The Baldrige Criteria for Performance

Excellence provide a widely accepted

perspective on how organizations can
address societal responsibility.

Social
Responsibility
and Performance
Excellence
Kay Kendall

W ho hasn’t heard about the increasing challenges for organizations to remain

viable and sustain high levels of performance? How is it then that some orga-
nizations can financially succeed and still make contributions to the society?
For instance, healthcare organizations are struggling to meet fiscal goals in the
face of shrinking reimbursements; yet some of them are finding ways to demonstrate
financial performance and provide generous levels of support to improving the
health of their communities. Baylor Regional Medical Center of Plano, TX, a 2013
Malcolm Baldrige National Quality Award recipient in healthcare, provided nearly
$200 million in community benefits between fiscal years 2007 and 2012. In 2012
alone, Baylor Plano held 103  community events reaching more than 3,600 people
and providing 1,200  preventive screenings. Similarly, Sutter Davis Hospital (CA),
another 2013 Baldrige Award recipient in healthcare, doubled the number of children
retained by the Yolo Children’s Alliance Health Initiative, a project dedicated to pro-
viding health insurance for all children in Yolo County from 2009 to 2012.
What do these organizations have in common? It is the use of the Baldrige frame-
work to drive their ability to achieve excellent results while serving as role models
for societal responsibility.

10 The Journal for Quality & Participation April 2014

 Why Baldrige? Why use a framework that requires the higher level of “society” along with those
the complete commitment of senior leaders? Why within the community. It was a change that
use an approach that cannot be delegated to a small might be summed up with the slogan, “Think
cadre of practitioners? Why use criteria that ask globally, act locally.”
questions but provide no answers? There are many Surprisingly, it was not until 1999 that the cri-
awards that U.S. organizations can vie for but none teria asked about results related to regulatory/legal
is as all-encompassing as the Malcolm Baldrige compliance and citizenship as part of the item on
National Quality Award. Over the years, the Criteria organizational effectiveness results. Bringing the
for Performance Excellence have evolved from an discipline of process management with its related
organizational examination template to an inte- measurement, review, and continuous improve-
grated systems model of validated, leading-edge ment elevated this area to one that required senior
management practices. leadership attention. In 2001, this same item added
Although Baldrige is compatible with Six Sigma, a specific area to address public responsibility and
lean, and other improvement methodologies and citizenship results.
accreditation programs, it has a broader influence In 2003, the core value became, “social respon-
on organizations that use it as a framework for how sibility.” Item 1.2 of the same name now included
they do business. One of the reasons is the criteria’s an area to address ethical behavior. A new item
lack of prescriptiveness, which makes it possible emerged, “governance and social responsibility
for each organization to determine its approach for results” worth 75 points, equally weighted with the
implementing the key systems. Another reason is other results items.
its ability to mirror the complex interrelationships
Then in 2005, governance was added to the pro-
that exist in organizations while providing clarity
cess item and included as a key term in the glossary.
and integration. A final compelling rationale is that
In the 2009–2010 criteria, “social responsibilities”
the criteria are evaluated continuously, tested, and
was changed to “societal responsibilities” as did the
improved to address the changing environment in
terminology for the core value. The concept that an
which American organizations operate.
organization’s delivery against its societal responsi-
Reviewing Societal Responsibility bilities should relate to its core competencies was
in the Criteria introduced. This version also reflected the integra-
When tracing the concept of societal responsibil- tion of societal responsibilities into the item for
ity in the Baldrige Criteria, many changes occurred leadership outcomes. The 2011–2012 criteria broad-
over the first 10 years as shown below: ened this area to become “societal well-being.”
Other than being fodder for some trivia questions
• The criteria were issued initially in 1988, and
on the criteria, why does all of this matter? There are
included Item 1.4, which addressed public
responsibility—worth 20 points out of 1,000. several reasons. First, this matters because the criteria
were developed initially at a time when American
• In 1992, the criteria added the core values, which
industries were suffering from increased global com-
included, “public responsibility.”
petition. Jobs were being lost to overseas companies
• In 1993, the core value was amended to add that offered products at higher quality and lower
“corporate citizenship.” costs. By including a focus on public responsibility,
• In the 1996 criteria, the definition of the core America made it clear that a return to competitive-
value was expanded to include the concept that ness would not be made at the expense of being good
being a role model organization meant operat- citizens in the communities and markets in which its
ing “beyond mere compliance.” This concept has companies operated. Serving as a role-model organi-
encouraged organizations using the criteria to zation worthy of the Baldrige Award meant more than
identify meaningful ways to demonstrate excel- achieving excellent financial results. It meant achiev-
lence and industry leadership, even in highly ing them while doing the “right” thing, operating in
regulated environments where achieving compli- an ethical way, treating employees with respect, and
ance itself can be challenging. providing products and services of high quality.
• In 1997, societal responsibilities and commu- The criteria also have dealt directly with critical
nity involvement were specifically called out in issues regarding the growing emphasis on governance,
Item  1.2, highlighting the need for processes at legal and ethical behavior, and societal well-being.

www.asq.org/pub/jqp 11
 Societal Responsibility in the 2013–2014
Baldrige Criteria for Performance Excellence
Here is some of the information associated with societal and charity; improving industry and business practices;
responsibility from the latest version of the Baldrige and sharing nonproprietary information.
Criteria (for manufacturing, service, small business, and “For a role-model organization, leadership also entails
nonprofit). More details on questions that organizations influencing other organizations, private and public, to
may choose to consider are available in other sections of partner for these purposes.
the criteria document.
“Managing societal responsibilities requires your organi-
Core Values and Concepts—Societal Responsibility zation to use appropriate measures and your leaders to
assume responsibility for those measures.”
“Your organization’s leaders should stress ethical behav-
ior, responsibilities to the public, and the consideration Category—Leadership
of societal well-being and benefit. Leaders should be
role models for your organization and its workforce in “The Leadership category asks how senior leaders’ personal
focusing on ethics and the protection of public health, actions guide and sustain your organization. It also asks
safety, and the environment. This protection applies to about your organization’s governance system; how your
any impact of your organization’s operations, as well organization fulfills its legal, ethical, and societal responsi-
as the life cycles of your products. Also, your organiza- bilities; and how it supports its key communities.
tion should emphasize resource conservation and waste “Governance and Societal Responsibilities. How do you
reduction at the source. Planning should anticipate govern and fulfill your societal responsibilities? Describe
adverse impacts from the production, distribution, trans- your organization’s approach to responsible governance
portation, use, and disposal of your products. Effective and leadership improvement. Describe how you ensure
planning should prevent problems, provide for a forth- legal and ethical behavior, fulfill your societal responsi-
right response if problems occur, and make available bilities, and support your key communities.”
the information and support needed to maintain public
awareness, safety, and confidence. Category—Results
“Your organization should not only meet all local, state, “The Results category asks about your organization’s
and federal laws and regulatory requirements but should performance and improvement in all key areas—product
also treat these and related requirements as opportunities and process results, customer-focused results, workforce-
to excel “beyond mere compliance.” Your organization focused results, leadership and governance results, and
should stress ethical behavior in all stakeholder transac- financial and market results. The category asks about per-
tions and interactions. Your organization’s governance formance levels relative to those of competitors and other
body should require highly ethical conduct and monitor organizations with similar product offerings.
all conduct accordingly. “Leadership and Governance Results. What are your senior
“Considering societal well-being and benefit means leading leadership and governance results? Summarize your
and supporting—within the limits of your resources—the key senior leadership and governance results, including
environmental, social, and economic systems in your those for fiscal accountability, legal compliance, ethical
organization’s sphere of influence. Such leadership and behavior, societal responsibility, support of key commu-
support might include improving education, health care, nities, and strategy achievement. Segment your results by
and other services in your community; pursuing envi- organizational units, as appropriate. Include appropriate
ronmental excellence; being a role model for socially comparative data.”
important issues; practicing resource conservation; reduc- Note: The information in this sidebar is excerpted from the
ing your carbon footprint; performing community service 2013–2014 Baldrige Criteria for Performance Excellence.

The most significant changes in 2003 occurred in also the same timeframe when the criteria empha-
the wake of the Enron collapse and the Tyco scandal. sized the need for senior leaders to encourage “frank,
Accountability for management’s actions, transpar- two-way communication” that enables employees to
ency in operations, disclosure policies, independence speak up about concerns without fear of reprisal. The
(and effectiveness) of internal and external audits, fate of Enron and Tyco—and their employees and
and the protection of stakeholder and stockholder investors—might have been very different had these
interests were identified explicitly as key elements of leadership practices been in place.
good governance. Furthermore, the criteria dared to Since its inception, the Baldrige Criteria have
tread on sacred ground by asking questions related to been intentionally nonprescriptive. Nowhere else
how executive compensation is determined. This was is this more evident than around the concept of

12 The Journal for Quality & Participation April 2014

societal responsibility. There is no rule of thumb Wisconsin Forward Award and Baldrige applica-
regarding the ways or extent that an organization tions on its website. Additionally, it has posted all
should support its key communities. In fact, the of its feedback reports.
notes in the Criteria for Manufacturing, Service, Leveraging core competencies has enabled sev-
Small Business, and Nonprofit specifically acknowl- eral Baldrige Award healthcare recipients to make
edge that “some charitable organizations may an impact on improved community health. North
contribute to society and support their key com- Mississippi Health Services, a two-time Baldrige
munities totally through mission-related activities.” Award winner, uses outreach to provide obesity
Applying the Criteria to Make a Difference prevention services and school health centers
What are some other examples of societal respon- that provide nurses to 22 schools in six counties.
sibility from Baldrige Award recipients? Heartland It also offers free health fairs that offer preven-
Health, a 2009 healthcare recipient, contributes to tive screenings, including blood pressure checks.
its local community by addressing the root causes The Henry Ford Health System, a 2011 Baldrige
of public health issues. Using that information, it Award recipient, has a workforce that demon-
forms partnerships to offer programs that foster strates its commitment to the community through
healthier, more livable communities. One of these increasing levels of community service such as
is the Project Fit America Program that addresses participation in the American Heart Association’s
physical fitness in 43 area schools, with more than Heart Walk (and is the number-one contributing
10,000 students participating. health system in the country). Schneck Medical
Other award recipients in that year demonstrated Center, another Baldrige Award recipient in 2011,
their own approaches to societal responsibility. performs many health screenings at no charge to
MidwayUSA, a small business award recipient, residents. Its new cancer center was developed
dedicates 10 percent of annual profits to support following a community needs assessment. The
its key communities. In its application senior organization’s employees raised a quarter of a mil-
leaders of the Veterans Affairs Cooperative Studies lion dollars in support of the effort.
Program Clinical Research Pharmacy Coordinating
Center in Albuquerque, NM, described their Putting the Criteria to Use
approach to promoting legal and ethical behavior Clearly, the Baldrige Criteria and its focus on
in a uniquely appropriate way using the Cowboy societal responsibility have prompted good orga-
Ethics, adopted from a book of the same name nizations to become better by focusing on a higher
written by James P. Owen. purpose. How can you use the Baldrige framework
Other Baldrige Award recipients demonstrate a in your organization to “do well by doing good?”
focus on protecting the environment. 2010 award
recipient, Medrad, has multiple programs to make
its environmental systems more efficient. It has
aggressive recycling efforts that result in sending less
than 20 percent of its waste to landfills.
The city of Irving, TX, a 2012 Baldrige Award recipi-
ent, has increased its use of alternately fueled vehicles Kay Kendall
since 2008 to more than 50 percent, compared with
a neighboring city at 10 percent. It has reduced its Kay Kendall is CEO of BaldrigeCoach. She coaches
greenhouse gas emissions by 17 percent since 2007. organizations on their journeys toward performance
The city also takes societal well-being to a new level excellence. Kendall served on the panel of judges for the
Malcolm Baldrige National Quality Program after serving
using best practices such as community policing and
as an examiner and senior examiner for six years, and
Twitter-based community crime watch groups to
continues as an alumnus. She has served as a judge for
reduce violent and property crime. As a result, Irving other Baldrige-based programs, was the chair of PiPEX, and
was named the fifth safest city in America. served as a national director on the board of The Alliance.
The Pewaukee (WI) School District, a 2013 Kendall is a Senior member of ASQ, an ASQ Certified
Baldrige Award recipient in education, has dem- Manager of Quality/Organizational Excellence (CMQ/OE),
onstrated real transparency. In a spirit of sharing and a past member of the ASQ board of directors. Contact
organizational learning, it has posted all of its her at [email protected] for more information.

www.asq.org/pub/jqp 13