Life-Changing Benchmarking: How Does Your Organization Compare?

Executives who have applied the Baldrige Criteria to their own work and used Baldrige feedback reports for assessment and planning have often spoken about how new insights led them to continuous improvement and the very beneficial results achieved both for their organizations and the people they serve. The manufacturing sector is no exception.

In a recent Industry Week article, "How Do You Know You Are Winning?", author Bill Baker writes that his life changed after his company Texas Instruments (TI) received its first Baldrige feedback report. The CEO had asked, “What did we learn and what were the opportunities/shortcomings that we need to fix.” With leaders assigned to each opportunity, the course of Baker's career quickly went in a new direction.

I recently had the pleasure of interviewing Baker, now president/owner of Speed To Excellence and co-author of Lean for the Long Term, about his Baldrige experience and being a manufacturing executive.

Baker began his career in the "wild and crazy world" of mechanical/manufacturing engineering in the Vietnam era, when missile programs, laser-guided bombs, satellites, night-vision equipment, and drones were just being built and perfected, some right at Baldrige Award winner TI under Baker's direction.

In the late 1980s, Jerry Ray Junkins, who eventually served as president, chairman, and CEO of TI, came to TI Defense Systems and Electronics Group (DSEG) praising the newly written criteria for the Malcolm Baldrige National Quality Award, said Baker. The environment was such that defense budgets were decreasing and competition was increasing, and an outside excellence criteria that could be used for learning and improving was something he saw as very valuable.

Although the defense manufacturer was very creative and innovative in terms of new products, Baker said, the organization's first Baldrige Award application, which did not even lead to a site visit, yielded some disappointment—at first. "We are in the defense industry. They don’t understand us. We’re better than they think we are," Baker said was the feeling of his colleagues, but "the CEO held the line [saying] we have to use this as a learning experience. Get ready. Apply again."

Baker, then a manufacturing engineer on missile programs, was assigned to learn about benchmarking, an insight from the Baldrige examiners that the company was very good but did not have the comparison measurements to prove it. "If you do not have continuous improvement goals based on benchmarking and benchmarks, you do not know how you compare," writes Baker.

Benchmarking was a new concept at the time, and Baker and a few colleagues were tasked to figure it out, starting with a visit to Xerox and Robert Camp, a well-known leader and author on the topic in 1990.

The TI folks quickly learned what the Baldrige examiners were trying to tell them: "You have to know how you compare to know if you’re any good," said Baker.

For its second Baldrige Award application, TI received a site visit, with examiners visiting most of its plants and the TI staff on walkie-talkies sharing what the examiners were asking about during interviews. This time the feedback report had a focus on sustainability and more trend data.

"The feedback was that we were doing lots of good things, but we did not have a long enough track record," said Baker. The examiners' message was "show us that you are really going to stick with this.”

Its third application in 1992 resulted in TI DSEG being the first defense company to win the Baldrige Award. Said Baker, by that application, "We were rolling on benchmarking. Everybody was doing it. You couldn't put up a chart without benchmarks and goals to exceed the benchmarks."

On winning the Baldrige Award, Baker said, “We were happy that all of our work had borne fruit, but the best thing, of course, was becoming more competitive in the defense business. That was the benefit. [The Baldrige Criteria provided an] outside criteria where you don’t just evaluate yourself on how well you’re doing. You’ve got comparisons. You’ve got world-class goals as opposed to just the industry goals of the business owner.”

According to Baker, TI DSEG used the Baldrige Criteria every year as part of its annual planning to help it prioritize areas of focus until the company was eventually bought by another defense contractor that also had the foresight to value external benchmarking/learning and internal knowledge sharing.

The value of benchmarking and continuous improvement, as well as an outside criteria to offer an objective evaluation, is still of paramount importance today to the success and sustainability of U.S. organizations, and especially manufacturers, said Baker, who now serves as chair of the Association for Manufacturing Excellence's Target magazine editorial board.

“You can always look at yourself and say I’m the smartest one in the room, right?" said Baker. "But guess what, there’s only one person in the world that can say that. You can learn from everybody. . . . When I was doing benchmarking, people would say ‘Why are we benchmarking them?’ And I would say, because they’re the leader in their industry. And our job is to find out from them what we can use to get better." Plant managers want to know how to get to market quicker, design quicker, work with suppliers, said Baker; benchmarking other companies is key to fast learning.  

In addition, said Baker, “The best learning is from somebody outside your industry. Other people try to do things in order to survive. You may be doing things just to compete."

The Baldrige Program offers several tools to help organizations benchmark world-class organizations, including Baldrige Asks, "How Do You Know?", the posting of Baldrige Award winners' application summaries, and the Baldrige Award application process itself that provides organizations with feedback from a team of examiners who often represent every sector of the U.S. economy.

Writes Baker, "What are you doing to improve, and how do you know if you’re winning?"

My suggestion, apply for the Baldrige Award and find out.