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After ten years, everyone is still a winner when it comes to the Baldrige. Learn how organizations adopt the Baldrige criteria to learn and grow.
Perhaps you have read articles about the declining number of Baldrige applications in the last several years and concluded that interest in the Baldrige criteria is waning. Nothing could be further from the truth. With more than 56 state and local and dozens of international award programs modeled after Baldrige, the total number of organizations applying for recognition, at all levels, is dramatically increasing.
And not only companies are getting involved. Government, education, health care, and nonprofit organizations are following business' lead in applying the criteria. In 1997, 1,081 organizations applied for local and state awards, up from 804 in 1996.
Since 1992, DeBaylo Associates, based in Princeton, New Jersey, have co-sponsored an annual Baldrige benchmarking workshop, where many of the companies that actively use a Baldrige-like process come together to share their best practices and lessons learned. From these workshops and our extensive assessment experience, we have identified ten key reasons for the effectiveness of the Baldrige process.
1 ) Assessment and improvements drive business results.
Of all the reasons the Baldrige process has remained vital, the first reason is the most powerful: the process produces results.
The evidence is mounting of a direct correlation between Baldrige "scores" and business performance. The stock performance analyses done by the National Institute of Standards and Technology (NIST) show that Baldrige winners outperform the Standard and Poor's (S&P) Index by ratios up to 3:1. Similarly, companies that received site visits but did not win an award beat the S&P by ratios of 2:1.
Xerox's business turnaround resulted in their winning the Baldrige Award in 1989 and the improvement effort has continued. Xerox Business Services, the division which won 1997 Baldrige honors, has achieved an average annual revenue growth rate of 30 percent and an average annual profit improvement of 60 percent since 1992. In the same period, it has had a 55 percent increase in new business locations.
2) Criteria that encourage concepts and values.
Companies use the Baldrige criteria in different ways, some for self-assessment, others as part of internal recognition processes. Some use part of the criteria; others tailor...