Past award recipients and applicants, however, beg to differ. "The improvement process isn't another thing to do; it's part of the only things you need to do," argues Earl A. Goode, president of GTE Directories Corp., a 1994 award winner. Ko Nishimura, president and CEO of twice-winning Solectron Corp., notes, "The value in the Baldrige process is understanding how the criteria apply to your company." And in response to a recent survey on 21st-century leadership challenges, most of the 300 CEOs polled said the program proved "very valuable" in stimulating improvements in quality and competitiveness.

Companies applying for the award or considering it for next year should remember that the process isn't something extra -- it's a systems approach to conducting business. The Baldrige Award will continue to evolve as quality practices take on the innovative stamp of best-practice companies. The following answers to frequently asked questions will help companies understand the award and application process as they pursue performance excellence via the Baldrige criteria.

Why should a company apply for the award?

     Many organizations believe that the application process itself is beneficial. Every applicant receives an extensive feedback report highlighting strengths and opportunities for improvement based on an independent assessment made by recognized experts. Award applicants and recipients report         improved alignment in their companies' plans and processes, as well as improved communication and employee morale, after applying for the award.

How much does it cost to apply?

     The fee is $1,500 for small companies and $4,500 for large companies in either manufacturing or service. In addition, there is a $100 fee for the eligibility determination. For the application fee, companies receive at least 300 hours of review by a minimum of 10 business and quality experts. Fees for site visits are extra.

Is the feedback worth the investment of time and money?

Yes, if the company intends to act on the knowledge gained to improve. Companies committed to performance excellence value objective feedback from a knowledgeable source. Many organizations that apply for the award already do self-assessments and are in the best position to get maximum value from a Baldrige assessment. However, companies just beginning their journey to performance excellence might experience an increased commitment, while those thinking about starting might be challenged to proceed.

Why have the number of applicants decreased?

While Baldrige Award applications have declined in recent years (from a high of 106 in 1991 to a low of 26 in 1997), applications to Baldrige-based award programs are increasing dramatically. For example, state and local award program applications have increased and in 1997 totaled 1,078. Also, more recipients of state and local program awards are applying for the Baldrige Award; seven of the last eight Baldrige Award recipients are state award recipients. For 1998, Baldrige applicants increased to 36, up 28 percent from 1997. (See story on page 8.)

Do Baldrige Award recipients sustain their quality efforts?

It is expected that recipients will continue their efforts because they have embraced a system that requires commitment to continuous improvement. The Baldrige process evaluates whether an applicant has embedded a dynamic management system focused on performance excellence in its organization.

What happens when a company wins the award?

Award recipients are required to share information on their successful performance and quality strategies with other U.S. organizations. The principal mechanism for sharing information is the annual Quest for Excellence Conference. Many award recipients also participate in the Baldrige regional conferences organized by The Conference Board with cooperation from the National Quality Program at NIST.

Is the award selection political?

No. The award program seeks to provide the fairest, most competent evaluation of each application. At least 10 members of the board of examiners review and score independently all applications. Afterward, a panel of judges determines which applications to forward for consensus review. The panel of judges conducts final reviews and presents award recommendations to the director of NIST. The director conveys the recommendations to the Secretary of Commerce, who makes the final determination of award recipients.

What is the typical payback on the Baldrige investment?

There is nothing typical about the benefits of an "investment" in the Baldrige process. Organizations that have received the award have experienced, among other developments, moves toward globalization; decreased time to market; an increase in new product sales; increased market share; cost reductions; improved product reliability; and increased employee involvement, empowerment and productivity.

How does the Baldrige affect financial results and shareholder value?

The National Quality Program does not maintain information on individual organizations' financial results. However, for the fourth year in a row, a NIST stock study comparison shows that the Baldrige Award recipients as a group significantly outperformed the Standard & Poor's 500 by nearly 2.5 to 1. Whole-company recipients outperformed them by nearly 3 to 1. The 52 publicly traded, site-visited companies outperformed the S&P 500 by 80 percent, achieving a 216-percent rate of return, compared with a 118.7-percent rate of return for the S&P 500.

Why are the Baldrige criteria good for running a business?

The criteria are used as a validated measurement tool to assess an organ-ization's performance. The criteria-based assessment is tailored to an applicant's business and its success, driven by its key business factors, strategic and action plans, and customer focus.

Studies by NIST, universities, business organizations and the U.S. General Accounting Office have found that the benefits for organizations using performance excellence models, such as the Baldrige criteria, include increased productivity, improved profitability and competitiveness, and satisfied employees and customers.

How do the criteria apply to service organizations?

The categories within the criteria apply equally well to a business community's manufacturing and service sectors. A service industry's success is no less dependent on effective leadership, strategic planning and business results than is a manufacturing organization's. Successful service organizations also depend on well-developed and well-managed processes that are meas-ured and improved based on data and information collected on a regular basis.

Is the Baldrige process relevant to small businesses?

Because it's a nonprescriptive framework for organizational excellence, the Baldrige Award applies well to a small business. The criteria allow organizations to respond in ways that are appropriate for their size and available resources.

What is the best way to motivate senior managers to use the criteria and the Baldrige process?

Expose them to organizations that have adopted the criteria. Companies will benefit from both self-assessment and the application process. CEOs also can evaluate the stock study results, which show a correlation between performance excellence and stock market performance.

How are Baldrige examiners selected?

NIST selects examiners through a competitive application process and with advice from the Baldrige Award panel of judges. Each fall, applications are solicited from individuals in industry, health care, education, government agencies, professional and trade organizations, and other not-for-profit groups to serve as examiners for the following year.

When will a national award be given for health care and education?

Nonprofit education and health care organizations can apply for the Baldrige Award next year if funding is approved as part of President Clinton's fiscal year 1999 budget proposal.

Is the Baldrige the same as ISO 9000?

The purpose, content and focus of the Baldrige criteria and ISO 9000 are quite different. The Baldrige criteria provide an integrated, results-oriented framework for designing, implementing and assessing a process for managing all operations. The ISO 9000 series are standards used in implementing a compliance system and assessing conformity in company-selected operations.

For a more detailed description on the differences between the two, see "The Malcolm Baldrige National Quality Award and ISO 9000 Registration: Understanding Their Many Important Differences," an article by Curt Reimann and Harry Hertz that appeared in the November 1993 issue of ASTM Standardization News. Copies are available from the National Quality Program, telephone (301) 975-2036 or fax (301) 948-3716.

Why should a company participate in the Baldrige process when it's registered to ISO 9000?

In today's competitive marketplace, ISO 9000 registration is becoming a requirement for doing business in many industries. To remain competitive, companies need to go beyond that. The Baldrige criteria focus on competitiveness and emphasize business results in areas such as customer satisfaction, financial and marketplace performance, employee satisfaction and development, and supplier and partner performance.