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Emgt 375 Team 1 Project Report:

A Case Study on Quality Management


Efforts of the 2012 Malcolm Baldrige
Award Recipients

Ashley Wallingford, Greg Morse & Tejaswi Materla


Team 1

Table of contents
1.
2.
3.
4.

5.

6.

7.
8.

Abstract.
Overview of Malcolm Baldrige National Quality Award.
Introduction of 2012 Malcolm Baldrige Award recipients.
Study of efforts of Lockheed Martin Missiles and Fire Control, Grand Prairie, TX.
4.1 Introduction
4.2 Leadership
4.3 Strategic planning
4.4 Customer Focus
4.5 Measurement, analysis and knowledge management
4.6 Workforce focus
4.7 Operations focus
4.8 Business results and conclusion
Study the efforts of MESA Products Inc., Tulsa, OK.
5.1 Introduction
5.2 Leadership
5.3 Strategic planning
5.4 Customer focus
5.5 Measurement, analysis and knowledge management
5.6 Workforce focus
5.7 Operations focus
5.8 Business results
5.9 Conclusions
Study the efforts of North Mississippi Health Services, Tupelo, MS.
6.1 Introduction
6.2 Leadership
6.3 Strategic planning
6.4 Customer focus
6.5 Measurement, analysis and knowledge management
6.6 Workforce focus
6.7 Operations focus
6.8 Business results and conclusion
Conclusions and Future work.
References.

1. Abstract

This case study focuses on quality management efforts taken by the companies: Lockheed Martin
Missiles and Fire Control, MESA Products Inc., and North Mississippi Health Services who have been
awarded the Malcolm Baldrige National Award in 2012. This is an in-depth study of improvement efforts,
overall performance management system, organizations policies and practices of quality improvements,
tools used for managing performance, organizations effectiveness and capabilities, sustainability etc.
Historically, Malcolm Baldrige award has been awarded to US organizations recognized for their efforts
in performance excellence.
Malcolm Baldrige National Quality award promotes awareness of quality and performance as key
elements in todays business environment. The companies that have received this award have been rolemodels who believe in continuous improvement in delivering products/services, demonstrating efficient
and effective operations in their specific industries. This project identifies the efforts of these companies
in realizing the criteria for the award such as leadership, strategic planning, customer and market focus,
measurement analysis and knowledge management, human resources focus, process management and
business results. This case study emphasizes their efforts to review and continuously improve quality
assurance and control programs.
A study by National Institute of Standards and Technology has shown that the recipients of
Malcolm Baldrige Award have regularly outperformed the S&P 500 companies. This study will also help
us realize the link between the quality and performance excellence programs and the financial
performance of the company.

2.

Overview of Malcolm Baldrige


National Quality Award.

The need for performance excellence and to increase awareness of quality assurance and
recognition of the declining U.S. productivity made way for a national quality award that successfully
challenges U.S. firms to meet the needs of quality and performance excellence in todays business
environment. The Malcolm Baldrige National Quality Improvement Act was signed into law (Public
Law 100-107) on August 20, 1987 (Evans et al. 2011). This award is named after US Secretary of
Commerce, Malcolm Baldrige and it focuses on helping the American companies to improve quality
and productivity for the pride of recognition, recognizing the firms which improve the quality of their
products and services, establishing guidelines and criteria that can be used by companies for selfassessment and to provide specific guidance for companies that wish to learn how to manage quality, to
change their cultures and to achieve eminence.
Originally, three types of organizations were eligible: manufacturers, service companies and
small businesses. In 1998, the President and Congress approved legislation that made education and
health care organizations eligible to participate in the Award Program beginning in 1999. In 2006 the U.S.
government approved legislation that made nonprofit organizations (including charities, trade and
professional organizations, and government agencies) eligible to participate in the Award Program starting
in 2007 ("Baldrige Performance Excellence Program" August 04, 2013). The Award promotes excellence
in organizational performance, recognizes the achievements and results of U.S. organizations, and
publicizes successful performance strategies. The Award is not given for specific products or services. A
panel of judges consisting of experts on quality and continuous improvement oversee the Baldrige award
process.
The Malcolm Baldrige award is based on rigorous set of criteria called the Criteria for
Performance Excellence, designed to encourage companies to enhance their competitiveness through an
aligned approach to organizational performance results. The criteria consists of a set of categories, items
and areas to address. There are seven categories:

Leadership,
Strategic planning,
Customer focus,
Measurement, Analysis and knowledge management,
Workforce focus,
Operations focus and
Business Results.

The Baldrige Criteria play three roles in strengthening U.S. competitiveness: (1) they help
improve organizational performance practices, capabilities, and results, (2) they facilitate communication
and sharing of best practices among U.S. organizations, and (3) they
serve as a working tool for
understanding and managing organizational performance, for guiding a strategic plan, and for providing
opportunities to learn ("Criteria for Performance Excellence" 2013). This composite of measures ensures
that your strategies are balancedthat they do not inappropriately trade off among important
stakeholders, objectives, or short- and long-term goals.

These seven categories form an integrated management systems which addresses various
questions about the organizations system and areas of improvement which will lead to performance
excellence. These seven categories represent a logical approach to planning, executing, and reviewing
performance of an organization. These categories will be focused in depth in the following sections with
respect to the 2012 Malcolm Baldrige Award recipients.

Figure 2.1: Baldrige Criteria for Performance Excellence framework

3) Introduction of 2012 Malcolm


Baldrige Award recipients.
Acting U.S. Commerce Secretary Rebecca Blank named four U.S. organizations as recipients
of the 2012 Malcolm Baldrige National Quality Award, the nation's highest Presidential honor for
performance excellence through innovation, improvement and visionary leadership. The winners in this,
the 25th anniversary year of the award, represent four different sectors, one repeat recipient and a health
network recognized for the same honor earned previously by its flagship hospital (Newman November 14,
2012).
The 2012 Baldrige Award recipientslisted with their categoryare:

Lockheed Martin Missiles and Fire Control, Grand Prairie, Texas (manufacturing)

MESA Products Inc., Tulsa, Okla. (small business)

North Mississippi Health Services, Tupelo, Miss. (health care)

City of Irving, Irving, Texas (nonprofit)

Mesa Products Inc., and North Mississippi Health Services have been awarded Malcolm Baldrige
award in 2006. The 2012 Baldrige Award recipients were selected from a field of 39 applicants. All of the
applicants were evaluated rigorously by an independent board of examiners in seven areas defined by the
Baldrige Criteria for Performance Excellence: leadership; strategic planning; customer focus;
measurement, analysis and knowledge management; workforce focus; operations focus; and business
results. The evaluation process for each of the recipients included about 1,000 hours of review and an onsite visit by a team of examiners to clarify questions and verify information in the applications. The
efforts of these companies excluding the City of Irving will be discussed in the following sections with
clear emphasis on each category, items and areas that have been addressed to achieve high quality and
performance excellence.

4) Study of efforts of Lockheed Martin Missiles and Fire


control, Grand Prairie, TX.
4.1 Introduction:
The Baldrige Criteria address all key areas of a manufacturing business and are compatible with
other performance improvement initiatives, such as ISO 9000, Lean, and Six Sigma. Using the Baldrige
framework, Lockheed Martin Missiles and Fire control organized and integrated these approaches,
improve productivity and effectiveness, and pursue Performance Excellence. Lockheed Martin Missiles
and Fire Control (MFC) designs, develops, manufactures, and supports advanced combat, missile, rocket,
and sensor systems for the U.S. and foreign militaries. The companys workforce of 10,688 employees
produces and delivers more than 100 products through 825 contracts in more than 60 countries. MFC is
headquartered in the Dallas, Texas area with a second major facility in Orlando, Florida. Additional
facilities are located in nine U.S. states as well as Japan and the United Kingdom ("Malcolm Baldrige
National Quality Award 2012 Award Recipient, Manufacturing Category" May 28, 2013).
MFC is one of five Lockheed Martin business areas. MFC is a recognized designer, developer
and manufacturer of precision engagement aerospace and defense systems for the U.S. and allied
militaries. MFC also offers a wide range of products and services for the global civil nuclear power
industry and the militarys green power initiatives. MFC has seven principal product categories that
correspond to the vital capabilities it provides our warfighters and civilian customers in their defining
moments. The company has established an Enterprise Excellence System (EES) which provides common
foundation to all the process in a systems approach and along with the Business Rhythm Process it helps
MFC to be agile and rapid as the industry continually changes.
Continuous improvement is ingrained in the culture of MFC making it the highest performing
company within Lockheed Martin Corporation with pride and sense of honor. MFC is dedicated to
delivering the products on time while meeting all the requirements. The companys culture encourages
active participation from all the members of the enterprise. The diversity in the company is much broader
than the standpoint of race and emphasizes inclusion that focuses on employees with different working
style, capabilities and skills. MFC has highly engaged work force and has shown commitment towards a
safe and healthy environment for them. We will discuss the efforts of Lockheed Martin Missiles and Fire
control in all the seven categories of the Baldrige framework.

4.2 Leadership:
From inception, the MFC leadership recognized the critical need for radical change. The
consolidation of the defense industry and the decreasing Department of Defense (DOD) budgets were
sure to increase competition. In order to achieve emphasis on performance, MFC realized need for
change at a faster pace. The fundamental Business principle for this organization is Business is not the
objectiveIt is the result. Performance is the objective.
With a pervasive executive emphasis on quality and performance, the Senior Leadership Team
(SLT) along with the Enterprise Leadership Council (ELC) developed the EES. The EES integrates over
500 processes and comprehensive metrics to provide a common foundation for operating, managing,
reviewing, analyzing, evaluating and improving almost every aspect of our business ("Missiles and Fire
Control. 2012 Malcolm Baldrige National Quality Award Application 2013). It enables the SLT, and
employees to measure the performance of our internal operations and those of suppliers. This common
foundation ensures consistent terminology, approach, objectives and goals that are aligned throughout the
enterprise. Senior leaders have created an unwavering dedication to teamwork and innovation, as well as
to developing talent, new markets and quality share, gaining market share with the highest quality
contracts in terms of innovation, dollars, time and importance to our customers. Each year, as a part of the
Strategic Planning and Execution System, the SLT and other members of the planning team exhaustively
evaluate the current business environment. They keep re-examining the vision, mission, and values
(VMV) to remain agile. Human Capital framework system along with communication systems are
embedded in the leadership category of the organization to deploy VMV along the organization.

Figure 4.1: MFCs Leadership system


The VMV is shared with employees at the presidents annual State of the Business address, biweekly briefings by managers at all levels, and annual Business Conduct Guidelines (BCG),
training/certification, and annual ethics training for all employees. The company encourages its suppliers
and partners to follow their values and mission by providing them a strategic performance management

team which guides them. MFC deploys and reinforces VMV through executive discussions and feedback
sessions. The senior leaders actions consistently reflect values and follow Do Whats Right, Respect
Others and Perform with Excellence. The company promotes ethical behavior by the president
personally completing the annual ethics training followed by senior leaders and the employees. A
quarterly ethics council and the Disciplinary Review Board oversee the training process. MFC has zero
tolerance policy for unethical and illegal behavior.
MFC uses an integrated communication system to engage work force which use digital, print,
interactive, and face to face techniques which are deployed throughout the company. By the use of
newsletter, surveys, and focus groups, MFC maintains the effectiveness of communication. The
organizational governance system ensures ethical business practices and accountability. They use three
day kaizen events to improve activities by workforce and ensures accountability on them. The governance
system also focuses on accountability for management actions, fiscal accountability, transparency in
operations, independence in internal and external audits, and protection of stakeholder and shareholder
interest. Through their Green Initiative they show their societal responsibility and their community
support by participating in many welfare organizations
4.3: Strategic planning:
MFC created and continuously refines a structured and dynamic Strategic planning and execution
system that is deployed throughout the organization. In this system, the business data is gathered,
analyzed and combined through Lines of Business and a lot of what if scenarios are created to make an
effective decision in strategic planning. This system has three strategic tenets such as: growth,
sustainment, and profitability which help in filtering all processes and decisions are and creating internal
operating plans which focuses on adjusting all system metrics. The strategic planning process along with
the work systems and work processes plan and execute long term and short tern initiatives. MFC has a
well-defined strategic process that ensures seamless operation and excellent performance across the
enterprise which includes the following steps:

Prepare company strategic plan that focuses on three areas: Perform Situational Assessment,
Develop Business Strategy, and Create the Strategic Plan.
Develop long-range plan which is three year based with 10-year orders forecast and ensures
growth, sustainability, and profitability.
Plan and Allocate New Business Acquisition Expense (NBAE) Capital, they determine how much
to allocate, as a percent of sales, to acquiring new business.
Capture the business which is integrated in planning and execution phases.

Figure 4.2: MFCs Strategic planning and execution system.


The company uses SWOT analysis to identify issues, opportunities and risks and make one year,
three year, and ten year plans to accomplish the execution of these strategic plans. Also, to make
appropriate strategic considerations after reviewing the business data with the help of senior leadership
team to ensure long term sustainability. The companys strategic objectives are: Continue Portfolio
Expansion and Diversification in Adjacent Segments; Invest in Technology and Contract Funded R&D
Capture; and Transform the Culture and WorkforceAgility, Innovation and Competitiveness which
address the need to develop core competencies for innovation, reliability and precision to be agile in
todays business environment. These objectives are achieved by extensive review of the data, in-depth
analysis and focus on the three strategic tenets. The strategic implementation of these objectives is done
through the following steps:

Action plan development using key work systems and processes.


Action plan implementation.
Resource allocation.
Workforce plans.
Performance measures.
Action plan modification according to the changing needs and
Performance projections to encourage the commitment from the workforce.

MFC proactively takes measures to ensure effective strategies throughout the enterprise including
reaching out to new markets to ensure success of the organization.

4.4: Customer Focus:


Lockheed Martin Missiles and Fire Control (MFC) forms long-term, intimate working
relationships with our customers based on executing programs together that span many years, even
decades. Customers are active members of the Integrated Product Teams (IPTs), and our Defense
Contract Management Agency (DCMA) representative co-chairs the Enterprise Leadership Council
(ELC) meetings with the president. The concepts of Customer First and We never forget who were
working for are more than a trademark; they are lived on a daily basis. Well-established customer
relationships benefit in meeting or exceeding the commitments on current business. They also allow to
hear and learn from the Voice of the Customer (VoC) to be well prepared to compete for future contracts
as they are put out for bid. This interdependency builds relationships and enhances customer engagement
("Missiles and Fire Control. 2012 Malcolm Baldrige National Quality Award Application 2013).
Customer focus category is approached in a step by step process which is: listening to the voice
of customer, engaging the customer, building relationships with the customer through informal and formal
methods. MFC has a robust VoC Listening and Learning Process that includes face-to-face, electronic and
written customer feedback. VoC is fully deployed at all sites and tailored to the best approaches for each
customer segment. They continuously analyze current process and methods of listening to evaluate their
usefulness and results. They add, remove or improve methods as a result of our evaluations. MFC
receives formal and informal feedback from the warfighters through their Field Service Representatives
(FSRs). MFC receives specific program- or contract-related feedback and learning through Business
Development efforts, rigorous Lessons Learned debriefings following a win or loss, Customer
Relationship Index surveys, FSRs, Contract Project Reviews, Contractor Performance Assessment
Reports, Government Corrective Action Reports, and Failure Reporting, Analysis and Corrective Action
System. In addition, they listen in person-to-person informal conversations, conference calls and
meetings. MFC uses four social media sites such as YouTube, Flicker, Facebook and Twitter to listen and
learn from the customers.

Figure 4.3: Voice of Customer

They also use these methods to listen to the potential customers, determining customer
engagement and satisfaction, dissatisfaction and relativity with respect to potential competitors. They use
New business capture process to make the customers aware of new product offerings, to reach out for
ideas, to provide efficient customer support which provides technical expertise and meets 95% of
customers request within one day. They also use this data for customer segmentation and complaint
management. They care for the customers with an unparalleled support and respect for them. They build
relationships with customers with core values such as: Do Whats Right, Respect Others, Perform with
Excellence, Retain customers, meet their requirements and exceed their expectations and engage
the customers with care which sets them apart from the rest.

4.5: Measurement, Analysis and Knowledge Management:


The objective of EES is to provide a dynamic system to integrate, gather, analyze and review
business data which is vital to managing by fact and to improve organizational performance. The EES is
dynamic so that improvements entered into one area of the EES automatically update data and cascade
and integrate into other areas. MFC tracks its daily operational and organizational data also by using
strategic planning and execution system where all the metrics are aligned with objectives, action plans
and key work systems. MFC systematically reviews and evaluates our metrics to improve their utility in
managing and leading a highly complex organization. They recently completed three comprehensive
improvement cycles in addition to annual reviews. In 2005, they changed the metrics in the Design the
Product Process to add Risk Management and Risk Aging measures ("Missiles and Fire Control. 2012
Malcolm Baldrige National Quality Award Application 2013).

Figure 4.4 Metric connectivity in EES


Comparative data is also gathered and reviewed with the help of both the EES and SPES.
Customer data is gathered by various formal and informal methods such as surveys, focus groups, social
media etc., with the help of the Business Rhythm process. They ensure response to rapid or unexpected
organizational or external changes through the exceptional and dynamic capabilities of the MFC EES. It
provides a high level of performance data availability and the frequency and Enterprise-wide nature of
reviews enable to determine changes almost instantly and take proactive steps. The EES provides the
framework to conduct what if scenarios to determine the optimal course of action required.
Performance review and analysis is done electronically through an enterprise metric utility tool which
aligns and integrates with strategic objectives throughout the enterprise. They have a highly innovative
enterprise performance index that includes dynamic modeling and simulation capabilities. The analysis is
also done in the DMAIC process, a concept of Six Sigma. The improvement program at MFC follows the
steps: best practice sharing, predicting the future performance, continuous improvement and innovation.
The knowledge management is also done through EES and follows a certain procedure such as:
maintaining a U.S. database with certain regulations, making information available to employees,
customers and stakeholders, collecting and transferring knowledge through EES, rapid identification,
sharing and implementation of practices, maintaining hardware and software resources, emergency
availability of those, and assembly of that data for future use.

4.6: Workforce Focus:


One of the Core Competencies at MFC is Developing Talent. They are dedicated to developing
talent as a critical differentiator for competitive advantage and long-term business success. An integrated
approach to managing the Human Capital of the enterprise to align with the Strategic Plan and Action
Plans includes a strong focus on ethics, engagement, development and flexibility. This has made MFC a
talent and process leader within Lockheed Martin Corporation, as well as in our industry. A key to success
at MFC is ensuring that the right people with the right knowledge and skills are in the right job at the right
time. The Integrated Talent Management Process (ITMP) enables a cross- functional team to assess the
talent requirements for the enterprise to evaluate capability and capacity during the Strategic Planning and
Execution System (SPES) and throughout the year. Based on this data, the talent gaps and further analysis
is done with systematic approach and on ad hoc basis depending on the needs be.

Figure 4.5: Human capital framework


MFC needs minimum of a Bachelors degree from an employee for a specialized job role and
minimum schooling for other employees to have a skilled work force. The MFCs Human capital
framework includes three categories while hiring new work force: Acquire, Develop and Engage
employees and retain the work force. MFC also pairs up with many universities and organizations to
acquire skilled and able work force. The organization uses matrix structure to permit efficient and fluid
movement of talent for work accomplishment. With the help of ITMP and HCF, MFC analyzes and
evaluates long term and short term talent needs and engages the workforce to be agile and actively
participate in all the processes of the organization. MFC focuses on providing safe and healthy work
environment for the employees and has policies that provides great benefits for employees. The
organization culture and workforce engagement is aligned with the strategic objectives of the MFC. The
company always collects feedback and optimizes its processes and policies regarding workforce
engagement and its culture and this has a clear effect on the organizational performance and business
results.
4.7: Operations Focus:
Lockheed Martin Missiles and Fire Control has developed a highly refined Five Key Work
Systems integrated with each other and its key work processes. These five work systems provide the
backbone for focusing and aligning the SPES and metrics to develop and accomplish the Strategic Plan,
Strategic Objectives, and Action Plans. The key work systems and processes are fully deployed to all
locations and lines of business with the help of Enterprise Work System Development Process. They
receive Business Performance Reviews monthly during the Enterprise Leadership Council (ELC), as well
as annually during a meeting of the Strategic Enterprise Leadership Council (SELC). These reviews
ensure our key Work Systems and Processes are continually improved and result in efficient, effective and
productive operations.

Figure 4.6: Enterprise Work System Development process.


MFC uses value stream mapping (VSM) in designing all of their work system processes and look
for Kaizen events to improve their processes. Work system management and implementation is done with
core competencies as basis and following the motto of performance being the objective. Along with the
improvement of work systems, cost analysis is performed to control additional expenditure on the
processes and an analysis report is constructed for further review which follows the Plan-Do-Check-Act

cycle. The company also focuses on a seven step supply chain management system to deliver high
supplier performance to improve quality and performance excellence of suppliers along with them. MFC
uses an LM21 path to excellence integrated with VSM to lead a path to excellence which is fully
deployed through the enterprise and frequently re-evaluated.

Figure 4.7: Path to excellence

4.8: Business Results and conclusion:


The Fundamental Business Principle at Lockheed Martin Missiles and Fire Control (MFC) is
Business is not the objectiveit is the result. Performance is our objective. From the beginning of the
MFC Journey toward Excellence in 1999, the focus has been on performance and continuous
improvement in all aspects of the enterprise. Through workforce engagement, strong customer
relationships, rigorous processes, challenging metrics and systematic review, analysis and improvement,
MFC has obtained results that places it as the highest performing company within Lockheed Martin
Corporation and one of the highest within our industry ("Malcolm Baldrige National Quality Award 2012
Award Recipient, Manufacturing Category" May 28, 2013).
MFC consistently operates at or near the Six Sigma level, defined as the level at which
99.99966% of the products manufactured are statistically expected to be free of defects. MFC has key
requirements of outcomes which are cost-effective, adhere to performance, mitigating risks and threats,
reliability and rate of success in completing events and milestones. MFC exceeds the benchmark provided
by Best Manufacturing Practices (BMP), an organization that identifies, researches and promotes
exceptional manufacturing practices and procedures. The strengths of MFC is in simulation, controlling
costs and modeling. The operational effectiveness is high because MFC uses Lean concepts, Six Sigma
and enterprise performance index in products, processes, delivery and service. The unique work system
processes, human capital framework, supply chain process etc., help the organization in enhancing ontime delivery by suppliers. The commitment to continuous improvement and performance helped MFC
increase their earnings as compared to their competitors with an annual growth rate of 14%. MFC has
achieved a compound annual growth rate of 6.2% of operating margin. According to the KPMG Global
Business Continuity Management Program Benchmark Study, MFC has a best-in-class Business
Resiliency System ("Missiles and Fire Control. 2012 Malcolm Baldrige National Quality Award
Application 2013). The strategic objectives and action plans are achieved with careful management and
total commitment of senior leadership and management. MFC has high performance even under
marketplace volatility, captures high percentage of competitive bids and has won 71% of dollar value of
wins against competitors. Along with the Baldrige award, MFC has won other awards such as Cogswell

award, William J. Perry Award, Eisenhower Award for Excellence in Small Business Utilization,
Customer research and development award and it continues to exceed the expectations of customers and
stakeholders while having high customer satisfaction & engagement, employee engagement and high
profits. Although the defense industry market is contracting, MFC is both increasing market share and
increasing the share at a faster rate than the primary competitor.

5) Study of the efforts of MESA Products Inc., Tulsa.


5.1 Introduction:
MESA Products, Inc. is a small company headquartered in Tulsa, Oklahoma. They are a small
business with approximately 139 employees. Their specialty is in designing, manufacturing, and
installing cathodic protection systems. Cathodic protection systems are used to prevent corrosion on
underground tanks and pipelines. MESA is no stranger to quality awards, seeing as this is their second
Baldrige Award for the company. Their previous award was received in 2006, and it was also in the small
business category. ("Malcolm Baldrige National Quality Award 2012 Award Recipient, Small Business
Category")
MESA was started by the current CEO and owner Terry May in 1979. The company has been
growing and expanding ever since. In 2012, MESA had their revenue reach the $56 million mark for the
first time in company history, which is a 120% increase from 2006. ("TAB Affiliated Mesa Products Wins
2012 Malcolm Baldrige National Quality Award") They have almost doubled their employee headcount
from 70 in 2007 to the current count of 139. Since opening in 1979, they have opened branch offices in
Houston, Texas; Los Angeles, California; and Tallahassee, Florida. (Daniels) MESA continues to look
for quality avenues in which to expand their brand on products.
5.2 Leadership:
One of biggest drivers of a good organization, and one that is critical to the level of quality that
MESA continually produces, is leadership. MESAs senior leadership has proven that they are very
capable of handling the issues that arise in the company. As illustrated above, the growth and expansion
that the company has experienced since they first opened can only be attributed to competent leadership
with a sound understanding of the driving factors. Figure 5.1 shows the Senior Leadership System that is
in use at MESA. (MESA Products)
The whole Senior Leadership System starts with the Strategic Planning Process (SPP), which will
be covered in more depth later. This system is where the company sets the vision and values they want to
implement moving forward. This is one of, if not the most important step in the entire process. If this
step is not executed properly, there is a significant risk that the entire strategy might fail. This entire
process has been perfected, through multiple revisions, and adopted to fit the culture and values that
MESA is known for and from which they have established their foundation as a business.

Figure 5.1: The Senior Leadership System at MESA


Another highly important responsibility of the leadership of any company is to create a
sustainable business. MESA has taken that into account by developing a Business Continuity Plan seen in
Figure 5.2. This plan addresses some of the risks and events that could cause a significant interruption in
the business. Some of the higher risk areas have even had a written plan developed for them. (MESA
Products) By planning for these sorts of situations during one of the most profitable times in company
history, the leaders currently in the positions that are vital to the company, can participate in the
succession planning of their own positions and start grooming the heir apparent to the position. (MESA
Products)
Some of the other leadership characteristics that have benefited MESA include their
communication policies, ethical behavior, and societal support. Through their open-door policies, town
hall meetings, and satisfaction surveys, upper management is very approachable and able to hear the
issues from lower level employees directly. (MESA Products) This is a very important part of a smaller
company such as MESA. The ethical behavior demonstrated by MESA is critical to a company in a
smaller, mature industry such as the cathodic protection industry.

Figure 5.2: The Business Continuity Plan at MESA


A companys reputation in such an industry is vital to continued success where customer retention
is very important to survival. (MESA Products) A thorough log of all incidents pertaining to ethical
behavior is kept for measurement purposes. Finally, the community support demonstrated by MESA is
key to gaining support and being viewed as a valued member of the community. MESA chooses to
support the industry in which they work, the local community, and some causes that have personal
connections with the company. These causes include NACE International: The Corrosion Society, the
Cystic Fibrosis Foundation, Oklahoma Blood Institute, Food for Families, and Adopt-a-Family. (MESA
Products)

5.3 Strategic Planning:


As mentioned above, the SPP is a Key Work Process within the MESA business model. MESA
attributes its steady growth and quality improvement since 1998 to the SPP, the year the SPP was adopted.
The SPP can be seen in Figure 5.3. (MESA Products) Without proper execution of this step, MESA
would not be experiencing the explosive growth that they have seen the last 15 years. It is in this process
that most of the strategic objectives, action plans, and resource allocation plan decisions are made. Figure
5.4 shows the strategic plan that was submitted in their application for the 2012 Baldrige Award. (MESA
Products) Some of the results of having a strategic plan has been to become ISO 9001 certified, adopting
the Baldrige criteria, and expanding service operations. (Daniels)

Figure 5.3: The Strategic Planning Process at MESA


5.4 Customer Focus:
As mentioned previously, customer retention is of paramount importance if a business is to succeed in the
cathodic protection industry. MESA is very concerned with the voice of the customer. They make sure
they listen to the customer and consider the customer impact before making any decisions. (MESA
Products) Customer satisfactions is a key component in retaining customers. Figure 5.5 shows how
MESA ranks compared to a few of their competitors. (Daniels) After their first Baldrige award in 2006,
they beat their competitors in all 17 of the fields when measured by a third party survey. From 2002 to
2005, MESA increased its overall customer satisfaction from an already good 80% to an unmatched 88%.
This surpassed all competitors and American Customer Satisfaction Index for energy utilities.

Figure 5.5: Customer Satisfaction Results


During the same time frame, the key measure of customer retention grew from 93% to the desired level of
100%. MESA also has a top notch complaint system. If there is any supplier nonconformance, the CEO
is required to sign off before approval is accepted. The CEO will then call the potentially affected
customers to apologize for the inconvenience. (Daniels) This is another step that shows the customer is
the first priority.

Figure 5.4: Strategic Plan for MESA in 2012

5.5 Measurement, Analysis and Knowledge Management:


This section is a key component in determining the action plans effectiveness associated with the
SPP. (MESA Products) MESA has four types of performance measurement systems: corporate,
department, process, and individual. The decision makers use this date for decisions and innovation
ideas. The corporate measurement system primarily relies on monthly report cards, monthly financial
results, and annual management reviews for monitoring purposes. The department measurement system
has specialized goals that are aligned with the corporate strategic plan. The process measurement system
is compared to the monthly report card. Some of the factors that are compared include three-day
shipments, on-time shipments, and total non-conformance reports. Finally, the individual measurement
assessments are completed on a monthly basis. These assessments are used in aligning personal goals
with the strategic business goals. (Daniels)
5.6 Workforce Focus:
Workforce focus, or Human Resource Management, is a key driver of employee satisfaction in
MESAs eyes. They have a strong belief in lean processes and systems, but they refuse to repeatedly
adjust the size of their workforce in order to meet the surges and lulls in demand. They believe that their
employee assets are much more valuable than to reduce them and run the risk of not being able to get
them back when needed. (Daniels) As a matter of fact, they have never in their existence had an
involuntary layoff. The CEO has even went on record before to say that if they do have an involuntary
layoff it will be a last resort. MESA says this is makes it easier to develop loyalty, empowerment, and
all the other traits of a positive culture. (Daniels)
As mentioned above, MESA is a big proponent of lean. This requires specialized training to get
all employees on the same page. Each employee in the Tulsa office will receive eight hours of classroom
training minimum in lean processes. (Daniels) Employees that have been hired within the past six
months are flown to Tulsa to attend a session that is run by the President/CEO. This training allows
employees to gain a better understanding of the history and principles that are the foundation of the
company. Figure 6 shows the key processes associated with the companys people strategic plan. (MESA
Products)

Figure 5.6: Key Processes of the People Strategic Plan at MESA


5.7 Operations Focus:
The quality and process improvement in place at MESA has been ingrained in their employees. This
gives the employees a job satisfaction that is easy to overlook at some institutions. By giving the
employees this level of satisfaction, they take more pride in the products they produce. The Plan-DoCheck-Act (PDCA) cycle is the primary improvement process in place, while lean methodologies is the

basic improvement method. (Daniels) The Plan is encompassed through the SPP; the Do is
accomplished in work processes and work systems; Check uses the Knowledge Management system to
determine the gaps of the organization; Act is done with the improvement systems and is applied to the
work systems and processes. Figure 5.7 gives a general process map of how the PDCA process is used in
the company business model. (MESA Products) MESA has three employees that are certified as being
LEAN Implementers. By having a lean system, MESA is able to stay current with business needs by
the flexibility that it provides. (MESA Products) These concepts stretch across departments to allow for
cooperative methods and processes.

Figure 5.7: Plan-Do-Check-Act and the MESA Business Model


5.8 Business Results
Business results are important to any business, but they are driven by some of the least
controllable factors faced by businesses. If customers expect on time delivery, MESA needs to have their
suppliers deliver on time. This is why key partnerships are such a major part of the Baldrige Criteria.
(MESA Products) Through these key partnerships, MESA has reached world class levels of on time
delivery to their customers. In 1997, MESA has seen an increase from 94% to the current level of 97.5%.
This matches up favorably when compared to previous Baldrige award winners as seen in Figure 5.8.
(Daniels)

Figure 5.8: On-Time Shipments of MBNQA Recipients


Another key driver to great business results has been the lean kaizen events. Through these
events, major waste reduction has been achieved. As a result, MESA has rewarded the employees very
well in order to encourage further implementation. After all is said and done, this compensation has been
between 5% and 15% of their annual salaries. (Daniels) This has led to 69% of MESA workers to be
highly satisfied with their work. When comparing this to the industry norm of 44%, it is easy to see why
MESA has won a second Baldrige Award.
5.9 Conclusion:
When looking at the results MESA has achieved in a relatively short amount of time, it is
amazing that not every company has instilled the Baldrige criteria into their culture. Even though it has
been hard work and some of the implementation schemes may not have been as smooth as was originally
thought, the results speak for themselves. Based on a study done in 2011, the Baldrige Programs value
was estimated to have a benefit-to-cost ratio of 820 to 1. (Link and Scott) MESA has made themselves
into a leading provider of cathodic protection services through hard work and a dedication to a total
quality system (ISO 9001, Lean, and Baldrige Criteria). If the trend continues, MESA has a bright future
ahead of them.

6) Study of the efforts of North Mississippi Health


Services, Tupelo, MS.
6.1 Introduction:
North Mississippi Health Services (NMHS) is a health care organization headquartered in Tupelo,
Mississippi. They are a non-profit, community-owned organization that includes six hospitals, four
nursing homes, and 34 clinics that serve 24 counties. NMHS provides preventive and wellness services,
hospital-based emergency care services, acute care services, and post-acute care services. They employ
over 6,200 employees and 491 physicians. NHMS is very familiar to quality awards, since this is their
second Baldrige Award for the company. Their previous award was received in 2006 which was awarded
to their flagship hospital, North Mississippi Medical Center (NMMC). (9)
6.2 Leadership:
NMHS founding principles include vision, innovation, agility, and community stewardship. Their
mission is to improve the health of the people in the region as well have a vision of providing the bestpatient care and health services in America. In Figure 6.1, NMHS has five critical success factors that
help them accomplish their goals. They credit their success by aligning with their employees personal
mission statements. This is done by balancing their leadership system with their mission, vision, and
values. NMHS uses a servant leadership approach by setting a foundation, getting feedback, analyzing
friction, and doing a follow up. Setting the foundation means they are educating their employees about
what tasks need to be accomplished. Getting feedback means that they have a 360 degree evaluation,
where both employee and manager give inputs. Analyzing friction refers to sharing results and forming an
action plan going forward. Finally, follow up is where the manager monitors the progress of their
employee. Servant leadership entails open communication, listening, learning, and is results driven.

Figure 6.1: NMHS Leadership System (7)

6.3 Strategic Planning:


NMHS uses the Evidence-Based Planning Process (EPP) in order to build their strategic plan.
The EPP process consists of evidence gathering & analysis, system goal development & approval,
organizational alignment & deployment, action plans, budget, and workforce alignment. EPP has eight
steps in order to utilize the process as Figure 6.2 will show. NMHS look at the national, regional, and
local healthcare trends first. They then reference previous EPP evaluations and stakeholder feedback.
They use SWOT analysis to identify the strengths, weaknesses, opportunities, and threats. North
Mississippi Health Care Services will then identify challenges and performance opportunities. After that
they host a leadership planning retreat where they conduct validations and prioritize challenges and
strategic objectives. They choose their strategic plan and action plan and then gain approval. NMHS hosts
an operational retreat where they align and communicate goals. They will also develop mulit-level
strategic plans/ action plans. They allocate resources, finalize budgets, and approve their multi-level
strategic plans/ action plans. Finally, they develop work processes and measures, communicate employee
performance plans, and then they execute those plans. (9)

Figure 6.2: Evidence-Based Planning Process (EPP)


6.4 Customer Focus:
A key factor for NMHS growth is the importance of the voice of the customer. NMHS bases a big
part of their learning on listening to the customer. This is done through satisfaction surveys, face time, and
open door policies. NMHS make sure that they hand out surveys to their patients, providers, and
employers in order to gain the voice of the customer. Their main goal is to obtain actionable information
through these surveys. Face time consists of items such as health fairs, church nurse programs, and
discharge phone calls for patients/families. NMHS goal is to familiarize themselves with their customers.
Their open door policy is used to attract potential patients and stakeholders. This is achieved by providing
help lines, social media pages, and participating in the community. NMHS also has a customer service
team that analyzes the inputs they receive from gathering the voice of the customer. This team uses the
inputs to determine if they have a process or behavioral issue that needs to be addressed. NMHS cares
greatly about their customers and learns every day from them. The reason they grow is solely because of
them. (9)

Figure 6.3: NMHS System Weighted Patient Satisfaction 2008- 2012

6.5 Measurement, Analysis and Knowledge Management


NMHS is continuously reviewing data and taking action. This guides their success to reach their
goals. They use the EPP process to determine what data to collect in order to clearly identify performance
measures. These performance measures are based on five categories: people, service, quality, financials,
and growth. They take pride in listening to their patients and stakeholders. North Mississippi Health
Services wants to hear from everyone involved in order to capture the satisfactions and dissatisfactions.
They also focus on Transparency to make sure that their decisions are effective and credible. Knowledge
Management is recognized as a need for NMHS. They know that in order to have a good working staff,
NMHS needs to have knowledge transfer. They track all employees training to ensure everyone is up to
date. All employees have company emails so that they can stay up with the latest news from the CEO.
They also have sessions where leaders/ employees can share their experiences and ideas to help others
grow. (7)

Fig 6.4: Measurement, Analysis and KM

6.6 Workforce Focus:


With a workforce over 6,500, North Mississippi Health Services are the largest employer in their
service area and the second largest private employer in the state of Mississippi. Employees are carefully
selected ensuring that they meet NMHS values. NMHS workforce environment is centered on people
providing a caring culture. They help their employees grow by providing career counseling, career
development, testing, excel performance management process, flex-schedules, and academic
reimbursement. They also provide Live Well Health Plans that include smoking cessation, weight
watchers@ work, and telephonic coaching. This is just how NMHS helps their workforce grow internally;
externally they have partnerships (with colleges, universities, and clinical programs) for furthering
education and provide scholarships. (9)
6.7 Operations Focus:
In order for NMHS to bring the best quality services to the table, they make sure they have a
great working system. Their goals for this system is to simplify delivery services, focus on patients
experiences, provide a reliable staff, and reduce errors. To achieve their goals, they focus on patient
perspectives and collaborative work groups. Implementations of these work groups include 90 days action
plans, performance scorecards, excel process, and benchmarking. Quality is brought about by having
focused work systems and collaborative groups within North Mississippi Health Services as Figure 6.4
shows. (9)

Figure 6.5 Population Focused Work Systems& Collaborative Work Groups


6.8 Business Results and Conclusion
NMHS shows that high standards create better health outcomes. They have achieved outstanding
results such as colorectal cancer screenings have consistently exceeded the state standard since 2009.
They amount of smokers has also declined seven percent in the region since 2004. NMHS maximizes
their service and improves performance by reaching out their patients and stakeholders. They have an
open policy where they share their performance results so they everyone know what type of service they
will receive. North Mississippi Health Services make employee satisfaction a priority. They employee
retention rate for NMHS has been at or above 90 percent since 2007. Employee engagement was also
above 90 percent and employees rate their job satisfaction as best in class. NMHS clearly shows that
they take their line of work seriously by going the extra miles and putting their customers first. They
focus on what needs to be done by getting the right employees, have a strategic plan, and listening in
every way to find out what they can do better. (7)

7) Conclusions
With efforts put into all the criteria for performance excellence and having a goal of continuous
improvement for achieving high quality and performance excellence, Malcolm Baldrige award recipients
have historically outperformed the S&P 500 index. Figure 7.1 demonstrates how a $1000 investment in
Lockheed Martin Missiles and Fire control in January 2001 would have yielded a return of over $4000
today as compared to a return of just $1300 for S & P 500 index.

Figure 7.1: Investment return of Lockheed Martin MFC in comparison with S&P 500 index
Since MESA Products Inc., and North Mississippi health services are not publicly traded
companies, they are not obligated to publish their quarterly and annual financial statements. So an
investment in those companies could not be compared to the market index.
The Baldrige Performance Excellence Program has eliminated a former limit on the number of
subunits of an organization that may apply within the same year. In previous competitions, this limit was
based on the size of the parent organizations workforce. The lifting of this restriction enables multiple
subunits to apply for the award in the same year if the parent organization is not applying and neither the
organization nor the subunit has received the Baldrige Award within the past five years. Our future work
would involve studying how the lifting of this restriction would affect the Baldrige awarding process.

8) References
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