[The following article appears in ASQC's Journal of Record, December 1994, pages 1, 2, and 3.] THREE COMPANIES WIN 1994 BALDRIGE AWARD Three companies--AT&T Consumer Communications Services, GTE Directories Corp., and Wainwright Industries--are the winners of the 1994 Malcolm Baldrige National Quality Award for excellence in quality management. They will be recognized at an award ceremony this month. The winners were announced by Commerce Secretary Ronald Brown. "The president and I congratulate the dedicated men and women of these companies," Brown said. "With visionary leaders and an educated and empowered work force, they are striding into the 21st century confident they will be able to meet the quality and competitiveness challenges of the future." There were two winners in the service category and one in small business. No award recipients were named in the large- manufacturing category for 1994. AT&T Consumer Communications Services Based in Basking Ridge, NJ, AT&T Consumer Communications Services (CCS) won in the service category. The company provides domestic and international long distance communications services primarily to residential customers. Its 44,000 employees serve more than 80 million customers. In spite of intense competition since deregulation-- competitors have grown from a handful in 1984 to more than 500 today--AT&T CCS has maintained about a 60% market share by focusing on customer needs. The company's goal of perfect customer connection and contact is tested in 75 million interactions with customers each day. The company's president and senior executives lead an integrated business and quality planning system that focuses on five key customer requirements: call quality, customer service, billing, reputation, and price. Executive compensation is based in part on "customer value added," a composite measure of customer satisfaction. Teams use standardized AT&T-developed tools for planning, executing, and evaluating initiatives to improve performance and customer satisfaction. Employees from all levels of the company are involved in implementing quality improvements, as are suppliers when appropriate. Internal contracts are used to ensure a shared focus and commitment across units. The telecommunications industry has been reshaped and "service" has been redefined for customers by rapid advances in technology. AT&T CCS invests more than $1 billion annually in technology to expand the capabilities of its worldwide telecommunications network. GTE Directories Corporation GTE Directories Corporation was also a winner in the service category. One of the world's largest telephone directory companies, it focuses primarily on publishing and/or selling advertising for white and yellow pages telephone directories for telephone companies within their official franchise areas. Headquartered in Dallas/Fort Worth, TX, GTE Directories employ $150 people. The company produces more than 1,200 directory titles in 45 states and in 17 countries, including more than 75 different directories in international markets. GTE Directories has sustained revenue growth in a very competitive market, which includes the directory businesses of all the regional Bell operating companies. The company has placed as best-in-class according to industry benchmark studies. The company's corporate vision is "100% Customer Satisfaction Through Quality," which consists of 14 key customer service requirements developed through a customer satisfaction measurement program. Key requirements include professionalism, timeliness, support for sales functions and post-sales, and complaint resolution. The measurement process weights the relative importance of different product and service delivery features to the company's three customer groups: advertisers, consumers who use the directories, and companies contracting for yellow pages services. Team-based management is pervasive at GTE Directories and it's not unusual to find employees who have served on 10 or more quality improvement teams. A reward system linked to customer satisfaction measurements is a strong motivator for quality service. Special awards for both individuals and teams support quality and operational performance improvements. Wainwright Industries, Inc. Family-owned Wainwright Industries, Inc., won the Baldrige Award in the small-business category. Wainwright manufactures stamped and machined products for the automotive, aerospace, home security, and information processing industries. The company's 275 employees are based in St. Peters, MO, and a recently opened plant in Arlington, TX. With $30 million in annual sales, Wainwright serves local, national, and international markets. Wainwright's continuous improvement process involves all employees. Senior leaders act as role models, developing the next level of managers and striving to personally motivate associates. Company executives also promote quality management outside of the company--to other businesses and to education and government officials in Missouri. "Total Customer Satisfaction" is Wainwright's guiding vision. For 1993, the company achieved a 95% rating on its customer satisfaction index, which measures quality, delivery, communication, and service; the goal is to reach 98% by 1995. Company data are linked to five key strategic indicators (in order of importance): safety, internal customer satisfaction, external customer satisfaction, six-sigma quality, and business performance. Public responsibility and environmental stewardship are part of Wainwright's core values. The company has eliminated all hazardous waste from its facilities by redesigning processes, developing water-based wash systems, and using organic coolants and lubricants. Training accounts for up to 7% of Wainwright's payroll. Basic math and English are covered, as well as more specialized education in statistical process control and operation of computer-controlled machinery. President Encourages Investment in Quality "The Baldrige Award recognizes clear, proven strategies for continued American success in the global economy," President Clinton said when the winners were announced. "These three winners demonstrate that aggressive quality management--including a clear customer focus and partnerships with employees and suppliers--equips American companies to compete and excel. "As the pace of global competition quickens, I encourage all U.S. companies to follow the examples of these winners by focusing on and investing in quality. U.S. business competitiveness depends on American firms that understand the importance of being fast-moving, cutting-edge, and more flexible than their competitors." The Baldrige Award was established by Congress in 1987 to promote quality awareness, recognize quality achievements of U.S. companies, and publicize successful quality strategies. The award is not given for specific products or services. The award is managed by the National Institute of Standards and Technology (NIST), an agency of the Commerce Department's Technology Division. ASQC has assisted NIST in administering the award since its inception. Companies submit applications with details of their quality management systems. These are evaluated by an independent board of quality experts. Applicants that pass an initial screening are visited by teams of examiners to verify information and clarify any issues that arose during the evaluation. Up to two awards may be given annually in each of three categories: manufacturing, service, and small business. Since 1988, 22 companies have won the award. About 1 million copies of the award criteria, which thousands of organizations use as a "road map" for quality management, have been distributed. AT&T TAKES BALDRIGE AWARD DEMING PRIZE ON SAME DRY On the same day that the recipients of the 1994 Malcolm Baldrige National Quality Award were announced, AT&T was named a winner of Japan's Deming Prize. The Deming Prize was earned by AT&T Power Systems in Mesquite, TX, which makes electrical power systems for telecommunications equipment. AT&T Power Systems worked for four years, submitted a 400-page application, and spent $250,000 to win the Deming Prize. The award was established by the Union of Japanese Scientists and Engineers in 1951 to honor W. Edwards Deming. Companies do not compete with other companies to win the prize; instead, they are challenged to meet the exacting standards of the judges for the prize. The only other U.S. company--and the first company outside of Japan--to win the Deming Prize is Florida Power & Light. AT&T's goal in pursuing the prize was to improve its business, not to win a prize. AT&T has won three Baldrige Awards--one this year for AT&T Consumer Communications Services and two in 1992 for AT&T Network Systems Group/Transmission Systems Business Unit and AT&T Universal Card Services.