External Review of the Baldrige Performance Excellence Program (BPEP) Underway

Many were surprised in June when they were notified that there would be no Baldrige award program process in 2022, a hard decision that came as a result of some serious reflection about whether the program was having the intended impact – which it was not – and a decision for an external and thorough review of the program and process in order to improve and to better meet its intended results.

Bob Fangmeyer of NIST, the director of the Baldrige Performance Excellence Program wrote in a press release at the time:

“As a program and a community, we have been well aware of the challenges we are facing. And as you know, in recent years we have worked collaboratively with our stakeholders to both streamline the evaluation process and increase the value for applicant organizations. Additionally, in December of last year, the Board of Overseers requested that we convene a broad group of Baldrige customers and other stakeholders to review our award process. The group was asked to make recommendations that would lower barriers to entry and encourage greater participation, particularly by organizations in the manufacturing and service sectors. This group has been hard at work, and we look forward to its recommendations for improvement, which are due in June.”

The Malcolm Baldrige National Quality Award – given annually to those assessed and having been found to effectively follow the framework – was established by Congress to promote improved quality of goods and services in U.S. companies and organizations. The goal of the Malcolm Baldrige National Quality Improvement Act of 1987 (Public Law 100-107) was to enhance the competitiveness of U.S. businesses. Its scope has since been expanded to health care and educational organizations (in 1999) and to nonprofit/government organizations (in 2007).

Congress created the Award Program to:

  • Identify and recognize role-model businesses
  • Establish a criteria for evaluating improvement efforts
  • Disseminate and share best practices.

“American business and industry are beginning to understand that poor quality costs companies as much as 20 percent of sales and revenues nationally, and that improved quality of goods and services goes hand in hand with improved productivity, lower costs, and increased profitability.”

— Public Law 100-107, August 20, 1987

The program had already went through a substantial redesign initiative for 2022, which left a lot of folks wondering why a review by the overseers and an external review were needed if the redesign had already been implemented.  To this question, NIST answered on their FAQ page regarding the topic that the redesign that the program underwent in 2022 was only to improve the examination process but the overseers’ review is more narrowly focused on lowering barriers to participation in the award process from an applicant’s perspective, and the external review will be broader considering the state of the program and its ability to help improve the competitive position of U.S. businesses and organizations. The external review is meant to be a much more comprehensive review bringing in external feedback to create a more holistic approach to improvement in the program.

At the time, NIST made sure to make distinctions between the redesigns in the examination process that had already occurred, the overseer review, which was aimed at reducing barriers that were hindering the process, and the external review, which was to be handled in the future by a contracted 3rd party, with the FAQ stating, “The external review will be performed by an independent organization. The external review will consider the review initiated by the overseers and will ensure that the Baldrige Program benefits from a genuinely outside perspective.”  Per a press release on October 31st, we now know that the contracted firm will be Rios Partners.

You won’t find enough information on Rios Partners’ website to make an informed decision about their capabilities or relevant experience in turning a program like this around, and a cursory Google search isn’t exactly resulting in an explosion of case studies and testimonials to highlight results of partnering with them, but they are an established consulting firm working both in the private and public sector, the very crossroads in which the Baldrige program exists.  While its difficult to make many judgements about the choice in the contracted firm based on the lack of information that can be found about Rios, this also seems to be justified in this weeks’ press release:

“Rios Partners was selected following a request for quotations from small businesses through the GSA eBuy process. The process included an extensive review of the proposals by a technical evaluation team consisting of BPEP and Department of Commerce (DOC) representatives and a final assessment performed by the NIST contracting officer and legal staff.”

This will likely be a defining project for the firm that will result in more robust information being available on their website in the future, taking for granted that the efforts are successful – and we indeed hope that they are.

At the time of the announcement of the suspension of the program in June, it was commonly asked why NIST did not feel that they could continue the program while the external review took place.  With the primary goal of the program being to improve US competitiveness in the global marketplace, NIST responded that, with so many initiatives underway to understand and improve the program – see above regarding the multiple, simultaneous, and distinct initiatives – it made sense to suspend the program while these initiatives took on a more combined and concerted manifestation rather than implementing incremental and piecemeal improvements with marginal effect.  Essentially, the program is too far off track to incrementally implement small course-correcting countermeasures – it needed to be taken offline for an overhaul.  Indeed, the program, with its high barrier to entry and constant dilution from competitors who copy the model and framework internationally – and with fewer barriers – the program has had increasingly less and less influence and impact in the US economy.

The program has come under fire on more than one occasion; it seems to constantly sit on a knife’s edge, being forced to defend its purpose and economic benefits in front of congress to ensure continued funding, for instance, even when most of the funding is raised privately.  It is not a new notion that the program – whose purpose is to establish and communicate best practices for several industries in order to increase efficiency and competitiveness – would have to take a hard look at itself to understand its own goals and purpose, its strategies, and its performance against its own metrics in order to own up to and rectify its shortcomings; this should be implied by the nature of the program.

A noteworthy statement from the October 31st press release:

“The program review will assess how BPEP can best advance U.S. competitiveness and address the challenges most relevant in today’s business environment, as well as examine how its impact and accessibility could be increased. The output of this process will inform how the program can best be positioned for maximal future impact to our nation.”

The Baldrige program has a lot yet to offer, and the need for American organizations to adopt best practices and strive for oganizational excellence in order to maintain competitiveness on the world stage is as relevant today as when the program was first established under the Malcolm Baldrige National Quality Improvement Act of 1987 (Public Law 100-107), especially when we hold true to free-market ideals that we claim and reject the urge for protectionism.  But just because the need is still there in which the program was intended to fulfill does not mean that the program, in its current state, is capable of doing that.  We at Isometric, acknowledging that this need is just as true today as ever, are hopeful that the outcome of this review will be an improved BPEP that is more well-suited to fulfill its intended purpose – the US economy is banking on it.