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Blogrige

The Official Baldrige Blog

The Verdict Is In -- Baldrige Is About Revenue and Jobs!

By: Dawn Bailey

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Revenue and jobs art

In these days of careful scrutiny of all business investments, a common request of us is "Prove Baldrige is worth the effort."

We have data of all types, including data shared by Cargill about performance of their business units correlated with their use of the Baldrige-based Cargill Excellence framework. It seemed one additional clear piece of evidence would be to look at the five businesses that are two-time recipients of the Baldrige Award.

Why them? For two reasons: 1. They clearly used Baldrige for an extended period, since at least six years must elapse before they can re-apply after receiving the Award, and 2. They represent a significant time span, reflecting the history and evolution of the Baldrige Program and Criteria.

Solectron received its second Baldrige Award in 1997 and MEDRAD in 2010. The other two-time winners are Ritz-Carlton Hotel Company, Texas Nameplate and Sunny Fresh Foods (now Cargill Kitchen Solutions).  As a group, they represent large business, small business, manufacturing, and service. We looked at three areas of potential growth: sites, revenue, and jobs.

While individual results are proprietary for some of the companies, we could clearly see common patterns and the medians for the group are impressive!

The median growth in number of sites was 67%. The median growth in revenue was 93%. And the median growth in jobs was 63%.

What would it be like, if every U.S. business and organization used Baldrige for six or more years? Would they all achieve these results? I don't know, but I certainly would like to know. I am sure we would all be better off as a nation!

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Steve George on August 25, 2011 4:40 PM

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Thanks for the data, Harry. Can you share what time span was studied to arrive at these numbers? Does this mean the median revenue growth was 93% from the time the companies received their first awards to the second awards or to the present?

Carlos Magarinos on August 25, 2011 4:42 PM

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Wow. Any chance to have access to hard data / evidence about this study? No need to disclose any company names...

Tim Brown on August 25, 2011 8:04 PM

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How does this growth differ from the industry standard growth? Was this growth over 6 years? What was the range of individual growth?

Jim Butt on August 25, 2011 9:55 PM

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Concur with the prior comments. Needs a baseline to compare with.

Carol Knight-Wallace on August 25, 2011 11:24 PM

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Agree that a baseline or control is warrented. But, at face value, these are impressive. Wish the company I worked for could report those results.

Greg Hanners on August 26, 2011 9:04 AM

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Wow. Serious Baldrige-heads don't miss a beat! They want benchmarks for comparison NOW. LOL

Thomas J. Williams on August 26, 2011 9:26 AM

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I'd like to see the data (both business results and student achievement) from the Education Sector recipients as well if that is available. Thanks Harry!

harry.hertz@nist.gov on August 27, 2011 3:54 PM

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Thanks for all the comments. The span of time that is reflected for each company in these numbers is the period from the first award to the second award. Furthermore the estimates are conservative. In some cases we only had the range of the organization's reported value from the check boxes on their application. In that case we always assumed the value at the second win was the lowest value in the range. The actual dates are different for the first and second awards for each of the recipients and the industries are very different. We are trying to respond to your data request for typical growth rates while protecting the proprietary nature of individual organizations' data. We have the NIST research library working on it and will see what we can find out. We cannot share the ranges of results without sharing specific data for at least two organizations in each case, the high and the low. And that comes too close to sharing proprietary data. We chose the median because that clearly indicates half the organizations were actually higher. The average could be dominated by one organization, if we had chosen that statistic. The average is indeed higher.

Baldrige OFI on August 31, 2011 12:15 PM

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One might interpret the "selective" data you use as the Baldrige version of "figures lie and liars figure". For instance, a simple internet search using "Solectron" and "layoff" reveals that Solectron cut tens of thousands of jobs not that long after its second Baldrige win. Was that a factor in the decision to ignore performance following the second win?

harry.hertz@nist.gov on September 1, 2011 6:54 AM

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I thank BaldrigeOFI for the comment because it allows me to provide some further insight that might not have been clear. We chose the period from first to second receipt of the Award because it is a period that we know the organizations have continued to use the Baldrige Criteria. After receiving the Award we have no way of guaranteeing continued use of the Baldrige Criteria. For the Solectron data cited in your blog comments we know that Solectron had a change in its senior leadership ranks and policies after the second Baldrige award and a departure from the Baldrige Criteria and established internal processes.This change is very parallel to some that Jim Collins describes in his latest book that shows how great organizations stumble. We always report data in the most transparent and fair way we can. We have intentionally chosen the median so that no one organization could unduly influence the results reported. Indeed, because of some very high performers the mean is considerably higher than the median in several cases.

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