Baldrige and ISO QMS: A Complementary Relationship

Posted by Christine Schaefer

How is a company to decide whether to use the Baldrige Criteria for Performance Excellence, the International Organization for Standardization (ISO) 9001: 2008 Quality Management System (QMS), or both? To explore some key distinctions between the comprehensive business model provided by the Baldrige framework and the quality management system provided by ISO, I recently talked to someone who has used both in his work. He also has taught and presented on the value of each and the relationship between them.

Ron Schulingkamp, ScD, MQM, MBA, has taught business leaders and MBA students alike about the Baldrige Criteria. As the senior strategic consultant for DM Petroleum Operations Company for more than a decade, Schulingkamp helped senior leaders transform the company into a high-performing organization that earned the Baldrige Award in 2005. As a visiting assistant professor in the College of Business of Loyola University in New Orleans, Schulingkamp has taught graduate business students how to use the Baldrige Criteria—which he describes as a “holistic, systems-based, high-performance business model”—to assess the performance of organizations, including local government organizations and companies where his students are employed. 

Ron Schulingkamp
Ron Schulingkamp

Schulingkamp also has conducted quality audits in the petro-chemical industry using ISO standards. He keeps abreast of revisions to both the Baldrige framework (updated every two years) and the ISO 9001: QMS standard (last issued in 2008, with a revision coming out in 2015).

The body of ISO 9000 standards includes ISO 9001: Quality Management System (QMS), which focuses on product and service quality for the customer. Schulingkamp noted recently that the ISO 9001: QMS is a systems approach based on systems thinking about management and that it encompasses all the processes and interconnections between the supplier and the customer. He also noted, however, that it doesn’t address the rest of the organization (e.g., health and safety, risk, financial, innovation, and environment—although there are separate ISO standards for those areas).

He said he often recommends organizations start with the ISO 9001: QMS because “if properly implemented, it will provide the CEO and senior leadership team with a mental model for management based on an organizational system, not a functional silo.” He added, “Often when senior leaders first read the [Baldrige Criteria], their response is, ‘Where does it tell me what to do?’ The concept of a nonprescriptive, interrelated, systems-based business model is contrary to teaching in most business schools.” Why so? Schulingkamp explained, “The typical professor in business school is an expert in a very specific field of study. Business leaders usually have studied with brilliant professors in accounting, economics, marketing, management, statistics, etc. But it is rare for a business professor to be an expert on the interrelationship, alignment, and integration of business systems. In fact, few business schools teach ‘quality management’ beyond the level of an overview course.”  

To highlight differences between the Baldrige business model and the ISO 9001: QMS, Schulingkamp starts with a comparison of the Leadership category of the Baldrige Criteria and the Management Commitment clause of ISO:9001 QMS. He explained that senior leaders (in particular, the CEO), are responsible for developing management systems and creating value. “We know from ancient philosophers such as Aristotle to modern management gurus such as W.  Edwards Deming—plus hundreds of contemporary practitioners, researchers, and authors—that leadership is the key to improving organizational performance,” said Schulingkamp. “Deming wrote and often spoke about the role of senior leadership and the importance of leaders’ understanding of systems thinking. For example, in his 1993 book The New Economics for Industry, Government, and Education, he described his “System of Profound Knowledge,” a powerful construct that consists of four important concepts: (1) an appreciation of a system, (2) understanding of variation, (3) psychology and (4) epistemology, or a theory of knowledge.”

As Schulingkamp sees it, the ISO 9001: QMS “provides the structure and prescription for senior leaders to begin the process of understanding the organization as it relates to the customer.” Schulingkamp pointed out that, in comparison to the Baldrige framework, the more prescriptive nature of the ISO 9001: QMS is demonstrated in the “shall” statements of its requirements. “The Baldrige framework provides a holistic, systems-based business model that builds alignment across the organization by making connections between and reinforcing organizational systems, processes, strategy, and results,” he noted.

To underline one difference, Schulingkamp raised the question, “How does ISO help you with strategic planning?” He pointed out that the ISO QMS standard asks about quality plans, but not strategic plans. In contrast, the Baldrige Criteria ask about strategy development and strategy implementation, which encompass systematic approaches for developing strategic objectives and action plans, implementing them, changing them as needed, and measuring progress. ISO also doesn’t ask about development of your workforce or leaders, Schulingkamp added.

“If you fully implement the ISO 9001 QMS, you may be getting at less than half of what Baldrige asks about,” he said. Illustrating the point, he described his experience in conducting ISO audits for petro-chemical companies; in particular, when he asked about customer complaints, businesses asked him what that has to do with ISO. “Although ISO requires the measurement of the quality management system processes and analyzes conformity to customer requirements and customer satisfaction, it is not unusual for an organization to focus on the customer requirements and miss the opportunity to manage the customer relationship,” he said. In contrast, the Baldrige Criteria in effect ask for the organization to have a holistic approach to building long-term customer relationships, which is part of a customer relationship management system. Specifically, the Baldrige Criteria ask “how your organization engages its customers for long-term marketplace success, including how your organization listens to the voice of the customer, builds customer relationships, and uses customer information to improve and to identify opportunities for innovation.”

Another difference from the Baldrige framework, according to Schulingkamp, is that ISO does not specifically address learning or integration. “ISO addresses continual improvement as it relates to the QMS, which may infer learning, but is not really learning,” he said. In contrast, he pointed out that the Baldrige Criteria address learning by asking about new knowledge or skills acquired through evaluation, study, experience, and innovation. The Baldrige Criteria also refer to two distinct kinds of learning: organizational and personal, he added. “The Criteria refer to organizational learning as learning achieved through research and development, evaluation and improvement cycles, ideas and input from the workforce and stakeholders, the sharing of best practices, and benchmarking; the Criteria refer to personal learning as learning achieved through education, training, and developmental opportunities that further individual growth.”  

Based on such differences, Schulingkamp values ISO as a “first step” toward a systems perspective and toward stimulating systems thinking by a senior leadership team. He sees in the tiered bands of the Baldrige scoring system a way to view the relationship between ISO 9001: QMS and the Baldrige Criteria; in this context, Schulingkamp sees use of QMS as a beginning approach in the lower bands. “The value of ISO [QMS] is that it teaches you about organizational systems, which is helpful to understanding Baldrige,” he said.

To depict the complementary way a business can use both the Baldrige Criteria and ISO standards to ensure product quality and overall performance excellence, Schulingkamp suggested this analogy: “the Baldrige framework is like the blueprint of a building, with ISO used for specific systems within the building such as electrical and air conditioning systems.”

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11 Responses to Baldrige and ISO QMS: A Complementary Relationship

  1. Dr. Annie Norman says:

    Excellent blog! Great comparison and contrast, I plan to quote from this. (I find it so difficult to explain systems thinking to non-systems thinkers, it’s like a dimension they can’t see.) Thanks!

  2. David P. Crowell says:

    Accurate and on point! Dr. Schulingkamp knows his stuff about these two complementary but very different approaches. He makes many good points, but chief among these is the failure of business school experts to teach holistic, systems-level models of organizations. Until this happens, we will have to continue to teach quality management to business school graduates who know little about “what works” in terms of the management of organizations.

  3. Joe King says:

    Great Analysis of both QMS and Performance Excellence.

  4. David Fischer says:

    Christine, very well written. Effective side by side analogy, this will help many leaders grasp the distinctions.

  5. Poh Lim says:

    Well articulated. This blog encapsulates the essence of how the Baldridge criteria and the ISO 9001 complements each other. Personally, I would say that the Baldridge criteria would be a ‘superset’ and the ISO 9001 the ‘subset’ of what an organization needs in order to excel.

    As a side note, the ISO 9004 document, which supports the ISO 9001 would point toward this complementation between the quality standards and business excellence models.

    • Robert says:

      Keep up the fantastic work, I read few blog posts on this web site and I think that your wobelg is really interesting and contains lots of superb info.

  6. Dialah Hokosuja says:

    This article helps me to understand ISO & Baldrige Criteria. The analogy describe the differences like : lex specialis derogat legi generali. Thanks

  7. Ron Schulingkamp says:

    To Poh Lim comment: In the Blog post I was subtle when I mentions “if properly implemented [ISO 9000]” which means the CEO “leads the effort” of using the ISO 9000 Quality Management net System (QMS) Standard, included its supporting documents. Over the years, I found organizations adopt the ISO 9001 QMS as a “requirement” from the customer, sometimes from the corporate headquarters (domestic and foreign) or from a regulatory body in the case of hospital accreditation. This “requirement” driver creates a culture where the CEO and leadership team are “compliance” driven. Again, in my limited experience I have not had the pleasure of working with a visionary CEO who was interested implementing the ISO 9000 or any other Standard to improve organizational performance. I an sure there are numerous CEO’s who read the ISO 9000 Standard including the ISO 9004:2009 Standard for “Managing for the sustained success of an organization– A quality management approach,”, and have developed strategies using the ISO Standards to create an integrated management system approach for improvement The ISO 9004:2009 is a guide to help the organization establish, implement, maintain and improve the QMS.
    (I recommend a Quality Progress June 2011 article titled “Organize How You Innovate; ISO 9004:2009 provides the structure to innovate more effectively” by Natalia Scriabina for a better understanding)
    http://asq.org/quality-progress/2011/06/innovation/organize-how-you-innovate.html

    This is the reason why I suggest ISO as a “first step” toward a systems perspective and toward stimulating systems thinking by a senior leadership team. After all the body of literature related to the development of quality and performance improvement is immense. The study of quality and performance improvement began with the study of philosophy and nature of humanity. Through trial and error and gut instinct, for thousands of years humans have sought to understand the world in an effort to improve their lives and their conditions mostly base. With the advent of the Industrial Revolution and the evolution of the scientific method, we have moved far beyond trial and error and gut instinct, and now apply the scientific method to guide our decision-making and planning to create a better world for the next 100 to 300 years. (This suppose to be funny or maybe sad.)

    Unfortunately. at this point, the ISO Standards are not a set of integrated systems used by management to improve the organization. This is a limitation of those leaders using the Standards not the Standards themselves. CEO’s and leadership teams that are “compliance” driven create cultures that support mediocrity. Fully implementing the ISO 9000 QMS beyond the minimum compliance will improve the organizations from mediocrity to good. To move from good to great requires a leadership team that thinks differently and a culture that supports high performance.

    It is the same problem with the Baldrige Criteria. As I also mentioned our schools create students with mental models of simple linear cause and effect thinkers. Few schools teach systems thinking and the concepts of complexity and interrelationships. We tend to focus on the parts rather than seeing the whole, and to fail to see organization or reality as adaptive complex dynamic systems. Understanding the Baldrige Criteria and how to see integrated systems requires shifting mental models from the traditional linear organizational chart functional view, to systems view described in Deming’s “System of Profound Knowledge,” and Peter Senge’s book titled The Fifth Discipline: The Art and Practice of the Learning Organization.”

  8. Rich Mallory says:

    Loved the analysis and the focus on systems management as the pre-ordinate and foundational skill for organizational excellence. There is systems thinking that has now surpassed Baldrige, however, and is found in the concept of auditable quality standards as introduced by the ASQ Government Division. The concept of auditable standards is based on three objective and measurable standards: the process management standard for organizational supervisors and managers, the systems management standard for senior- and executive managers, and the aligned systems objective standard for leadership. These standards are future-looking in the sense that the “old school” systems depend on leadership that is generally a single person, the supreme senior leader, or the group of senior leaders. Auditable quality standards (AQS) reflect the fact that leadership is transitory, and that the practice of quality at any (and every) level is essential for a sustained quality effort. AQS offer a “plug and play” system of quality management for the future, that can morph and be sustained through multiple leadership transitions. AQS are uniform and measurable, and put the focus for quality practices equally on everyone, instead of sole reliance on the senior leaders to guide the organizational ship of quality bravely like a three-masted ship through the fog. AQS provide a virtual quality framework that aligns with either Baldrige or ISO. If you are interested in viewing the future, read the book: “Auditable Quality Standards for Highly Effective Government.” And yes, while written for government, they will fit anywhere!

  9. C B Lunawat says:

    A very thorough, thought-provoking, and in-depth analysis by Ms. Christine Schaefer. Very interesting article on the background; all of us in the profession want integration as much as possible.

    Thought to add as given below:

    ISO 9001:2015 published in Sept 2015 brings Baldrige model and ISO 9001 model closer. Inclusion of leadership, risk-based planning in respect to context of the organization, emphasis on control over externally provided processes, and emphasis on effectiveness assessment (result) puts ISO to a reasonable extent nearer to Baldrige Excellence (BE) model. In the new edition, linking of risk-based thinking and process approach is quite visible, which is a very fundamental aspect.

    A similar approach is also evident in ISO 14001:2015 (requirements of Environmental Management System). The other management system ISO docs will follow the same approach. With much less emphasis on specific documentations, there seems to be a possibility of integrating ISO system with BE more effectively. This, however, may need some minor structural alterations in the BU documentation process (ISO systems being a subset to BE model). This integration possibly will help in a bottom-up approach and may provide additional trigger for implementation at the functional levels.

  10. Pingback: Innovative Leadership Behaviors, Customized for You | Blogrige The Official Baldrige Blog

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