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A QualitEvolution is intended to capture positions and experiences as a participant in the evolution of the Quality profession into the 21st century. From its origins as the brainchild of Corporate Industrial Statisticians, our profession has transformed and evolved to incorporate and adapt to the demands and expectations of our modern existence.

The scope of the subject matter within A QualitEvolution extends to the furthest ranges of quality, business transformation, management science, and quality issues especially pertinent to the members of ASQ in Canada.

Tuesday, August 21, 2012

The Red Flags of Baldrige: Identified Flaws and Fixes To Save American Quality

WARNING:  This post takes a contrary-minded viewpoint on the merits and validity of this U.S. government program.  It is intended to stimulate necessary discussion that will ultimately lead to necessary changes to be relevant and applicable to the industry.  Those who approach quality as dogmatic fundamentalists should cease reading any further, lest their staunch convictions be adulterated with reason and objective evidence.

The article in the View from the Q poses the question why after 25 years, the Baldrige program has not been more widely adopted, but in fact is hovering on the list of endangered government programs.  As a Canadian, I read this article with detached interest, since the mandate of the 1987 Quality Improvement Act is to aid and support companies of the United States of America.  For analysis and evolution of this program, I have identified the following gaps or “Red Flags” which I believe to be impediments to the adoption and participation in this government program.

1.      Outdated Model:   It has been 25 years since the Quality Improvement Act was ratified.  Imagine opening a time capsule from 1987 and reviewing the business literature of the day.  There have been many changes since that time which have affected American business and quality, which were not considered in the initial intentions of the Baldrige program.  The proliferation of technology in software, devices, automation, and individual connectivity to internet communications has altered every major business model in that time.  The emergence of foreign economies as service and manufacturing centers with superior opportunities for cost-saving labor arbitrage (a.k.a. cheaper workers with higher productivity) has changed business models for companies.  The effects of NAFTA and WTO on trade and commerce have expanded supply chains and market opportunities.  Finally, the combined effects of increased deficits and debt, multiple wars on terror, and expansive government bail-outs have bloated the public debt, necessitating an upcoming “Fiscal cliff” in 2013 which will be characterized by tax increases and significant spending cuts to non-essential programs.  Baldrige was created to reflect a bygone era which no longer exists.

2.       Baldrige success does not predict future prosperity:  The premise of the Quality Improvement act was the affirmation of Tom Peters’ hypothesis in the book In Search of Excellence: Quality leaders will have sustained profitability.  While the merits of this argument are sound, the actuality is not universally applied.  In two particular examples, Baldrige Award recipients have encountered severe losses.  General Motors, who won for the efforts of their Cadillac division, reached a point of distress that required severe government intervention.  Motorola, an award winner in multiple categories, encountered significant financial losses and declines in market share until it finally was absorbed by Google, where it now operates as a subsidiary.

3.       Program Redundancy:   In the detailed account within View from the Q, there are now 40 concurrent programs in operation within the United States at the State or Regional level.  There are also approximately 40 similar programs offered internationally, reflective of the transnational, globalized mode of 21st century business operations.  The underutilized but highly valued ISO 9004:2009 standard for Quality Management replicates many of the ideals of quality improvement in a more concise and structured format that aligns with the other ISO standards for management systems and quality auditing.  From this description it would appear that there is a substantial amount of noise and confusion from the plethora of competing options and opportunities.

4.       Bureaucratic Layer:  The Baldrige program has entrenched itself as a permanent and indefinite entity of the federal government.  The growing number of Baldrige examiners, duly sanctioned to evaluate and bestow upon worthy organizations the highly prized seal of Baldrige approval, provides the impression not of a value-adding program, but a self-serving appendage creating overhead and financial burden.  The justification and rationalization is that Baldrige is equivalent to quality.  As an anecdote, I attended the WCQI in Anaheim in May 2012, and during my stay had the opportunity to shop at a convenience store located within a few blocks of the conference.   I was shocked SHOCKED to find that, in spite of having no Baldrige certificate, this store independently managed to keep the fresh fruit chilled, the beer and white wine cold, the red wine and spirits at room temperature, and the cigars humidified in the humidor.  It doesn’t take a Baldrige examiner to impart the wisdom to a convenience store operator about the customer dissatisfaction from warm and mouldy fruit, warm beverages, or dry cigars.  If anything, the Baldrige “seal of approval” can be used to divert attention from poor quality outcomes by forcing the customer to presume quality and evade direct accountability for day-to-day events.

5.       Partisan Political Patriotism:  By naming the award after Baldrige, this tags the program as a Republican initiative, which implicitly disconnects itself with the 45-60% of those who are not card-carrying Republicans.  While the late Secretary Baldrige was held in high personal regard, the overall impression of the Reagan’s second term was steeped in disruption, controversy and scandal.  Land of Confusion  An example of pop culture was the Spitting Image video to the song Land of Confusion which portrayed a bumbling and confused Reagan accidentally setting off a nuclear bomb.  .  Consider the reaction and willingness to adopt if the award was named after political figures of similar stature: (i.e. Robert McNamara, Ralph Nader, Janet Reno).  I am personally uncomfortable with anything that has advocates terming themselves as “zealots”, which implies irrational levels of inflexibility and objectivity.  Zealots are useful in defending fortresses under siege (i.e. the Alamo, Masada, Chick-Fil-A), but highly inappropriate within a professional environment.

6.       Public challenge to the Private Sector:  Nothing strikes fear in the hearts of those who prize liberty and freedom more than the phrase “We’re from the government and we’re here to help you”.  Apparently the bureaucrats within the Beltway don’t believe that the private sector already faces enough challenges with managing against competitors, appeasing shareholders and creditors, eliciting productivity from employees and unionized collective agreements, and dealing with an ever-expanding regulatory burden.  By taking inspiration from historical figures like Mao and Stalin, the federal bureaucrats have manifested their own “Great Leap Forward” and “Five Year Plan” to entrench quality improvement by decree.  The “carrot” in the program is the presentation of the award by a senior government official, being either the President or the Secretary of Commerce.  This reinforces the anti-business sentiment expressed by President Obama, “You didn’t build that” by making government pick winners in the marketplace.  The European model of mixed economies, which is proving its worth in places like Italy, Greece, Spain, and France, is culturally incompatible with the heroic frontier risk-taking, thrill-seeking mentality of the American mindset.

Having established the reasons why the current incarnation of Baldrige falls short of its ideals and intentions, I propose six solutions to address the gaps, and in so doing, restore Quality as a top executive priority.

1.       Unified program with international scope:  Instead of having 81 distinct programs with the same intention, start with the internationally recognized ISO 9004:2009 standard, and rebuild a single robust program that is relevant to global organizations and adopted by all levels of government.
2.       Politically neutral and generic:  In this increasingly partisan environment and separation of convictions, it would be less offensive if a more neutral or generic nomenclature were used to define this program.  By tagging a program with a political reference (i.e. ObamaCare, Reaganomics),  the objectivity and virtues are lost and the political supporters or opponents rally in support or defiance without regard to the merits of the respective initiatives.
3.       Emphasize objectivity, simplicity and common sense: Instead of using bombastic references to galvanize support (i.e. zealots), impress upon the collective intelligence and respect to build a quality culture based on objectivity, shared values and reinforced positive outcomes.
4.       Privatize, industrialize, and modernize:  By decoupling from the federal bureaucracy, this program can function and more readily adapt to changes in order to remain relevant and sustainable.  This will force the program to “walk its talk” by transforming from detached “examiners” to value-adding partners and collaborators.  While this will deprive the worthy organizations of a photo opportunity with a leading political figure of the day, the organizations will just have to adjust. 
5.       Recognize impact of high-performing individuals:  The advent of technology has given rise to an Artisan Mentality, where individuals with specialized skills can affect quality outcomes more profoundly than an organizational system.  This reality should be addressed and encouraged as an element of overall quality improvement.
6.       Adaptable and agile:  The only constant is change.  By anticipating the effects of change, a program should incorporate a robust change mechanism to continually review and integrate new developments.   For example, how would a social networking company like Facebook demonstrate their quality improvement?  This is what an adaptable program must address.

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