Thirty-Six U.S. Businesses Try For Nation's Top Award For Business Excellence

Thirty-six U.S. companies—up from 26 in 1997—including 15 large manufacturers, five service companies and 16 small businesses, have submitted applications for the 1998 Malcolm Baldrige National Quality Award, the nation’s premier award for business excellence and quality achievement.

Managed by the Commerce Department’s National Institute of Standards and Technology in cooperation with the private sector, the Baldrige Award has received 684 applications since the first competition was held in 1988. Thirty-two companies (including one company that has won twice) have earned the award in a wide variety of industries.

Many companies believe that applying for the award is beneficial, whether they win or not. "The Baldrige application process is a great business health check that forces a company to closely examine all of its business practices. Every company that applies is a winner," said Gary Floss, director, Customer-Focused Quality, Medtronic Inc., and chair, Baldrige Award board of judges.

Applicants for the award must show achievements and improvements in seven areas: leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management and business results. During the upcoming months, each of the 36 companies applying for the Baldrige Award will receive a minimum of 300 hours of review by at least 10 members of the award’s board of 300 business and quality experts selected for their depth and breadth of knowledge. Companies passing initial screening will be visited by a team of examiners in the fall to verify information provided in the application and to clarify issues and questions raised during the review of the applications. Every applicant receives an extensive feedback report highlighting strengths and opportunities for improvement. Winners of the 1998 award are expected to be announced in November by President Clinton and Commerce Secretary William Daley after the award’s examiners and judges make their recommendations.

While the awards are the centerpiece of the Baldrige Award program, the overall goal is much broader, according to Harry Hertz, director of the Baldrige National Quality Program at NIST. "Together with state and local organizations we are building a national network to educate and encourage all U.S. organizations to improve their overall performance and capabilities," he said.

In 1991, fewer than 10 state and local quality awards existed. Now, more than 40 awards are in place in 34 states. Most are modeled after the Baldrige Award. In 1997, these state programs received more than 970 award applications. Some of the state award winners go on to apply for, and win, the Baldrige Award. Over the past two years, seven of the eight Baldrige Award winning companies also have won at the state level.

Non-profit education and healthcare organizations will be able to apply for the Baldrige Award next year if funding is approved as part of President Clinton’s fiscal year 1999 budget proposal. In May 1997, the private Foundation for the Malcolm Baldrige National Quality Award announced a $15 million fund drive to raise an endowment to help establish an award program for these two sectors, provided federal funding also is available for support. "Thousands of businesses have dramatically improved their competitiveness and effectiveness by using the Baldrige Award criteria. We look forward to having the same opportunity available to America’s healthcare and education sectors," said Roger Ackerman, chairman and CEO of Corning Incorporated and president of the Baldrige Award foundation.

The Baldrige Award was established by Congress in 1987 not only to recognize individual U.S. companies for their quality achievements but also to promote quality awareness and to provide information on successful quality strategies. Over time, the award’s criteria have evolved to represent a general performance and business excellence model. More than one and a half million copies of the Baldrige criteria have been distributed since 1988, and many more have been downloaded from the NIST World Wide Web site. Also, the criteria have been adopted by many international, state, company and other award programs, and they have been included in textbooks.

Studies by NIST, universities, business organizations, and the U.S. General Accounting Office have found that the benefits for companies using performance excellence models, such as the Baldrige criteria, include increased productivity, improved profitability and competitiveness, and satisfied employees and customers. For example, the fictitious "Baldrige Index," made up of publicly traded U.S. companies that have received the Baldrige Quality Award during the years 1988 to 1996, has outperformed the Standard & Poor’s 500 by almost 3 to 1.

A non-regulatory agency of the Commerce Department’s Technology Administration, NIST promotes U.S. economic growth by working with industry to develop and apply technology, measurements and standards. NIST was selected by Congress to design and manage the award program because of its role in helping U.S. companies compete, its world-renowned expertise in measurement, and its reputation as an impartial third party. This year marks the 10th anniversary of the Baldrige Award