Why Baldrige? Reflections of a Retired New England Business Leader

Laurence (“Larry”) Smith is a long-time advocate of quality and systems-thinking-based management of U.S. businesses. In the early 1980s, while he was leading a chamber of commerce in northeastern Massachusetts, Smith recognized “the need for a transformation of American management,” he told me recently. A learning experience that inspired him to appreciate a holistic, systems view of business leadership and management was a four-day workshop his chamber sponsored in his community by the late Dr. W. Edwards Deming. “I learned to think of quality as a 360-degree process that includes quality of life,” Smith recalled recently.

“Managers from one of my chamber’s members, the 10,000-employee Western Electric & Bell Labs plant, attended that Deming course and decided to adopt his teaching. In 1992, 11 years later, that plant won a Baldrige Award,” Smith said.

What happened next convinced Smith of the value of the Baldrige framework through difficult consequences for his entire community: “Unfortunately, with the AT&T break-up, the plant was taken over by another company. I met a manager from Western Electric five years later who told me that, after getting the Baldrige Award, the new management stopped using the Baldrige Criteria for Performance Excellence, and unresolved failures increased,” Smith recounted. “The manager said life was much happier and more productive when they were using Baldrige. Not long after, the plant closed. The community lost what had been a 10,000 employee factory in 1980—one that had an annual $1 billion economic impact in the area.”

Following are additional reflections from my recent exchange with Smith.

Would you please share more about how you came to believe the Baldrige Excellence Framework (which includes the Criteria for Performance Excellence) provides a superior approach to business leadership and management?

It started with Deming’s teaching about the need for a transformation of American management, and Total Quality Management (TQM), and then, with the Malcolm Baldrige National Quality Awards program,

Let me share a few background experiences that led me to this conviction: In the 1980s, after getting an MBA (majoring in executive management), I thought I knew something significant about organization management. Actually, I’d pursued the MBA because my BS in industrial technology education didn't prepare me for management or managing organizations in a globalized economy.

However, as executive director of a chamber of commerce in an old industrial city in Massachusetts that lost most of its job-producing industry after World War II, I saw that nothing anyone in my city or state had done during the 25 years after the industrial evacuation was able to grow jobs and improve the economy of the city.

Then, in 1980, we learned about how Dr. W. Edwards Deming helped Japan recover economically from the war, and we wondered if he could help our communities recover, too. Our community leaders invited him to our community, and he told us that the major problem was that the American style of management was ineffective in the new environment of a globalized economy and that we needed a transformation of American management. We invited him to teach us how to transform American management so that it could be competitive and profitable in the new, globalized economy. I applied Deming’s thinking in my chamber of commerce work, which enabled us to be one of the 10 percent of chambers of commerce in the nation to be accredited, and to win a top award in the President’s Citation Program for Private Sector Initiatives in 1985. The award was for finding innovative private solutions to public problems. 

In the 1960s and 1970s, chambers of commerce were networked, in a free and democratic fashion, to work in and on the public systems in which our businesses resided throughout the nation, facilitated by the U.S. Chamber’s state and local chamber department. There was a strong, 10-year-plus professional development program for chamber staff. The mission of chambers of commerce back then was to advance systems-thinking-based total community development. The understanding was that if the whole community did not function well and keep improving, then business and the economic climate would not be sustainable. Virtually all of this was quietly dismantled in the mid-1980s. 

From 1995 to 2008, while editor of the Journal of Innovative Management, I attended the annual Baldrige Quest for Excellence® conference in Washington, DC. I heard the presentations and talked with Baldrige Award winners as well as other attendees, and we developed journal articles. Then I retired, but worked for a year in 2010 to help the Massachusetts Council for Quality recover from its deficit and try to grow its Baldrige programming.

Why do you think more organization leaders are not using the Baldrige Criteria (or any similar systems-based management process) to lead and manage their organizations?

In our society, I think people are often rewarded for outstanding individual behavior. Winning—being number-one in individual competitive exploits—reaps the top reward. That’s true both for individual people and individual organizations. But human organizations are complex communities of relationships. To be successful and sustainable, everyone has to work smartly, cooperatively, and—as I learned in the Coast Guard—to be always ready, relevant, and responsive to the environment, nature, people, and  communities in which they live and serve. That requires participative, systems-based management processes, which Baldrige teaches and rewards. But our schools have not been teaching that to people in the past, so they don’t understand it. I hope that’s changing now.

There’s another reason, too: systems-based customer- and quality-focused management is also a movement away from traditional command-and-control styles of management to a participative style of management. The Baldrige approach does it all, creating a clear and measured process system, from leadership to results, one that links and documents an organization’s results all the way back up to leadership decisions; and that can stimulate some fear from top management, depending on how organizations deal with and learn from mistakes.

You have observed that not many U.S. business schools are teaching about systems thinking and other core concepts of the Baldrige framework; why?

I asked that question of a business graduate­ school professor who was on my Massachusetts Council for Quality board. His answer was that business school systems are organized in individual “stove-pipes,” where each professor attends to his or her specialty. That’s understandable because individual students take individual courses to get individual degrees to get individual jobs in individual companies. Few, if any, are dedicated to an integrated whole. The result is that there’s little interest in a holistic, systems-based, comprehensive approach to organization/community/national/world leadership and management for the common good.

The outcome of that is that there is little recognition of the need for leaders of all organizations to be interested and informed about working on the larger systems they’re living in, as well as working in the systems that produce the money they need and want. Those big-picture affairs tend to be left to interested individuals who see a need and work it out for themselves.

What do you see as a key challenge for increasing use of the Baldrige framework by leaders of U.S. businesses and other organizations?

Our social, economic, and political culture today is a tough one for Baldrige because our culture is so divided and ruggedly individualistic in vision, mission, and practice. There’s a pervasive zero-sum, winner-take-all mentality and short-term profitability imperative. A leader considering using a Baldrige system would quickly see that his/her major leadership and management decisions would become participative, shared, measured, visible, and transparent. While that’s expected and allowed in sports and military organizations, it is not required (or embraced) in a political or stock-market-driven economic system that simplistically demands continuously winning popular votes or quarterly monetary increases.

Also, it can take a long time to change a management culture, even in a single organization, and you need a leader at the top of each organization who’s persistent, patient, and has the time in office to build the culture and demonstrate the good results. I had an experience where I worked with a mayor and his department heads to learn TQM, but due to the city’s mayoral term limit, a new mayor came in and didn’t want to use TQM methods.

How do you think interest in the Baldrige framework could grow in the contemporary environment?

I think the Baldrige Program and its Criteria for Performance Excellence is and has been doing the right things for running an organization. The Criteria is continuously improved and expanded to keep it ready, relevant, and responsive to the needs of organizations and communities.

It would be beneficial for Baldrige adherents to also work on the larger legal, economic, community, and political systems that enable everyone in a society to survive and thrive. I think we will know that we’re on the right track when our leaders in all sectors create systems that serve to finance and facilitate a high quality of life for all, with a triple bottom-line of people, planet, and profit.

How do you view the relatively new Baldrige-based initiatives of Communities of Excellence 2026—including the proposed addition of a Baldrige Award eligibility category for communities?

Adding an award category and criteria for communities would be a great capstone for the Baldrige Program, one that could have the potential to bring people and the nation together and form a real sense of community, a real united states of America. As far as I can see, there isn’t another leadership and management system that can do that today, and Baldrige would create a path for enabling that to happen by including communities in its criteria and program. I hope that, with the help of the Baldrige Program, Communities of Excellence 2026 will gather enough power and speed to take off and fly.

In recent decades, business and industry leaders have tended not to think of the community as being a living part of their organizations that they need to care for. I believe that such inattention to the community by business leaders is a cultural error in judgment, perhaps created and made worse by the design of the monetary and economic systems in which we live and work that demand ever-increasing consumption and short-term monetary (paper) profits, which leads to problems in communities, nations, and the world. The matter is holistic and complex—something we tend not to be taught about in school or think about, and it is controversial when we do.

There are times when a local chamber of commerce can help, but it’s not the sort of integrated systems approach that Communities of Excellence would enable. An example I can cite is what my chamber of commerce did in the 1980s. Two of our largest industries, which employed some 16,000 people, asked us to become involved with the local schools, encouraging higher graduation rates, higher grades, and a good work ethic. They said they needed that if they were to be able to hire from a local labor pool because it would be too expensive to move entry-level people into our local communities. That led us to create an extensive business-education collaborative that these two industries, along with many other businesses, actively supported and participated in. We actually created an adopt-a-school program where every school in the inner city was adopted by one or more businesses.

As a cautionary tale, I want to share one more relevant experience: While working to create a community quality council in our region in the mid-1990s, I recall that a member of our board of directors who was the Baldrige leader for a manufacturing organization came to me and said he was leaving the board because he couldn’t see how the Baldrige framework could apply to a community. It seems to me that many leaders just don’t understand how a management system focused on quality; total community development; a triple bottom-line of people, planet, and profit; and the pursuit of excellence could prevent some breakdowns and improve quality of life. I hope this is changing. Communities of Excellence may be just what the nation, its individual organizations, and their communities need to enable a good quality of life for all.
 

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