ROI evidence of Baldrige impact: The foundation of the NHQA

June 24, 2011

This year 69 organizations have applied for the nation's highest recognition for organizational performance excellence the Malcom Baldrige National Quality Award which Professional Builder Magazines, National Housing Quality Award is based on.  This years Baldrige applicants are from manufacturing, service, small business, healthcare, education and nonprofit/government sectors. So despite the recession organizations are turning to Baldrige as a key way to drive improvement and create return on investment. So what ROI evidence is there?

In April 2010, Jerry Rose of Cargill a 2008 Baldrige winner, produced this chart to demonstrate the return on investment of using Baldrige.Cargill color-codes its businesses based upon their degree of deployment of the Baldrige Criteria. Gold represents businesses with a high degree of deployment; Blue represents businesses with partial deployment; and White represents businesses beginning the Baldrige journey.

The chart shows that the Cargill businesses with a high degree of deployment of the Baldrige Criteria have achieved 

30% cumulative earnings after taxes vs. budget vs.

13% for Cargill businesses with partial Baldrige deployment and

-12% for Cargill businesses just beginning use of Baldrige.

So, in Jerry’s words, is there payback? Yes.  According to Jerry, “deciding to embrace the Baldrige program in your company is a commitment to a journey. It takes time, it takes dedication and it takes resources. What I know for sure is that there is a huge return on your investment.”

Builders that have used the NHQA have also found similar impacts in fact 94% of NHQA winners are still in business despite the recession.

Are you looking for a way to gain a huge return on your ROI? Use the NHQA for self-assessment, to drive improvement and apply for the NHQA in 2012. Click the following link for FAQ’s on NHQA and an application form that includes a detailed breakdown on the criteria.

Denis Leonard has a degree in construction engineering an M.B.A. and a Ph.D. in quality management. Denis is a Fellow of the American Society for Quality, a Certified Quality Manager, Auditor, and Six Sigma Black Belt. He has been an Examiner for the Baldrige National Quality Award Board of Examiners a Judge on the International Team Excellence Competition and a Lead Judge on the National Housing Quality Award. A former Professor of Quality at the University of Wisconsin, he has experience as a quality manager in the home building industry as well as construction engineer, site manager, and in training, auditing, and consulting with expertise in strategic and operational quality improvement initiatives. His work has achieved national quality, environmental, and safety management awards for clients. 

Denis is co-author of The Executive Guide to Understanding and Implementing the Baldrige Criteria: Improve Revenue and Create Organizational Excellence.