1. Baldrige National Quality Program
The Path to Excellence and
Some Path-Building Tools

2. The Baldrige Framework
“The Baldrige Award enjoys very broad, positive recognition among leaders in each of the Baldrige Award-eligible sectors More than 70 percent of leaders surveyed among Fortune 1000 companies said they are likely to use the Criteria for Performance Excellence.”
Booz Allen Hamilton
Results:
Better employee relations
Higher productivity
Greater customer loyalty
Increased market share
Improved profitability
The Baldrige National Quality Program’s Criteria for Performance Excellence are nationally and internationally renowned as a comprehensive framework that any organization can use to improve overall performance. Seven Categories make up the Criteria: Leadership; Strategic Planning; Customer Focus; Measurement, Analysis, and Knowledge Management; Workforce Focus; Process Management; and Results. The Criteria are used by thousands of organizations of all kinds for self-assessment and training and as a tool to develop performance and business processes. For many organizations, Criteria utilization results in better employee relations, higher productivity, greater customer loyalty, increased market share, and improved profitability. According to a report by Booz Allen Hamilton, a leading consulting firm, “The Baldrige Award enjoys very broad, positive recognition among leaders in each of the Baldrige Award-eligible sectors More than 70 percent of leaders surveyed among Fortune 1000 companies said they are likely to use the Criteria for Performance Excellence.”

3. Lean is focused on the elimination of all nonvalue-adding
activities and waste from an organization’s processes.
Map and
understand
value stream
Waste includes
Scrap
Rework
Inspection
Inventory
Queuing time
Transporting materials
or products
Redundant motion
Anything for which a final customer would not want to pay
Goals:
Increase productivity
Eliminate waste
Maximize resource
utilization
Customer-
defined value
Make value
stream flow
Lean is a series of tools and techniques utilized in managing processes in an organization. The tools used differ from application to application but are used for both incremental and breakthrough improvements and focus on the elimination of all nonvalue-adding activities and waste from the organization. Types of waste to be eliminated or reduced include scrap, rework, inspection, inventory, queuing or wait time, transportation of materials or products, redundant motion, and nonvalue-adding process steps—basically anything for which a final customer would not want to pay. Lean-focused organizations extend the concepts of waste elimination and value-adding processes to suppliers, partners, and customers. A Lean organization is said not to reach full potential until all aspects of its value chain have eliminated waste and are operating at full value-added potential.
Continuous
process
improvement

4. Six Sigma Six Sigma concentrates on variation
reduction by using statistical
methods to lower process defect
rates to less than 3.4 defects per million opportunities.
Six Sigma concentrates on variation reduction by using statistical methods to lower process defect rates to less than 3.4 defects per million opportunities. Six Sigma focuses on implementing measurement systems for work processes whereby variation reduction and process improvement may be identified through Six Sigma projects. These projects may include anything from improving the processes involved in mass-producing component piece parts to completely redesigning, for example, an aircraft completion process so that the aircraft requires less maintenance. Two Six Sigma methodologies, DMAIC (define, measure, analyze, improve, and control) and DMADV (define, measure, analyze, design, and verify) are utilized to this end. DMAIC is an improvement system for existing processes that fall below specifications and need incremental improvement. DMADV (sometimes referred to as Design for Six Sigma [DFSS]) is a system used to develop new processes or products at Six Sigma-quality levels.
Six Sigma Methodologies:
DMAIC - define, measure, analyze, improve, and control
DMADV - define, measure, analyze, design, and verify

5. The Baldrige Criteria
The Criteria for Performance Excellence emphasize
Continuous performance improvement
Innovation
Integration
Results
Sustainability
The Criteria for Performance
Excellence focus on common requirements and are
Nonprescriptive
Holistic
Inclusive
Adaptable
Integrative
The Baldrige System
The emphasis of the Baldrige Criteria for Performance Excellence is on continuous performance improvement, innovation, results, and sustainability, not on being an Award recipient. The Criteria do not prescribe how your organization should be structured; that your organization should or should not have departments for quality, planning, or other functions; or that different units in your organization should be managed in the same way.
The Criteria are holistic, inclusive, and adaptable. The Criteria focus on common requirements, rather than procedures, tools, or techniques. Other improvement efforts (e.g., International Organization for Standardization [ISO], Six Sigma, Lean manufacturing, or accreditation) may be integrated into the organization’s performance management system and included as part of a response to Criteria requirements. The Criteria can be used by large and small businesses, education and health care organizations, government and nonprofit organizations, and organizations with one site or worldwide locations.
The Baldrige Criteria focus on key areas of organizational performance, including product outcomes; customer-focused outcomes; financial and market outcomes; workforce-focused outcomes; process effectiveness outcomes, including key operational performance results; and leadership outcomes.

6. The Baldrige Criteria, Lean, and Six Sigma are complementary,
not mutually exclusive. Many organizations use Baldrige to
develop an overall performance map to identify areas that need
improvement, and then they use Six Sigma, Lean, or both tools to
design operations or improve processes within the organization. .
Compatibility Among the Baldrige Criteria, Six Sigma, and Lean
The Baldrige Criteria, Lean, and Six Sigma are complementary, not mutually exclusive. All three are results-focused and team-based, require management by fact, are customer- and market-focused, and require strong leadership with embedded change management skills to actualize long-term improvement.
The Criteria can be used by organizations at all levels of maturity. Many organizations that are just beginning their improvement efforts start by using the Criteria for self-assessment. The Baldrige Criteria are useful for identifying what areas within an organization are most ripe for an improvement focus. Continuous improvement also is an integral part of the cyclical steps of Six Sigma and Lean.
For example, in the control stage of a Six Sigma project, data are generated on an ongoing basis, and they are monitored continuously to identify needs for further improvement. Similarly, in a Lean environment, continuous work is done to identify and eliminate waste-generating processes. Many organizations use Baldrige to develop an overall performance map to identify areas that need improvement and to track organizational performance results, and they then use Six Sigma, Lean, or both tools to design operations or improve processes within the organization.

7. How they relate to the seven Baldrige Criteria Categories
Six Sigma and Lean
How they relate to the seven Baldrige Criteria Categories
The Baldrige Criteria can be used effectively as a systemic organizational performance excellence framework. In addition to the use of the Baldrige Criteria as a roadmap to organizational excellence, Six Sigma, Lean, or a variety of other performance improvement tools may be used to help improve core processes identified by thoughtful application of the Baldrige Criteria.

8. The Leadership Category
Baldrige, Lean, and Six Sigma all benefit from leaders who
Align financial and human resources
Communicate cultural norms
Encourage and provide resources
Solidify a culture of organizational excellence
Only Baldrige addresses the overall leadership system.
Leadership
The first Category in the Baldrige Criteria is Leadership, reflecting the critical role of committed senior leaders in an organization. The Leadership Category examines how an organization’s senior leaders’ personal actions guide and sustain the organization, including how they communicate with the workforce and create an environment that encourages high performance. This Category also examines the organization’s governance system and how the organization addresses its legal, ethical, and societal responsibilities and supports its key communities.
By responding to the specific questions in the Leadership Category, an organization can, for example, identify any gaps in setting and deploying its vision and values, in addressing fiscal accountability and transparency in operations, or in recognizing disparity between the mission of the organization and its processes for mission achievement. It is at this point that senior leaders align financial and human resources to carry out Six Sigma, Lean, or other enterprise-critical initiatives.
In both Lean and Six Sigma environments, senior leaders communicate new cultural norms to employees, such as fact-based decision making and process measurement. Senior leaders must also encourage and provide organizational resources in order to sustain success with process improvement activities and projects over the long term, thus solidifying a culture of organizational excellence.

9. Strategic Planning Category
Lean and Six Sigma can be methodologies for coordinating
resource use toward organizational objectives identified
using the Baldrige Criteria.
Six Sigma provides tools for measuring progress.
Strategic Planning
The Strategic Planning Category examines how an organization develops strategic objectives and action plans. The organization should be able to summarize how it establishes strategy and strategic objectives, including how it addresses its strategic challenges and leverages its strategic advantages, as well as be able to summarize key strategic objectives and related goals. Also examined are how an organization’s strategic objectives and action plans are deployed and changed, if circumstances require, and how progress is measured. Organizations are asked to describe how strategic objectives are converted into action plans. Following this, the organization’s action plans and related key performance measures or indicators should be elucidated and accompanied by a projection of the organization’s future performance relative to key comparisons on these measures or indicators.
Organizational performance depends on the actions the organization takes and on the totality of the organization’s operating environment. Every organization has resources that it uses to accomplish its mission, vision, and values. The coordinated use of these assets toward some set of objectives and goals is the organization’s strategy. The existence of organizational capability in Lean, Six Sigma, and other tools can be methodologies for coordinating asset use toward organizational objectives. As an organization defines and deploys its business strategies, these techniques help leaders analyze performance gaps and respond by setting strategic improvement goals to close those gaps.

10. Customer Focus Category
Quantification of
customer needs is the key.
Customer-
defined value
Map and
understand
value stream
Lean environments aim
for all process steps to
be something for
which the customer is
willing to pay.
Customer Focus
In the Baldrige Criteria, the Customer Focus Category asks organizations how they determine product offerings and mechanisms to support customers’ use of their products. Furthermore, the organization will describe how it builds a customer-focused culture. Also examined is how the organization listens to customers and acquires satisfaction and dissatisfaction information. Also described is how customer information is used to improve the organization’s marketplace success.
Lean has as one of its main tenets a focus on customer requirements. In a Lean environment, it is desired that all process steps be value-added. Value-added process steps are defined as those steps that the customer is willing to pay for, that are done right the first time, and that change the product or service in some manner. Customer and market focus is required to know what a customer is willing to pay for. Six Sigma focuses improvement projects on what is important to internal product recipients and to final customers. Within Six Sigma, the voice of the customer is often used to identify areas of needed improvement and gather a variety of customer and market data through such mechanisms as surveys, focus groups, industry research, and competitive analyses.
Make value stream flow
Continuous process improvement
In Baldrige and Six Sigma, the voice of the customer is used to identify areas of needed improvement.

11. Measurement, Analysis, and Knowledge Management Category
Six Sigma is data-driven:
specific metrics
data collection
data analysis
control data
Baldrige measures and improves processes, business results, and overall organizational performance.
Lean measures, analyzes, and reduces
waiting time
inventory
batches
process time
rework
Measurement, Analysis, and Knowledge Management
The Measurement, Analysis, and Knowledge Management Category is the system foundation for the Baldrige framework. The Criteria ask organizations how they measure, analyze, review, and improve their performance through the use of data and information, as well as how they ensure the data quality and availability not only for the workforce but also for suppliers, partners, collaborators, and customers. The Criteria ask also how organizations ensure that hardware, software, data, and information will be available in an emergency and that hardware and software are reliable, secure, and user-friendly. Finally, organizations are asked to describe how they build and manage their knowledge assets.
The use of data and metrics is an integral part of Six Sigma. For example, decision making must be data-driven to allow the measure, analyze, and control phases of the DMAIC process to function. Organizations that use Six Sigma will have specific metrics, as well as data collection and analysis tools, built into the various steps of both DMAIC and DMADV projects. Lean focuses on developing processes with zero waiting time, zero inventory, pull-based scheduling, reduction of batch sizes, work balancing, and process time reduction. Quantitative measures and metrics are utilized within Lean systems to monitor processes and make decisions regarding the health of a process and its place within the continual process improvement cycle. Lean and Six Sigma project selection is based on process knowledge and potential benefit to the organization. Cost savings, increased sales, reduced cycle time, and improved customer service and satisfaction are the types of factors used to prioritize and select improvement projects.
Lean and Six Sigma complement well the Baldrige foundation of measurement, analysis, and prioritization to improve overall organizational performance.

12. Workforce Focus Category
Employee Engagement
85.6
70.2
79.9
59.6
56.7 50 55 60 65 70 75 80 85 90 95
100
2001
2002
2003
2004
2005
Workforce Focus
The Workforce Focus Category examines how an organization engages, compensates, and rewards its workforce to achieve high performance. Included within this is a description of how members of the workforce, including leaders, are developed to achieve high performance. Also examined are the organization’s efforts to assess workforce engagement and use the results to achieve higher performance. A description of how the organization manages workforce capability and capacity to accomplish the work of the organization is included, as well as a description of how the organization maintains a safe, secure, and supportive work climate.
Adoption of Six Sigma and/or Lean methodologies requires human resource assets in areas of project leadership, training, and compensation alignment. Leadership and training programs are required to launch and sustain successful improvement projects. Key individuals must be identified and trained to serve as initiative and project champions and as process owners and project facilitators. Lean and Six Sigma expertise must be instilled in project leaders prior to their beginning of project tasks. To facilitate the continuation of either methodology, reward and recognition systems need to be developed to drive behaviors of both process owners and Lean and Six Sigma personnel. Due to the data-driven nature of Six Sigma and Lean, these performance assessment tools will be data-driven and results-oriented.
Six Sigma and Lean methodologies require
Leadership development
Training
Compensation alignment
Culture shift

13. Process Management Category
Lean or Six Sigma methodologies are used to
Generate standard operating procedures
Set specification and control limits
Identify explicit corrective actions
Optimize processes
Process Management
The Process Management Category examines the key aspects of an organization’s process management. This Category encompasses all key processes and all work units. This Category asks how the organization designs its work systems and determines its key processes to deliver customer value, prepare for potential emergencies, and achieve organizational success and sustainability. How the organization designs, implements, manages, and improves its key work processes to deliver customer value and achieve organizational success and sustainability should also be described.
Both Six Sigma and Lean focus deeply on processes; therefore, this is the Baldrige Criteria Category that Six Sigma and Lean most closely address. Both methodologies view processes as interrelated and interdependent steps along the path to customer satisfaction and achievement of the organization’s core mission, vision, and values. The drive for the kind of sustainable, transformational change in operations called for by Lean and Six Sigma can be effective only if change itself becomes part of the organization’s processes and all processes become demonstrably better at fulfilling customer needs. Earnestly adopting Lean, Six Sigma, or any of the other process improvement tool sets or standards directly addresses an organization’s methodology for improving key value-creating processes.
Baldrige processes are interrelated and interdependent steps along the path to customer engagement and organizational sustainability.

14. Results Category
Six Sigma and Lean are data-driven and results-oriented. Their use leads to tracking systems (control charts, scorecards, rolled throughput yield charts, etc.) and results monitoring in functional business areas where the methodologies are applied.
Results
This slide shows various types of results, and in the Baldrige framework, everything points toward the final Category, Results. This Category asks for performance levels and trends linked to processes examined in all the previous Categories and for financial and market outcomes. Performance levels should be examined relative to those of competitors and other organizations providing similar product offerings. Segmentation of organizational results by product and service types and groups, customer groups, and market segments, as appropriate, should be undertaken to ensure full coverage in identifying trends and outcomes.
The goals of Lean and Six Sigma as process enhancement tools are not to create management scorecards. However, as both Six Sigma and Lean are data-driven and results-oriented, their use leads naturally to tracking systems and results monitoring in functional business areas where the methodologies are applied. These include the use of performance scorecards and customer dashboards to measure and monitor process performance. Both Lean and Six Sigma are at their core focused on achieving and reporting specific performance goals, applying metrics to meeting customer requirements, monitoring and sustaining high performance levels, and using performance measures to monitor the organization’s operations. The development of robust processes leads to the ability to review and report process measures and to roll results from individual processes into divisional or organizational outcomes so that overall organizational and process performance may be assessed against overall and segmented benchmarks.
Baldrige addresses all results—process, leadership, product, customer, financial, and workforce.

15. Summary
Summary
As many organizations have discovered, the Baldrige Criteria can be used effectively as an umbrella or systemic organizational performance excellence model. In addition to the use of the Baldrige Criteria as a roadmap to organizational excellence, Six Sigma, Lean, or a variety of other performance improvement tools may be used to help improve processes identified by thoughtful application of the Baldrige Criteria. The Criteria help organizations of all types pinpoint their strengths and opportunities for improvement—and they allow the organizations to choose the tools best suited for them to implement those improvements. The Baldrige Criteria focus on organizational improvement and innovation systems. Six Sigma and Lean methodologies drive waste and inefficiencies out of processes that users of the Baldrige Criteria identify for improvement. Six Sigma and Lean focus on organizational improvement and innovation processes.
The Baldrige Criteria focus on business results and organizational improvement and innovation systems. Six Sigma and Lean methodologies drive waste and inefficiencies out of processes that users of the Baldrige Criteria identify for improvement. Six Sigma and Lean focus on organizational improvement and innovation processes.

16. Resources for More Information
Most Baldrige National Quality Program (BNQP) documents are available in printed form and on the BNQP Web site.
To obtain these documents, call (301) , send to or visit the Web site