongorientationto
thefutureandacommitmenttoimprovement,
innovation,andorganizationalsustainability.
Increasingly,thisrequirescreatinganenvironment
forempowerment,agility,andlearning.

Inhighlyrespectedorganizations,senior
leadersarecommittedtoestablishingaculture
ofcustomerengagement,todevelopingthe
organizationsfutureleaders,andtorecognizing
andrewardingcontributionsbymembersofthe
workforce.Seniorleadersenhancetheirpersonal
leadershipskills.Teyparticipateinorganizational
learning,thedevelopmentoffutureleaders,
successionplanning,andrecognitionopportunities
andeventsthatcelebratetheworkforce.Develop-
mentoffutureleadersmightincludepersonal
mentoringorparticipationinleadershipdevelop-
mentcourses.
1.2 Governance and Societal Responsibilities:
Howdoyougovernandfulllyour
societal responsibilities?
Purpose
Tisitemexamineskeyaspectsofyourorganizations
governancesystem,includingleadershipimprove-
ment.Italsoexamineshowyourorganizationensures
thateveryoneintheorganizationbehaveslegallyand
ethicallyandhowyourorganizationfulllsitssocietal
responsibilitiesandsupportsitskeycommunities.
Comments

Teorganizationalgovernancerequirementaddresses
theneedforaresponsible,informed,transparent,and
accountablegovernanceoradvisorybodythatcanprotect
theinterestsofkeystakeholders(includingstockholders)
inpubliclytraded,private,andnonprotorganizations.
Tisbodyshouldhaveindependenceinreviewand
auditfunctions,aswellasaperformanceevaluation
functionthatmonitorsorganizationalandCEOsorchief
administratorsperformance.

Anintegralpartofperformancemanagementandimprove-
mentisproactivelyaddressing(1)theneedforethical
behavior,(2)alllegalandregulatoryrequirements,and
(3)riskfactors.Ensuringhighperformanceintheseareas
requiresestablishingappropriatemeasuresorindicatorsthat
seniorleaderstrack.Yourorganizationshouldbesensitive
toissuesofpublicconcern,whetherornottheseissues
currentlyareembodiedinlawsandregulations.Role-model
organizationslookforopportunitiestoexceedrequirements
andtoexcelinareasoflegalandethicalbehavior.

Publicconcernsthatcharitableandgovernmentorganiza-
tionsshouldanticipatemightincludethecostofprograms
andoperations,timelyandequitableaccesstotheiroer-
ings,andperceptionsabouttheorganizationsstewardship
ofitsresources.

Tisitemaddressestheconservationofnaturalresources.
Conservationmightbeachievedthroughtheuseofgreen
technologies,thereplacementofhazardouschemicals
withwater-basedchemicals,energyconservation,theuse
ofcleanerenergysources,ortherecyclingofby-products
orwastes.

Societalresponsibilityimpliesgoingbeyondacompliance
orientation.Opportunitiestocontributetothewell-being
ofenvironmental,social,andeconomicsystemsand
opportunitiestosupportkeycommunitiesareavailableto
organizationsofallsizes.Televelandbreadthofthese
contributionswilldependonthesizeofyourorganization
andyourabilitytocontribute.

Yourorganizationscommunityinvolvementshouldinclude
consideringcontributionsinareasofyourcorecompeten-
cies.Examplesoforganizationalcommunityinvolvement
arepartneringwithschoolsandschoolboardstoimprove
education;partneringwithhealthcareproviderstoimprove
healthinthelocalcommunitybyprovidingeducation
andvolunteerservicestoaddresspublichealthissues;and
partneringtoinuencetrade,business,andprofessional
associationstoengageinbenecial,cooperativeactivities,
suchasvoluntarystandardsactivitiesorsharingbest
practicestoimproveoverallU.S.globalcompetitiveness
andtheenvironment.Examplesspecicallyfornonprot
organizationsincludepartneringwithothernonprot
organizationsorbusinessestoimproveoverallperformance
andstewardshipofpublicandcharitableresources.
Strategic Planning (Category 2)
StrategicPlanningaddressesstrategicandactionplanning,
implementationofplans,howadequateresourcesareensured
toaccomplishtheplans,howaccomplishmentsaremeasured
andsustained,andhowplansarechangedifcircumstances
requireachange.Tecategorystressesthatlong-term
organizationalsustainabilityandyourcompetitiveenvironment
arekeystrategicissuesthatneedtobeintegralpartsofyour
organizationsoverallplanning.Decisionsaboutyourorganiza-
tionalcorecompetenciesareanintegralpartoforganizational
sustainabilityandthereforearekeystrategicdecisions.
Whilemanyorganizationsareincreasinglyadeptatstrategic
planning,planexecutionisstillasignicantchallenge.Tisis
especiallytruegivenmarketdemandstobeagileandtobepre-
paredforunexpectedchange,suchasvolatileeconomiccondi-
tionsordisruptivetechnologiesthatcanupsetanotherwise
fast-pacedbutmorepredictablemarketplace.Tiscategory
highlightstheneedtoplaceafocusnotonlyondeveloping
yourplans,butalsoonyourcapabilitytoexecutethem.
TeBaldrigeCriteriaemphasizethreekeyaspectsof
organizationalexcellence.Teseaspectsareimportantto
strategicplanning:

Customer-drivenexcellenceisastrategicviewof
excellence.Tefocusisonthedriversofcustomer
engagement,newmarkets,andmarketsharekey
factorsincompetitiveness,protability,and
organizationalsustainability.

Operationalperformanceimprovementandinnovation
contributetoshort-andlonger-termproductivity
growthandcost/pricecompetitiveness.Building
operationalcapabilityincludingspeed,responsiveness,
andexibilityrepresentsaninvestmentinstrengthen-
ingyourorganizationaltness.

Organizationalandpersonallearningarenecessarystra-
tegicconsiderationsintodaysfast-pacedenvironment.
TeCriteriaemphasizethatimprovementandlearning
needtobeembeddedinworkprocesses.Tespecialrole
ofstrategicplanningistoalignworksystemsandlearn-
inginitiativeswithyourorganizationsstrategicdirec-
tions,therebyensuringthatimprovementandlearning
prepareyouforandreinforceorganizationalpriorities.
TeStrategicPlanningcategoryexamineshowyour
organization

determinesitskeystrengths,weaknesses,opportunities,
andthreats;itscorecompetencies;anditsabilityto
executeyourstrategy

optimizestheuseofresources,ensurestheavailabilityof
askilledworkforce,andbridgesshort-andlonger-term
requirementsthatmayentailcapitalexpenditures,
technologydevelopmentoracquisition,supplier
development,andnewpartnershipsorcollaborations

ensuresthatimplementationwillbeeectivethat
therearemechanismstocommunicaterequirementsand
achievealignmentonthreelevels:(1)theorganization
andexecutivelevel,(2)thekeyworksystemandwork
processlevel,and(3)theworkunitandindividual
joblevel
TerequirementsintheStrategicPlanningcategoryencourage
strategicthinkingandactinginordertodevelopabasisfora
distinctcompetitivepositioninthemarketplace.Teserequire-
mentsdonotimplytheneedforformalplanningdepartments
orspecicplanningcycles.Teyalsodonotimplythatall
yourimprovementscouldorshouldbeplannedinadvance.
Aneectiveimprovementsystemcombinesimprovementsof
manytypesanddegreesofinvolvement.Tisrequiresclear
strategicguidance,particularlywhenimprovementalternatives,
includingmajorchangeorinnovation,competeforlimited
resources.Inmostcases,settingprioritiesdependsheavilyon
acostrationale.However,youalsomighthavecriticalrequire-
ments,suchassocietalresponsibilities,thatarenotdrivenby
costconsiderationsalone.
2.1 Strategy Development: How do you develop
your strategy?
Purpose
Tisitemexamineshowyourorganizationdeterminesitscore
competencies,strategicchallenges,andstrategicadvantagesand
establishesitsstrategicobjectivestoaddressitschallengesand
leverageitsadvantages.Teaimistostrengthenyouroverall
performance,competitiveness,andfuturesuccess.
Comments

Tisitemcallsforbasicinformationontheplanning
processandforinformationonallthekeyinuences,risks,
challenges,andotherrequirementsthatmightaectyour
organizationsfutureopportunitiesanddirectionstaking
aslong-termaviewasappropriateandpossiblefromthe
perspectivesofyourorganizationandyourindustryormar-
ketplace.Tisapproachisintendedtoprovideathorough
andrealisticcontextforthedevelopmentofacustomer-
andmarket-focusedstrategytoguideongoingdecision
making,resourceallocation,andoverallmanagement.

Tisitemisintendedtocoveralltypesofbusinesses,
for-protandnonprotorganizations,competitivesitu-
ations,strategicissues,planningapproaches,andplans.
Terequirementsexplicitlycallforafuture-orientedbasis
foractionbutdonotimplytheneedforformalplanning
departments,specicplanningcycles,oraspeciedwayof
visualizingthefuture.Evenifyourorganizationisseeking
tocreateanentirelynewbusiness,itisstillnecessaryto
setandtotesttheobjectivesthatdeneandguidecritical
actionsandperformance.

Tisitememphasizescompetitiveleadership,whichusually
dependsonrevenuegrowthandoperationaleectiveness.
Competitiveleadershiprequiresaviewofthefuturethat
includesnotonlythemarketsorsegmentsinwhichyour
organizationcompetesbutalsohowitcompetes.How
itcompetespresentsmanyoptionsandrequiresthatyou
understandyourorganizationsandyourcompetitors
strengthsandweaknesses.Howitcompetesalsomight
involvedecisionsontakingintelligentrisksinorderto
gainorretainamarketleadershipposition.Althoughno
specictimehorizonsareincluded,thethrustofthisitemis
sustainedcompetitiveleadership.

Anincreasinglyimportantpartofstrategicplanning
isprojectingthefuturecompetitiveandcollaborative
environment.Tisincludestheabilitytoprojectyourown
futureperformance,aswellasthatofyourcompetitors.
Suchprojectionshelpyoutodetectandreducecompetitive
threats,toshortenreactiontime,andtoidentifyopportuni-
ties.Dependingonthesizeandtypeoforganization,the
potentialneedfornewcorecompetencies,thematurityof
markets,thepaceofchange,andcompetitiveparameters
(suchasprice,costs,ortheinnovationrate),organizations
mightuseavarietyofmodeling,scenarios,orother
techniquesandjudgmentstoanticipatethecompetitiveand
collaborativeenvironment.
2.2 Strategy Implementation: How do you implement
your strategy?
Purpose
Tisitemexamineshowyourorganizationconvertsyour
strategicobjectivesintoactionplanstoaccomplishtheobjec-
tives.Italsoexamineshowyourorganizationassessesprogress
relativetotheseactionplans.Teaimistoensurethatyour
strategiesaresuccessfullydeployedforgoalachievement.
Comments

Tisitemaskshowyouractionplansaredevelopedand
deployedtoyourworkforce,keysuppliers,andpartners.
Teaccomplishmentofactionplansrequiresresources
andperformancemeasures,aswellasthealignmentof
theplansofyourworkunits,suppliers,andpartners.Of
centralimportanceishowyouachievealignmentandcon-
sistencyforexample,viaworksystems,workprocesses,
andkeymeasurements.Also,alignmentandconsistencyare
intendedtoprovideabasisforsettingandcommunicating
prioritiesforongoingimprovementactivitiespartofthe
dailyworkofallworkunits.Inaddition,performance
measuresarecriticalfortrackingperformance.

Manytypesofanalysescanbeperformedtoensurethat
nancialresourcesareavailabletosupporttheaccomplish-
mentofyouractionplans,whileyourorganizationalso
meetsexistingobligations.Forcurrentoperations,these
eortsmightincludetheanalysisofcashows,netincome
statements,andcurrentliabilitiesversuscurrentassets.
Forinvestmentstoaccomplishactionplans,theeorts
mightincludeanalysisofdiscountedcashows,returnon
investment(ROI),orreturnoninvestedcapital(ROIC).
Tespecictypesofanalyseswillvaryfromorganizationto
organization.Teseanalysesshouldhelpyourorganization
assessthenancialviabilityofyourcurrentoperationsand
thepotentialviabilityofandrisksassociatedwithyour
actionplaninitiatives.

Actionplansshouldincludehumanresourceor
workforceplansthatarealignedwithandsupportyour
overallstrategy.

Examplesofpossiblehumanresourceplanelementsare
a redesign of your work organization and jobs to increase
workforceempowermentanddecisionmaking
initiatives to promote greater labor-management
cooperation,suchasunionpartnerships
a consideration of the impacts of outsourcing on your
currentworkforceandinitiatives
initiatives to prepare for future workforcecapabilityand
capacityneeds
initiatives to foster knowledge sharing and
organizationallearning
the modifcation of your compensationandrecognition
systemstorecognizeteam,organizational,stockmarket,
customer,orotherperformanceattributes
education and training initiatives, such as developmental
programsforfutureleaders,partnershipswithuniversi-
tiestohelpensuretheavailabilityofaneducatedand
skilledworkforce,andtheestablishmentoftraining
programsonnewtechnologiesimportanttothefuture
successofyourworkforceandyourorganization

Projectionsandcomparisonsinthisitemareintended
toimproveyourorganizationsabilitytounderstandand
trackdynamic,competitiveperformancefactors.Projected
performancemightincludechangesresultingfromnew
businessventures,entryintonewmarkets,theintroduc-
tionofnewtechnologies,productinnovations,orother
strategicthruststhatmightinvolveadeliberatedegree
ofrisk.Troughthistrackingprocess,yourorganization
shouldbebetterpreparedtotakeintoaccountitsrateof
improvementandchangerelativetothatofcompetitorsor
comparableorganizationsandrelativetoitsowntargetsor
stretchgoals.Suchtrackingservesasakeydiagnostictool
foryourorganizationsmanagementtostart,accelerate,or
discontinueinitiatives.
Customer Focus (Category 3)
CustomerFocusaddresseshowyourorganizationseeksto
engageyourcustomers,withafocusonlisteningtoandsup-
portingcustomers,determiningtheirsatisfaction,oeringthe
rightproducts,andbuildingrelationshipsthatresultinloyalty
throughcustomersinvestmentinyourbrandandproduct
oerings.Tecategorystressescustomerengagementasan
importantoutcomeofanoveralllearningandperformance
excellencestrategy.Yourcustomersatisfactionanddissatisfac-
tionresultsprovidevitalinformationforunderstandingyour
customersandthemarketplace.Inmanycases,thevoiceofthe
customerprovidesmeaningfulinformationnotonlyonyour
customersviewsbutalsoontheirmarketplacebehaviorsand
howtheseviewsandbehaviorsmaycontributetothesustain-
abilityofyourorganizationinthemarketplace.
3.1 Voice of the Customer: How do you obtain information
from your customers?
Purpose
Tisitemexaminesyourorganizationsprocessesforlistening
toyourcustomersanddeterminingtheirsatisfactionand
dissatisfaction.Italsoexaminesyourprocessesforusingthese
data.Teaimistocapturemeaningfulinformationinorderto
exceedyourcustomersexpectations.
Comments

Selectionofvoice-of-the-customerstrategiesdependson
yourorganizationskeybusinessfactors.Increasingly,orga-
nizationslistentothevoiceofthecustomerviamultiple
modes.Somefrequentlyusedmodesincludefocusgroups
withkeycustomers,closeintegrationwithkeycustomers,
interviewswithlostandpotentialcustomersabouttheir
purchasingorrelationshipdecisions,win/lossanalysis
relativetocompetitorsandotherorganizationsproviding
similarproducts,andsurveyorfeedbackinformation.

Tisitememphasizeshowyouobtainactionableinforma-
tionfromcustomers.Informationthatisactionablecanbe
tiedtokeyproductoeringsandbusinessprocessesand
canbeusedtodeterminecostandrevenueimplicationsfor
settingimprovementgoalsandprioritiesforchange.

Inarapidlychangingtechnological,competitive,economic,
andsocialenvironment,manyfactorsmayaectcustomer
expectationsandloyaltyandyourinterfacewithcustomers
inthemarketplace.Tismakesitnecessarytocontinually
listenandlearn.Tobeeective,listeningandlearning
needtobecloselylinkedwithyourorganizationsoverall
businessstrategy.

Customersincreasinglyareturningtosocialmediato
voicetheirimpressionsofyourproductsandcustomer
support.Tisinformationmaybeprovidedthrough
socialinteractionsyoumediateorthroughindependent
orcustomer-initiatedmeans.Allofthesecanbevaluable
sourcesofinformationforyourorganization.Organizations
mayneedtobecomefamiliarwithvehiclesformonitoring
andtrackingthisinformation.

Knowledgeofcustomers,customergroups,marketseg-
ments,formercustomers,andpotentialcustomersallows
yourorganizationtotailorproductoerings,tosupport
andtailoryourmarketingstrategies,todevelopamore
customer-focusedworkforceculture,todevelopnewbusi-
ness,andtoensureorganizationalsustainability.

Indeterminingcustomerssatisfactionanddissatisfac-
tion,akeyaspectistheircomparativesatisfactionwith
competitors,competingoralternativeoerings,and/or
organizationsprovidingsimilarproducts.Suchinformation
mightbederivedfromyourowncomparativestudiesor
fromindependentstudies.Tefactorsthatleadtocustomer
preferenceareofcriticalimportanceinunderstanding
factorsthatdrivemarketsandpotentiallyaectlonger-term
competitivenessandorganizationalsustainability.
3.2 Customer Engagement: How do you engage customers to
serve their needs and build relationships?
Purpose
Tisitemexaminesyourorganizationsprocessesfor
identifyingandinnovatingproductoeringsthatserveyour
customersandmarkets;enablingcustomerstoseekinforma-
tionandsupport;andusingcustomer,market,andproduct
oeringinformation.Teitemalsoexamineshowyoubuild
relationshipswithyourcustomersandmanagecomplaintsin
ordertoretaincustomersandincreasetheirengagementwith
you.Teaimoftheseeortsistoimprovemarketing,builda
morecustomer-focusedculture,enhancecustomerloyalty,and
identifyopportunitiesforinnovation.
Comments

Customerengagementisastrategicactionaimedat
achievingsuchadegreeofloyaltythatthecustomerwill
advocateforyourbrandandproductoerings.Achieving
suchloyaltyrequiresacustomer-focusedcultureinyour
workforcebasedonathoroughunderstandingofyour
businessstrategyandthebehaviorsandpreferencesof
yourcustomers.

Arelationshipstrategymaybepossiblewithsomecustom-
ersbutnotwithothers.Terelationshipstrategiesyoudo
havemayneedtobedistinctlydierentforeachcustomer,
customergroup,andmarketsegment.Teyalsomay
needtobedistinctlydierentduringvariousstagesofthe
customerlifecycle.

Complaintaggregation,analysis,androotcause
determinationshouldleadtoeectiveeliminationofthe
causesofcomplaintsandtothesettingofprioritiesfor
processandproductimprovements.Successfuloutcomes
requireeectivedeploymentofinformationthroughout
theorganization.
Measurement, Analysis, and Knowledge
Management (Category 4)
TeMeasurement,Analysis,andKnowledgeManagement
categoryisthemainpointwithintheCriteriaforallkeyinfor-
mationabouteectivelymeasuring,analyzing,andimproving
performanceandmanagingorganizationalknowledgetodrive
improvementandorganizationalcompetitiveness.Inthesim-
plestterms,category4isthebraincenterforthealignment
ofyourorganizationsoperationswithitsstrategicobjectives.
Centraltosuchuseofdataandinformationaretheirquality
andavailability.Furthermore,sinceinformation,analysis,
andknowledgemanagementmightthemselvesbeprimary
sourcesofcompetitiveadvantageandproductivitygrowth,this
categoryalsoincludessuchstrategicconsiderations.
4.1 Measurement, Analysis, and Improvement of
Organizational Performance: How do you measure,
analyze, and then improve organizational performance?
Purpose
Tisitemexaminesyourorganizationsselectionanduseof
dataandinformationforperformancemeasurement,analysis,
andreviewinsupportoforganizationalplanningandperfor-
manceimprovement.Teitemservesasacentralcollection
andanalysispointinanintegratedperformancemeasurement
andmanagementsystemthatreliesonnancialandnonnan-
cialdataandinformation.Teaimofperformancemeasure-
ment,analysis,review,andimprovementistoguideyour
organizationsprocessmanagementtowardtheachievementof
keyorganizationalresultsandstrategicobjectives,toanticipate
andrespondtorapidorunexpectedorganizationalorexternal
changes,andtoidentifybestpracticesthatmaybeshared.
Comments

Alignmentandintegrationarekeyconceptsforsuccessful
implementationanduseofyourperformancemeasurement
system.Teyareviewedintermsoftheextentandeec-
tivenessoftheirusetomeetyourperformanceassessment
andimprovementneedsandyourstrategydevelopmentand
execution.Alignmentandintegrationincludehowmeasures
arealignedthroughoutyourorganizationandhowtheyare
integratedtoyieldorganization-widedataandinformation.
Alignmentandintegrationalsoincludehowperformance
measurementrequirementsaredeployedbyyoursenior
leaderstotrackworkgroupandprocess-levelperformance
onkeymeasurestargetedfororganization-widesignicance
orimprovement.

Teuseofcomparativedataandinformationisimportant
toallorganizations.Temajorpremisesfortheiruse
arethat(1)yourorganizationneedstoknowwhereit
standsrelativetocompetitorsandtobestpractices,(2)
comparativeinformationandinformationobtainedfrom
benchmarkingoftenprovidetheimpetusforsignicant
(breakthrough)improvementorchange,(3)comparing
performanceinformationfrequentlyleadstoabetter
understandingofyourprocessesandtheirperformance,and
(4)comparativeperformanceprojectionsandcompetitors
performancemayrevealorganizationalchallengesaswellas
areaswhereinnovationisneeded.Comparativeinformation
alsomaysupportbusinessanalysisanddecisionsrelatingto
corecompetencies,partnering,andoutsourcing.

Youreectiveselectionanduseofcomparativedataand
informationrequire(1)thedeterminationofneedsand
priorities,(2)criteriaforseekingappropriatesourcesfor
comparisonsfromwithinandoutsideyourorganiza-
tionsindustryandmarkets,and(3)theuseofdataand
informationtosetstretchgoalsandtopromotemajor
nonincremental(breakthrough)improvementsinareas
mostcriticaltoyourorganizationscompetitivestrategy.

Teorganizationalreviewcalledforinthisitemisintended
tocoverallareasofperformance.Tisincludesnotonly
currentperformancebutalsoprojectionsofyourfuture
performance.Itisanticipatedthatthereviewndings
willprovideareliablemeanstoguidebothimprovements
andopportunitiesforinnovationthataretiedtoyour
organizationskeyobjectives,corecompetencies,success
factors,andmeasures.Terefore,animportantcomponent
ofyourorganizationalreviewisthetranslationofthe
reviewndingsintoactionsthataredeployedthroughout
yourorganizationandtoappropriatesuppliers,partners,
collaborators,andkeycustomers.

Analysesthatyourorganizationconductstogainan
understandingofperformanceandneededactionsmay
varywidelydependingonyourtypeoforganization,size,
competitiveenvironment,andotherfactors.Examplesof
possibleanalysesincludethefollowing:
how product improvements correlate with key customer
indicators,suchascustomersatisfaction,customer
loyalty,andmarketshare
cost and revenue implications of customer-related
problemsandeectiveproblemresolution
interpretation of market share changes in terms
ofcustomergainsandlossesandchangesin
customerengagement
improvement trends in key operationalperformance
indicators,suchasproductivity,cycletime,waste
reduction,newproductintroduction,anddefectlevels
relationships among personal learning, organizational
learning,andthevalueaddedperemployee
fnancial benefts derived from improvements in
workforcesafety,absenteeism,andturnover
benefts and costs associated with education and
training,includinge-learningandotherdistance
learningopportunities
benefts and costs associated with improved organiza-
tionalknowledgemanagementandsharing
the relationship between knowledge management
andinnovation
how the ability to identify and meet workforcecapability
andcapacityneedscorrelateswithretention,motivation,
andproductivity
cost and revenue implications of workforce-related
problemsandeectiveproblemresolution
individual or aggregate measures of productivityand
qualityrelativetocompetitorsperformance
cost trends relative to competitorstrends
relationships among product quality, operationalper-
formanceindicators,andoverallnancialperformance
trendsasreectedinindicatorssuchasoperatingcosts,
revenues,assetutilization,andvalueaddedperemployee
allocation of resources among alternative improvement
projectsbasedoncost/benetimplicationsorenviron-
mentalandsocietalimpact
net earnings or savings derived from quality, operational,
andworkforceperformanceimprovements
comparisons among business units showing how quality
andoperationalperformanceimprovementaect
nancialperformance
contributions of improvement activities to cash fow,
workingcapitaluse,andshareholdervalue
proft impacts of customerloyalty
cost and revenue implications of new market entry,
includingglobalmarketexpansion
market share versus profts
trends in economic, market, and stakeholder
indicatorsofvalueandtheimpactofthesetrendson
organizationalsustainability

Individualfactsanddatadonotusuallyprovideaneective
basisforsettingorganizationalpriorities.Tisitemempha-
sizesthatclosealignmentisneededbetweenyouranalysis
andyourorganizationalperformancereviewandbetween
youranalysisandyourorganizationalplanning.Tis
ensuresthatanalysisisrelevanttodecisionmakingandthat
decisionmakingisbasedonrelevantdataandinformation.
Inaddition,yourhistoricalperformance,combinedwith
assumptionsaboutfutureinternalandexternalchanges,
allowsthedevelopmentofyourperformanceprojections.
Teseprojectionsmayserveasakeyplanningtool.

Actiondependsonunderstandingcausalityamongprocesses
andbetweenprocessesandresults.Processactionsandtheir
resultsmayhavemanyresourceimplications.Organizations
haveacriticalneedtoprovideaneectiveanalyticalbasis
fordecisionsbecauseresourcesforimprovementarelimited
andcausalityisoftenunclear.
4.2 Management of Information, Knowledge, and
Information Technology: How do you manage
your information, organizational knowledge, and
information technology?
Purpose
Tisitemexamineshowyourorganizationensuresthequality
andavailabilityofneededdata,information,software,and
hardwareforyourworkforce,suppliersandpartners,col-
laborators,andcustomers,normallyandintheeventofan
emergency.Italsoexamineshowyourorganizationbuildsand
managesitsknowledgeassets.Teaimistoimproveorganiza-
tionaleciencyandeectivenessandtostimulateinnovation.
Comments

Managinginformationcanrequireasignicantcommit-
mentofresourcesasthesourcesofdataandinformation
growdramatically.Tecontinuedgrowthofelectronic
informationwithinorganizationsoperationsaspartof
organizationalknowledgenetworks,throughtheWeband
socialmedia,andinbusiness-to-business,organization-to-
organization,andbusiness-to-consumercommunications
challengesorganizationalabilitiestoensurereliabilityand
availabilityinauser-friendlyformat.

Dataandinformationareespeciallyimportantinbusiness
ororganizationnetworks,partnerships,andsupplychains.
Yourresponsestothisitemshouldtakeintoaccountthis
useofdataandinformationandshouldrecognizetheneed
forrapiddatavalidationandreliabilityassurance,giventhe
increasinguseofelectronicdatatransfer.

Tefocusofanorganizationsknowledgemanagement
isontheknowledgethatpeopleneedtodotheirwork;
improveprocesses,products,andservices;anddevelop
innovativesolutionsthataddvalueforthecustomerand
theorganization.

Oneofthemanyissuesfacingorganizationstodayishow
tomanage,use,evaluate,andsharetheirever-increasing
organizationalknowledge.Leadingorganizationsbenet
fromtheknowledgeassetsoftheirworkforce,customers,
suppliers,collaborators,andpartners,whotogetherdrive
organizationallearningandinnovation.

Organizationsshouldcarefullyplanhowtheywillcontinue
toprovideaninformationtechnologyinfrastructure,data,
andinformationintheeventofeitheranaturalorman-
madedisaster.Teseplansshouldconsidertheneedsofall
oftheorganizationsstakeholders,includingtheworkforce,
customers,suppliers,partners,andcollaborators.Teplans
alsoshouldbecoordinatedwiththeorganizationsoverall
planforbusinesscontinuity(item6.1).
Workforce Focus (Category 5)
WorkforceFocusaddresseskeyworkforcepracticesthose
directedtowardcreatingandmaintainingahigh-performance
workenvironmentandtowardengagingyourworkforceto
enableitandyourorganizationtoadapttochangeandto
succeed.Tecategorycoversyourcapabilityandcapacity
needsandyourworkforcesupportclimate.Yourworkforce
focusincludesworkforceengagement,development,and
management,whichshouldbeaddressedinanintegratedway
(i.e.,alignedwithyourorganizationsstrategicobjectivesand
actionplans).
Toreinforcethebasicalignmentofworkforcemanagement
withoverallstrategy,theCriteriaalsocoverhumanresourceor
workforceplanningaspartofoverallplanningintheStrategic
Planningcategory(category2).
5.1 Workforce Environment: Howdoyoubuildaneective
and supportive workforce environment?
Purpose
Tisitemexaminesyourorganizationsworkforceenviron-
ment,yourworkforcecapabilityandcapacityneeds,howyou
meetthoseneedstoaccomplishtheworkofyourorganization,
andhowyouensureasafeandsupportiveworkclimate.Te
aimistobuildaneectiveenvironmentforaccomplishing
yourworkandforsupportingyourworkforce.
Comments

Allorganizations,regardlessofsize,arerequiredtomeet
minimumregulatorystandardsforworkforcesafety;
however,high-performingorganizationshaveprocessesin
placetoensurethattheynotonlymeettheseminimum
standardsbutgobeyondacomplianceorientation.Tis
includesdesigningproactiveprocesses,withinputfrom
peopledirectlyinvolvedinthework,toensureasafework-
ingenvironment.

Mostorganizations,regardlessofsize,havemany
opportunitiestosupporttheirworkforce.Someexamples
ofservices,facilities,activities,andotheropportunitiesare
personalandcareercounseling,careerdevelopmentand
employabilityservices,recreationalorculturalactivities,
formalandinformalrecognition,nonwork-relatededuca-
tion,daycare,specialleaveforfamilyresponsibilitiesand
communityservice,exibleworkhoursandbenetspack-
ages,outplacementservices,andretireebenets,including
extendedhealthcareandongoingaccesstoservices.
5.2 Workforce Engagement: How do you engage
your workforce to achieve organizational and
personal success?
Purpose
Tisitemexaminesyourorganizationssystemsforengaging,
developing,andassessingtheengagementofyourworkforce,
withtheaimofenablingandencouragingallmembersofyour
workforcetocontributeeectivelyandtothebestoftheirabil-
ity.Tesesystemsareintendedtofosterhighperformance,to
addressyourcorecompetencies,andtohelpaccomplishyour
actionplansandensureorganizationalsustainability.
Comments

High-performanceworkischaracterizedbyexibility,
innovation,knowledgeandskillsharing,goodcommunica-
tionandinformationow,alignmentwithorganizational
objectives,customerfocus,andrapidresponsetochanging
businessneedsandmarketplacerequirements.Te
focusofthisitemisonaworkforcecapableofachieving
highperformance.

Manystudieshaveshownthathighlevelsofworkforce
engagementhaveasignicant,positiveimpactonorganiza-
tionalperformance.Researchhasindicatedthatengagement
ischaracterizedbyperformingmeaningfulwork;having
clearorganizationaldirectionandperformanceaccountabil-
ity;andhavingasafe,trusting,eective,andcooperative
workenvironment.Inmanyorganizations,employeesand
volunteersaredrawntoandderivemeaningfromtheir
workbecausetheworkisalignedwiththeirpersonalvalues.

Factorsinhibitingengagementshouldbeunderstoodand
addressedbyyourorganization.Understandingofthese
factorscouldbedevelopedthroughworkforcesurveys,focus
groups,blogs,orexitinterviewswithdepartingmembersof
yourworkforce.

Compensationandrecognitionsystemsshouldbematched
toyourworksystems.Tobeeective,compensationand
recognitionmightbetiedtodemonstratedskills.Compen-
sationandrecognitionapproachesalsomightincludeprot
sharing;rewardsforexemplaryteamorunitperformance;
andlinkagetocustomerengagementmeasures,achievement
oforganizationalstrategicobjectives,orotherkeyorganiza-
tionalobjectives.

Dependingonthenatureofyourorganizationswork,
workforceresponsibilities,andthestageoforganizational
andpersonaldevelopment,workforcedevelopmentneeds
mightvarygreatly.Teseneedsmightincludegainingskills
forknowledgesharing,communication,teamwork,and
problemsolving;interpretingandusingdata;exceeding
customerrequirements;accomplishingprocessanalysisand
simplication;reducingwasteandcycletime;workingwith
andmotivatingvolunteers;andsettingprioritiesbasedon
strategicalignmentorcost-benetanalysis.Educationneeds
alsomightincludeadvancedskillsinnewtechnologiesor
basicskills,suchasreading,writing,language,arithmetic,
andcomputerskills.

Learninganddevelopmentopportunitiesmightoccurinside
oroutsideyourorganizationandcouldinvolveon-the-job,
classroom,computer-based,ordistancelearning,aswellas
developmentalassignments,coaching,ormentoring.

Tohelppeoplerealizetheirfullpotential,manyorganiza-
tionsuseindividualdevelopmentplanspreparedwitheach
personthataddresshisorhercareerandlearningobjectives.

Althoughthisitemdoesnotspecicallyaskyouabout
trainingforcustomercontactemployees,suchtrainingis
importantandcommon.Itfrequentlyincludeslearning
criticalknowledgeandskillsinthefollowingareas:your
productsandcustomers,howtolistentocustomers,how
torecoverfromproblemsorfailures,andhowtoeectively
manageandexceedcustomerexpectations.

Anorganizationsknowledgemanagementsystemshould
providethemechanismforsharingtheknowledgeof
itspeopleandtheorganizationtoensurethathigh-
performanceworkismaintainedthroughtransitions.Each
organizationshoulddeterminewhatknowledgeiscritical
foritsoperationsandshouldthenimplementsystematic
processesforsharingthisinformation.Tisisparticularly
importantforimplicitknowledge(i.e.,knowledgeperson-
allyretainedbymembersoftheworkforce).

Measurestoevaluatetheeectivenessandeciencyof
yourworkforceandleaderdevelopmentandlearning
systemsmightaddresstheimpactonindividual,unit,and
organizationalperformance;theimpactoncustomer-related
performance;andacost-benetanalysis.

Althoughsatisfactionwithpayandsatisfactionwith
promotionareimportant,thesetwofactorsgenerallyare
notsucienttoensureworkforceengagementandhigh
performance.Someexamplesofotherfactorstoconsider
areeectiveproblemandgrievanceresolution;develop-
mentandcareeropportunities;theworkenvironment
andmanagementsupport;workplacesafetyandsecurity;
theworkload;eectivecommunication,cooperation,and
teamwork;jobsecurity;appreciationofthedieringneeds
ofdiverseworkforcegroups;andorganizationalsupportfor
servingcustomers.

Inadditiontodirectmeasuresofworkforceengagement
throughformalorinformalsurveys,someotherindicators
includeabsenteeism,turnover,grievances,andstrikes.
Operations Focus (Category 6)
OperationsFocusaddresseshowtheworkofyourorganization
isaccomplished.Itexamineshowyourorganizationdesigns,
manages,andimprovesitskeyworkprocessesandthework
systemsofwhichtheyareapart.Itstressestheimportanceof
yourcorecompetenciesandhowyouprotectandcapitalize
onthemforsuccessandorganizationalsustainability.Itcalls
specicattentiontotheneedtoprepareforpotentialemergen-
ciesandtoensurecontinuityofoperations.
Ecientandeectiveworksystemsrequireeectivedesign;
apreventionorientation;andlinkagetocustomers,suppli-
ers,partners,andcollaborators,aswellasafocusonvalue
creationforallkeystakeholders;operationalperformance
improvement;cycletimereduction;emergencyreadiness;
andevaluation,continuousimprovement,innovation,and
organizationallearning.
Worksystemsmustalsobedesignedinawaythatallows
yourorganizationtobeagile.Inthesimplestterms,agility
referstoyourabilitytoadaptquickly,exibly,andeectively
tochangingrequirements.Dependingonthenatureofyour
organizationsstrategyandmarkets,agilitymightmeanrapid
changefromoneproducttoanother,rapidresponsetochang-
ingdemandsormarketconditions,ortheabilitytoproduce
awiderangeofcustomizedservices.Agilityalsoincreasingly
involvesdecisionstooutsource,agreementswithkeysuppliers,
andnovelpartneringarrangements.
Costandcycletimereductionmaybeachievedthrough
Leanprocessmanagementstrategies.Defectreductionand
improvedproductyieldmayinvolveSixSigmaprojects.Itis
crucialtoutilizekeymeasuresfortrackingallaspectsofyour
operationsmanagement.
6.1 Work Systems: How do you design, manage and improve
your work systems?
Purpose
Tisitemexaminesyourorganizationsoverallapproachto
worksystemdesign,management,andimprovement,capital-
izingonyourcorecompetencies,withtheaimofcreating
valueforyourcustomers,preparingforpotentialemergencies,
andachievingorganizationalsuccessandsustainability.
Comments
Tisitemaskshowyoudesignyouroverallworksystemsand
howyouorganizealloftheworkneededtoproduceyour
products.Itdrawsacriticallinkagetoyourcorecompeten-
cies,whichfrequentlyareunderappreciatedaskeysources
oforganizationalsustainability,competitiveadvantage,and
marketplacerespect.

Manyorganizationsneedtoconsiderrequirementsfor
suppliers,partners,andcollaboratorsattheworksystem
andworkprocessdesignstage.Overall,eectivedesign
musttakeintoaccountallstakeholdersinthevaluechain.
Ifmanydesignprojectsarecarriedoutinparallelorif
yourorganizationsproductsutilizeparts,equipment,and
facilitiesthatareusedforotherproducts,coordination
ofresourcesmightbeamajorconcern,butitalsomight
oerameanstosignicantlyreduceunitcostsandtime
tomarket.

Eortstoensurethecontinuityofoperationsinan
emergencyshouldconsiderallfacetsofyourorganizations
operationsthatareneededtoprovideyourproductsto
customers.Tespeciclevelofservicethatyouwillneedto
providewillbeguidedbyyourorganizationsmissionand
yourcustomersneedsandrequirements.Forexample,a
publicutilityislikelytohaveahigherneedforservicesthan
organizationsthatdonotprovideanessentialfunction.
Nonprotorganizationswhosemissionistorespondto
emergencieswillhaveahighneedforservicereadiness.
Yourcontinuityofoperationseortsalsoshouldbecoor-
dinatedwithyoureortstoensuredataandinformation
availability(item4.2).
6.2 Work Processes: How do you design, manage, and
improve your key work processes?
Purpose
Tisitemexaminesthedesign,management,andimprove-
mentofyourkeyworkprocesses,withtheaimofcreating
valueforyourcustomers,operatingecientlyandeectively,
andachievingorganizationalsuccessandsustainability.
Comments

Yourkeyworkprocessesincludeyourproduct-related
processesandthosenonproductbusinessprocessesthatare
consideredimportanttoorganizationalsuccessandgrowth
byyourseniorleaders.Teseprocessesfrequentlyrelateto
anorganizationscorecompetencies,strategicobjectives,
andcriticalsuccessfactors.Keybusinessprocessesmight
includeprocessesforinnovation,researchanddevelopment,
technologyacquisition,informationandknowledgeman-
agement,supply-chainmanagement,supplierpartnering,
outsourcing,mergersandacquisitions,globalexpansion,
projectmanagement,andsalesandmarketing.Forsome
nonprotorganizations,keybusinessprocessesmight
includefundraising,mediarelations,andpublicpolicy
advocacy.Giventhediversenatureoftheseprocesses,the
requirementsandperformancecharacteristicsmightvary
signicantlyfordierentprocesses.

Yourkeyworkprocessesincludethosesupportprocesses
thatsupportyourdailyoperationsandyourproduct
deliverybutarenotusuallydesignedindetailwiththe
products.Tesupportprocessrequirementsusuallydonot
dependsignicantlyonproductcharacteristics.Support
processdesignrequirementsusuallydependsignicantlyon
yourinternalrequirements,andtheymustbecoordinated
andintegratedtoensureecientandeectivelinkageand
performance.Supportprocessesmightincludeprocesses
fornanceandaccounting,facilitiesmanagement,legal
services,humanresourceservices,publicrelations,and
otheradministrativeservices.

Yourdesignapproachescoulddierappreciablydepending
onthenatureofyourproductoeringswhetherthe
productsareentirelynew,arevariants,orinvolvemajoror
minorworkprocesschanges.Youshouldconsiderthekey
requirementsforyourproducts.Factorsthatmightneed
tobeconsideredinworkprocessdesignincludesafety,
long-termperformance,environmentalimpact,green
manufacturing,measurementcapability,processcapability,
manufacturability,maintainability,variabilityincustomer
expectationsrequiringproductorsupportoptions,supplier
capability,anddocumentation.Eectivedesignalsomust
considerthecycletimeandproductivityofproductionand
deliveryprocesses.Tismightinvolvedetailedmapping
ofmanufacturingorserviceprocessesandtheredesign
(reengineering)ofthoseprocessestoachieveeciency,as
wellastomeetchangingcustomerrequirements.

Specicreferenceismadetoin-processmeasurements
andinteractionswithcustomersandsuppliers.Tese
measurementsandinteractionsrequiretheidenticationof
criticalpointsinprocessesformeasurement,observation,
orinteraction.Teseactivitiesshouldoccurattheearliest
pointspossibleinprocessestominimizeproblemsandcosts
thatmayresultfromdeviationsfromexpectedperformance.
Achievingexpectedperformancefrequentlyrequires
settingin-processperformancelevelsorstandardstoguide
decisionmaking.Whendeviationsoccur,correctiveaction
isrequiredtorestoretheperformanceoftheprocessto
itsdesignspecications.Dependingonthenatureofthe
process,thecorrectiveactioncouldinvolvetechnologyand/
orpeople.Propercorrectiveactioninvolveschangesatthe
source(rootcause)ofthedeviation.Suchcorrectiveaction
shouldminimizethelikelihoodofthistypeofvariation
occurringagainorelsewhereinyourorganization.When
customerinteractionsareinvolved,dierencesamong
customersmustbeconsideredinevaluatinghowwellthe
processisperforming.Tisisespeciallytrueofprofessional
andpersonalservices.Keyprocesscycletimesinsomeorga-
nizationsmaybeayearorlonger,whichmaycreatespecial
challengesinmeasuringday-to-dayprogressandidentifying
opportunitiesforreducingcycletimes,whenappropriate.

Formanyorganizations,supply-chainmanagementhas
becomeakeyfactorinachievingproductivityandprot-
abilitygoalsandoverallorganizationalsuccess.Suppliers,
partners,andcollaboratorsarereceivingincreasingstrategic
attentionasorganizationsreevaluatetheircorecompeten-
cies.Supplierprocessesshouldfullltwopurposes:to
helpimprovetheperformanceofsuppliersandpartners
and,forspecicactions,tohelpthemcontributetoyour
organizationsimprovedoveralloperations.Supply-chain
managementmightincludeprocessesforselectingsuppliers,
withtheaimofreducingthetotalnumberofsuppliersand
increasingpreferredsupplierandpartneringagreements.

Tisitemalsocallsforinformationonhowprocessesare
improvedtoachievebetterperformance.Betterperfor-
mancemeansnotonlybetterqualityfromyourcustomers
perspectivesbutalsobetternancialandoperational
performancesuchasproductivityfromyourother
stakeholdersperspectives.Avarietyofprocessimprovement
approachesarecommonlyused.Examplesinclude(1)
usingtheresultsoforganizationalperformancereviews,
(2)sharingsuccessfulstrategiesacrossyourorganization
todrivelearningandinnovation,(3)performingprocess
analysisandresearch(e.g.,processmapping,optimization
experiments,errorproong),(4)conductingtechnicaland
businessresearchanddevelopment,(5)benchmarking,
(6)usingalternativetechnology,and(7)usinginformation
fromcustomersoftheprocesseswithinandoutsideyour
organization.Processimprovementapproachesmightutilize
nancialdatatoevaluatealternativesandsetpriorities.
Together,theseapproachesoerawiderangeofpos-
sibilities,includingacompleteredesign(reengineering)
ofprocesses.
Results (Category 7)
TeResultscategoryprovidesaresultsfocusthatencompasses
yourobjectiveevaluationandyourcustomersevaluationof
yourorganizationsproductoerings,aswellasyourevalua-
tionofyourkeyprocessesandprocessimprovementactivities;
yourcustomer-focusedresults;yourworkforceresults;your
governance,leadershipsystem,andsocietalresponsibility
results;andyouroverallnancialandmarketperformance.
Troughthisfocus,theCriteriaspurposessuperiorvalueof
oeringsasviewedbyyourcustomersandthemarketplace;
superiororganizationalperformanceasreectedinyour
operational,workforce,legal,ethical,societal,andnancial
indicators;andorganizationalandpersonallearningare
maintained.Category7thusprovidesreal-timeinformation
(measuresofprogress)forevaluationandimprovementofpro-
cessesandproducts,inalignmentwithyouroverallorganiza-
tionalstrategy.Item4.1callsforanalysisandreviewofresults
dataandinformationtodetermineyouroverallorganizational
performanceandtosetprioritiesforimprovement.
7.1 Product and Process Outcomes: What are your product
performanceandprocesseectivenessresults?
Purpose
Tisitemexaminesyourorganizationskeyproductand
operationalperformanceresults,whichhavetheaimofdem-
onstratingproductandservicequalityandvaluethatleadto
customersatisfactionandengagement.Tisitemalsoexamines
yourorganizationsotherkeyprocessresultsnotreportedin
items7.27.5,whichhavetheaimofdemonstratingwork
systemandworkprocesseectivenessandeciency.
Comments

Tisitemplacesemphasisonmeasuresofproduct
performancethatserveasindicatorsofcustomersviewsand
decisionsrelativetofutureinteractionsandrelationships.
Tesemeasuresofproductperformancearederivedfrom
customer-relatedinformationgatheredinitems3.1and3.2.

Productmeasuresappropriateforinclusionmightbebased
onthefollowing:internalqualitymeasurements,eldper-
formanceofproducts,defectlevels,serviceerrors,response
times,anddatacollectedfromyourcustomersbyother
organizationsoneaseofuseorotherattributes,aswellas
customersurveysonproductandserviceperformance.

Tecorrelationbetweenproductperformanceandcustomer
indicatorsisacriticalmanagementtoolwithmultipleuses:
(1)deningandfocusingonkeyqualityandcustomer
requirements;(2)identifyingproductandservicedieren-
tiatorsinthemarketplace;and(3)determiningcause-eect
relationshipsbetweenyourproductattributesandevidence
ofcustomersatisfactionandengagement.Tecorrelation
mightrevealemergingorchangingmarketsegments,the
changingimportanceofrequirements,oreventhepotential
obsolescenceofproductoerings.

Measuresandindicatorsofprocesseectiveness
andeciencymightincludeworksystem
performancethatdemonstratesimprovedcost
savingsorhigherproductivitybyusinginternal
and/orexternalresources;reducedemissionlevels
orenergyconsumption,wastestreamreductions,
by-productuse,andrecycling;internalresponsive-
nessindicators,suchascycletimes,production
exibility,leadtimes,set-uptimes,andtimeto
market;andimprovedperformanceofadministra-
tiveandothersupportfunctions.Measuresand
indicatorsalsomightincludebusiness-specic
indicators,suchasinnovationratesandincreased
useofproductandprocessyields,SixSigmainitia-
tiveresults,andacceptableproductperformance
atthetimeofdelivery;supply-chainindicators,
suchasreductionsininventoryandincoming
inspections,increasesinqualityandproductivity,
improvementsinelectronicdataexchange,and
reductionsinsupply-chainmanagementcosts;
andthird-partyassessmentresults,suchasISO
9001audits.

Tisitemencouragesyourorganizationtodevelop
andincludeuniqueandinnovativemeasuresto
trackkeyprocessesandoperationalimprovement.
Uniquemeasuresshouldconsidercause-eect
relationshipsbetweenoperationalperformance
andproductqualityorperformance.Allkeyareas
oforganizationalandoperationalperformance,
includingyourorganizationsreadinessfor
emergencies,shouldbeevaluatedbymeasuresthat
arerelevantandimportanttoyourorganization.

Becausemanyorganizationshavedicultydetermining
appropriatemeasures,measuringprogressinaccomplishing
theirstrategicobjectivesisakeychallenge.Frequently,
theseprogressmeasurescanbediscernedbyrstdening
theresultsthatwouldindicateend-goalsuccessinachieving
thestrategicobjectiveandthenusingthatend-goalto
deneintermediatemeasures.
7.2 Customer-Focused Outcomes: What are your customer-
focused performance results?
Purpose
Tisitemexaminesyourorganizationscustomer-focused
performanceresults,whichhavetheaimofdemonstratinghow
wellyourorganizationhasbeensatisfyingyourcustomersand
engagingtheminalong-termrelationship,asappropriate.
Comments

Tisitemfocusesonallrelevantdatatodetermineandhelp
predictyourorganizationsperformanceasviewedbyyour
customers.Relevantdataandinformationincludecustomer
satisfactionanddissatisfaction;retention,gains,andlosses
ofcustomersandcustomeraccounts;customercomplaints,
complaintmanagement,eectivecomplaintresolution,
andwarrantyclaims;customer-perceivedvaluebasedon
qualityandprice;customerassessmentofaccessandease
ofuse(includingcourtesyinserviceinteractions);customer
advocacyforyourbrandandproductoerings;andawards,
ratings,andrecognitionfromcustomersandindependent
ratingorganizations.

Tisitemplacesanemphasisoncustomer-focusedresults
thatgobeyondsatisfactionmeasurements,because
customerengagementandrelationshipsarebetterindicators
andmeasuresoffuturesuccessinthemarketplaceandof
organizationalsustainability.
7.3 Workforce-Focused Outcomes: What are your
workforce-focused performance results?
Purpose
Tisitemexaminesyourorganizationsworkforce-focused
performanceresults,whichhavetheaimofdemonstratinghow
wellyourorganizationhasbeencreatingandmaintaininga
productive,caring,engaging,andlearningenvironmentforall
membersofyourworkforce.
Comments

Resultsreportedmightincludegenericororganization-
specicfactors.Genericfactorsmightincludesafety,
absenteeism,turnover,satisfaction,andcomplaints
(grievances).Forsomemeasures,suchasabsenteeismand
turnover,localorregionalcomparisonsmightbeappropri-
ate.Organization-specicfactorsarethoseyouassessfor
determiningyourworkforceclimateandengagement.Tese
factorsmightincludetheextentoftraining,retraining,
orcross-trainingtomeetcapabilityandcapacityneeds;
theextentandsuccessofself-direction;theextentof
union-managementpartnering;ortheextentofvolunteer
involvementinprocessandprogramactivities.

Resultsreportedforindicatorsofworkforcecapacityand
capabilitymightincludestanglevelsacrossorganizational
unitsandcerticationstomeetskillneeds.Additional
factorsmayincludeorganizationalrestructuring,aswell
asjobrotationsdesignedtomeetstrategicdirectionsor
customerrequirements.

Resultsmeasuresreportedforindicatorsofworkforce
engagementandsatisfactionmightincludeimprovement
inlocaldecisionmaking,organizationalculture,andwork-
forceknowledgesharing.Inputdata,suchasthenumber
ofcashawards,mightbeincluded,butthemainemphasis
shouldbeondatathatshoweectivenessoroutcomes.For
example,anoutcomemeasuremightbeincreasedworkforce
retentionresultingfromestablishingapeerrecognition
programorthenumberofpromotionsthathaveresulted
fromtheorganizationsleadershipdevelopmentprogram.
7.4 Leadership and Governance Outcomes: What are your
senior leadership and governance results?
Purpose
Tisitemexaminesyourorganizationskeyresultsintheareas
ofseniorleadershipandgovernance,whichhavetheaimof
demonstratingascallysound,ethicalorganizationthatfullls
itssocietalresponsibilitiesandsupportsitskeycommunities.
Comments

Independentofanincreasednationalfocusonissuesof
governanceandscalaccountability,ethics,andleadership
accountability,itisimportantfororganizationstopractice
anddemonstratehighstandardsofoverallconduct.
Governancebodiesandseniorleadersshouldtrackrelevant
performancemeasuresonaregularbasisandemphasizethis
performanceinstakeholdercommunications.

Resultsreportedshouldincludeenvironmental,legal,and
regulatorycompliance;resultsofoversightauditsbygovern-
mentorfundingagencies;andnoteworthyachievements
intheseareas,asappropriate.Resultsalsoshouldinclude
organizationalcontributionstosocietalwell-beingand
benetandsupportforkeycommunities.

Ifyourorganizationhasreceivedsanctionsoradverse
actionsunderlaw,regulation,orcontractduringthepast
veyears,theincidentsandtheircurrentstatusshould
besummarized.
7.5 Financial and Market Outcomes: What are your
nancialandmarketplaceperformanceresults?
Purpose
Tisitemexaminesyourorganizationskeynancialandmar-
ketresults,whichhavetheaimofdemonstratingyournancial
sustainabilityandyourmarketplaceachievements.
Comments

Measuresreportedinthisitemarethoseusuallytracked
byseniorleadershiponanongoingbasistoassessyour
organizationsnancialperformanceandviability.

Inadditiontothemeasuresincludedinitem7.5,note
1,appropriatenancialmeasuresandindicatorsmight
includerevenues,budgets,protsorlosses,cashposition,
netassets,debtleverage,cash-to-cashcycletime,earnings
pershare,nancialoperationseciency(collections,billing,
receivables),andnancialreturns.Marketplaceperformance
measuresmightincludemeasuresofbusinessgrowth,new
productsandmarketsentered,orthepercentageofrevenues
derivedfromnewproducts.Fornonprotorganizations,
marketplaceperformancemeasuresmightalsoinclude
charitabledonationsandgrantsreceived.
CORE VALUES AND CONCEPTS
Criteria Purposes
TeCriteriaarethebasisforconductingorganizational
self-assessments,formakingBaldrigeAwards,andforgiving
feedbacktoapplicants.Inaddition,theCriteriahavethree
importantrolesinstrengtheningU.S.competitiveness:
tohelpimproveorganizationalperformancepractices,
capabilities,andresults
tofacilitatecommunicationandsharingofinformation
onbestpracticesamongU.S.organizationsofalltypes
toserveasaworkingtoolforunderstandingandmanag-
ingperformanceandforguidingorganizationalplanning
andopportunitiesforlearning
Criteria for Performance Excellence Goals
TeCriteriaaredesignedtohelpprovideorganizations
withanintegratedapproachtoorganizationalperformance
managementthatresultsin
deliveryofever-improvingvaluetocustomers
andstakeholders,contributingto
organizationalsustainability
improvementofoverallorganizationaleectiveness
andcapabilities
organizationalandpersonallearning
Core Values and Concepts
TeCriteriaarebuiltonthefollowingsetofinterrelatedcore
valuesandconcepts:
visionaryleadership
customer-drivenexcellence
organizationalandpersonallearning
valuingworkforcemembersandpartners
agility
focusonthefuture
managingforinnovation
managementbyfact
societalresponsibility
focusonresultsandcreatingvalue
systemsperspective
Tesevaluesandconcepts,describedbelow,areembedded
beliefsandbehaviorsfoundinhigh-performingorganizations.
Teyarethefoundationforintegratingkeyperformanceand
operationalrequirementswithinaresults-orientedframework
thatcreatesabasisforactionandfeedback.
Visionary Leadership
Yourorganizationsseniorleadersshouldsetdirectionsand
createacustomerfocus,clearandvisibleorganizationalvalues,
andhighexpectationsfortheworkforce.Tedirections,values,
andexpectationsshouldbalancetheneedsofallyourstake-
holders.Yourleadersshouldensurethecreationofstrategies,
systems,andmethodsforachievingperformanceexcellence,
stimulatinginnovation,buildingknowledgeandcapabilities,
andensuringorganizationalsustainability.Tedenedvalues
andstrategiesshouldhelpguideallyourorganizationsactivi-
tiesanddecisions.Seniorleadersshouldinspireandencourage
yourentireworkforcetocontribute,todevelopandlearn,
tobeinnovative,andtoembracemeaningfulchange.Senior
leadersshouldberesponsibletoyourorganizationsgovernance
bodyfortheiractionsandperformance.Tegovernancebody
shouldberesponsibleultimatelytoallyourstakeholdersfor
theethics,actions,andperformanceofyourorganizationand
itsseniorleaders.
Seniorleadersshouldserveasrolemodelsthroughtheir
ethicalbehaviorandtheirpersonalinvolvementinplanning,
communicating,coachingtheworkforce,developingfuture
leaders,reviewingorganizationalperformance,andrecognizing
membersofyourworkforce.Asrolemodels,theycanreinforce
ethics,values,andexpectationswhilebuildingleadership,com-
mitment,andinitiativethroughoutyourorganization.
Core Values and Concepts 49
Customer-Driven Excellence
Performanceandqualityarejudgedbyanorganizations
customers.Tus,yourorganizationmusttakeintoaccountall
productfeaturesandcharacteristicsandallmodesofcustomer
accessandsupportthatcontributevaluetoyourcustomers.
Suchbehaviorleadstocustomeracquisition,satisfaction,
preference,andloyalty;topositivereferrals;and,ultimately,
tobusinesssustainability.Customer-drivenexcellencehas
bothcurrentandfuturecomponents:understandingtodays
customerdesiresandanticipatingfuturecustomerdesiresand
marketplacepotential.
Valueandsatisfactionmaybeinuencedbymanyfactors
throughoutyourcustomersoverallexperiencewithyour
organization.Tesefactorsincludeyourorganizations
customerrelationships,whichhelptobuildtrust,condence,
andloyalty.
Customer-drivenexcellencemeansmuchmorethanreducing
defectsanderrors,merelymeetingspecications,orreducing
complaints.Nevertheless,thesefactorscontributetoyour
customersviewofyourorganizationandthusalsoare
importantpartsofcustomer-drivenexcellence.Inaddition,
yourorganizationssuccessinrecoveringfromdefects,service
errors,andmistakesiscrucialforretainingcustomersand
engagingcustomersforthelongterm.
Acustomer-drivenorganizationaddressesnotonlytheproduct
andservicecharacteristicsthatmeetbasiccustomerrequire-
mentsbutalsothosefeaturesandcharacteristicsthatdierenti-
atetheorganizationfromitscompetitors.Suchdierentiation
maybebasedoninnovativeoerings,combinationsofproduct
andserviceoerings,customizationofoerings,multiple
accessmechanisms,rapidresponse,orspecialrelationships.
Customer-drivenexcellenceisthusastrategicconcept.It
isdirectedtowardcustomerretentionandloyalty,market
sharegain,andgrowth.Itdemandsconstantsensitivityto
changingandemergingcustomerandmarketrequirements
andtothefactorsthatdrivecustomerengagement.Itdemands
closeattentiontothevoiceofthecustomer.Itdemands
anticipatingchangesinthemarketplace.Terefore,customer-
drivenexcellencedemandsacustomer-focusedcultureand
organizationalagility.
The Role of Core Values and Concepts
The Criteria build on
core values and concepts ...
which are embedded in
systematic processes ...
(Criteria categories 16)
yielding
performance results.
(Criteria category 7)
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Organizational and Personal Learning
Achievingthehighestlevelsoforganizationalperformance
requiresawell-executedapproachtoorganizationaland
personallearningthatincludessharingknowledgeviasystem-
aticprocesses.Organizationallearningincludesbothcontinu-
ousimprovementofexistingapproachesandsignicantchange
orinnovation,leadingtonewgoalsandapproaches.Learning
needstobeembeddedinthewayyourorganizationoperates.
Tismeansthatlearning(1)isaregularpartofdailywork;(2)
ispracticedatpersonal,workunit,andorganizationallevels;
(3)resultsinsolvingproblemsattheirsource(rootcause);
(4)isfocusedonbuildingandsharingknowledgethroughout
yourorganization;and(5)isdrivenbyopportunitiestoeect
signicant,meaningfulchangeandtoinnovate.Sourcesfor
learningincludeemployeesandvolunteersideas,researchand
development(R&D),customersinput,best-practicesharing,
andbenchmarking.
Organizationallearningcanresultin(1)enhancingvalueto
customersthroughnewandimprovedproductsandcustomer
services;(2)developingnewbusinessopportunities;(3)devel-
opingnewandimprovedprocessesorbusinessmodels;(4)
reducingerrors,defects,waste,andrelatedcosts;(5)improving
responsivenessandcycletimeperformance;(6)increasing
productivityandeectivenessintheuseofallyourresources;
and(7)enhancingyourorganizationsperformanceinfullling
itssocietalresponsibilities.
Tesuccessofmembersofyourworkforcedependsincreas-
inglyonhavingopportunitiesforpersonallearningandfor
practicingnewskills.Leaderssuccessdependsonaccessto
thesekindsofopportunities,aswell.Inorganizationsthat
relyonvolunteers,thevolunteerspersonallearningalsois
important,andtheirlearningandskilldevelopmentshouldbe
consideredwithemployees.Organizationsinvestinpersonal
learningthrougheducation,training,andotheropportunities
forcontinuinggrowthanddevelopment.Suchopportunities
mightincludejobrotationandincreasedpayfordemonstrated
knowledgeandskills.On-the-jobtrainingoersacost-
eectivewaytocross-trainandtobetterlinktrainingtoyour
organizationalneedsandpriorities.Educationandtraining
programsmayhavemultiplemodes,includingcomputer-and
Web-basedlearninganddistancelearning.
Personallearningcanresultin(1)amoreengaged,satised,
andversatileworkforcethatstayswithyourorganization;
(2)organizationalcross-functionallearning;(3)thebuilding
ofyourorganizationsknowledgeassets;and(4)animproved
environmentforinnovation.
Tus,learningisdirectednotonlytowardbetterproductsbut
alsotowardbeingmoreresponsive,adaptive,innovative,and
ecientgivingyourorganizationmarketplacesustainability
andperformanceadvantagesandengagingyourworkforceto
increasesatisfactionandthemotivationtoexcel.
Valuing Workforce Members and Partners
Anorganizationssuccessdependsincreasinglyonan
engagedworkforcethatbenetsfrommeaningfulwork,clear
organizationaldirection,andperformanceaccountabilityand
thathasasafe,trusting,andcooperativeenvironment.Addi-
tionally,thesuccessfulorganizationcapitalizesonthediverse
backgrounds,knowledge,skills,creativity,andmotivationof
itsworkforceandpartners.
Valuingthepeopleinyourworkforcemeanscommittingto
theirengagement,satisfaction,development,andwell-being.
Increasingly,thisinvolvesmoreexible,high-performance
workpracticestailoredtovaryingworkplaceandhomelife
needs.Majorchallengesintheareaofvaluingmembersof
yourworkforceinclude(1)demonstratingyourleaderscom-
mitmenttotheirsuccess,(2)providingrecognitionthatgoes
beyondtheregularcompensationsystem,(3)oeringdevelop-
mentandprogressionwithinyourorganization,(4)sharing
yourorganizationsknowledgesoyourworkforcecanbetter
serveyourcustomersandcontributetoachievingyourstrategic
objectives,(5)creatinganenvironmentthatencouragesintel-
ligentrisktakingandinnovation,and(6)creatingasupportive
environmentforadiverseworkforce.
Organizationsneedtobuildinternalandexternalpartnerships
tobetteraccomplishoverallgoals.Internalpartnerships
mightincludelabor-managementcooperation.Partnerships
withmembersofyourworkforcemightentaildevelopmental
opportunities,cross-training,orworkorganizationssuchas
high-performanceworkteams.Internalpartnershipsalsomight
involvecreatingnetworkrelationshipsamongyourworkunits
orbetweenemployeesandvolunteerstoimproveexibility,
responsiveness,andknowledgesharing.
Externalpartnershipsmightbewithcustomers,suppliers,and
educationorcommunityorganizations.Strategicpartnerships
oralliancesareincreasinglyimportantkindsofexternal
partnerships.Suchpartnershipsmightoerentryintonew
marketsorabasisfornewproductsorcustomersupport
services.Also,partnershipsmightpermittheblendingofyour
organizationscorecompetenciesorleadershipcapabilitieswith
thecomplementarystrengthsandcapabilitiesofpartnersto
addresscommonissues.Suchpartnershipsmaybeasourceof
strategicadvantageforyourorganization.
Successfulinternalandexternalpartnershipsdeveloplonger-
termobjectives,therebycreatingabasisformutualinvestments
andrespect.Partnersshouldaddressthekeyrequirements
forsuccess,meansforregularcommunication,approaches
toevaluatingprogress,andmeansforadaptingtochanging
conditions.Insomecases,jointeducationandtrainingcould
oeracost-eectivemethodforworkforcedevelopment.
Agility
Successintodaysever-changing,globallycompetitive
environmentdemandsagilityacapacityforrapidchange
andexibility.Organizationsfaceever-shortercyclesfor
theintroductionofnew/improvedproducts,andnonprot
andgovernmentorganizationsareincreasinglybeingasked
torespondrapidlytoneworemergingsocialissues.Major
improvementsinresponsetimesoftenrequirenewwork
systems,simplicationofworkunitsandprocesses,orthe
abilityforrapidchangeoverfromoneprocesstoanother.A
cross-trainedandempoweredworkforceisavitalassetinsuch
ademandingenvironment.
Amajorsuccessfactorinmeetingcompetitivechallengesisthe
design-to-introduction(productorservicefeatureinitiation)or
innovationcycletime.Tomeetthedemandsofrapidlychang-
ingmarkets,organizationsneedtocarryoutstage-to-stage
integration(suchasconcurrentengineering)ofactivitiesfrom
researchorconcepttocommercializationorimplementation.
Allaspectsoftimeperformancenowaremorecritical,and
cycletimehasbecomeakeyprocessmeasure.Otherimportant
benetscanbederivedfromthisfocusontime;time
improvementsoftendrivesimultaneousimprovementsinwork
systems,organization,quality,cost,supply-chainintegration,
productivity,andsustainabilityinachallengingeconomy.
Focus on the Future
Ensuringanorganizationssustainabilityrequiresunderstand-
ingtheshort-andlonger-termfactorsthataectyour
organizationandmarketplace.Tepursuitofsustainedgrowth
andperformanceleadershiprequiresastrongfutureorientation
andawillingnesstomakelong-termcommitmentstokey
stakeholdersyourcustomers,workforce,suppliers,partners,
andstockholders;thepublic;andyourcommunity.
Yourorganizationsplanningshouldanticipatemanyfactors,
suchascustomersexpectations,newbusinessandpartnering
opportunities,changingeconomicconditions,workforcedevel-
opmentandhiringneeds,theincreasinglyglobalmarketplace,
technologicaldevelopments,changesincustomerandmarket
segments,newbusinessmodels,evolvingregulatoryrequire-
ments,changesincommunityandsocietalexpectationsand
needs,andstrategicmovesbycompetitors.Strategicobjectives
andresourceallocationsneedtoaccommodatetheseinu-
ences.Afocusonthefutureincludesdevelopingyourleaders,
workforce,andsuppliers;accomplishingeectivesuccession
planning;creatingopportunitiesforinnovation;andanticipat-
ingsocietalresponsibilitiesandconcerns.
Managing for Innovation
Innovationmeansmakingmeaningfulchangetoimprove
anorganizationsproducts,services,programs,processes,
operations,andbusinessmodeltocreatenewvalueforthe
organizationsstakeholders.Innovationshouldleadyour
organizationtonewdimensionsofperformance.Innovation
mayinvolvetakingintelligentrisks.Innovationisnolonger
strictlythepurviewofresearchanddevelopmentdepartments;
innovationisimportantforallaspectsofyouroperationsand
allworksystemsandworkprocesses.Organizationsshouldbe
ledandmanagedsothatinnovationbecomespartofthelearn-
ingculture.Innovationshouldbeintegratedintodailywork
andshouldbesupportedbyyourperformanceimprovement
system.Systematicprocessesforinnovationshouldreachacross
yourentireorganization.
Innovationbuildsontheaccumulatedknowledgeofyour
organizationanditspeople.Terefore,theabilitytorapidly
disseminateandcapitalizeonthisknowledgeiscriticalto
drivingorganizationalinnovation.
Management by Fact
Organizationsdependonthemeasurementandanalysisof
performance.Suchmeasurementsshouldderivefrombusiness
needsandstrategy,andtheyshouldprovidecriticaldataand
informationaboutkeyprocesses,outputs,andresults.Many
typesofdataandinformationareneededforperformance
management.Performancemeasurementshouldinclude
customer,product,andprocessperformance;comparisonsof
operational,market,andcompetitiveperformance;supplier,
workforce,partner,cost,andnancialperformance;andgov-
ernanceandcomplianceoutcomes.Datashouldbesegmented
by,forexample,markets,productlines,andworkforcegroups
tofacilitateanalysis.
Analysisreferstoextractinglargermeaningfromdataand
informationtosupportevaluation,decisionmaking,improve-
ment,andinnovation.Analysisentailsusingdatatodetermine
trends,projections,andcauseandeectthatmightnot
otherwisebeevident.Analysissupportsavarietyofpurposes,
suchasplanning,reviewingyouroverallperformance,
improvingoperations,accomplishingchangemanagement,
andcomparingyourperformancewithcompetitorsorwith
best-practicesbenchmarks.
Amajorconsiderationinperformanceimprovementand
changemanagementinvolvestheselectionanduseof
performancemeasuresorindicators.Te measures or indicators
you select should best represent the factors that lead to improved
customer, operational, nancial, and societal performance. A
comprehensive set of measures or indicators tied to customer and
organizational performance requirements provides a clear basis for
aligning all processes with your organizations goals. Measuresand
indicatorsmayneedtosupportdecisionmakinginarapidly
changingenvironment.Troughtheanalysisofdatafromyour
trackingprocesses,yourmeasuresorindicatorsthemselvesmay
beevaluatedandchangedtobettersupportyourgoals.
Societal Responsibility
Anorganizationsleadersshouldstressresponsibilitiestothe
public,ethicalbehavior,andtheneedtoconsidersocietal
well-beingandbenet.Leadersshouldberolemodelsforyour
organizationinfocusingonethicsandtheprotectionofpublic
health,safety,andtheenvironment.Teprotectionofhealth,
safety,andtheenvironmentincludesanyimpactofyourorga-
nizationsoperations,aswellasthelifecyclesofyourproducts.
Also,organizationsshouldemphasizeresourceconservation
andwastereductionatthesource.Planningshouldanticipate
adverseimpactsfromproduction,distribution,transportation,
use,anddisposalofyourproducts.Eectiveplanningshould
preventproblems,provideforaforthrightresponseifproblems
occur,andmakeavailabletheinformationandsupportneeded
tomaintainpublicawareness,safety,andcondence.
Organizationsshouldnotonlymeetalllocal,state,andfederal
lawsandregulatoryrequirements,buttheyshouldtreatthese
andrelatedrequirementsasopportunitiestoexcelbeyond
merecompliance.Organizationsshouldstressethicalbehavior
inallstakeholdertransactionsandinteractions.Highlyethical
conductshouldbearequirementofandshouldbemonitored
bytheorganizationsgovernancebody.
Societalwell-beingandbenetreferstoleadershipand
supportwithinthelimitsofanorganizationsresourcesof
theenvironmental,social,andeconomicsystemsinthe
organizationssphereofinuence.Suchleadershipandsupport
mightincludeimprovingeducation,healthcare,andother
servicesinyourcommunity,pursuingenvironmentalexcel-
lence,beingarolemodelforsociallyimportantissues,practic-
ingresourceconservation,performingcommunityserviceand
charity,improvingindustryandbusinesspractices,andsharing
nonproprietaryinformation.Forarole-modelorganization,
leadershipalsoentailsinuencingotherorganizations,private
andpublic,topartnerforthesepurposes.
Managingsocietalresponsibilitiesrequirestheorganizationto
useappropriatemeasuresandleaderstoassumeresponsibility
forthosemeasures.
Focus on Results and Creating Value
Anorganizationsperformancemeasurementsneedtofocus
onkeyresults.Resultsshouldbeusedtocreateandbalance
valueforyourkeystakeholdersyourcustomers,workforce,
stockholders,suppliers,andpartners;thepublic;andthecom-
munity.Bycreatingvalueforyourkeystakeholders,yourorga-
nizationbuildsloyalty,contributestogrowingtheeconomy,
andcontributestosociety.Tomeetthesometimesconicting
andchangingaimsthatbalancingvalueimplies,organizational
strategyexplicitlyshouldincludekeystakeholderrequire-
ments.Tiswillhelpensurethatplansandactionsmeet
dieringstakeholderneedsandavoidadverseimpactsonany
stakeholders.Teuseofabalancedcompositeofleadingand
laggingperformancemeasuresoersaneectivemeansto
communicateshort-andlonger-termpriorities,monitoractual
performance,andprovideaclearbasisforimprovingresults.
Systems Perspective
TeBaldrigeCriteriaprovideasystemsperspectiveformanag-
ingyourorganizationanditskeyprocessestoachieveresults
andtostriveforperformanceexcellence.TesevenBaldrige
Criteriacategories,thecorevaluesandconcepts,andthe
scoringguidelinesformthebuildingblocksandtheintegrating
mechanismforthesystem.However,successfulmanagement
ofoverallperformancerequiresorganization-specicsynthesis,
alignment,andintegration.Synthesismeanslookingatyour
organizationasawholeandbuildsonkeybusinessattributes,
includingyourcorecompetencies,strategicobjectives,action
plans,andworksystems.Alignmentmeansusingthekey
linkagesamongrequirementsgivenintheBaldrigeCriteria
categoriestoensureconsistencyofplans,processes,measures,
andactions.Integrationbuildsonalignment,sothatthe
individualcomponentsofyourperformancemanagement
systemoperateinafullyinterconnectedmanneranddeliver
anticipatedresults.
TeseconceptsaredepictedintheBaldrigeCriteriaframework
onpageiv.Asystemsperspectiveincludesyourseniorleaders
focusonstrategicdirectionsandonyourcustomers.Itmeans
thatyourseniorleadersmonitor,respondto,andmanage
performancebasedonyourresults.Asystemsperspectivealso
includesusingyourmeasures,indicators,corecompetencies,
andorganizationalknowledgetobuildyourkeystrategies.It
meanslinkingthesestrategieswithyourworksystemsandkey
processesandaligningyourresourcestoimproveyouroverall
performanceandyourfocusoncustomersandstakeholders.
Tus,asystemsperspectivemeansmanagingyourwhole
organization,aswellasitscomponents,toachievesuccess.
KEY CHARACTERISTICS OF THE CRITERIA
1. The Criteria focus on results.
TeCriteriafocusonthekeyareasoforganizational
performancegivenbelow.
Organizational performance areas:
(1) productandprocessoutcomes
(2) customer-focusedoutcomes
(3) workforce-focusedoutcomes
(4) leadershipandgovernanceoutcomes
(5) nancialandmarketoutcomes
Teuseofthiscompositeofmeasuresisintendedtoensure
thatstrategiesarebalancedthattheydonotinappropri-
atelytradeoamongimportantstakeholders,objectives,or
short-andlonger-termgoals.
2. The Criteria are nonprescriptive and adaptable.
TeCriteriaaremadeupofresults-orientedrequirements.
However,theCriteriado not prescribethefollowing:
howyourorganizationshouldbestructured
thatyourorganizationshouldorshouldnothave
departmentsforplanning,ethics,quality,or
otherfunctions
thatdierentunitsinyourorganizationshouldbe
managedinthesameway
Tesefactorsdieramongorganizations,andtheyarelikely
tochangeasneedsandstrategiesevolve.
TeCriteriaarenonprescriptiveforthefollowingreasons:
(1) Tefocusisonresults,notonprocedures,tools,or
organizationalstructure.Organizationsareencour-
agedtodevelopanddemonstratecreative,adaptive,
andexibleapproachesformeetingrequirements.
Nonprescriptiverequirementsareintendedtofoster
incrementalandmajor(breakthrough)improve-
mentsthroughinnovation.
(2) Teselectionoftools,techniques,systems,and
organizationalstructureusuallydependsonfactors
suchastheorganizationtypeandsize,organiza-
tionalrelationships,yourorganizationsstageof
development,andthecapabilitiesandresponsibili-
tiesofyourworkforce.
(3) Afocusoncommonrequirements,ratherthanon
commonprocedures,fostersunderstanding,commu-
nication,sharing,alignment,andintegration,while
supportinginnovationanddiversityinapproaches.
Key Characteristics of the Criteria
3. The Criteria support a systems perspective to
maintaining organization-wide goal alignment.
Tesystemsperspectivetogoalalignmentisembeddedin
theintegratedstructureofthecorevaluesandconcepts;the
OrganizationalProle;theCriteria;thescoringguidelines;
andtheresults-oriented,cause-eect,cross-processlinkages
amongtheCriteriaitems.
AlignmentintheCriteriaisbuiltaroundconnectingand
reinforcingmeasuresderivedfromyourorganizationspro-
cessesandstrategy.Tesemeasurestiedirectlytocustomer
andstakeholdervalueandtooverallperformance.Teuse
ofmeasuresthuschannelsdierentactivitiesinconsistent
directionswithlessneedfordetailedprocedures,centralized
decisionmaking,oroverlycomplexprocessmanagement.
Measurestherebyservebothasacommunicationstool
andasabasisfordeployingconsistentoverallperformance
requirements.Suchalignmentensuresconsistencyof
purposewhilealsosupportingagility,innovation,and
decentralizeddecisionmaking.
Asystemsperspectivetogoalalignment,particularlyas
strategyandgoalschangeovertime,requiresdynamiclink-
agesamongCriteriaitems.IntheCriteria,action-oriented
cyclesofimprovementtakeplaceviafeedbackbetween
processesandresults.
Teimprovementcycleshavefour,clearlydenedstages:
(1) planning,includingdesignofprocesses,
selectionofmeasures,anddeploymentof
requirements(approach)
(2) executingplans(deployment)
(3) assessingprogressandcapturingnewknowl-
edge,includingseekingopportunitiesfor
innovation(learning)
(4) revisingplansbasedonassessmentndings,
harmonizingprocessesandworkunitoperations,
andselectingbettermeasures(integration)
4. The Criteria support goal-based diagnosis.
TeCriteriaandthescoringguidelinesmakeupatwo-part
diagnostic(assessment)system.TeCriteriaareaset
of17performance-orientedrequirements.Tescoring
guidelinesspellouttheassessmentdimensionsprocess
andresultsandthekeyfactorsusedtoassesseach
dimension.Anassessmentthusprovidesaproleof
strengthsandopportunitiesforimprovementrelativeto
the17performance-orientedrequirementsandrelativeto
processandperformancematurityasdeterminedbythe
scoringguidelines.Inthisway,assessmentleadstoactions
thatcontributetoperformanceimprovementinallareas,
asdescribedintheboxabove.Tisdiagnosticassessment
isausefulmanagementtoolthatgoesbeyondmost
performancereviewsandisapplicabletoawiderangeof
strategies,managementsystems,andtypesoforganizations.
55
GLOSSARY OF KEY TERMS
TisGlossaryofKeyTermsdenesandbrieydescribesterms
usedthroughouttheCriteriabookletthatareimportantto
performancemanagement.Asyoumayhavenoted,keyterms
arepresentedinsxaiicaiseverytimetheyappearinthe
CriteriaforPerformanceExcellenceandscoringguidelines.
Tegeneralformatinpresentingglossarydenitionsisas
follows:Terstsentencecontainsaconcisedenitionofthe
term.Subsequentsentencesintherstparagraphelaborate
onandfurtherdelineatetheterm.Anysubsequentparagraphs
provideexamples,descriptiveinformation,orkeylinkagesto
otherCriteriainformation.
Action Plans
Tetermactionplansreferstospecicactionsthatrespond
toshort-andlonger-termstrategicobjectives.Actionplans
includedetailsofresourcecommitmentsandtimehorizons
foraccomplishment.Actionplandevelopmentrepresents
thecriticalstageinplanningwhenstrategicobjectivesand
goalsaremadespecicsothateective,organization-wide
understandinganddeploymentarepossible.IntheCriteria,
deploymentofactionplansincludescreatingalignedmeasures
foralldepartmentsandworkunits.Deploymentalsomight
requirespecializedtrainingforsomeemployeesorrecruitment
ofpersonnel.
Anexampleofastrategicobjectiveforasupplierinahighly
competitiveindustrymightbetodevelopandmaintaina
priceleadershipposition.Actionplanscouldentaildesigning
ecientprocessesandcreatinganaccountingsystemthat
tracksactivity-levelcosts,alignedfortheorganizationasa
whole.Deploymentrequirementsmightincludeworkunit
andteamtraininginsettingprioritiesbasedoncostsand
benets.Organizational-levelanalysisandreviewlikelywould
emphasizeproductivitygrowth,costcontrol,andquality.
Seealsothedenitionofstrategicobjectivesonpage62.
Alignment
Tetermalignmentreferstoconsistencyofplans,processes,
information,resourcedecisions,actions,results,andanalyses
tosupportkeyorganization-widegoals.Eectivealignment
requiresacommonunderstandingofpurposesandgoals.It
alsorequirestheuseofcomplementarymeasuresandinforma-
tionforplanning,tracking,analysis,andimprovementatthree
levels:theorganizationallevel,thekeyprocesslevel,andthe
workunitlevel.
Seealsothedenitionofintegrationonpage59.
Analysis
Tetermanalysisreferstoanexaminationoffactsanddata
toprovideabasisforeectivedecisions.Analysisofteninvolves
thedeterminationofcause-eectrelationships.Overall
organizationalanalysisguidesthemanagementofworksystems
andworkprocessestowardachievingkeybusinessresultsand
towardattainingstrategicobjectives.
Despitetheirimportance,individualfactsanddatadonotusu-
allyprovideaneectivebasisforactionsorsettingpriorities.
Eectiveactionsdependonanunderstandingofrelationships,
derivedfromanalysisoffactsanddata.
Anecdotal
Tetermanecdotalreferstoprocessinformationthatlacks
specicmethods,measures,deploymentmechanisms,and
evaluation,improvement,andlearningfactors.Anecdotal
informationfrequentlyusesexamplesanddescribesindividual
activitiesratherthansystematicprocesses.
Ananecdotalresponsetohowseniorleadersdeployperfor-
manceexpectationsmightdescribeaspecicoccasionwhen
aseniorleadervisitedalloftheorganizationsfacilities.On
theotherhand,asystematicprocessmightdescribethecom-
municationmethodsusedbyallseniorleaderstodeliverper-
formanceexpectationsonaregularbasistoallorganizational
locationsandworkforcemembers,themeasuresusedtoassess
theeectivenessofthemethods,andthetoolsandtechniques
usedtoevaluateandimprovethecommunicationmethods.
Seealsothedenitionofsystematiconpage63.
Approach
Tetermapproachreferstothemethodsusedbyanorga-
nizationtoaddresstheBaldrigeCriteriaitemrequirements.
Approachincludestheappropriatenessofthemethodstothe
itemrequirementsandtotheorganizationsoperatingenviron-
ment,aswellashoweectivelythemethodsareused.
Approachisoneofthedimensionsconsideredinevaluating
processitems.Forfurtherdescription,seethescoringsystem
onpages6670.
Basic Requirements
TetermbasicrequirementsreferstothetopicCriteriausers
needtoaddresswhenrespondingtothemostcentralconcept
ofanitem.Basicrequirementsarethefundamentalthemeof
thatitem(e.g.,yourapproachforstrategydevelopmentfor
item2.1).IntheCriteria,thebasicrequirementsofeachitem
arepresentedastheitemtitlequestion.Tispresentationis
illustratedintheitemformatshownonpage29.
Benchmarks
Tetermbenchmarksreferstoprocessesandresultsthat
representbestpracticesandperformanceforsimilaractivities,
insideoroutsideanorganizationsindustry.Organizations
engageinbenchmarkingtounderstandthecurrentdimensions
ofworld-classperformanceandtoachievediscontinuous
(nonincremental)orbreakthroughimprovement.
Benchmarksareoneformofcomparativedata.Other
comparativedataorganizationsmightuseincludeindustrydata
collectedbyathirdparty(frequentlyindustryaverages),data
oncompetitorsperformance,andcomparisonswithsimilar
organizationsthatareinthesamegeographicareaorthat
providesimilarproductsandservicesinothergeographicareas.
Capability, Workforce
Seeworkforcecapabilityonpage64.
Capacity, Workforce
Seeworkforcecapacityonpage64.
Collaborators
Tetermcollaboratorsreferstothoseorganizationsor
individualswhocooperatewithyourorganizationtosupport
aparticularactivityoreventorwhocooperateonanintermit-
tentbasiswhenshort-termgoalsarealignedorarethesame.
Typically,collaborationsdonotinvolveformalagreementsor
arrangements.
Seealsothedenitionofpartnersonpage60.
Core Competencies
Tetermcorecompetenciesreferstoyourorganizations
areasofgreatestexpertise.Yourorganizationscorecompeten-
ciesarethosestrategicallyimportantcapabilitiesthatare
centraltofulllingyourmissionorprovideanadvantagein
yourmarketplaceorserviceenvironment.Corecompetencies
frequentlyarechallengingforcompetitorsorsuppliersand
partnerstoimitate,andtheymayprovideasustainable
competitiveadvantage.Absenceofaneededorganizational
corecompetencymayresultinasignicantstrategicchallenge
ordisadvantageinthemarketplace.
Corecompetenciesmayinvolvetechnologyexpertise,unique
serviceoerings,amarketplaceniche,oraparticularbusiness
acumen(e.g.,businessacquisitions).
Customer
Tetermcustomerreferstoactualandpotentialusersof
yourorganizationsproducts,programs,orservices(referred
toasproductsintheCriteria).Customersincludetheend
usersofyourproducts,aswellasotherswhomightbetheir
immediatepurchasersorusers.Teseothersmightinclude
distributors,agents,ororganizationsthatfurtherprocessyour
productasacomponentoftheirproduct.TeCriteriaaddress
customersbroadly,referencingcurrentandfuturecustomers,
aswellasthecustomersofyourcompetitors.
Customer-drivenexcellenceisaBaldrigecorevalueembedded
inthebeliefsandbehaviorsofhigh-performingorganizations.
Customerfocusimpactsandshouldintegrateanorganizations
strategicdirections,itsworksystemsandworkprocesses,and
itsbusinessresults.
Seethedenitionofstakeholdersonpage62fortherela-
tionshipbetweencustomersandotherswhomightbeaected
byyourproducts.
Customer Engagement
Tetermcustomerengagementreferstoyourcustomers
investmentinorcommitmenttoyourbrandandproduct
oerings.Itisbasedonyourongoingabilitytoservetheir
needsandbuildrelationshipssotheywillcontinueusingyour
products.Characteristicsofcustomerengagementinclude
customerretentionandloyalty,customerswillingnesstomake
aneorttodobusinesswithyourorganization,andcustomers
willingnesstoactivelyadvocateforandrecommendyourbrand
andproductoerings.
Cycle Time
Tetermcycletimereferstothetimerequiredtofulll
commitmentsortocompletetasks.Timemeasurementsplay
amajorroleintheCriteriabecauseofthegreatimportance
oftimeperformancetoimprovingcompetitivenessand
overallperformance.Cycletimereferstoallaspectsoftime
performance.Cycletimeimprovementmightincludetimeto
market,orderfulllmenttime,deliverytime,changeovertime,
customerresponsetime,andotherkeymeasuresoftime.
Deployment
Tetermdeploymentreferstotheextent towhichan
approachisappliedinaddressingtherequirementsofa
BaldrigeCriteriaitem.Deploymentisevaluatedonthebasis
ofthebreadthanddepthofapplicationoftheapproachto
relevantworkunitsthroughouttheorganization.
Deploymentisoneofthedimensionsconsideredinevaluating
onpages6670.
Diversity
Tetermdiversityreferstovaluingandbenetingfrom
personaldierences.Tesedierencesaddressmanyvariables
andmayincluderace,religion,color,gender,nationalorigin,
disability,sexualorientation,ageandgenerationaldierences,
education,geographicorigin,andskillcharacteristics,aswell
asdierencesinideas,thinking,academicdisciplines,and
perspectives.
TeBaldrigeCriteriarefertothediversityofyourworkforce
hiringandcustomercommunities.Capitalizingonbothpro-
videsenhancedopportunitiesforhighperformance;customer,
workforce,andcommunitysatisfaction;andcustomerand
workforceengagement.
Effective
Tetermeectivereferstohowwellaprocessorameasure
addressesitsintendedpurpose.Determiningeectiveness
requires(1)theevaluationofhowwelltheprocessisaligned
withtheorganizationsneedsandhowwelltheprocessis
Glossary of Key Terms 57
deployedor(2)theevaluationoftheoutcomeofthemeasure
used.
Empowerment
Tetermempowermentreferstogivingpeopletheauthority
andresponsibilitytomakedecisionsandtakeactions.Empow-
ermentresultsindecisionsbeingmadeclosesttothefront
line,wherework-relatedknowledgeandunderstandingreside.
Empowermentisaimedatenablingpeopletosatisfycustomers
onrstcontact,toimproveprocessesandincreaseproductiv-
ity,andtoimprovetheorganizationsperformanceresults.An
empoweredworkforcerequiresinformationtomakeappropri-
atedecisions;thus,anorganizationalrequirementistoprovide
thatinformationinatimelyandusefulway.
Engagement, Customer
Seecustomerengagementonpage57.
Engagement, Workforce
Seeworkforceengagementonpage64.
Ethical Behavior
Tetermethicalbehaviorreferstohowanorganization
ensuresthatallitsdecisions,actions,andstakeholderinterac-
tionsconformtotheorganizationsmoralandprofessional
principlesofconduct.Teseprinciplesshouldsupportall
applicablelawsandregulationsandarethefoundationfor
theorganizationscultureandvalues.Teydistinguishright
fromwrong.
Seniorleadersshouldactasrolemodelsfortheseprinciples
ofbehavior.Teprinciplesapplytoallpeopleinvolvedin
theorganization,fromtemporarymembersoftheworkforce
tomembersoftheboardofdirectors,andtheyneedtobe
communicatedandreinforcedonaregularbasis.Althoughthe
BaldrigeCriteriadonotprescribethatallorganizationsusethe
samemodelforensuringethicalbehavior,seniorleadersshould
ensurethattheorganizationsmissionandvisionarealigned
withitsethicalprinciples.Ethicalbehaviorshouldbepracticed
withallstakeholders,includingtheworkforce,sharehold-
ers,customers,partners,suppliers,andtheorganizations
localcommunity.
Well-designedandclearlyarticulatedethicalprinciples
shouldempowerpeopletomakeeectivedecisionswithgreat
condence.Someorganizationsalsomayviewtheirethical
principlesasboundaryconditionsrestrictingbehaviorthat
otherwisecouldhaveadverseimpactsontheirorganizations
and/orsociety.
Goals
Tetermgoalsreferstoafutureconditionorperformance
levelthatoneintendsordesirestoattain.Goalscanbeboth
short-andlonger-term.Goalsareendsthatguideactions.
Quantitativegoals,frequentlyreferredtoastargets,include
anumericalpointorrange.Targetsmightbeprojectionsbased
oncomparativeorcompetitivedata.Tetermstretchgoals
referstodesiredmajor,discontinuous(nonincremental)or
breakthroughimprovements,usuallyinareasmostcriticalto
yourorganizationsfuturesuccess.
Goalscanservemanypurposes,including
clarifyingstrategicobjectivesandactionplanstoindicate
howyouwillmeasuresuccess
fosteringteamworkbyfocusingonacommonend
encouragingout-of-the-boxthinking(innovation)to
achieveastretchgoal
providingabasisformeasuringandacceleratingprogress
Seealsothedenitionofperformanceprojectionson
page61.
Governance
Tetermgovernancereferstothesystemofmanagement
andcontrolsexercisedinthestewardshipofyourorganization.
Itincludestheresponsibilitiesofyourorganizationsowners/
shareholders,boardofdirectors,andseniorleaders.Corporate
ororganizationalcharters,bylaws,andpoliciesdocumentthe
rightsandresponsibilitiesofeachofthepartiesanddescribe
howyourorganizationwillbedirectedandcontrolledto
ensure(1)accountabilitytoowners/shareholdersandother
stakeholders,(2)transparencyofoperations,and(3)fair
treatmentofallstakeholders.Governanceprocessesmay
includetheapprovalofstrategicdirection,themonitoring
andevaluationoftheCEOsperformance,theestablish-
mentofexecutivecompensationandbenets,succession
planning,nancialauditing,riskmanagement,disclosure,
andshareholderreporting.Ensuringeectivegovernanceis
importanttostakeholdersandthelargersocietystrustandto
organizationaleectiveness.
High-Performance Work
Tetermhigh-performanceworkreferstoworkprocesses
usedtosystematicallypursueever-higherlevelsofoverall
organizationalandindividualperformance,includingquality,
productivity,innovationrate,andcycletimeperformance.
High-performanceworkresultsinimprovedservicefor
customersandotherstakeholders.
Approachestohigh-performanceworkvaryinform,function,
andincentivesystems.High-performanceworkfocuseson
workforceengagement.Itfrequentlyincludescooperation
betweenmanagementandtheworkforce,whichmayinvolve
workforcebargainingunits;cooperationamongworkunits,
ofteninvolvingteams;theempowermentofyourpeople,
includingself-directedresponsibility;andinputtoplanning.It
alsomayincludeindividualandorganizationalskillbuilding
andlearning;learningfromotherorganizations;exibilityin
jobdesignandworkassignments;aattenedorganizational
structure,wheredecisionmakingisdecentralizedand
decisionsaremadeclosesttothefrontline;andeective
useofperformancemeasures,includingcomparisons.Many
high-performingorganizationsusemonetaryandnonmonetary
incentivesbasedonfactorssuchasorganizationalperformance,
teamandindividualcontributions,andskillbuilding.Also,
high-performanceworkusuallyseekstoaligntheorganiza-
tionsstructure,corecompetencies,work,jobs,workforce
development,andincentives.
How
Tetermhowreferstothesystemsandprocessesthatan
organizationusestoaccomplishitsmissionrequirements.In
respondingtohowquestionsintheprocessitemrequire-
ments,processdescriptionsshouldincludeinformationsuchas
approach(methodsandmeasures),deployment,learning,and
integrationfactors.
Indicators
Seemeasuresandindicatorsonpage60.
Innovation
Teterminnovationreferstomakingmeaningfulchangeto
improveproducts,processes,ororganizationaleectivenessand
tocreatenewvalueforstakeholders.Innovationinvolvesthe
adoptionofanidea,process,technology,product,orbusiness
modelthatiseithernewornewtoitsproposedapplication.
Teoutcomeofinnovationisadiscontinuousorbreakthrough
changeinresults,products,orprocesses.
Successfulorganizationalinnovationisamultistepprocess
thatinvolvesdevelopmentandknowledgesharing,adecision
toimplement,implementation,evaluation,andlearning.
Althoughinnovationisoftenassociatedwithtechnological
innovation,itisapplicabletoallkeyorganizationalprocesses
thatwouldbenetfromchange,whetherthroughbreak-
throughimprovementorachangeinapproachoroutputs.It
couldincludefundamentalchangesinorganizationalstructure
orthebusinessmodeltomoreeectivelyaccomplishthe
organizationswork.
Integration
Tetermintegrationreferstotheharmonizationofplans,
processes,information,resourcedecisions,actions,results,
andanalysestosupportkeyorganization-widegoals.Eective
integrationgoesbeyondalignmentandisachievedwhenthe
individualcomponentsofaperformancemanagementsystem
operateasafullyinterconnectedunit.
Seealsothedenitionofalignmentonpage56.
Integrationisoneofthedimensionsconsideredinevaluating
bothprocessandresultsitems.Forfurtherdescription,seethe
scoringsystemonpages6670.
Key
Tetermkeyreferstothemajorormostimportantelements
orfactors,thosethatarecriticaltoachievingyourintended
outcome.TeBaldrigeCriteria,forexample,refertokey
challenges,keyplans,keyworkprocesses,andkeymeasures
thosethataremostimportanttoyourorganizationssuccess.
Teyaretheessentialelementsforpursuingormonitoringa
desiredoutcome.
Knowledge Assets
Tetermknowledgeassetsreferstotheaccumulatedintel-
lectualresourcesofyourorganization.Itistheknowledgepos-
sessedbyyourorganizationanditsworkforceintheformof
information,ideas,learning,understanding,memory,insights,
cognitiveandtechnicalskills,andcapabilities.Yourworkforce,
software,patents,databases,documents,guides,policiesand
procedures,andtechnicaldrawingsarerepositoriesofyour
organizationsknowledgeassets.Knowledgeassetsareheld
notonlybyanorganizationbutresidewithinitscustomers,
suppliers,andpartners,aswell.
Knowledgeassetsaretheknow-howthatyourorganization
hasavailabletouse,toinvest,andtogrow.Buildingand
managingitsknowledgeassetsarekeycomponentsforyour
organizationtocreatevalueforyourstakeholdersandtohelp
sustainacompetitiveadvantage.
Leadership System
Tetermleadershipsystemreferstohowleadershipis
exercised,formallyandinformally,throughouttheorganiza-
tion;itisthebasisforandthewaykeydecisionsaremade,
communicated,andcarriedout.Itincludesstructuresand
mechanismsfordecisionmaking;two-waycommunication;
selectionanddevelopmentofleadersandmanagers;and
reinforcementofvalues,ethicalbehavior,directions,and
performanceexpectations.
Aneectiveleadershipsystemrespectsthecapabilitiesand
requirementsofworkforcemembersandotherstakeholders,
anditsetshighexpectationsforperformanceandperformance
improvement.Itbuildsloyaltiesandteamworkbasedonthe
organizationsvisionandvaluesandthepursuitofshared
goals.Itencouragesandsupportsinitiativeandappropriate
risktaking,subordinatesorganizationalstructuretopurpose
andfunction,andavoidschainsofcommandthatrequire
longdecisionpaths.Aneectiveleadershipsystemincludes
mechanismsfortheleaderstoconductself-examination,
receivefeedback,andimprove.
Learning
Tetermlearningreferstonewknowledgeorskillsacquired
throughevaluation,study,experience,andinnovation.Te
BaldrigeCriteriaincludetwodistinctkindsoflearning:orga-
nizationalandpersonal.Organizationallearningisachieved
throughresearchanddevelopment,evaluationandimprove-
mentcycles,workforceandstakeholderideasandinput,
best-practicesharing,andbenchmarking.Personallearning
isachievedthrougheducation,training,anddevelopmental
opportunitiesthatfurtherindividualgrowth.
Tobeeective,learningshouldbeembeddedinthewayan
organizationoperates.Learningcontributestoacompetitive
advantageandsustainabilityfortheorganizationanditswork-
force.Forfurtherdescriptionoforganizationalandpersonal
learning,seetherelatedcorevalueandconceptonpage51.
Learningisoneofthedimensionsconsideredinevaluating
onpages6670.
Levels
Tetermlevelsreferstonumericalinformationthatplaces
orpositionsanorganizationsresultsandperformanceona
meaningfulmeasurementscale.Performancelevelspermit
evaluationrelativetopastperformance,projections,goals,and
appropriatecomparisons.
Measures and Indicators
Tetermmeasuresandindicatorsreferstonumerical
informationthatquantiesinput,output,andperformance
dimensionsofprocesses,products,programs,projects,services,
andtheoverallorganization(outcomes).Measuresand
indicatorsmightbesimple(derivedfromonemeasurement)or
composite.
TeCriteriadonotmakeadistinctionbetweenmeasuresand
indicators.However,someusersofthesetermspreferindica-
tor(1)whenthemeasurementrelatestoperformancebutis
notadirectmeasureofsuchperformance(e.g.,thenumber
ofcomplaintsisanindicatorofdissatisfactionbutnotadirect
measureofit)and(2)whenthemeasurementisapredictor
(leadingindicator)ofsomemoresignicantperformance
(e.g.,increasedcustomersatisfactionmightbealeadingindica-
torofmarketsharegain).
Mission
Tetermmissionreferstotheoverallfunctionofan
organization.Temissionanswersthequestion,Whatis
thisorganizationattemptingtoaccomplish?Temission
mightdenecustomersormarketsserved,distinctiveorcore
competencies,ortechnologiesused.
Multiple Requirements
Tetermmultiplerequirementsreferstotheindividual
questionsCriteriausersneedtoanswerwithineachareato
address.Tesequestionsconstitutethedetailsofanitems
requirements.Teyarepresentedinblacktextundereach
itemsarea(s)toaddress.Tispresentationisillustratedinthe
itemformatshownonpage29.
Evenhigh-performing,high-scoringusersoftheCriteriaare
notlikelytobeabletoaddressallthemultiplerequirements
withequalcapabilityorsuccess.
Overall Requirements
TetermoverallrequirementsreferstothetopicsCriteria
usersneedtoaddresswhenrespondingtothecentraltheme
ofanitem.Overallrequirementsaddressthemostsignicant
featuresoftheitemrequirements.IntheCriteria,theoverall
requirementsofeachitemarepresentedinoneormore
introductorysentencesprintedinbold.Tispresentationis
illustratedintheitemformatshownonpage29.
Partners
Tetermpartnersreferstothosekeyorganizationsor
individualswhoareworkinginconcertwithyourorganization
toachieveacommongoalortoimproveperformance.Typi-
cally,partnershipsareformalarrangementsforaspecicaim
orpurpose,suchastoachieveastrategicobjectiveortodeliver
aspecicproduct.
Formalpartnershipsareusuallyforanextendedperiodoftime
andinvolveaclearunderstandingoftheindividualandmutual
rolesandbenetsforthepartners.
Seealsothedenitionofcollaboratorsonpage57.
Performance
Tetermperformancereferstooutputsandtheiroutcomes
obtainedfromprocesses,products,andcustomersthatpermit
theorganizationtoevaluateandcompareitsresultsrelativeto
performanceprojections,standards,pastresults,goals,andthe
resultsofotherorganizations.Performancecanbeexpressedin
nonnancialandnancialterms.
TeBaldrigeCriteriaaddressfourtypesofperformance:
(1)product,(2)customer-focused,(3)operational,and(4)
nancialandmarketplace.
Productperformancereferstoperformancerelativeto
measuresandindicatorsofproductandservicecharacteristics
importanttocustomers.Examplesincludeproductreliability,
on-timedelivery,customer-experienceddefectlevels,and
serviceresponsetime.Fornonprotorganizations,product
performanceexamplesmightincludeprogramandproject
performanceintheareasofrapidresponsetoemergencies,
at-homeservices,ormultilingualservices.
Customer-focusedperformancereferstoperformance
relativetomeasuresandindicatorsofcustomersperceptions,
reactions,andbehaviors.Examplesincludecustomerretention,
complaints,andcustomersurveyresults.
Operationalperformancereferstoworkforce,leadership,
organizational,andethicalperformancerelativetoeective-
ness,eciency,andaccountabilitymeasuresandindicators.
Examplesincludecycletime,productivity,wastereduction,
workforceturnover,workforcecross-trainingrates,regulatory
compliance,scalaccountability,strategyaccomplishment,and
communityinvolvement.Operationalperformancemightbe
measuredattheworkunitlevel,keyworkprocesslevel,and
organizationallevel.
Financialandmarketplaceperformancereferstoperfor-
mancerelativetomeasuresofcost,revenue,andmarket
position,includingassetutilization,assetgrowth,andmarket
share.Examplesincludereturnsoninvestments,valueadded
peremployee,debt-to-equityratio,returnsonassets,operating
margins,performancetobudget,theamountinreservefunds,
cash-to-cashcycletime,otherprotabilityandliquidity
measures,andmarketgains.
Performance Excellence
Tetermperformanceexcellencereferstoanintegrated
approachtoorganizationalperformancemanagementthat
resultsin(1)deliveryofever-improvingvaluetocustomers
andstakeholders,contributingtoorganizationalsustainability;
(2)improvementofoverallorganizationaleectivenessand
capabilities;and(3)organizationalandpersonallearning.Te
BaldrigeCriteriaforPerformanceExcellenceprovideaframe-
workandanassessmenttoolforunderstandingorganizational
strengthsandopportunitiesforimprovementandthusfor
guidingplanningeorts.
Performance Projections
Tetermperformanceprojectionsreferstoestimatesof
futureperformance.Projectionsshouldbebasedonan
understandingofpastperformance,ratesofimprovement,and
assumptionsaboutfutureinternalchangesandinnovations,as
wellasassumptionsaboutchangesintheexternalenvironment
thatresultininternalchanges.Tusperformanceprojections
canserveasakeytoolinbothmanagementofoperationsand
strategydevelopmentandimplementation.
Performanceprojectionsareastatementofexpectedfuture
performance.Goalsareastatementofdesiredfutureperfor-
mance.Performanceprojectionsforcompetitorsorsimilar
organizationsmayindicatechallengesfacingyourorganization
andareaswherebreakthroughperformanceorinnovationis
needed.Wherebreakthroughperformanceorinnovationis
intended,performanceprojectionsandgoalsmayoverlap.
Seealsothedenitionofgoalsonpage58.
Process
Tetermprocessreferstolinkedactivitieswiththepurpose
ofproducingaproduct(orservice)foracustomer(user)
withinoroutsidetheorganization.Generally,processes
involvecombinationsofpeople,machines,tools,techniques,
materials,andimprovementsinadenedseriesofstepsor
actions.Processesrarelyoperateinisolationandmustbe
consideredinrelationtootherprocessesthatimpactthem.In
somesituations,processesmightrequireadherencetoaspecic
sequenceofsteps,withdocumentation(sometimesformal)of
proceduresandrequirements,includingwell-denedmeasure-
mentandcontrolsteps.
Inmanyservicesituations,particularlywhencustomersare
directlyinvolvedintheservice,processisusedinamore
generalway(i.e.,tospelloutwhatmustbedone,possibly
includingapreferredorexpectedsequence).Ifasequence
iscritical,theserviceneedstoincludeinformationtohelp
customersunderstandandfollowthesequence.Suchservice
processesalsorequireguidancetotheprovidersofthoseser-
vicesonhandlingcontingenciesrelatedtothepossibleactions
orbehaviorsofthoseserved.
Inknowledgework,suchasstrategicplanning,research,
development,andanalysis,processdoesnotnecessarilyimply
formalsequencesofsteps.Rather,processimpliesgeneral
understandingsregardingcompetentperformance,suchas
timing,optionstobeincluded,evaluation,andreporting.
Sequencesmightariseaspartoftheseunderstandings.
IntheBaldrigescoringsystem,yourprocessachievementlevel
isassessed.Tisachievementlevelisbasedonfourfactorsthat
canbeevaluatedforeachofanorganizationskeyprocesses:
approach,deployment,learning,andintegration.Forfurther
description,seethescoringsystemonpages6670.
Productivity
Tetermproductivityreferstomeasuresoftheeciencyof
resourceuse.
Althoughthetermoftenisappliedtosinglefactors,suchasthe
workforce(laborproductivity),machines,materials,energy,
andcapital,theproductivityconceptappliesaswelltothetotal
resourcesusedinproducingoutputs.Teuseofanaggregate
measureofoverallproductivityallowsadeterminationof
whethertheneteectofoverallchangesinaprocesspossibly
involvingresourcetrade-osisbenecial.
Projections, Performance
Seeperformanceprojectionsonthispage.
Purpose
Tetermpurposereferstothefundamentalreasonthatan
organizationexists.Teprimaryroleofpurposeistoinspire
anorganizationandguideitssettingofvalues.Purposeis
generallybroadandenduring.Twoorganizationsindierent
businessescouldhavesimilarpurposes,andtwoorganizations
inthesamebusinesscouldhavedierentpurposes.
Results
Tetermresultsreferstooutputsandoutcomesachieved
byanorganizationinaddressingtherequirementsofa
BaldrigeCriteriaitem.Resultsareevaluatedonthebasisof
currentperformance;performancerelativetoappropriate
comparisons;therate,breadth,andimportanceofperformance
improvements;andtherelationshipofresultsmeasurestokey
organizationalperformancerequirements.Forfurtherdescrip-
tion,seethescoringsystemonpages6670.
Segment
Tetermsegmentreferstoapartofanorganizations
overallcustomer,market,productoering,orworkforcebase.
Segmentstypicallyhavecommoncharacteristicsthatcanbe
groupedlogically.Inresultsitems,thetermreferstodisaggre-
gatingresultsdatainawaythatallowsformeaningfulanalysis
ofanorganizationsperformance.Itisuptoeachorganization
todeterminethespecicfactorsthatitusestosegmentits
customers,markets,products,andworkforce.
Understandingsegmentsiscriticaltoidentifyingthedistinct
needsandexpectationsofdierentcustomer,market,and
workforcegroupsandtotailoringproductoeringstomeet
theirneedsandexpectations.Asanexample,marketsegmenta-
tionmightbebasedondistributionchannels,businessvolume,
geography,ortechnologiesemployed.Workforcesegmentation
mightbebasedongeography,skills,needs,workassignments,
orjobclassications.
Senior Leaders
Tetermseniorleadersreferstoanorganizationssenior
managementgrouporteam.Inmanyorganizations,this
consistsoftheheadoftheorganizationandhisorher
directreports.
Stakeholders
Tetermstakeholdersreferstoallgroupsthatareormight
beaectedbyanorganizationsactionsandsuccess.Examples
ofkeystakeholdersmightincludecustomers,theworkforce,
partners,collaborators,governingboards,stockholders,donors,
suppliers,taxpayers,regulatorybodies,policymakers,funders,
andlocalandprofessionalcommunities.
Seealsothedenitionofcustomeronpage57.
Strategic Advantages
Tetermstrategicadvantagesreferstothosemarketplace
benetsthatexertadecisiveinuenceonanorganizations
likelihoodoffuturesuccess.Teseadvantagesfrequentlyare
sourcesofanorganizationscurrentandfuturecompetitive
successrelativetootherprovidersofsimilarproducts.Strategic
advantagesgenerallyarisefromeitherorbothoftwosources:
(1)corecompetencies,whichfocusonbuildingandexpanding
onanorganizationsinternalcapabilities,and(2)strategically
importantexternalresources,whichareshapedandleveraged
throughkeyexternalrelationshipsandpartnerships.
Whenanorganizationrealizesbothsourcesofstrategicadvan-
tage,itcanamplifyitsuniqueinternalcapabilitiesbycapital-
izingoncomplementarycapabilitiesinotherorganizations.
Seethedenitionsofstrategicchallengesandstrategic
objectivesbelowfortherelationshipamongstrategicadvan-
tages,strategicchallenges,andthestrategicobjectivesanorga-
nizationarticulatestoaddressitschallengesandadvantages.
Strategic Challenges
Tetermstrategicchallengesreferstothosepressuresthat
exertadecisiveinuenceonanorganizationslikelihoodof
futuresuccess.Tesechallengesfrequentlyaredrivenbyan
organizationsfuturecompetitivepositionrelativetoother
providersofsimilarproducts.Whilenotexclusivelyso,
strategicchallengesgenerallyareexternallydriven.However,
inrespondingtoexternallydrivenstrategicchallenges,an
organizationmayfaceinternalstrategicchallenges.
Externalstrategicchallengesmayrelatetocustomerormarket
needsorexpectations;productortechnologicalchanges;or
nancial,societal,andotherrisksorneeds.Internalstrategic
challengesmayrelatetoanorganizationscapabilitiesorits
humanandotherresources.
Seethedenitionsofstrategicadvantagesandstrategic
objectivesonthispagefortherelationshipamongstrategic
challenges,strategicadvantages,andthestrategicobjec-
tivesanorganizationarticulatestoaddressitschallenges
andadvantages.
Strategic Objectives
Tetermstrategicobjectivesreferstoanorganizations
articulatedaimsorresponsestoaddressmajorchangeor
improvement,competitivenessorsocialissues,andbusiness
advantages.Strategicobjectivesgenerallyarefocusedboth
externallyandinternallyandrelatetosignicantcustomer,
market,product,ortechnologicalopportunitiesandchal-
lenges(strategicchallenges).Broadlystated,theyarewhatan
organizationmustachievetoremainorbecomecompetitive
andensurelong-termsustainability.Strategicobjectivesset
anorganizationslonger-termdirectionsandguideresource
allocationsandredistributions.
Seethedenitionofactionplansonpage56forthe
relationshipbetweenstrategicobjectivesandactionplansand
foranexampleofeach.
Sustainability/Sustainable
Tetermsustainabilityreferstoyourorganizationsability
toaddresscurrentbusinessneedsandtohavetheagilityand
strategicmanagementtopreparesuccessfullyforyourfuture
business,market,andoperatingenvironment.Bothexternal
andinternalfactorsneedtobeconsidered.Tespecic
combinationoffactorsmightincludeindustrywideand
organization-speciccomponents.
Sustainabilityconsiderationsmightincludeworkforcecapabil-
ityandcapacity,resourceavailability,technology,knowledge,
corecompetencies,worksystems,facilities,andequipment.
Sustainabilitymightbeaectedbychangesinthemarketplace
andcustomerpreferences,changesinthenancialmarkets,
andchangesinthelegalandregulatoryenvironment.In
addition,sustainabilityhasacomponentrelatedtoday-to-day
preparednessforreal-timeorshort-termemergencies.
InthecontextoftheBaldrigeCriteria,theimpactofyour
organizationsproductsandoperationsonsocietyandthecon-
tributionsyoumaketothewell-beingofenvironmental,social,
andeconomicsystemsarepartofyourorganizationsoverall
societalresponsibilities.Whetherandhowyourorganization
addressessuchconsiderationsalsomayaectitssustainability.
Systematic
Tetermsystematicreferstoapproachesthatarewell-
ordered,arerepeatable,andusedataandinformationso
learningispossible.Inotherwords,approachesaresystematic
iftheybuildintheopportunityforevaluation,improvement,
andsharing,therebypermittingagaininmaturity.Foruse
oftheterm,seethescoringguidelinesforprocessitemson
page68.
Trends
Tetermtrendsreferstonumericalinformationthatshows
thedirectionandrateofchangeforanorganizationsresultsor
theconsistencyofitsperformanceovertime.Trendsprovidea
timesequenceoforganizationalperformance.
Aminimumofthreehistorical(notprojected)datapointsgen-
erallyisneededtobegintoascertainatrend.Moredatapoints
areneededtodeneastatisticallyvalidtrend.Tetimeperiod
foratrendisdeterminedbythecycletimeoftheprocess
beingmeasured.Shortercycletimesdemandmorefrequent
measurement,whilelongercycletimesmightrequirelonger
timeperiodsbeforemeaningfultrendscanbedetermined.
ExamplesoftrendscalledforbytheCriteriaincludedata
relatedtoproductperformance,customerandworkforce
satisfactionanddissatisfactionresults,nancialperformance,
marketplaceperformance,andoperationalperformance,such
ascycletimeandproductivity.
Value
Tetermvaluereferstotheperceivedworthofaproduct,
process,asset,orfunctionrelativetocostandtopossible
alternatives.
Organizationsfrequentlyusevalueconsiderationstodetermine
thebenetsofvariousoptionsrelativetotheircosts,suchas
thevalueofvariousproductandservicecombinationstocus-
tomers.Organizationsneedtounderstandwhatdierentstake-
holdergroupsvalueandthendelivervaluetoeachgroup.Tis
frequentlyrequiresbalancingvalueforcustomersandother
stakeholders,suchasyourworkforceandthecommunity.
Values
Tetermvaluesreferstotheguidingprinciplesand
behaviorsthatembodyhowyourorganizationanditspeople
areexpectedtooperate.Valuesreectandreinforcethe
desiredcultureofanorganization.Valuessupportandguide
thedecisionmakingofeveryworkforcemember,helpingthe
organizationaccomplishitsmissionandattainitsvisionin
anappropriatemanner.Examplesofvaluesmightinclude
demonstratingintegrityandfairnessinallinteractions,exceed-
ingcustomerexpectations,valuingindividualsanddiversity,
protectingtheenvironment,andstrivingforperformance
excellenceeveryday.
Vision
Tetermvisionreferstothedesiredfuturestateofyour
organization.Tevisiondescribeswheretheorganizationis
headed,whatitintendstobe,orhowitwishestobeperceived
inthefuture.
Voice of the Customer
Tetermvoiceofthecustomerreferstoyourprocessfor
capturingcustomer-relatedinformation.Voice-of-the-customer
processesareintendedtobeproactiveandcontinuouslyinno-
vativetocapturestated,unstated,andanticipatedcustomer
requirements,expectations,anddesires.Tegoalistoachieve
customerengagement.Listeningtothevoiceofthecustomer
mightincludegatheringandintegratingvarioustypesofcus-
tomerdata,suchassurveydata,focusgroupndings,warranty
data,andcomplaintdata,thataectcustomerspurchasing
andengagementdecisions.
Work Processes
Tetermworkprocessesreferstoyourmostimportant
internalvaluecreationprocesses.Teymightincludeproduct
designanddelivery,customersupport,supplychainmanage-
ment,business,andsupportprocesses.Teyaretheprocesses
thatinvolvethemajorityofyourorganizationsworkforceand
producecustomer,stakeholder,andstockholdervalue.
Yourkeyworkprocessesfrequentlyrelatetoyourcorecom-
petencies,tothefactorsthatdetermineyoursuccessrelative
tocompetitors,andtothefactorsconsideredimportantfor
businessgrowthbyyourseniorleaders.
Work Systems
Tetermworksystemsreferstohowtheworkofyour
organizationisaccomplished.Worksystemsinvolveyour
workforce,yourkeysuppliersandpartners,yourcontractors,
yourcollaborators,andothercomponentsofthesupply
chainneededtoproduceanddeliveryourproductsandyour
businessandsupportprocesses.Yourworksystemscoordinate
theinternalworkprocessesandtheexternalresourcesnecessary
foryoutodevelop,produce,anddeliveryourproductstoyour
customersandtosucceedinyourmarketplace.
Decisionsaboutworksystemsarestrategic.Tesedecisions
involveprotectingandcapitalizingoncorecompetenciesand
decidingwhatshouldbeprocuredorproducedoutsideyour
organizationinordertobeecientandsustainableinyour
marketplace.
Workforce
Tetermworkforcereferstoallpeopleactivelyinvolved
inaccomplishingtheworkofyourorganization,including
paidemployees(e.g.,permanent,part-time,temporary,and
telecommutingemployees,aswellascontractemployeessuper-
visedbytheorganization)andvolunteers,asappropriate.Te
workforceincludesteamleaders,supervisors,andmanagersat
alllevels.
Workforce Capability
Tetermworkforcecapabilityreferstoyourorganizations
abilitytoaccomplishitsworkprocessesthroughtheknowl-
edge,skills,abilities,andcompetenciesofitspeople.
Capabilitymayincludetheabilitytobuildandsustain
relationshipswithyourcustomers;toinnovateandtransition
tonewtechnologies;todevelopnewproductsandworkpro-
cesses;andtomeetchangingbusiness,market,andregulatory
demands.
Workforce Capacity
Tetermworkforcecapacityreferstoyourorganizations
abilitytoensuresucientstanglevelstoaccomplishits
workprocessesandsuccessfullydeliveryourproductstoyour
customers,includingtheabilitytomeetseasonalorvarying
demandlevels.
Workforce Engagement
Tetermworkforceengagementreferstotheextentof
workforcecommitment,bothemotionalandintellectual,to
accomplishingthework,mission,andvisionoftheorganiza-
tion.Organizationswithhighlevelsofworkforceengagement
areoftencharacterizedbyhigh-performingworkenvironments
inwhichpeoplearemotivatedtodotheirutmostfortheben-
etoftheircustomersandforthesuccessoftheorganization.
Ingeneral,membersoftheworkforcefeelengagedwhenthey
ndpersonalmeaningandmotivationintheirworkandwhen
theyreceivepositiveinterpersonalandworkplacesupport.An
engagedworkforcebenetsfromtrustingrelationships,asafe
andcooperativeenvironment,goodcommunicationandinfor-
mationow,empowerment,andperformanceaccountability.
Keyfactorscontributingtoengagementincludetrainingand
careerdevelopment,eectiverecognitionandrewardsystems,
equalopportunityandfairtreatment,andfamily-friendliness.
Steps Toward Mature Processes
An Aid for Assessing and Scoring Process Items
(1) Reacting to Problems (025%)
Operationsarecharacterizedbyactivitiesratherthanby
processes,andtheyarelargelyresponsivetoimmediate
needsorproblems.Goalsarepoorlydened.
(2) Early Systematic Approaches (3045%)
Strategic
and Operational
Goals
Strategic and
Operational
Goals
Teorganizationisatthebeginningstagesofconducting
operationsbyprocesseswithrepeatability,evaluation
andimprovement,andsomeearlycoordinationamong
organizationalunits.Strategyandquantitativegoalsare
beingdened.
(3) Aligned Approaches (5065%)
Strategic
and Operational
Goals
Strategic
and Operational
Goals
Operationsarecharacterizedbyprocessesthatarerepeat-
ableandregularlyevaluatedforimprovement,withlearn-
ingssharedandwithcoordinationamongorganizational
units.Processesaddresskeystrategiesandgoalsofthe
organization.
(4) Integrated Approaches (70100%)
Operationsarecharacterizedbyprocessesthatare
repeatableandregularlyevaluatedforchangeand
improvementincollaborationwithotheraectedunits.
Ecienciesacrossunitsaresoughtandachievedthrough
analysis,innovation,andthesharingofinformationand
knowledge.Processesandmeasurestrackprogressonkey
strategicandoperationalgoals.
SCORING SYSTEM
TescoringofresponsestoCriteriaitemsandBaldrigeAward
applicantfeedbackarebasedontwoevaluationdimensions:
(1)processand(2)results.Criteriausersneedtofurnish
informationrelatingtothesedimensions.Specicfactorsfor
thesedimensionsaredescribedbelow.Scoringguidelinesare
givenonpages6869.
Process
Processreferstothemethodsyourorganizationusesand
improvestoaddresstheitemrequirementsincategories16.
Tefourfactorsusedtoevaluateprocessareapproach,deploy-
ment,learning,andintegration(ADLI).
Approachrefersto
themethodsusedtoaccomplishtheprocess
theappropriatenessofthemethodstotheitemrequire-
mentsandtheorganizationsoperatingenvironment
theeectivenessofyouruseofthemethods
thedegreetowhichtheapproachisrepeatableandbased
onreliabledataandinformation(i.e.,systematic)
Deploymentreferstotheextent towhich
yourapproachisappliedinaddressingitemrequire-
mentsrelevantandimportanttoyourorganization
yourapproachisappliedconsistently
yourapproachisused(executed)byallappropriate
workunits
Learningrefersto
reningyourapproachthroughcyclesofevaluationand
improvement
encouragingbreakthroughchangetoyourapproach
throughinnovation
sharingrenementsandinnovationswithotherrelevant
workunitsandprocessesinyourorganization
Integrationreferstotheextent towhich
yourapproachisalignedwithyourorganizational
needsidentiedintheOrganizationalProleandother
processitems
yourmeasures,information,andimprovementsystems
arecomplementaryacrossprocessesandworkunits
yourplans,processes,results,analyses,learning,and
actionsareharmonizedacrossprocessesandworkunits
tosupportorganization-widegoals
Results
Resultsreferstoyourorganizationsoutputs andoutcomes
inachievingtherequirementsinitems7.17.5(category7).
Tefourfactorsusedtoevaluateresultsarelevels,trends,
comparisons,andintegration(LeTCI).
Levelsrefersto
yourcurrentlevelofperformance
Trendsrefersto
therateofyourperformanceimprovementsorthe
sustainabilityofgoodperformance(i.e.,theslopeof
trenddata)
thebreadth(i.e.,theextentofdeployment)ofyour
performanceresults
Comparisonsrefersto
yourperformancerelativetoappropriatecomparisons,
suchascompetitorsororganizationssimilartoyours
yourperformancerelativetobenchmarksor
industryleaders
Integrationreferstotheextent towhich
yourresultsmeasures(oftenthroughsegmentation)
addressimportantcustomer,product,market,process,
andactionplanperformancerequirementsidentiedin
yourOrganizationalProleandinprocessitems
yourresultsincludevalidindicatorsoffuture
performance
yourresultsareharmonizedacrossprocessesandwork
unitstosupportorganization-widegoals
Item Classifcation and Scoring Dimensions
Itemsareclassiedaccordingtothekindsofinformationand
datayouareexpectedtofurnishrelativetothetwoevaluation
dimensionsgivenabove.
Tetwotypesofitemsaredesignatedas
1. process
2. results
Process
Results
Inprocessitems,approach,deployment,learning,andintegra-
tionarelinkedtoemphasizethatdescriptionsofapproach
shouldalwaysindicatethedeploymentconsistentwiththe
specic requirements oftheitemandyourorganization.As
processesmature,theirdescriptionalsoshouldindicatehow
cyclesoflearning(includinginnovation),aswellasintegration
withotherprocessesandworkunits,occur.Althoughthe
ADLIfactorsarelinked,feedbacktoBaldrigeAwardapplicants
reectsstrengthsandopportunitiesforimprovementinanyor
allofthesefactors.
Resultsitemscallfordatashowingperformancelevels,trends,
andrelevantcomparisonsforkeymeasuresandindicators
oforganizationalperformance,andintegrationwithkey
organizationalrequirements.Resultsitemsalsocallfordataon
thebreadthoftheperformanceresultsreported.Tisisdirectly
relatedtodeploymentandorganizationallearning;ifimprove-
mentprocessesarewidelysharedanddeployed,thereshould
becorrespondingresults.Ascoreforaresultsitemisthusa
compositebasedonoverallperformance,takingintoaccount
thefourresultsfactors(LeTCI).
Importance as a Scoring Consideration
Tetwoevaluationdimensionsdescribedpreviouslyarecentral
toevaluationandfeedback.Acriticalconsiderationinevalu-
ationandfeedbackistheimportance ofyourreportedprocess
andresultstoyourkeybusinessfactors.Teareasofgreatest
importanceshouldbeidentiedinyourOrganizational
Proleandinitemssuchas2.1,2.2,3.2,5.1,5.2,and6.1.
Yourkeycustomerrequirements,competitiveenvironment,
workforceneeds,keystrategicobjectives,andactionplansare
particularlyimportant.
Assignment of Scores to Your Responses
Tefollowingguidelinesshouldbeobservedinassigningscores
toitemresponses.
Allareastoaddressshouldbeincludedintheitem
response.Also,responsesshouldreectwhatisimpor-
tanttotheorganization.
Inassigningascoretoanitem,rstdecidewhich
scoringrange(e.g.,50percentto65percent)ismost
descriptiveoftheorganizationsachievementlevelas
presentedintheitemresponse.Mostdescriptiveof
theorganizationsachievementlevelcanincludesome
gapsinoneormoreoftheADLI(process)factors
or theLeTCI(results)factorsforthechosenscoring
range.Anorganizationsachievementlevelisbasedona
holisticviewofeitherthefourprocessorthefourresults
factorsinaggregateandnotonatallyingoraveraging
ofindependentassessmentsagainsteachofthefour
factors.Assigningtheactualscorewithin thechosen
rangerequiresevaluatingwhethertheitemresponseis
closertothestatementsinthenexthigherornextlower
scoringrange.
Scoring System 67
Aprocessitemscoreof50percentrepresentsan
approachthatmeetstheoverallrequirementsof
theitem,thatisdeployedconsistentlyandtomost
workunits,thathasbeenthroughsomecyclesof
improvementandlearning,andthataddressesthe
keyorganizationalneeds.Higherscoresreectgreater
achievement,demonstratedbybroaderdeployment,
signicantorganizationallearning,andincreased
integration.
Aresultsitemscoreof50percentrepresentsaclear
indicationofgoodlevelsofperformance,benecial
trends,andappropriatecomparativedatafortheresults
areascoveredintheitemandimportant totheorganiza-
PROCESS SCORING GUIDELINES
SCORE PROCESS (for use with categories 16)
0% or 5%
Nos\srixaricaiiioacutoitemrequirementsisevident;informationisaxicoorai.(A)
Littleornooiiio\xixrofanys\srixaricaiiioacuisevident.(D)
Animprovementorientationisnotevident;improvementisachievedthroughreactingtoproblems.(L)
Noorganizationalaiicxxixrisevident;individualareasorworkunitsoperateindependently.(I)
10%, 15%,
20%, or 25%
Tebeginningofas\srixaricaiiioacutothenasiciiquiiixixrsoftheitemisevident.(A)
Teaiiioacuisintheearlystagesofoiiio\xixrinmostareasorworkunits,inhibitingprogressin
achievingthenasiciiquiiixixrsoftheitem.(D)
Earlystagesofatransitionfromreactingtoproblemstoageneralimprovementorientationare
evident.(L)
Teaiiioacuisaiicxiowithotherareasorworkunitslargelythroughjointproblemsolving.(I)
30%, 35%,
40%, or 45%
Aniiiicrivi,s\srixaricaiiioacu,responsivetothenasiciiquiiixixrsoftheitem,isevident.(A)
Teaiiioacuisoiiio\io,althoughsomeareasorworkunitsareinearlystagesofoiiio\xixr.(D)
Tebeginningofas\srixaricaiiioacutoevaluationandimprovementofxi\iiocissisis
evident.(L)
Teaiiioacuisintheearlystagesofaiicxxixrwithyourbasicorganizationalneedsidentiedin
responsetotheOrganizationalProleandotherprocessitems.(I)
50%, 55%,
60%, or 65%
Aniiiicrivi,s\srixaricaiiioacu,responsivetotheoviiaiiiiquiiixixrsoftheitem,is
evident.(A)
Teaiiioacuiswelloiiio\io,althoughoiiio\xixrmayvaryinsomeareasorworkunits.(D)
Afact-based,s\srixaricevaluationandimprovementiiocissandsomeorganizationaliiaixixc,
includingixxovariox,areinplaceforimprovingtheeciencyandiiiicrivixissofxi\
iiocissis.(L)
Teaiiioacuisaiicxiowithyouroverallorganizationalneedsidentiedinresponsetothe
OrganizationalProleandotherprocessitems.(I)
70%, 75%,
80%, or 85%
Aniiiicrivi,s\srixaricaiiioacu,responsivetothexuiriiiiiiquiiixixrsoftheitem,is
evident.(A)
Teaiiioacuiswelloiiio\io,withnosignicantgaps.(D)
Fact-based,s\srixaricevaluationandimprovementandorganizationaliiaixixc,including
ixxovariox,arexi\managementtools;thereisclearevidenceofrenementasaresultof
organizational-levelaxai\sisandsharing.(L)
Teaiiioacuisixriciariowithyourcurrentandfutureorganizationalneedsidentiedinresponseto
theOrganizationalProleandotherprocessitems.(I)
90%, 95%,
or 100%
Aniiiicrivi,s\srixaricaiiioacu,fullyresponsivetothexuiriiiiiiquiiixixrsoftheitem,is
evident.(A)
Teaiiioacuisfullyoiiio\iowithoutsignicantweaknessesorgapsinanyareasorworkunits.(D)
Fact-based,s\srixaricevaluationandimprovementandorganizationaliiaixixcthroughixxovariox
arexi\organization-widetools;renementandixxovariox,backedbyaxai\sisandsharing,are
evidentthroughouttheorganization.(L)
Teaiiioacuiswellixriciariowithyourcurrentandfutureorganizationalneedsidentiedin
responsetotheOrganizationalProleandotherprocessitems.(I)
tionsbusinessormission.Higherscoresreectbetter
trendsandlevelsofperformance,strongercomparative
performance,andbroadercoverageandintegrationwith
therequirementsofthebusinessormission.
BaldrigeAwardapplicantsdonotreceiveasingle,nalscore
aspartoftheirfeedback.Teyreceiveascoringrangeforeach
Criteriaitem,andtheyreceivescoresintwooverallbands:one
forprocessitemsandoneforresultsitems.Tedescriptorsfor
thesescoringbandsportraytheorganizationsoverallprogress
andmaturityintheprocessandtheresultsdimensions.Te
scoringbanddescriptorsareavailableontheBaldrigeWebsite.
RESULTS SCORING GUIDELINES
SCORE RESULTS (for use with category 7)
0% or 5%
Terearenoorganizationaliiiioixaxciiisuirsand/orpooriisuirsinareasreported.(Le)
Tiixodataeitherarenotreportedorshowmainlyadverseriixos.(T)
Comparativeinformationisnotreported.(C)
Risuirsarenotreportedforanyareasofimportancetotheaccomplishmentofyourorganizations
xissiox.(I)
10%, 15%,
20%, or 25%
Afeworganizationaliiiioixaxciiisuirsarereported,responsivetothenasiciiquiiixixrsofthe
item,andearlygoodiiiioixaxciiiviisareevident.(Le)
Someriixodataarereported,withsomeadverseriixosevident.(T)
Littleornocomparativeinformationisreported.(C)
Risuirsarereportedforafewareasofimportancetotheaccomplishmentofyourorganizations
xissiox.(I)
30%, 35%,
40%, or 45%
Goodorganizationaliiiioixaxciiiviisarereported,responsivetothenasiciiquiiixixrsofthe
item.(Le)
Someriixodataarereported,andamajorityoftheriixospresentedarebenecial.(T)
Earlystagesofobtainingcomparativeinformationareevident.(C)
Risuirsarereportedformanyareasofimportancetotheaccomplishmentofyourorganizations
xissiox.(I)
50%, 55%,
60%, or 65%
Goodorganizationaliiiioixaxciiiviisarereported,responsivetotheoviiaiiiiquiiixixrsofthe
item.(Le)
Benecialriixosareevidentinareasofimportancetotheaccomplishmentofyourorganizations
xissiox.(T)
Somecurrentiiiioixaxciiiviishavebeenevaluatedagainstrelevantcomparisonsand/or
nixcuxaixsandshowareasofgoodrelativeiiiioixaxci.(C)
Organizationaliiiioixaxciiisuirsarereportedformostxi\cusroxii,market,andiiociss
requirements.(I)
70%, 75%,
80%, or 85%
Goodtoexcellentorganizationaliiiioixaxciiiviisarereported,responsivetothexuiriiii
iiquiiixixrsoftheitem.(Le)
Benecialriixoshavebeensustainedovertimeinmostareasofimportancetotheaccomplishmentof
yourorganizationsxissiox.(T)
Manytomostriixosandcurrentiiiioixaxciiiviishavebeenevaluatedagainstrelevantcompari-
sonsand/ornixcuxaixsandshowareasofleadershipandverygoodrelativeiiiioixaxci.(C)
Organizationaliiiioixaxciiisuirsarereportedformostxi\cusroxii,market,iiociss,and
acrioxiiaxrequirements.(I)
90%, 95%,
or 100%
Excellentorganizationaliiiioixaxciiiviisarereportedthatarefullyresponsivetothexuiriiii
iiquiiixixrsoftheitem.(Le)
Benecialriixoshavebeensustainedovertimeinallareasofimportancetotheaccomplishmentof
yourorganizationsxissiox.(T)
Evidenceofindustryandnixcuxaixleadershipisdemonstratedinmanyareas.(C)
Organizationaliiiioixaxciiisuirsandiio;icrioxsarereportedformostxi\cusroxii,market,
iiociss,andacrioxiiaxrequirements.(I)
Results Scoring Guidelines 69
Learningisanessentialattributeofhigh-performingorga-
nizationsand,therefore,acriticalconceptinperformance
excellence.ItisakeytermusedthroughouttheCriteria
bookletandisoneofthefourscoringfactorsusedtoassess
thematurityofanorganizationsprocesses(pages66and68,
scoringsystemandscoringguidelines).
Eective,well-deployedorganizationallearningcanhelpan
organizationimprovefromtheearlystagesofreactingto
problems(05%inthescoringguidelines)tothehighest
levelsoforganization-wideimprovement,renement,and
innovation(70100%).Tereghtinganalogyillustrated
heredepictsaprogressionthroughthelevelsofmaturityfor
thisscoringdimension.
Learningisanessentialattributeofhigh-performingorga-
nizationsand,therefore,acriticalconceptinperformance
excellence.ItisakeytermusedthroughouttheCriteria
bookletandisoneofthefourscoringfactorsusedtoassess
thematurityofanorganizationsprocesses(pages66and68,
scoringsystemandscoringguidelines).
Eective,well-deployedorganizationallearningcanhelpan
organizationimprovefromtheearlystagesofreactingto
problems(05%inthescoringguidelines)tothehighest
levelsoforganization-wideimprovement,renement,and
innovation(70100%).Tereghtinganalogyillustrated
heredepictsaprogressionthroughthelevelsofmaturityfor
thisscoringdimension.
APPLYING FOR THE MALCOLM BALDRIGE NATIONAL QUALITY AWARD
TeMalcolmBaldrigeNationalQualityAwardisthehighest
levelofnationalrecognitionforperformanceexcellencethata
U.S.organizationcanreceive.Teawardpromotes
awarenessofperformanceexcellenceasanincreasingly
importantelementincompetitiveness
thesharingofinformationonsuccessfulperformance
strategiesandonthebenetsderivedfromusingthese
strategies
Organizationsapplyfortheawardinoneofsixeligibility
categories:
manufacturing
service
smallbusiness
education
healthcare
nonprot
Upto18awardsmaybegivenacrossthesixeligibility
categorieseachyear.Whateveryourawardeligibilitycategory,
youwillneedtheBaldrige Award Application Forms before
applying.Youcandownloadthedocument,aswellasllable
MicrosoftWordforms,fromhttp://www.nist.gov/baldrige/
publications/award_application.cfm.
Application Process
Applyingfortheawardisatwo-stepprocess:
Submit an eligibility certication package.Intherst

part,youcertifythatyourorganizationmeetseligibility
requirements.
Submit an award application package.Inthesecond

part,yousubmitanawardapplication(onCDoron
paper)thataddressestheCriteriaforPerformance
Excellence(pages426).
YoushouldusetheCriteriainthisbookletonlyifyour
organizationisapplyinginthebusinesseligibilitycategories
(manufacturing,service,orsmallbusiness)orthenonprot
eligibilitycategory.Ifyouapplyintheeducationorhealth
careeligibilitycategory,yourapplicationshouldaddressthe
EducationCriteriaforPerformanceExcellenceortheHealth
CareCriteriaforPerformanceExcellence,respectively.For
informationonorderingordownloadingEducation Criteria for
Performance Excellence andHealth Care Criteria for Performance
Excellence booklets,seepages7475orhttp://www.nist.gov/
baldrige/publications.
Ifyourorganizationlesaneligibilitycerticationpackage,
youmaynominateaseniormemberofyourstatoserveon
theBoardofExaminersfortheMalcolmBaldrigeNational
QualityAward.Toreserveaplaceontheboardforasta
member,submityoureligibilitycerticationpackageby
March1,2011,forthe2011awardcycleandbyFebruary
28,2012,forthe2012awardcycle.Forotherduedates,see
theboxbelow.Fordetailedinformationontheeligibility
certicationpackage,theawardapplicationpackage,deadlines,
andfees,seetheBaldrige Award Application Forms,whichcan
bedownloadedathttp://www.nist.gov/baldrige/publications/
award_application.cfm.
Application Review
AteamfromtheBoardofExaminers,whichadherestostrict
rulesregardingconictofinterest,reviewseachawardapplica-
tionagainsttheCriteriaforPerformanceExcellenceusingthe
followingprocess:
Independent and Consensus Review:Membersofthe

BoardofExaminersreviewtheapplication(1)inde-
pendentlyand(2)asateamledbyaseniororalumni
examiner.
Application Deadlines for the 2011 and 2012 Award Cycles
2011 2012
Eligibility certication packages
WithanominationtotheBoardofExaminers March1 February28
WithoutanominationtotheBoardofExaminers April12 April3
Award application packages
SubmittedonCD May3 May1
Submittedonpaper May17 May15
ForfeesrelatedtoapplyingfortheBaldrigeAward,seetheBaldrige Award Application Forms booklet
(http://www.nist.gov/baldrige/publications/award_application.cfm).
Applying for the Malcolm Baldrige National Quality Award 71
Site Visit Review:Higher-scoringorganizationsreceive

sitevisits.
Judges review:TePanelofJudgesconductsnal
reviewsandrecommendsawardrecipients.
Teidentityofallapplicantorganizationsremainscondential
unlesstheyreceivetheaward.TeBaldrigeProgramtreatsall
informationsubmittedbyapplicantsasstrictlycondential
andhasnumerousprotocolsandprocessesinplacetoprotect
theorganizationsandhelpensuretheintegrityoftheaward.
Award Recipients
Awardrecipientsmaypublicizeandadvertisetheirawards.
Recipientsareexpectedtoshareinformationabouttheir
successfulperformancestrategieswithotherU.S.organizations.
Fees for the 2011 and 2012 Award Cycles
Informationoncurrentfeesrelatedtoapplyingforthe
MalcolmBaldrigeNationalQualityAwardisavailableat
http://www.nist.gov/baldrige/publications/award_
application.cfm.Note:theprogramanticipatesarisein
feesinthe2012awardcycle,aswellaspossibleincreases
thereafter.Suchincreaseswouldbebasedonrelated
changesintheConsumerPriceIndex.
Feedback to Applicants
Feedbackisoneofthemostimportantpartsofthe
BaldrigeAwardprocess;itprovidesapathwayfor
improvement.
Attheconclusionofthereviewprocess,eachaward
applicantreceivesafeedbackreportawrittenassess-
mentbyanevaluationteamofleadingU.S.experts.Te
reportcontainsanapplicant-speciclistingofstrengths
andopportunitiesforimprovementbasedontheCri-
teria.Usedbyorganizationsintheirstrategicplanning,
thefeedbackreporthelpsorganizationsfocusontheir
customersandimproveoverallperformance.
Feedbackreportsaremailedatvarioustimesduringthe
awardcyclebasedonthestageofreviewanapplicant
reachesintheevaluationprocess.Strictcondentialityis
observedatalltimesandineveryaspectofapplication
reviewandfeedback.
If your organization is applying in either the education or the health care category,
refer to the appropriate sector-specifc Criteria booklet. For ordering information,
see pages 7475 or http://www.nist.gov/baldrige/publications.
SUMMARY OF ELIGIBILITY REQUIREMENTS
OrganizationsthatareheadquarteredintheUnitedStates,
includingU.S.subunitsofforeignorganizations,mayapply
fortheaward.Foreligibilitypurposes,overseasU.S.military
installationsandembassiesdonotconstituteU.S.territories.
Tobeeligible,yourorganizationmust
haveexistedforatleastoneyear
havetheoperationalpracticesassociatedwithallofits
majororganizationalfunctionsavailableforexamination
intheUnitedStatesoritsterritories
beabletoshareinformationonthesevenCriteria
categoriesatyourorganizationsU.S.facilitiesandTe
QuestforExcellenceConference.
Eligibilityrulesforthebusinessandnonprotcategoriesare
summarizedhere.Forsummariesofeducationandhealthcare
eligibilityrules,seetherespectiveCriteriabooklets.
Eligibility Categories
Business
Eligiblefor-protbusinessesincludepubliclyorprivately
ownedcorporations,jointventures,soleproprietorships,
partnerships,andholdingcompaniesinthreecategories:
Manufacturing organizations thatproduceandsell

manufacturedproductsormanufacturingprocesses,or
produceagricultural,mining,orconstructionproducts
Service organizations thatprovideorsellservices
Small businesses thathave500orfewerpaidemploy-

ees;areengagedinmanufacturingand/ortheprovision
ofservices;andarediscrete,independententities
Nonproft
Nonprotandgovernmentorganizationsincludinglocal,state,
andfederalgovernmentagencies;tradeassociations;charitable
organizations;socialserviceagencies;creditunions;andprofes-
sionalsocietiesareeligibletoapplyinthiscategory.
Aneducationorhealthcareorganizationmaychoosetoapply
intheeducationorhealthcarecategory,usingtheEducation
CriteriaforPerformanceExcellenceortheHealthCare
CriteriaforPerformanceExcellence,or,asappropriate,in
theservice,smallbusiness,ornonprotcategory,usingthe
CriteriaforPerformanceExcellence(theBusiness/Nonprot
Criteria).
Ifyouhaveaquestionabouteligibility,seethecomplete
descriptionofeligibilityrequirementsintheBaldrigeAward
ApplicationForms(http://www.nist.gov/baldrige/publications/
award_application.cfm)orcalltheBaldrigePerformance
ExcellenceProgramat(301)975-2036.
Eligibility Restrictions
Parent Organizations and Subunits
Telargerorganizationthatholdsorhascontrolofasubunit
istheparentthehighestlevelofanorganizationthatiseli-
gibletoapplyfortheaward.Tobeeligible,subunitsmustbe
recognizableasdiscreteentities;beeasilydistinguishablefrom
theparentanditsothersubunits;beself-sucientenoughto
beexaminedinallsevenCriteriacategories;haveacleardeni-
tionoforganizationreectedintheirliterature;andfunction
asbusinessoroperationalentities,notasactivitiesassembled
towriteanawardapplication.
Asubunitanditsparentmaynotbothapplyforawardsin
thesameyear.Dependingonthenumberofemployees,upto
vesubunitsofasingleparentorganizationmayapplyforthe
awardduringthesameawardcycle.
Award Recipients
Awardrecipientsareineligibletoapplyfortheawardagain
forveyears.However,theymaysubmitawardapplications
toreceivefeedbackonlyduringthoseveyears.Afterve
years,recipientsmayapplyfortheawardor,iftheywish,for
feedbackonly.
Similarly,ifasubunitwithmorethan50percentofthe
totalemployeesoftheparentreceivesanaward,theparent
organizationandallitssubunitsareineligibletoapplyforthe
awardforveyears.Teymaysubmitawardapplicationsto
receivefeedbackonlyduringthoseveyears.Ifanysubunit
ofanorganizationreceivesanaward,thatsubunitandallits
subunitsareineligibletoapplyfortheawardforveyears,but
theymayalsosubmitawardapplicationstoreceivefeedback
duringthoseveyears.
Summary of Eligibility Requirements 73
HOW TO OBTAIN BALDRIGE PERFORMANCE EXCELLENCE PROGRAM MATERIALS
Note: If you are planning to apply for the award,
you will need the Baldrige Award Application
Forms in addition to the Criteria booklet.
Criteria for Performance Excellence and
Award Application Forms
Individual Copies
YoumaydownloadtheCriteriabookletsandtheBaldrige
AwardApplicationFormsfromhttp://www.nist.gov/
baldrige.IndividualcopiesoftheCriteriabookletsand
papercopiesoftheBaldrigeAwardApplicationFormsare
availablefreeofchargefrom
NationalInstituteofStandardsandTechnology
AdministrationBuilding,RoomA600
100BureauDrive,Stop1020
Gaithersburg,MD20899-1020
Telephone:(301)975-2036
Fax:(301)948-3716
E-Mail:baldrige@nist.gov
Bulk Orders
PacketsoftencopiesoftheCriteriabookletsareavailablefor
$39.95perpacket(plusshippingandprocessing)fromthe
AmericanSocietyforQuality(ASQ).(SeeOrderingfrom
ASQonpage75.)
20112012 Criteria for Performance Excellence
(referredtoastheBusiness/NonprotCriteria)Item
NumberT1535
20112012 Education Criteria for Performance
ExcellenceItemNumberT1534
20112012 Health Care Criteria for Performance
ExcellenceItemNumberT1536
Baldrige Educational Materials
Eachyear,theBaldrigePerformanceExcellenceProgram
developsmaterialstotrainmembersoftheBoardofExaminers
andshareinformationonthesuccessfulperformanceexcel-
lencestrategiesofawardrecipients.Tefollowingitemsare
samplesofthesematerials.Forthefulllist,seehttp://www
.nist.gov/baldrige.
Case Study Packets
Casestudypacketscontainacasestudy(actionalBaldrige
Awardapplication),ascorebook,afeedbackreport,andan
executivesummary.WhenusedwiththerelatedCriteria for
Performance Excellence booklet,thecasestudiesarevaluable
resourcestoBaldrigeAwardapplicantsandotherCriteria
users.Teyillustratetheawardapplication,review,and
feedbackprocess;showtheformatandgeneralcontentofan
application;andfurnishinformationonscoring.Casestudy
packetsbasedonctionalorganizationsfromthebusiness,
nonprot,healthcare,andeducationsectorsareavailablein
PDFformatfromhttp://www.nist.gov/baldrige/publications.
Tefollowingareafewexamplesofthesecasestudypackets:
2010NonprofitCaseStudyPacket:NuGrain
Laboratories(basedonthe20092010 Criteria for
Performance Excellence)
2009EducationCaseStudyPacket:Nightingale
College of Nursing(basedonthe20092010 Education
Criteria for Performance Excellence)
2008 Manufacturing Case Study Packet: Novel
Connect (basedonthe2008 Criteria for Performance
Excellence)
2007 Nonprofit Case Study Packet: Share Food
(basedonthe2007 Criteria for Performance Excellence)
2006HealthCareCaseStudyPacket:Arroyo
Fresco Community Health Center(basedonthe
2006 Health Care Criteria for Performance Excellence)
2005BusinessCaseStudyPacket:Landmark
Dining, Inc.(basedonthe2005 Criteria for Performance
Excellence)
2004EducationCaseStudyPacket:SandyHill
School District(basedonthe2004 Education Criteria for
2003BusinessCaseStudyPacket:GeoOrb
Polymers, North America(basedonthe2003 Criteria
for Performance Excellence)
2002 Health Care Case Study Packet: CapStar
Health System (basedonthe2002 Health Care Criteria
for Performance Excellence)
2001BusinessCaseStudyPacket:TriView
National Bank(basedonthe2001 Criteria for
Ordering from ASQ
ASQoersfourconvenientwaystoorder:
Forfastestservice,calltoll-free(800)248-1946inthe
UnitedStatesandCanada(inMexico,dialtoll-free
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cardorpurchaseordernumber,and(ifapplicable)
yourASQmembernumberready.
FaxyourcompletedorderformtoASQat
(414)272-1734.
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The Baldrige Performance Excellence Program welcomes your comments on the
Criteria or any of the Baldrige Award processes. Please address your comments to
20112012CriteriaforPerformanceExcellence
NationalInstituteofStandardsandTechnology
E-Mail:baldrige@nist.gov
WebSite:http://www.nist.gov/baldrige
How to Obtain Baldrige Performance Excellence Program Materials 75
INDEX OF KEY TERMS
Note: Page number references to C2 and C3 refer to the inside front cover and inside back cover, respectively.
A
achievementlevel,61,67
actionplans,7,1012,1619,2324,
28, 31,38,43,54,56,58,62,67, 69
actionableinformation,13,39
agility,7,11,16, 22,2728, 36,45,
4951,55,62
alignment,11,16,18,31,3738,40,
4244,46,5456,59,6566, 68
AmericanSocietyforQuality(ASQ),
C2, 7475
analysis,1, 3, 1213, 1617, 23, 28, 31,
3844, 46, 52, 56, 6162, 65, 68
anecdotal,31,56,68
approach,6, 810, 22, 2527, 3031,
34, 3738, 43, 45, 4951, 5559,
61, 63, 6566, 68;see also systematic
approach
areastoaddress(areas),1,27, 29,31,67
assessment,34,6,9, 17, 19,27, 2930,
40,4748,55,61,72, C3
awardcycle,7173
awardrecipients,C2, 2, 72, 74, C3
B
basicrequirements;see requirements
benchmark(s),11, 13, 16, 35, 40, 46,
5152, 5657, 60, 66, 69
bestpractices,1617,37,40,49,5152,
56, 60
BoardofExaminers,C2, 71,74, C3
BoardofOverseers,C2
businesscategory,71, 73
C
capability;see workforcecapability
capacity;see workforcecapacity
categories
awardeligibilitycategories,71, 73,
C3
Criteriacategories,1, 3, 5, 28, 30,
32, 34, 50, 54, 66, 6869, 71, 73
changemanagement,18, 52
collaborators,45,1617,21,4143,
4546,57,60,6263
community
hiringandcustomer,18, 57
service,5,43,53
comparativedata,6,16,2326,30,
4041,57,69
compensationandrecognition,8,
1920, 27, 38,43
competitors,56,1011,1314,16,
2324,31,33,35,3842,50,52,57,
61,63,66
complaint,1314,40, 4748,50, 60, 63
compliance
legal,89, 25, 48
regulatory,89, 25, 48,60
condentiality,17,72
conictofinterest,9, 71
continuousimprovement,16,20,45,51
corecompetencies,45,8,10,12,
1819,21,23,31,3438,41,43,
4546,51,54,57,5960,62,63
corevaluesandconcepts,4951, 5455
CriteriaforPerformanceExcellence,1,
34,27, 29,49,56,61,71,7375,
C3
CriteriaResponseGuidelines,29
criticalsuccessfactors,45
customer,57
customer-drivenexcellence,37,
4950,57
engagement,3, 7,11,1314,24,
3637,3940,43,48,50,5758,
63
listening,13, 24, 27, 39, 63;see also
voiceofthecustomer
loyalty,15, 27, 3942, 50, 54, 57
retention,15,47, 50,57,60
satisfaction,1314,22,24,26,39,
41,4647,60
support,4,6,1315,22,28, 40,
51,63
cycletime,8,2223,4243,4546,48,
5152,5758,6061,63
D
deployment,6,9,1112,3032,40,
5557,59,61,6668
distancelearning,42,44,51
distributors,5,10,57
diversity,4,11,24,55,57,63
E
e-learning,42
EducationCriteriaforPerformance
Excellence,71,7374
eective,57
eligibility,71,73
employee;see also workforce
contract,18, 63
empowerment,36,38,58,64
engagement;see workforceengagement
ethics(ethicalbehavior),79,19,25,
3536,4849,5253,55, 5859
excellence;see performanceexcellence
F
feedback,C2, 1,9,1314,31,39,49,
55,59,6667,69,7274
fees,7172
nancialperformance,26, 42, 46, 48,
52, 6061, 63
scalaccountability,8,25,48,60
focusonresultsandcreatingvalue,49,
54
focusonthefuture,49,52
FoundationfortheMalcolmBaldrige
NationalQualityAward,C2, C3
G
gap,4, 11, 31, 6768
goals,6,8,1011,18,23,31,33,39,
41,46,5152,5561,6566;see
also quantitativegoalsandstretch
goals
governance,1,35,79,23,25,3436,
46,4849,5253,55,58
H
HealthCareCriteriaforPerformance
Excellence,71,7374
highperformance,7,1819,33,3536,
4344,57
high-performancework,1920,4344,
51,5859
how,31, 59
humanresourceplans,6,11,24,38,43,
46;see also workforceplans
I
improvement
breakthrough,31, 33, 41, 5556,
5860, 66
continuous,16,20,45,51
discontinuous(nonincremental),33,
56, 5859
indicators;see measuresandindicators
individualdevelopmentplans,44
innovation,C2, 67,1011,1314,
1617,19,23,31,3538,4043,
4547,49,5152,55,5859,61,
6566,68,70;see also managingfor
innovation
integration,6,3032,3940,52,
5456,59,61,6669
intelligentrisks,7,10,38,5152
ISO,6, 11, 22, 47
itemrequirements;see requirements
items,1,3,5,78,1112,17,20,23,
2934,4647,5557,5960,6263,
6669,7475
K
key,59
keyfactors,[4, 6], 910, 18, 3637, 46,
55, 6364, 67
knowledgeassets,1617, 4243, 51, 59
knowledgemanagement,1,3,12,
1617,28, 40, 42, 4445
L
leadership
competitive,38
visionary,49
leadershipsystem,78,46,59
LeanEnterpriseSystem,6,22, 45
learning,5960, 66
organizationalandpersonal
learning;see organizational
levels,60, 66
linkages,1, 5,12,29,4546, 5456
listeningandlearning,39;see also
customerlistening
M
MalcolmBaldrigeNationalQuality
Award,C2, ii,2,7172, C3
managementbyfact,49
managingforinnovation,49, 52
maturity(organizationallearning),6,9,
3031,38,51, 55,59, 63,6970
measurement,C2, 1, 3, 1112,1617,
28, 32,40,46,52,6061,63
measuresandindicators,60
mentoring,20,36,44
mission,47,9,18,20,30,34,45,
5760,6364,69
multiplerequirements;see requirements
N
NationalInstituteofStandardsand
Technology,C2, 7475
nonprotcategory,71, 73, C3
O
opportunitiesforimprovement(OFIs),
1920,35,55,61,66,72;see
also strengths
organizational
andpersonallearning,37, 46,49,
51,6061
culture,4,7, 14, 19,27, 36, 40, 48,
50, 58, 63
knowledge,10,17,2223,40,
4243,54
OrganizationalProle,1,36,910,14,
2223,3032,34,55,6668
overallrequirements;see requirements
P
partners,45,78,1011,1617,
21,38,4143,4546,49,5152,
54,5760,6263;see also valuing
workforcemembersandpartners
performance,60;see also results
customer-focused,23, 47, 60
excellence,C2, 39,49,54,61,63,
7071
nancialandmarketplace,26,
48, 6061, 63;see also financial
performance
management,1,9,19,3031,36,
49,52,54,56,59,61
operational,23,37, 42,4547,
52, 60, 63;see also results,process
effectiveness
product,23,4647,60,63
projections,11,4142,58,6061
workforce,19,42
process,61, 66
processes
businessprocesses,39,45
supportprocesses,2122,45,63
workprocessdesign,22, 28, 4546
workprocessmanagement,22, 28,
45
workprocesses,3, 16,18,2122,
31,3738,45,52,5659,6364
productivity,7,19,2123,37,40,42,
4647,5152,56,58,6061,63
projections,1011,17,28, 38,
4142,52,58,6061,69;see
also performanceprojections
proprietaryinformation,C2
PublicLaw100-107,C3
purpose,61
Q
quantitativegoals,58, 65
QuestforExcellenceConference,C2, ii,
73, C3
R
recruitment,35,56
regulatoryenvironment,4,10,35,62
requirements
basic,56,6869
item,5,9,2931,56,5960,66,
6869
multiple,29,60,6869
overall,60,6869
resourceallocation,1011,37, 52, 62
resourceconservation,89, 25, 36,
5253
Index of Key Terms 77
results,61, 66;see also performance
and focusonresultsandcreatingvalue
business,19,5657
customer-focused,24,46,48
nancialandmarket,26, 48
leadershipandgovernance,25, 48
processeectiveness,23,4647
product,23, 4647
workforce-focused,20,24, 48
rework,21
risks,78,1011,25,3738,52,62
role-modelorganization,10, 36, 53
S
safety
workforce,4, 9, 19, 2425, 4243,
48
workplace,18, 44
sanctions,48
scoringguidelines,5,2933,5456,63,
6870
scoringrange,67,69
scoringsystem,3,6,9,29,31,5657,
5961,66, 70
segment,5,10, 1314, 1819, 26,40,
6162, 66
seniorleaders,4,79,12,19,25,3436,
40,45,4849,54,56,58,6263
SixSigma,6,8,22,3233,45,47
socialmedia,13,35,40,42
societalresponsibility,3, 6,11,25,35,
46,49, 53
stakeholders,4,78,1011,22, 2527,
36,43,4546,49,52,5455,5759,
6163
strategicadvantages,6, 10,27, 35, 37,
62
strategicchallenges,1,6,10,1819,
3435,37,62
strategicobjectives,78,1012,1618,
23,31,3738,40,43,45,47,51,54,
56,58,62,67
strengths,1011,35,3738,51,55,
61,66,72;see also opportunitiesfor
improvement(OFIs)
stretchgoals,39,41,58
successionplanning,7,19,36,52,58
suppliers,45,78,1011,1617,
2122,35,38,4143,4546,5152,
54,5759,62,63
supply-chainmanagement,8, 22, 2728,
4547, 63
sustainability,10,2122,26,3437,
3940,4243,45,4852,6062,66
sustainable,7,35,57,6263
systematic,14,31,44,51,56,63,66,
68
systematicapproach,31, 65, 68;see also
approach
systemsperspective,27, 49,54,55
T
technology,3, 56,910,12,1617,
2122,35,37,4243,4546,57,59,
62
trenddata,32,66,69
trends,63, 66
V
value,67,12,15,2122,2930,36,
42,4546,4852,5455,57,5961,
63
valueadded,42,61
valuecreation,12,22,45,63;see
also focusonresultsandcreatingvalue
values,1,4,7,25,3436,43,49,
5455,5859,61,63
valuingworkforcemembersand
partners,49, 51
vision,4,7,20,25,3435,5859,
6364
visionaryleadership;see leadership
voiceofthecustomer,3, 13,28, 39,50,
63
W
wastereduction,42,52,60
what,31
workforce,18,63;see valuing
workforcemembersandpartners
capability,1112,18,24,38,
4243,57,62,64
capacity,1112, 1819, 24, 28, 38,
4243, 48,57,64
engagement,3, 19,24,2728,
4345,48,5758,64
plans,11,24,38
turnover,26, 42, 45, 48, 60
workprocesses,63
worksystems,3, 7,12,18,2123,31,
3738,43,45,5152,54,5657,
6263
NOTES
Notes 79
NOTES
A Public-Private Partnership
Building active partnerships in the public sectorand among the
private sector and all levels of governmentis fundamental to
the success of the Baldrige Performance Excellence Program in
improving national competitiveness. Private-sector support for the
program in the form of funds, volunteer eorts, and participation
in public outreach continues to grow.
To ensure the continued growth and success of these partnerships,
each of the following organizations plays an important role.
Foundation for the Malcolm Baldrige
Te Foundation for the Malcolm Baldrige National Quality
Award was created to foster the success of the program. Te
foundations main objective is to raise funds to permanently
endow the award program.
Prominent leaders from U.S. organizations serve as foundation
trustees to ensure that the foundations objectives are accom-
plished. A broad cross section of organizations throughout the
United States provides nancial support to the foundation.
National Institute of Standards
and Technology
Te National Institute of Standards and Technology (NIST),
an agency of the U.S. Department of Commerce, manages the
Baldrige Performance Excellence Program. NIST promotes
U.S. innovation and industrial competitiveness by advancing
measurement science, standards, and technology in ways that
enhance economic security and improve our quality of life. NIST
carries out its mission in four cooperative programs, including
the Baldrige Performance Excellence Program. Te other three
are the NIST laboratories, conducting research that advances the
nations technology infrastructure and is needed by U.S. industry
to continually improve products and services; the Hollings
Manufacturing Extension Partnership, a nationwide network
of local centers oering technical and business assistance to
smaller manufacturers; and the Technology Innovation Program,
which provides cost-shared awards to industry, universities, and
consortia for research on potentially revolutionary technologies
that address critical national and societal needs.
Te American Society for Quality (ASQ) assists in administering
the award program under contract to NIST. ASQs vision is to
make quality a global priority, an organizational imperative, and
a personal ethic and, in the process, to become the community
for all who seek quality concepts, technology, or tools to improve
themselves and their world.
Board of Overseers
Te Board of Overseers advises the Department of Commerce
on the Baldrige Performance Excellence Program. Te board is
appointed by the secretary of commerce and consists of distin-
guished leaders from all sectors of the U.S. economy.
Te board evaluates all aspects of the program, including the
adequacy of the Criteria and processes for determining award
recipients. An important part of the boards responsibility is to
assess how well the program is serving the national interest and, as
needed, recommend changes and improvements to the secretary
of commerce and to the director of NIST.
Board of Examiners
Te Board of Examiners evaluates award applications and prepares
feedback reports. Te Panel of Judges, part of the Board of
Examiners, makes award recommendations to the director of
NIST. Te board consists of leading experts from U.S. businesses
and education, health care, and nonprot organizations. NIST
selects members through a competitive application process. Te
current board consists of more than 575 members. Of these, 12
(who are appointed by the secretary of commerce) serve as judges,
and approximately 90 serve as senior examiners. All members of
the board must take part in an Examiner Preparation Course.
Board members also play a signicant role in sharing information
about the program. Teir membership in hundreds of profes-
sional, trade, community, and state organizations helps them
disseminate this information.
Award Recipients
Award recipients are required to share information on their
successful performance strategies with other U.S. organizations.
However, recipients are not required to share proprietary informa-
tion, even if such information was part of their award application.
Te principal mechanism for sharing information is Te Quest for
Excellence Conference, held annually. Two regional conferences
are also held annually to oer additional forums for sharing the
applicants best practices.
For more than 20 years, award recipients have demonstrated their
commitment to improving U.S. competitiveness and furthering
the U.S. pursuit of performance excellence by also generously
sharing information with hundreds of thousands of companies,
education organizations, health care organizations, government
agencies, nonprot organizations, and others. Tis sharing far
exceeds expectations and program requirements. Tese eorts
have encouraged many other organizations in all sectors of the
U.S. economy to undertake their own performance improvement
eorts.
The Alliance for Performance Excellence
Te Alliance for Performance Excellence (http://www.baldrigepe
.org/alliance), a nonprot national network, aims to enhance the
success and sustainability of its member Baldrige-based programs.
Te Alliances member organizations promote the use of the
Baldrige Criteria; disseminate information on the Baldrige Award
process and Baldrige concepts; serve as a feeder system for the
national program, providing a signicant number of examiners
and award applicants; network with the Baldrige Performance
Excellence Program and each other; and receive and use the
Baldrige Criteria for Performance Excellence and other program
and training materials from the national program.
THE MALCOLM BALDRIGE NATIONAL QUALITY AWARD THE BALDRIGE PERFORMANCE EXCELLENCE PROGRAM AND ITS IMPACTS
Te Malcolm Baldrige National Quality Award was created by Public Law 100-107 and signed into law on August 20, 1987. Public
Law 100-107 led to the creation of a new public-private partnership. Principal support for the program comes from the Foundation for the
Malcolm Baldrige National Quality Award, established in 1988.
Te award is named for Malcolm Baldrige, who served as secretary of commerce from 1981 until his death in 1987. His managerial excel-
lence contributed to long-term improvement in the eciency and eectiveness of government.
In 2010, as a result of a branding study, the programs name was changed to the Baldrige Performance Excellence Program.
On August 20, 1987, President Ronald W. Reagan signed the
Malcolm Baldrige National Quality Improvement Act of 1987,
establishing a program that many credit with making quality
a national priority and helping to revitalize the U.S. economy
during the 1990s. Today, the Baldrige Performance Excellence
Program and the Baldrige Award recipients are imitated and
admired worldwide. More than 30 states and many countries,
including Japan, have programs modeled after Baldrige. In
particular, the Baldrige Criteria for Performance Excellence are
widely used as an assessment and improvement tool. Millions of
print and electronic copies of the Criteria have been distributed.
In 1999, categories for education and health care were added to
the original three categories: manufacturing, service, and small
business. In 2007, a nonprot category was added.
Impacts of the program have been far-reaching:
Since the Baldrige Programs inception in 1987, there have
been nearly 1,500 applicants for the Malcolm Baldrige
National Quality Award. Tese applicants have received vigor-
ous evaluations by the Board of Examiners, using the Criteria
for Performance Excellence.
Trough 2009, 84 award recipients have been selected across
six categories: 28 manufacturing companies, 15 service compa-
nies, 19 small businesses, 8 education organizations, 11 health
care organizations, and 3 nonprot organizations.
Tere are more than 35 active state and local, regional,
and sector-specic quality award programs based in states
throughout the country. All of these programs are modeled
to some degree after the Baldrige Performance Excellence
Program, and their award criteria are based on the Criteria for
Performance Excellence.
From 1996 to 2009, 45 of the 60 Baldrige Award recipients
were previous winners in state award programs.
Since 1991, there have been nearly 11,800 applications for
state and local quality awards.
Since 1988, the Baldrige Program has trained about 8,800
examiners. Since 1991, the state and local programs have
trained more than 39,000 examiners.
Te Quest for Excellence conferences have reached
approximately 21,300 attendees over the Baldrige Programs
history.
The Baldrige Program thanks the following 2008 and 2009 award recipients for the use of the photographs in
this booklet: Cargill Corn Milling (2008, manufacturing); Honeywell Federal Manufacturing & Technologies, LLC
(2009, manufacturing); MidwayUSA (2009, small business); and the VA Cooperative Studies Program Clinical
Research Pharmacy Coordinating Center (2009, nonprot).
Cover art Havlin Levente/Shutterstock
Criteria for
Performance
Excellence
20112012
National Institute of Standards and Technology
United States Department of Commerce
Telephone: (301) 975-2036 Fax: (301) 948-3716
E-Mail: baldrige@nist.gov Web Site: http://www.nist.gov/baldrige
TheNationalInstituteofStandardsandTechnology(NIST),anagencyoftheU.S.DepartmentofCommerce,manages
the Baldrige Performance Excellence Program. NIST has a 100-plus-year track record of serving U.S. industry, science,
and the public with a mission and approach unlike any other agency of government. That mission is to promote U.S.
innovationandindustrialcompetitivenessbyadvancingmeasurementscience,standards,andtechnologyinwaysthat
enhanceeconomicsecurityandimproveourqualityoflife.NISTcarriesoutitsmissioninfourcooperativeprograms,
including the Baldrige Performance Excellence Program. The other three are the NIST laboratories, conducting research
thatadvancesthenationstechnologyinfrastructureandisneededbyU.S.industrytocontinuallyimproveproductsand
services; the Hollings Manufacturing Extension Partnership, a nationwide network of local centers offering technical
andbusinessassistancetosmallermanufacturers;andtheTechnologyInnovationProgram,whichprovidescost-shared
awardstoindustry,universities,andconsortiaforresearchonpotentiallyrevolutionarytechnologiesthataddresscritical
nationalandsocietalneeds.
Call the Baldrige Program or visit our Web site for
tools to help you improve the performance of your organization
information on applying for the Baldrige Award
information on becoming a Baldrige examiner
profiles of Baldrige Award recipients
individual copies of the Criteria for Performance ExcellenceBusiness/Nonprofit, Education, and Health Care
case studies and other Baldrige educational materials
600 North Plankinton Avenue
Milwaukee, WI 53203
Telephone: (800) 248-1946 Fax: (414) 272-1734
E-Mail: asq@asq.org Web Site: http://www.asq.org
By making quality a global priority, an organizational imperative, and a personal ethic, the American Society for Quality
(ASQ) becomes the community for all who seek quality technology, concepts, or tools to improve themselves and their
world.ASQadministerstheMalcolmBaldrigeNationalQualityAwardundercontracttoNIST.
ContactASQtoorder
bulk copies of the Criteria
award recipients DVDs
T1535
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20112012

Criteria for Performance ExcellenceItem Listing 3

Item1.2,Governance and Societal Responsibilities,

Item3.1,nowVoice of the Customer,asksabouthow

Item4.1,Measurement, Analysis, and Improvement

Item7.1,nowProduct and Process Outcomes,

Item7.4,nowLeadership and Governance Outcomes,

Item7.5,nowFinancial and Market Outcomes,

performance levels thatarereportedonameaningful

Submit an eligibility certication package.Intherst

Submit an award application package.Inthesecond

Independent and Consensus Review:Membersofthe

Site Visit Review:Higher-scoringorganizationsreceive

Manufacturing organizations thatproduceandsell

Service organizations thatprovideorsellservices

Small businesses thathave500orfewerpaidemploy-

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