The Baldrige Award Controversy

A controversy has arisen over a recipient of the 2006 Malcolm Baldrige National Quality Award. Today’s posting, commenting on the controversy, is written by Mark Graham Brown, author of Baldrige Award Winning Quality.

            First, some background: The 2006 Baldrige Award Recipients, announced in November, included Premier Inc., a major healthcare consulting and services organization owned by not-for-profit hospitals and health systems organizations.

            The Baldrige announcement, in addition to mentioning Premier’s achievements in finances, retention of hospital members and career development of employees, also said Premier “has taken a leadership role in promoting best practices in ethical conduct, transparency, and accountability within its industry.”

            Premier has been accused of taking legal kickbacks from big medical manufacturers to unfairly suppress competition. The day before the awards were announced, Premier agreed to pay $8.8 million to settle a lawsuit involving catheter maker Rochester Medical. Other lawsuits are pending. Premier CEO Richard Norling is on the board of the Baldrige Foundation, which raises money for the award.

            Some critics – including Dale Crownover, president and CEO of Texas Nameplate Co., former chairman of the Baldrige foundation and writer of The Baldrige Blog (not connected to the award) – have suggested the award to Premier was improper and should be rescinded.

            In addition to the Baldrige book, Mark Graham Brown is author of Keeping Score, Winning Score, Get It, Set It, Move It, Prove It and Beyond the Balanced Scorecard. Here are his comments:

 

Once again the Baldrige Award and criteria are the subject of some strong criticism and debate.  One of the past year's winners is accused of resorting to unethical practices regarding its competitors and suppliers.  Another CEO of a two-time Baldrige winner has, for some reason, soured on the award program and has created his own blog that bashes the award and the criteria.  The power of the internet has given everyone the ability to voice their own opinions that can be read by thousands via their own personal blogs or web pages. 

 

Is the Baldrige process flawed?  Certainly it is.  Baldrige examiners do not talk to customers, stakeholders, competitors, and there is a lot of data that might be relevant that does not get collected.  A more thorough analysis would certainly reveal more information about the strengths and weaknesses of an organization.  Such an approach, however, would make the cost of the assessment so high that hardly anyone would pay for it.

 

 There is no foolproof way of assessing the health of an organization. The process and the criteria, however, are the most comprehensive and widely accepted model for evaluating organizations.  Most other countries have their own version of the award that follows the Baldrige criteria and process to the letter.  The examiners and judges involved in the award are selected from thousands of applicants and have generally already had experience as a state examiner or leader of a major organization.  Examiners are very well trained, and there is a strict code of ethics for the program that is followed very strictly.  The team consensus scoring process makes it highly unlikely that any individual can exert bias or inappropriate influence on the scores or selection of winners.

 

Every single critic of the award or criteria during the past 20 years has failed to suggest an alternative set of standards or process for assessing the health of an organization.  The process and criteria are not perfect and the evaluation process is not without gaps. It is, however, light years ahead of other award programs that are mostly subjective popularity contests judged by a good-old-boy network of CEOs and leaders that look at stock prices and profits to assess the performance of an organization. 

 

If you compare the Baldrige Award to any other business or professional organization award program, you will not find a single program that is as comprehensive, thorough, or objective as the Baldrige.