Quest for Excellence XII

The Official Conference of the Malcolm Baldridge National Quality Award
March 13-15, 2000, Washington, DC

by Phil Landesberg,
Member, Federal Communicators Network,
Naval Ordnance Safety and Security Activity
Indian Head, MD
(301) 744-6078 X106, LandesbergP@navsea.navy.mil.

Executive Summary

Quest for Excellence XII featured the 1999 recipients of the Malcolm Baldridge National Quality Award - STMicroelectronics, Inc. - Region Americas, BI, The Ritz-Carlton Hotel Company, L.L.C., and Sunny Fresh Foods. These four companies were selected based on a review of applications explaining their approach to using the Baldridge Criteria and demonstrating favorable business results. Award winners are expected to share non-proprietary information on their quality strategy and business performance with other U.S. organizations, and the annual Quest for Excellence conference is the principal forum for sharing this information with others. Education and Health Care organizations are now eligible for the Baldridge Award, and 2000 Business, Education, and Health Care Criteria for Performance Excellence are now available. Free individual copies of each set of Criteria can be obtained from the National Institute of Standards (NIST) by telephone: (301) 975-2036; fax: (301) 948-3716; or e-mail: nqp@nist.gov, or via download from http://www.quality.nist.gov.

Day One

Harry S. Hertz, Director of the Baldridge National Quality Program at NIST provided an overview of the conference. The conference format has been changed over the years based on feedback from conference attendees, to better meet their learning needs. The main part of the conference started with senior leaders from the Baldridge winning companies providing a business overview and discussing leadership, one of the seven categories of Baldridge criteria. For the balance of Day One and through Day Two, concurrent sessions (moderated panel discussions) were held with representatives from each Award winner to discuss their approaches and lessons learned with respect to each of the seven Categories of Baldridge Criteria - leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management, and business results. Each session included a question and answer segment.

STMicroelectronics, Inc. - Region Americas designs, develops, manufactures, and markets semiconductor integrated circuits for many applications in the U.S. and around the world. Headquartered in Texas, ST employs more than 3,000 individuals at 37 domestic and Canadian sites. It is a business entity of STMicroelectronics N.V. based in St. Genis, France. Dick Pieranunzi, President and CEO, discussed how the Baldridge Criteria provided a useful focus on quality improvement in his company.

BI is a service organization that helps its customers achieve their business goals by enhancing the performance of people, including distributors, employees, and consumers. BI designs and delivers performance improvement programs integrating such functions as training, communications, measurements, and rewards. BI employs more than 1,400 employees, mostly at its headquarters in Minneapolis, MN, and others at two facilities and 21 domestic sales offices. Guy Schoenecker, President and Chief Quality Officer, explained BI's quality journey.

The Ritz-Carlton Hotel Company, L.L.C. manages 36 luxury hotels around the world (30 more are planned or being built). Based in Atlanta, Ritz-Carlton has about 17,000 employees and in 1998 had sales of over $ 1 billion. By winning the 1999 Baldridge Award, Ritz-Carlton became the first service company to win the Award twice. Ritz-Carlton is a wholly owned subsidiary of Marriott International, Inc. Horst Schulze, President and Chief Operating Officer, explained how the Baldridge Criteria provide a framework for continual improvement, noting that the Criteria have helped drive improvement since his company first won the Award.

Sunny Fresh Foods manufactures processed egg products including pasteurized refrigerated, frozen, and pre-cooked items. Sunny Fresh is the first food manufacturer to win the Baldridge Award. It employs about 380 individuals, primarily in Minnesota and also in Iowa and Michigan. It is a wholly owned subsidiary of Cargill, Inc. Jerry Rose, President, explained the importance of people, teamwork, and creating partnerships in providing a high quality product to the customer.

At the conclusion of the concurrent sessions, attendees were provided an informal opportunity to network with each other and talk with representatives from the Award winners during a buffet dinner reception.

Day Two

Day Two commenced with Town Hall sessions at which each Award winner had representatives available to discuss one or more Baldridge Category. Later in the morning, concurrent sessions continued at which each Award winner discussed strategic planning and customer & market focus, information & analysis and process management, and human resource focus.

I attended the Ritz-Carlton concurrent sessions, since Ritz-Carlton has demonstrated a long-term commitment to quality improvement. Also, I thought it interesting to learn what Ritz-Carlton's leaders had learned since the company first won the Award. I was impressed that their leaders had an extensive understanding of quality management principles, and were personally involved in leading the quality journey. Ritz-Carlton has well-defined business and support processes, uses data to monitor and improve performance, and has a common set of assumptions behind their approach to business. I was impressed that when Patrick Mene, Vice-President of Quality, was asked why, during Quest for Excellence presentations following their first winning of the Baldridge Award they did not emphasize pride and joy in work as a business imperative and the proper way to treat employees, he said they now better appreciated Dr. W. Edwards Deming's theory on that point. By ongoing improvement of their understanding and application of management theory, Ritz-Carlton is likely to continue to perform in the long-term.

Day Three

The concluding day of the conference included a dynamic keynote address, a summation from each of the Award winners about their quality journeys and lessons learned, and a wrap-up by Harry H. Hertz and Curt Reiman.

"Every Patient is the Only Patient"

Dr. Donald M. Berwick, President and CEO of the Institute for Healthcare Improvement, gave a stirring keynote address at the start of Day Three. Demonstrating the benefit of adding health care as an Award eligibility category, Dr. Berwick explained the current crisis in health care from an organizational and systemic perspective. Using humor, insight, and drawing on personal experiences, he described how health care institutions can fail to meet the human and health needs of patients. Dr. Berwick emphasized that he was not critical of individuals - doctors, nurses, and administrators - working in the current health care system. He was effective in pointing out deficiencies of some current assumptions that underlie health care. Some recommendations for systemic improvement included making sure that the patient is fully involved in his or her care provided at all times, ensuring that the patient is the source of all control (i.e., "things" are not done to him or her without knowledge and consent), and ensuring that all patients receive individualized care and attention. Dr. Berwick noted that much inefficiency is caused by a fixation on the "visit", and that better health care will be provided when the focus is placed on interaction with the patient over time in healing relationships. Rather than focusing on the "visit" to the doctor, the health care system should provide patient support on a 24-7-365 basis (i.e., all the time) using the talents of doctors, nurses, and other practitioners and making better use of such technology as the Internet.

Lessons Learned

Leaders from each Award winner participated in a panel session to provide a summary of their quality journey and lessons learned, and answer question submitted by the audience. Kevin McManus, President of the Association for Quality and Participation acted as the moderator. Jerry Rose, President of Sunny Fresh Foods, indicated that the commitment to quality needs to be a long and continual journey. Sunny Fresh made a commitment in 1989 to lead its industry in food safety and quality. Indicating how long it can take to impress the Baldridge Examiners, Sunny Fresh first made a written application in 1993. He noted that applying for the Award is very helpful to improving performance, because applicants get a detailed feedback report with recommendations for improvement. Sunny Fresh believes if you create value foe your customers, financial performance takes care of itself. It supports its employees and takes pride in community involvement programs.

Patrick Mene, Ritz-Carlton's Vice-President for Quality explained how using the Baldridge Criteria was introduced within the company via the strategic planning process. Success depends (in the highly competitive hotel industry) on how hotel guests feel they are treated. Ritz-Carlton tries to anticipate the wishes and needs of guests, resolve any problems quickly, and exhibit genuinely caring conduct towards guests and between employees. Ritz-Carlton treats their employees with respect, provides necessary training in a timely manner, and allows employees the freedom to take care of the needs of guests. These actions, and involving people in the planning of the work that effects them, supports a high degree of pride and joy in work that drives excellence in job performance. A Ritz-Carlton motto is "we are ladies and gentlemen serving ladies and gentlemen". A valuable lesson learned is that top managers are responsible for quality - their actions and decisions will determine how effective the company will be.

Wrap-up

Curt Reiman, NIST's first Director of the National Quality Program, expressed pleasure at the growing acceptance of the Baldridge Criteria, and the addition of education and health care as Award eligibility categories. Harry Hertz concluded an exciting three days by noting that next year's Quest For Excellence will be held at the same location (Marriott Wardman Park Hotel, Washington, DC) March 23-25, 2001.

I found the conference a rewarding opportunity to study contemporary business practices, exchange ideas with business leaders, and compare federal management practices and assumptions with those of the private sector.