Criteria for Performance ExcellenceBaldrigeNational Quality Program

Seven Categories of the Business/Nonprofit CriteriaLeadershipStrategic PlanningCustomer FocusMeasurement, Analysis, and Knowledge ManagementWorkforce FocusProcess ManagementResults

Core Values and ConceptsVisionary Leadership

Customer-Driven Excellence

Organizational and Personal Learning

Core Values and ConceptsValuing Workforce Members and Partners

Agility

Focus on the Future

Managing for Innovation

Core Values and ConceptsManagement by Fact

Societal Responsibility

Focus on Results and Creating Value

Systems Perspective

Baldrige Criteria Framework: A Systems Perspective

Item Format

Steps Toward Mature Processes

Organizational ProfileP.1 Organizational DescriptionP.2 Organizational Situation

Starting point for self-assessment and application preparationBasis for early action planning

Category Point Values1Leadership1202Strategic Planning 853Customer Focus 854Measurement, Analysis, and Knowledge Management 905Workforce Focus 856Process Management 857Results450TOTAL POINTS 1,000

Addresses Senior Leaders Actions, Governance, and Societal Responsibilities 1.1 Senior Leadership (70 pts.)

1.2 Governance and Societal Responsibilities (50 pts.)

1. Leadership (120 pts.)

Addresses Strategic and Action Planning and Deployment of Plans

2.1 Strategy Development (40 pts.)

2.2 Strategy Deployment (45 pts.)2. Strategic Planning (85 pts.)

Addresses How an Organization Engages its Customers and Listens to the Voice of the Customer 3.1 Customer Engagement (40 pts.)

3.2 Voice of the Customer (45 pts.)

3.Customer Focus (85 pts.)

Addresses Analysis, Review, and Improvement of Organizational Performance and Management of Data, Knowledge, and Information Resources4.1 Measurement, Analysis, and Improvement of Organizational Performance (45 pts.)

4.2 Management of Information, Knowledge, and Information Technology (45 pts.)4. Measurement, Analysis, and Knowledge Management (90 pts.)

Addresses How an Organization Engages, Develops, and Manages Its Workforce and Builds an Effective Workforce Environment5.1 Workforce Engagement (45 pts.)

5.2 Workforce Environment (40 pts.)

5. Workforce Focus (85 pts.)

Addresses How an Organization Designs Its Work Systems; Prepares for Emergencies; and Designs, Manages, and Improves Its Work Processes 6.1 Work Systems (35 pts.)

6.2 Work Processes (50 pts.)6. Process Management (85 pts.)

Addresses an Organizations Performance and Improvement in Key Areas and Includes Current Performance Levels, Trends, and Comparative Data7.1 Product Outcomes (100 pts.) 7.2 Customer-Focused Outcomes (70 pts.)7.3 Financial and Market Outcomes (70 pts.)7.4 Workforce-Focused Outcomes (70 pts.)7.5 Process Effectiveness Outcomes (70 pts.)7.6 Leadership Outcomes (70 pts.)7. Results (450 pts.)

2007 Award RecipientsThrough Baldrige we have learned that there are no destinations on the journeyonly more opportunities for improvement. What a remarkable method to move an organization forward.W. Paul Worstell, President of 2007 Award recipient PRO-TEC Coating Company

[The men and women of ARDEC] have earned distinction for our organization, the new high-technology Army, and the Department of Defense by embracing the Baldrige Criteria. . . . We [adopted the Baldrige Criteria] in order to become the best organization we can possibly be and provide the best products and support we can to the U.S. Warfighter.Joseph A. Lannon, Director of 2007 Award recipient the U.S. Army Armament Research, Development and Engineering Center (ARDEC)

People ask, Why Baldrige? My answer is very simple: Triple A bond rating on Wall Street from all three rating agencies, bringing capital projects in on time and within budget, a 96 percent business satisfaction rating, a 94 percent resident satisfaction rating, an overall quality rating of 95 percent, and an employee satisfaction rating of 97 percent . . . thats why were involved with Baldrige.Michael Levinson, City Manager of 2007 Award recipient the City of Coral Springs

Resources for More InformationMost Baldrige National Quality Program (BNQP) documents are available both in printed form and on the BNQP Web site.

To obtain these documents, call (301) 975-2036; send an e-mail to baldrige@nist.gov; or visit www.nist.gov/baldrige.

**The Criteria consist of these seven Categories. Each Category is subdivided into Items and Areas to Address. There are 18 Items, each focusing on a major requirement. Embodied within these is a set of Core Values and Concepts.Lets take a look at these Core Values and Concepts before discussing the Categories and Items and the related Areas to Address.*The Criteria are built on a number of interrelated Core Values and Concepts.

These values and concepts are embedded beliefs and behaviors found in high-performing organizations. They are the foundation for integrating key performance and operational requirements within a results-oriented framework that creates a basis for action and feedback.

This figure shows the role of the Core Values and Concepts. The Criteria are built on them. Core Values and Concepts are embedded in the systematic processes addressed in Criteria Categories 1 through 6. These systematic processes yield the performance results found in Criteria Category 7.

Lets take a closer look at these Core Values and Concepts.

*Visionary Leadership: An organizations senior leaders have a central role in setting directions and creating a customer focus. They must convey clear and visible values and high expectations. The organizations defined values and strategies should help guide all of its activities and decisions. Senior leaders serve as role models and reinforce ethics, values, and expectations while building leadership, commitment, and initiative throughout the organization. Senior leaders should be responsible to the organizations governance body for their actions and performance. Customer-Driven Excellence: Performance and quality are judged by an organizations customers. Thus, your organization must take into account all product features and characteristics and all modes of customer access and support that contribute value for your customers and lead to customer acquisition, satisfaction, preference, and loyalty; to positive referrals; and, ultimately, to business expansion. Customer-driven excellence has both current and future components. It demands close attention to the voice of the customer, anticipation of marketplace changes, and a customer-focused culture. Therefore, it demands organizational agility.Organizational and Personal Learning: Organizational learning refers to continuous improvement of existing approaches and significant change or innovation, leading to new goals and approaches. Personal learning refers to education, training, and other opportunities for the continuous growth and development of your workforce, including senior leaders and volunteers. Learning is directed not only toward developing better products and services but also toward being more responsive, adaptive, innovative, and efficientgiving your organization marketplace sustainability and performance advantages and giving your workforce satisfaction and the motivation to excel. *Valuing Workforce Members and Partners: An organizations success depends increasingly on an engaged workforce and on the diverse backgrounds, knowledge, skills, creativity, and motivation of its workforce and partners. Valuing the people in your workforce means committing to their engagement, satisfaction, development, and well-being. Internal partners may include unions and employees, while external partners may include customers, suppliers, and education or community organizations. Such partnerships may be a source of strategic advantage for an organization.Agility: Success in todays ever-changing, globally competitive environment demands agilitya capacity for rapid change and flexibility. Organizations face ever-shorter cycles for the introduction of new/improved products, as well as for faster and more flexible responses to customers. Cycle time has become a key process measure.Focus on the Future: The pursuit of sustainable growth and sustained performance leadership requires a strong future orientation and a willingness to make long-term commitments to key stakeholders, such as your customers, workforce, suppliers, partners, and stockholders, as well as the public and your community.Managing for Innovation: Innovation is no longer strictly the purview of research and development departments. Organizations should be led and managed so that innovation becomes part of the learning culture, is integrated into daily work, and reaches across the entire organization. Innovation should lead the organization to new dimensions of performance. *Management by Fact: Performance improvement requires measurement and analysis. The measures selected should best represent the factors that lead to improved customer, operational, financial, and societal performance. Analysis of data entails determining trends, projections, and cause and effect in support of planning, improving operations, accomplishing change management, and comparing your organizational performance with that of competitors or with best practices benchmarks.Societal Responsibility: Leaders should stress responsibilities to the public, ethical behavior, and the need to consider societal well-being and benefit, which refers to leadership and supportwithin the limits of an organizations resourcesof publicly important purposes. Leaders should be role models in focusing on ethics and the protection of public health, safety, and the environment. They should go beyond mere compliance in these areas and focus on opportunities for improvement. Planning should anticipate adverse impacts that may arise and make available the information and support needed to maintain public awareness. Also, organizations should emphasize resource conservation and waste reduction at the source.Focus on Results and Creating Value: Results should be used to create and balance value for your key stakeholders. The use of a balanced composite of leading and lagging performance measures offers an effective means to communicate short- and longer-term priorities, monitor actual performance, and provide a clear basis for improving results. Systems Perspective: A systems perspective means managing the whole organization, as well as its key processes, to achieve resultsand strive for performance excellence. The seven Baldrige Criteria Categories, the Core Values, and the Scoring Guidelines form the building blocks and the integrating mechanism for the system. This systems perspective is depicted in the following slide.

*The framework provides a high-level overview of the Baldrige Criteria for Performance Excellence and illustrates how the Criteria provide a systems perspective for managing your organization to achieve performance excellence. From top to bottom, the framework has three basic elementsthe Organizational Profile, the system operations, and the system foundation (Measurement, Analysis, and Knowledge Management).The Organizational Profile (the umbrella at the top of the figure) sets the context for the way your organization operates. Your environment, key working relationships, and strategic challenges and advantages serve as an overarching guide for your organizational performance management system. The system operations (middle of the figure) comprise two linked triads.The leadership triadLeadership, Strategic Planning, and Customer Focusemphasizes the importance of a leadership focus on strategy and customers.

The results triadWorkforce Focus, Process Management, and Resultsfocuses on your workforce and key processes that accomplish the work of the organization that yields your overall performance results.

ALL actions point toward Results.

The horizontal arrow in the center of the framework links the two triads, a linkage critical to organizational success. The arrow indicates the central relationships between Leadership (Category 1) and Results (Category 7), as well as the importance of feedback in an effective performance management system.The system foundation (bottom of the figure) is composed of Measurement, Analysis, and Knowledge Management, which are critical to the effective management of your organization and to a fact-based, knowledge-driven system for improving performance and competitiveness.*As previously mentioned, there are 18 Items under the seven Baldrige Categories. Lets take a look at what an Item looks like in the Criteria booklet. In this graphic of Item 1.1, you can see that the basic requirements are presented in the Item title, Senior Leadership: How do your senior leaders lead? The overall requirements are expressed as introductory sentences in bold text at the top of the Item. You also can see this is classified as a Process Item. (All Items in Categories 1 through 6 are classified this way. Items in Category 7 are Results Items.)Two arrows at the left point out the Items Areas to Address, which are in blue text and assigned a letter designationin this case, a and b. Multiple requirements are shown here on the right in brackets. They appear under each Area to Address as individual questions in black text.Item Notes are provided and serve three purposes: (1) to clarify key terms or requirements, (2) to give instructions and examples on responding to the Item requirements, and (3) to indicate key linkages to other Items. They also provide additional guidance specifically for nonprofit organizations. These nonprofit-specific notes are shown in italics.Note: Key terms presented in the Glossary are shown in small capital letters throughout the Criteria and Scoring Guidelines. The Criteria booklet also contains a section that discusses the Organizational Profile and each of the Categories and Items in more detail.*This graphic is an aid for assessing and scoring Process Items (Categories 1 through 6). In each case, the arrows indicate the degree of consistency and coordination among organizational units. The circular shapes shown next to the arrows depict the relative clarity or definition of an organizations goals. The steps are as follows:Reacting to Problems. Here operations are characterized by activities rather than by processes, and they are largely responsive to immediate needs or problems.In Early Systematic Approaches, the organization is at the beginning stages of conducting operations by processes with repeatability, evaluation and improvement, and some early coordination among organizational units.Aligned Approaches occur in the third step toward a mature process. At this stage, operations are repeatable and are regularly evaluated for improvement, with learnings shared and with coordination among organizational units. Integrated Approaches occur at the final stage of a mature process. The arrows indicate the evolution of the organization into an interconnected unit. At this stage, not only are processes repeatable, but also, in collaboration with other affected units, they are regularly evaluated for change and improvement. This collaboration and interconnection help organizations achieve efficiencies across units.

*Learning is an essential attribute of high-performing organizations and, therefore, a critical concept in performance excellence. It is a key term used throughout the Criteria booklet and is one of the four scoring factors used to assess the maturity of an organizations processes.Effective, well-deployed organizational learning can help an organization improve from the early stages of reacting to problems to the highest levels of organization-wide improvement, refinement, and innovation. The firefighting analogy illustrated here depicts a progression through the levels of maturity for this scoring dimension.

*Whether being used as part of a self-assessment or as part of a Baldrige Award application, the Organizational Profile provides a snapshot of the organization, the key influences on how it operates, and the key challenges it faces. The placement of the Organizational Profile at the front of the Criteria sets the organizational context for responding to the Criteria Items. The Organizational Profile helps everyone (e.g., organizations using the Criteria for self-assessment, application writers, and reviewers) understand what is most relevant and important to the organizations business and to its performance.The Organizational Profile is the starting point for self-assessment and for writing an Award application. If you identify topics for which conflicting, little, or no information is available, it is possible that your assessment need not go any further and you can use these topics for action planning. By addressing the questions in the Organizational Profile, potential gaps in key information can be identified, and areas that affect key performance requirements and results can be brought into focus. P.1 Organizational Description asks What are your key organizational characteristics? It asks an organization to describe its operating environment, including identifying its core competencies, and its key relationships with customers, stakeholders, suppliers, partners, and collaborators. It also asks for a description of your governance system.P.2 Organizational Situation asks What is your organizations strategic situation? It asks an organization to describe its competitive environment, key strategic challenges and advantages, and system for performance improvement. It includes a request to identify available sources of comparative and competitive data to emphasize the need for these sources and to provide a context for later responses.*All responses to the Items within the boxed Categories (1 through 6) should address Process. Responses to the Results Items should address performance levels, trends, comparisons, and integration, as well as the breadth and importance of the results. Because the bottom line for any organization is results, almost half of the application points are for results.Results must be supported by linkages to the appropriate Process Items to show cause and effect. Results may be the bottom line, but they are accomplished through a successful performance management system that is guided from the top.

*Category 1 (Leadership) examines how senior leaders personal actions guide and sustain your organization. It also examines your organizations governance system and how the organization fulfills its legal, ethical, and societal responsibilities, as well as supports its key communities.1.1 Senior Leadership asks How do your senior leaders lead? It focuses on how senior leaders set organizational vision and values; create an environment that fosters, requires, and results in legal and ethical behavior; create a sustainable organization; and create an environment for organizational improvement. It also asks how senior leaders communicate with and engage the workforce, create a focus on action to accomplish organizational objectives, and create and balance value for patients and other stakeholders in their performance expectations. 1.2 Governance and Societal Responsibilities asks How do you govern and fulfill your societal responsibilities? It examines several key aspects of your organizations governance system and approach to leadership. It also asks how your organization assures legal and ethical behavior and fulfills its societal responsibilities. In addition, it asks you to describe how your organization supports its key communities.*Category 2 (Strategic Planning) addresses how your organization develops strategic objectives and action plans. It also examines how the chosen strategic objectives and action plans are deployed and changed if circumstances require it, and how progress is measured. Decisions about your organizations core competencies are key strategic decisions.2.1 Strategy Development asks How do you develop your strategy? It examines how your organization establishes its strategy to address its strategic objectives and leverage its strategic advantages. It addresses your long-term organizational sustainability, including your needed core competencies, and your ability to execute the strategic plan. It also examines how key strategic objectives balance the needs of all key stakeholders.2.2 Strategy Deployment asks How do you deploy your strategy? It examines how your organization converts its strategic objectives into action plans to accomplish these objectives and how it deploys and assesses progress on its action plans. It also asks for your key performance measures or indicators and the performance projections for both your short- and longer-term planning horizons.

*Category 3 (Customer Focus) examines how your organization engages its customers for long-term marketplace success. This engagement strategy includes how your organization builds a customer-focused culture. Also examined is how your organization listens to the voice of its customers and uses this information to improve and identify opportunities for innovation.3.1 Customer Engagement asks How do you engage customers to serve their needs and build relationships? It asks how your organization determines product offerings and mechanisms to support customers use of your products. It examines how communication mechanisms vary for different customer groups and market segments. It also examines how your organization builds a customer-focused culture, including how your workforce performance management system reinforces this culture and how you build and manage relationships with customers to increase their engagement with you.3.2 Voice of the Customer asks How do you obtain and use information from your customers? It examines how your organization listens to its customers, acquires satisfaction and dissatisfaction information, and uses customer information to improve its marketplace success. It also examines how customer listening mechanisms vary for different customer groups, market segments, and phases of the customer life cycle, as well as how you manage complaints. In addition, it asks how you use customer, market, and product offering information to identify and anticipate current and future customer groups and market segments, to identify key customer requirements, to improve marketing, and to identify opportunities for innovation.

*Category 4 (Measurement, Analysis, and Knowledge Management) examines how your organization selects, gathers, analyzes, manages, and improves its data, information, and knowledge assets and how it manages its information technology. It also addresses how your organization reviews its performance and uses these reviews to improve its performance.4.1 Measurement, Analysis, and Improvement of Organizational Performance asks How do you measure, analyze, and then improve organizational performance? It covers your performance data and information at all levels and in all parts of the organization. This Item also emphasizes the purpose and use of the results of analyses and reviews, including using them to make strategic decisions for your organization.4.2 Management of Information, Knowledge, and Information Technology asks How do you manage your information, organizational knowledge, and information technology? It addresses the availability and quality of needed data, information, hardware, and software for your workforce, suppliers, partners, collaborators, and customers. It also examines how your organization builds and manages its knowledge assets and the continued availability of data, information, hardware, and software in the event of an emergency. *Category 5 (Workforce Focus) addresses how your organization engages, manages, and develops your workforce to utilize its full potential in alignment with the organizations overall mission, strategy, and action plans. It also examines your organizations ability to assess workforce capability and capacity needs and to build a workforce environment conducive to high performance.5.1 Workforce Engagement asks How do you engage your workforce to achieve organizational and personal success? It examines how your organization engages, compensates, and rewards your workforce to achieve high performance. It also examines how members of the workforce, including senior leaders, are developed to achieve high performance. In addition, it addresses how your organization assesses workforce engagement and uses the results to achieve higher performance. 5.2 Workforce Environment asks How do you build an effective and supportive workforce environment? It addresses how your organization manages workforce capability and capacity to accomplish its work and how it maintains a safe, secure, and supportive work climate.

*Category 6 (Process Management) is the focal point within the Criteria for examining all key aspects of process management, including how your organization designs its work systems and how it designs, manages, and improves its key processes for implementing those work systems. This Category stresses the importance of your core competencies and how you protect and capitalize on them for success and organizational sustainability. It also examines how your organization ensures its readiness for emergencies.6.1 Work Systems asks How do you design your work systems? It addresses how your organization designs its work systems and determines its key processes to deliver customer value, prepare for potential emergencies, and achieve organizational success and sustainability. 6.2 Work Processes asks How do you design, manage, and improve your key organizational work processes? It examines how your organization designs, implements, manages, and improves its key work processes to deliver customer value and achieve organizational success and sustainability.

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Category 7 (Results) addresses your organizations performance and improvement in six key areas. It also examines your performance levels relative to those of competitors and other organizations providing similar products and services. This Category includes a specific focus on results related to the effectiveness of your senior leaders.7.1 Product Outcomes asks What are your product performance results? It also asks for segmented results and appropriate comparative data.7.2 Customer-Focused Outcomes asks What are your customer-focused performance results? It examines results for customer satisfaction, dissatisfaction, and engagement.7.3 Financial and Market Outcomes asks What are your financial and marketplace performance results? These results might include aggregate measures of financial return, measures of financial viability or budgetary performance, and measures of marketplace performance, such as market share or position, market or market share growth, and new markets entered.7.4 Workforce-Focused Outcomes asks What are your workforce-focused performance results? It examines results relating to workforce engagement and satisfaction, workforce and leader development, workforce capability and capacity, and the workforce climate. It asks for results that address the diversity of the workforce and the organizations workforce groups and segments.7.5 Process Effectiveness Outcomes asks What are your process effectiveness results? It examines your key operational performance results that contribute to the achievement of organizational effectiveness, including your organizations readiness for emergencies. These results address the operational performance of your work systems and key work processes, including productivity and cycle time. 7.6 Leadership Outcomes asks What are your leadership results? It examines your organizations key governance and senior leadership results, including evidence of strategic plan accomplishments, fiscal accountability, legal compliance, ethical behavior, societal responsibility, and support of key communities.

*More quotes: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.Jim Collins, author of Good to Great: Why Some Companies Make the Leap . . . and Others DontLet me recall the staggering benefits which are waiting for the [United States] as we go forward with our own quality revolution:Regaining market shareBringing back the jobs we exportedWiping out the bulk of our trade deficitThose are goals which deserve the unified support of all of us. The activities surrounding the Baldrige Award have been a valuable contribution toward reaching those goals.Joseph M. Juran, founder of the Juran Institute, Inc.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?Pal Barger, Chairman and founder of 2001 Award recipient Pals Sudden ServiceQuality saves money and makes products appealing and attractive . . . anything thats wrong is costing you money. To get the process exactly right is going to be cheaper and is going to be better.Robert Galvin, Chairman of 1988 Award recipient MotorolaWe 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.Earnest Deavenport, Chairman and CEO of 1993 Award recipient Eastman Chemical CompanyFor seven years in a row, we improved customer satisfaction, we improved occupancy, we improved employee satisfaction, we lowered employee departures [and] turnover, and we improved annually our profit.Horst Schulze, President/CEO of 1999 Award recipient The Ritz-Carlton Hotel Company, L.L.C.*