Posted by Dawn Marie Bailey
In the blog Does Baldrige Benefit the Economy?, Harry Hertz presented an economic impact study that showed the Baldrige Program’s benefit-to-cost ratio at 820-to-1. The economists who conducted the study arrived at this ratio by comparing the benefits received by the 273 Malcolm Baldrige National Quality Award applicants from 2007 to 2010 with the cost of operating the Baldrige Program.
So, this is great news for an economy in which the Baldrige Program is operating. But how does this news translate for CEOs? If my main interest as a CEO is my bottomline, so what?
This study directly addresses the public accountability question for public programs—namely what is the social benefit of the Baldrige Program and how does the social benefit compare with the social costs. CEOs want more specifics—they want to know what the private benefits for their companies will be given an investment in performance excellence.
According to the economists, the Baldrige CEOs reported the substantial gains they experienced by using the Baldrige Criteria for Performance Excellence versus the shortfalls had they not invested in Baldrige. The CEOs saw more benefits from use of the Baldrige Criteria and the other resources of the Baldrige Program than if they had used the best available alternatives to develop their performance excellence strategies. And it is these benefits that resulted in the 820-to-1 return for the economy.
In addition, the Baldrige Program Web site provides much more data to make the case for Baldrige to CEOs across the sectors of the U.S. economy.
So now we know that the evidence supports not only an 820-to-1 ratio to show Baldrige’s benefit to the U.S. economy, but it also supports the belief that CEOs who implement Baldrige will see great gains as well.