Why Baldrige Works

For Life Science Companies

There's no doubt that the Baldrige Criteria drive excellent performance. Of course, the perennial question for any improvement approach is "What's the return on my investment?" Cargill, a $107 billion company that produces and markets food, agricultural, financial and industrial products and services, says Baldrige is a huge return on investment. Their divisions that use the Criteria achieve 130 percent of their earnings targets versus divisions not using the Criteria, who achieve about 82 percent of target1.

The Baldrige Criteria was our roadmap—a set of questions based on leadership best practices that focused on creating sustained organizational excellence.

MEDRAD, a global market leader in radiology and interventional cardiology, measures success through our corporate Scorecard, which are five benchmarked goals that drive exceptional performance for our three stakeholders: customers, employees and our parent company, Bayer. The Baldrige Criteria helped MEDRAD consistently deliver results to stakeholders during times of growth and during tough times.

These results include the following:

  • Sustained market share leadership in most products for over 20 years (in many cases more than twice the leading competitor)
  • Consistent delivery of profit commitments to shareholders for that same period
  • Extraordinary customer loyalty - 96 percent of customers would recommend MEDRAD to a colleague
  • Engaged and aligned employees - 84 percent know how they contribute to MEDRAD goals, and savings-per-employee exceeds Industry Week's best-in-class

Wouldn't you love to have every employee aligned on, even excited about, delivering sustained results to customers and shareholders with best-in-class productivity? Would you like that to happen in tough times as well as growth times? That's an organizational holy grail. Is it easy? No. Nothing great is easy. Is there a roadmap for doing it? Yes. The Baldrige Criteria was our roadmap—a set of questions based on leadership best practices that focused on creating sustained organizational excellence. The Criteria helped MEDRAD create processes that were scalable for growth and adaptable to change.

What worked for MEDRAD is this: Questions that force us to think differently about our business, a team of examiners who provide a fresh perspective, best-practices from past recipients, and a milestone-driven process that creates urgency and instills pride.

MEDRAD's senior leaders selected the Baldrige Criteria as our organizational improvement tool in the early 1990s, based on results achieved by Baldrige recipients like Milliken, FedEx, and Westinghouse. It guided us to design an organization built for growth—from about $90 million in revenue when we first applied in 1996, to over $650 million today.

Inspired by the customer focus of recipients like Ritz-Carlton, MEDRAD used the Baldrige Criteria to create a customer-focused culture. And when the perfect storm of reimbursement changed and economic downturn and acquisition by a new parent hit in 2006 through 2010, our processes helped us to anticipate impacts, understand new requirements and respond adeptly. How many companies do you know that, when hit with significant market, economic and shareholder change, continue to deliver excellent results? Continual assessment of critical processes with the Baldrige Criteria delivers.

One of the first questions a new Baldrige applicant hears from Examiners is "How do you know?" Trust me, this can be very annoying. The question is annoying because it requires examining deep assumptions. Our first 'how do you know' question was about our philosophy, which defines the three reasons we exist as:

  1. To improve the quality of healthcare
  2. To ensure continued growth and profit
  3. To provide an enjoyable and rewarding place to work

Examiners asked us "How do you know that you're delivering these three objectives?" Like most companies, we knew who our stakeholders were and we had mission and values statements. Unlike most companies however, the 'how do you know' question drove us to link these three goals directly to measures and processes, driving performance for stakeholders at every organizational level. This became our unchanging core and the basis for our scorecard. Every process is designed around these three goals.

In the early years, MEDRAD focused on systematizing processes that established a foundation for growth. Customer relationship and customer satisfaction processes were defined and improved; voice-of-customer and product development process were analyzed to keep pace with the market. Together, these processes delivered leadership market share and best-in-class customer satisfaction, driving consistent 15 percent per-year growth.

Rapid growth isn't just about getting more customers, it's also about getting more employees, and getting them excited and aligned on our mission. Criteria-driven improvements in our performance management system aligned every employee's objectives with scorecard goals, and assessment processes reinforced the customer, teamwork and performance values in our philosophy.

When MEDRAD received the award in 2003, we enjoyed fast-growing markets and a stable workforce. Three years later, everything began to change. How did those growth-designed processes hold up? Better than our peers and competitors, actually. Our unchanging core - that focus on customers, employees and shareholders - kept our eyes on what was important. And our processes were constantly adaptable, thanks to Criteria questions like:

  • "How do you detect early indications of major shifts?" and
  • "How do your objectives and measures adapt to sudden shifts or rapid external changes?" and
  • "How do you prepare your workforce for changing capability and capacity needs?"

When reimbursement changes hit the industry, our VOC and strategy planning and deployment processes anticipated the impact, proactively adjusting expenses and redeploying roles to the highest priority areas. This continued as the economic downturn developed, and healthcare reform created market uncertainty. Communication and shareholder processes helped us to understand and meet the requirements of our new parent, Bayer. Today, we are still delivering on our commitments to our customers, employees and shareholders.

The Criteria work. They worked in the 1980s and they work today. Built on proven, cutting edge practices, and designed for adaptability, Baldrige is our best tool for excellence, short and long-term, in growth times and tough times. For more information on MEDRAD's Performance Excellence approaches, visit our website at www.medrad.com.

1 http://www.nist.gov/baldrige/qe/upload/Jerry_Rose_ROI_Slide.pdf

MEDRAD is a trademark of MEDRAD. Bayer is a trademark of Bayer.