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Season 8 Episode 3 - Continuous Improvement Through the MBNQA Framework

Posted by Rachel Miller

Episode Show Notes

Episode 3 features three executives from Mizuho OSI – Steve Lamb, Kevin Thorne, and Bill Bregar – as well as Denise Shields, Principal of the Shields Resource Group. Steve, Kevin, Bill, and Denise explain the Malcolm Baldrige National Quality Award and the MBNQA Framework. The group then discusses Mizuho’s continuous improvement journey using the Baldrige Criteria – why they were interested in applying the Criteria, what the process looked like, and the value the Criteria has provided them. 

Steve Lamb is President & Chief Operating Officer at Mizuho OSI. Steve joined OSI when it was founded in 1978 and has held several senior positions in engineering, operations, and research & development. Steve’s research background includes developing artificial limbs and designing tracked military vehicles. He is the named inventor on over 28 U.S. patents, primarily for products produced by OSI in collaboration with leading surgeons. Steve has a Bachelor of Science in Mechanical Engineering from San José State University and performed graduate coursework in Biomechanics at the University of California, Berkeley, while employed full-time as a research engineer in the UC Biomechanics Laboratory.

Kevin Thorne joined Mizuho OSI in 2015 as the Vice President of Operations. In 2017, Kevin was tasked with an added responsibility of integrating a recent acquisition into the Mizuho Family as the GM of OSI’s German subsidiary, Trilux Medical. In 2021, he added the Global Service function to his responsibilities under his expanded role – Vice President of Global Operations and Service. Before entering the private sector, Kevin graduated from the U.S. Naval Academy with a degree in Engineering and served as an officer on nuclear fast attack submarines. Kevin’s 30+ year career has been spent in medical devices and advanced technology, holding senior leadership roles in Operations, Service, Consulting, and General Management. He has worked for a number of U.S. and international companies, including Ford Aerospace, Loral, ADAC Laboratories, Asyst Technologies, Cisco Systems, Zeiss Meditec, Zonare, and Mizuho OSI. Kevin is a Lean Six Sigma Black Belt and has served as a Baldrige Examiner for the California State Level Award.

Bill Bregar joined Mizuho OSI as Director of Service in 2015 with the responsibility of developing a direct service team for installations, repair, and maintenance of Mizuho OSI products in the United States as well as developing a technical support team and a depot repair. Bill began his career out of the Navy as a field service engineer at ADAC Laboratories and grew with ADAC Labs from that position to Senior VP of Global Customer Service. Bill then worked at Philips Medical and was responsible for all medical imaging equipment installations in North America, including X-Ray, CT, MRI, Ultrasound, and Nuclear Gamma Cameras. Bill went on to develop a consulting career helping companies focus on customers by implementing TQM, conducting Quarterly Business Reviews (DASH), and leveraging the Baldrige Framework.

Denise Shields is Principal of Shields Resource Group, a Baldrige-based consulting organization specializing in organizational performance excellence. From small to the Fortune 100, Denise has extraordinary experience in helping organizations by utilizing the Baldrige Criteria to accomplish their dreams of performance excellence. Denise has the distinguished honor of being selected and named a Master Examiner to the Baldrige Performance Excellence Program after serving in multiple leadership roles since 1996. Additionally, she actively volunteers locally for the California Council for Excellence (CCE), which oversees the California Baldrige Award for Performance Excellence. She currently serves as Chair of CCE’s Board of Directors.


00:00:00 - Introductions

00:03:10 - Definition of Malcolm Baldrige National Quality Award and the MBNQA Framework

00:09:26 - Number of times the Baldrige Criteria was used by Kevin and Bill

00:10:33 - What attracted Kevin and Bill to using the Criteria

00:15:14 - Most illuminating things Steve learned as the Criteria was applied to his business

00:16:57 - Advice on how to implement the Baldrige Framework

00:22:12 - “Aha” moments gained from application of the Criteria

00:24:06 - Results gained at Mizohu OSI and ADAC Laboratories

00:28:01- Specifics of process changes made and examples of results achieved

00:35:43 - Impact of Criteria outside the company

00:38:16 - Increased credibility of companies pursuing Criteria

00:42:08 - Do’s and don’ts when beginning implementation

00:51:10 - How far Mizohu OSI plans to continue the Baldrige journey


Gregg Profozich [00:00:00] In the world of manufacturing, change is the only constant. How are small and medium-sized manufacturers SMMs to keep up with new technologies, regulations, and other important shifts, let alone leverage them to become leaders in their industries? Shifting Gears, a podcast from CMTC, highlights leaders in the modern world of manufacturing, from SMMs to consultants to industry experts. Each quarter we go deep into topics pertinent to both operating a manufacturing firm and the industry as a whole. Join us to hear about manufacturing sector's latest trends, groundbreaking technologies, and expert insights to help SMMs in California set themselves apart in this exciting modern world of innovation and change. I'm Gregg Profozich, director of advanced manufacturing technologies at CMTC. I'd like to welcome you.  In this episode, I'm joined by three executives from Mizuho OSI, Steve Lamb, Kevin Thorne, and Bill Bregar, as well as Denise Shields, principal of the Shields Resource Group. Steve, Kevin, Bill, and Denise explain the Malcolm Baldrige National Quality Award and the MBNQA framework. The group then discusses Mizuho’s continuous improvement journey using the Baldrige Criteria, covering why they were interested in applying the criteria in the first place, what the process looked like, and the value that criteria has provided them. Welcome, Kevin; it's great to have you here today.

Kevin Thorne [00:01:22] Hey, Gregg, it’s great to be here. I’m Kevin Thorne. I’m the VP of Operations and Service at Mizuho OSI. I’ve been with the company for about seven years. Together with Bill and Steve, you’ll hear from shortly, we’ve been on the Baldrige journey to try to make Mizuho OSI the best place to work.

Gregg Profozich [00:01:38] Sounds like an interesting conversation we’re about to have. Thank you so much. Steve, appreciate you being here today, as well.

Steve Lamb [00:01:45] Gregg, I’m happy to be here, as well. This has been a very interesting journey, and we’re continuing on this journey, for sure. I am President and COO of Mizuho OSI. I’ve only been here 44 years now. I helped found the company way back when, and been through different variations of the company, worn all the hats, and now trying to keep the ship going in the right direction.

Gregg Profozich [00:02:07] Sounds like there’s going to be a lot of good detail we can share. I’m looking forward to that. Welcome, Bill. Happy to have you join us today, as well.

Bill Bregar [00:02:15] Hi, Gregg. My name is Bill Bregar. I’m the Director of Service here at Mizuho OSI. I’ve been here eight years. Kevin and I was at a company, ADAC Laboratories, that won the Malcolm Baldrige National Quality Award in 1996. I have spent most of my career implementing that type of process to make companies better.

Gregg Profozich [00:02:38] Well, thank you, Bill. I’m looking forward to our conversation. Welcome, Denise. It’s great to have you here, as well.

Denise Shields [00:02:43] Thanks, Gregg. Good to be back with you guys. I’m Denise Shields, and I’m Chairman of the Board of the wonderful organization called the California Council for Excellence. We are the official Baldrige program here in California. Mizuho is one of our most recent award recipients, and we’re looking forward to celebrating their big win at our conference in Sacramento in May. In the meantime, we want to share their story with all of you here today because it’s a great one to share.

Gregg Profozich [00:03:10] Thank you, Denise. It’s great to have you here. Thank you all. I’m excited about our conversation today, and I’m looking forward to hearing about your perspectives and your insights. Let’s get started. We’re here to talk about the Malcolm Baldrige National Quality Award. Now, our regular listeners know that we discussed Baldrige once before on Shifting Gears back in season five, episode three, where I spoke with David Spong, formerly of Boeing, and with Denise from the California Council of Excellence. But Boeing’s experience was something of a big company perspective. Today we’re going to get the small and medium-sized company perspective. Before we get into the details of your experience within companies you’ve worked with, let’s get some context for our listeners. What is the Malcolm Baldrige National Quality Award and the MBNQA framework?

Kevin Thorne [00:03:50] Gregg, thanks for asking. Like Bill said in his intro, he and I worked at a company that applied for the award and after a couple of attempts, eventually won the national level. What we learned in that journey is a framework for running and managing a business that ties everything together. It shows the interconnectedness of a system of business that everybody has. I think what many companies struggle to do is figuring out a way to connect all of these seemingly disparate organizations in a company and put them together into one system that’s operating and feeding off of each other in a synchronistic way. It really does create that framework for connecting the business and providing context to all of the departments so that the entire company is moving forward to achieve those goals and objectives that are most important to that company. We found it to be very powerful the first time we went through it. Both Bill and I have used it at other companies we’ve gone to help those companies be better. Now that we’re here at OSI, we’re doing the same thing. We’re taking that criteria and trying to make the company a better place.

Gregg Profozich [00:04:50] Bill, something to add?

Bill Bregar [00:04:52] Kevin, if I could, when I got here about eight years ago, in terms of improving business performance excellence, one of the presentations I gave, Steve Lamb challenged me and the company: “What is the standard for business performance excellence?” All you have to do is google and research this, and the Baldrige criteria comes up as the standard. The framework comes back as a standard for business excellence. I presented that to Steve in the company. Just those categories, you think about them as the right way to run and manage a company and set up your processes.

Kevin Thorne [00:05:29] Gregg, maybe one more thing to add. Bill was here shortly before I was. Then I got here, and I was working with Bill in what we used to call the Business Excellence Initiative. To Bill’s point, we had to find a standard—what is excellence? He and I had both been in the process before, and we naturally gravitated toward the Malcolm Baldrige criteria. But I think, just like you’re having us here talk about our experience as a small to mid-sized company when Bill and I presented it to my colleagues on the executive staff, Steve included, it was a little bit of a “That’s a big company program, and we may not have the resources for it, and that could be very challenging for us to embark on.” Steve, I’m putting some words in your mouth that I’m sure you can respond to, but there was some apprehension in the beginning about how difficult this might be. But I think since we have gone down this journey and learned what it takes to do it and how this isn’t really anything on top of what you do, it really is adding context and structure to what we need to do anyhow. The company had a few people in the beginning that may not have been completely aligned with the vision, but I think since then—Steve has been one of the biggest champions of this thing in the company—now from the leadership level on down, we’re promoting it, because we see the value it brings to the company, and it makes sense. It’s good for the business.

Steve Lamb [00:06:47] I would echo what both Kevin and Bill said there. When we started down this journey, there were the naysayers, if you will. There were folks that looked at it, and they said, “Well, we’re so busy; how can we now layer on this thing just so we can win an award?” Early on it was clear—to me, anyway—that we had to approach this not from the perspective of the prize being a trophy or an award but a prize being the improvement of the company. Since the inception of this company anyway, we started as a small entrepreneurial company doing all things for all people and then defined our niche and grew from there. But a culture always is or should be… The successful ones, I believe, are cultures of continuous improvement, always looking to make things better. We saw early on how this would help us. It would help us grow, help us be more profitable, and do more with less, for lack of a better term. That was the main appeal to me. When I got educated more on the Baldrige criteria, primarily from my experts Bill and Kevin, who’ve done an excellent job, I saw that it was a very clear, logical roadmap that helped us guide our action and give us the confidence that we wouldn’t overlook things as we go. As Kevin said earlier, it became a structured way for us to do what we already do but do it better. That was the primary appeal for me. I think it’s played out in that way so far. I think winning the award we just won in the state on the first go-around, I think it’s pretty impressive. Really enthusiastic about this program going forward.

Gregg Profozich [00:08:22] Impressive, indeed. Congratulations on that.

Denise Shields [00:08:25] If I could interject, I just want to echo what you just said. It is really impressive. What the process includes is an outside board of examiners. They come in knowing nothing about your organization and validating the application process. When you win, it’s because you clearly deserve it. These people are unbiased. They have to sign conflicts of interest statements saying they know nothing about your company and they’re not consultants working for you. They’re outside examiners. There’s no conflicts of interest. It’s truly an outside shout-out to you guys from the highest business standard in the country, which is the Baldrige criteria. You guys are on the right roadmap for continuous improvement and performance excellence. Kudos to all of you for this great accomplishment.

Gregg Profozich [00:09:11] All the more impressive when you think about the fact that it’s your first go-around. Steve, if I heard you correctly, this is your first time through the Baldrige framework. Correct?

Steve Lamb [00:09:20] That’s correct. I was aware of it, certainly, but never went through the steps formally.

Gregg Profozich [00:09:26] Kevin and Bill, it’s not your first time. You’ve been through it a couple times. How many times have you used the framework, and how many different companies?

Bill Bregar [00:09:33] Well, for me, certainly, winning the award at ADAC Laboratories was one, and I did some consulting where I certainly brought the category, the framework into play. It’s a journey. It’s not a one-and-done event. I moved on from some of those companies but have always endorsed those.

Kevin Thorne [00:09:54] Gregg, I think it’s one of those things where… This is only the second company in which I formally applied. We did it at ADAC first and then here at OSI. I think what happens, though, once you go through it, now that you’ve seen a better way of doing it, you can’t unsee it. I think you take those principles with you throughout your career. You may not take the whole criteria formally applied but measurement by fact, continuous improvement, looking at effectiveness and efficiency. Those kinds of things are principles that become just basic pillars of running a business. I think once you go down this journey, you’re changed forever.

Gregg Profozich [00:10:33] I heard you talking a little earlier, and I wanted to key back on something I heard you talk about—the standard for business excellence, and the framework, and the question set that is broadly applicable, those kinds of things you were mentioning. Is that what attracted you to Baldrige in the first place for each of you guys on your individual journeys, or was there something else?

Kevin Thorne [00:10:54] When we first started this at ADAC—Bill, you were there before I was, so you can talk to some of the original history—ADAC was a scrappy, competitive company. We wanted to be the best in the industry. We were looking for some kind of a cookbook that would help us to be the best in the industry. The Baldrige criteria was kind of new then. It wasn’t completely new, but it was still a little bit new. That’s what we just embarked on and said, “Hell, we’re going to do this.”

Bill Bregar [00:11:21] Kevin, in my opinion, at ADAC Labs they really did the homework and saw the advantages of winning the Baldrige Award and what it can do to your business, given the improvements that are made going through this process. I think the CEO at that time was very aggressive at being the best of the best in the industry. Winning that Baldrige Award, getting that logo, and leveraging that certainly had the impact on ADAC Labs that he thought it was going to have and really went after it. Now, there’s serious advantages to this, as both you and Steve have mentioned—just the journey and what that brings to your processes and improvements. If you never won the award, never applied for the award, applying this in showing the improvements is well worth it. But ADAC really went after it aggressively for the logo, I believe, as well.

Gregg Profozich [00:12:14] I think that’s a conversation we had with Denise and David Spong back a couple seasons ago. It’s not so much about the award; it’s the process and the business improvements that happen on your way to meeting the criteria. By the way, if you meet all the criteria, you can get the award. Denise, anything to add to that?

Denise Shields [00:12:31] The Baldrige office is run by the Department of Commerce. When the award was first announced, it was called the Malcolm Baldrige National Quality Award, and all of the operations was under the same name. Several years ago they had an aha moment and realized you don’t even have to apply for the award; you can use the criteria just to be excellent. They actually changed formally the name of the program to now what is called the Baldrige Performance Excellence Program. If you want to apply for the award, you can. You can be a great swimmer, but that doesn’t mean you have to go to the Olympics. It’s really a choice for organizations. The advantage of applying for the award is what these guys did, which is apply through an application process, and conduct a site visit, and get these outside voices that verify your strengths and your opportunities for improvement and, ultimately, give you the award. But, as Bill and others have said, it’s really not about the award; it’s about achieving performance excellence, whether it’s on-time quality, defect control. There’s lots of different things that come out of the Baldrige process that improves your business, but it’s not about the award. It’s definitely about continuous improvement for your bottom line. I don’t mean financially but your other operational statistics, as well.

Steve Lamb [00:13:48] What I’ve learned from Bill…and Kevin, for that matter…is that the output is better results. It’s not the award; it’s doing the right things in the right order in a manner that creates results. Quite frankly, we’re using that concept to get people involved, to keep people involved. One might think we were crazy for embarking on this journey in the middle of a pandemic, but we did. Without everybody in the building every day, some of it was challenging, but we made it work. Getting that involvement was key and reminding them we weren’t looking for a trophy, but we were trying to get better. They could see as we went down the path that it made sense, number one. It did tie things together in a way they may not have thought about before. It really did put structure to the things that they did every day. Without being able to demonstrate those values, I think it would have just been so much window dressing, but that’s not at all what it’s turned out to be here. As I said, we’re still on the journey. We got a lot more work to do.

Bill Bregar [00:14:47] Denise, I’ll add one thing. One of the key phrases I first heard way back in 1992, 1993, with this was a systematic approach to continuous improvement. It really took me a while to let that sink in. It has a life of its own. Through the Baldrige criteria, it really exhibits that. But there really is a systematic approach to this.

Denise Shields [00:15:11] Absolutely. Thank you for recognizing that.

Gregg Profozich [00:15:14] Steve, one of the things I wanted to ask. You’ve been through the journey now, and it’s still relatively fresh because it’s your first time through it. What were the things you found most illuminating as you applied the criteria to your business?

Steve Lamb [00:15:25] Well, I touched on it a little bit before. It really helped show us how all these business processes are interlinked. They’re interlinked and dependent upon each other. I think it helps our employees see that, as well, to see that they don’t just show up and do an independent job, but what they do every day affects what everybody else does. If we’re all moving in the same direction with the same goal in mind, we reach that result sooner. Again, that’s been very powerful. This whole notion of applying learnings to consciously make gradual improvements is really powerful. Nothing happens overnight. We didn’t expect anything to happen overnight, and we made sure everybody understood that. The little wins are huge to keep people involved. To help people understand how the criteria shows them how all things are linked was really important.

Gregg Profozich [00:16:17] The criteria made the interconnections between people’s roles and the activities they were doing in various departments more obvious and more visible.

Steve Lamb [00:16:25] Absolutely. I believe so. I guess with anybody as they go down this journey, they start with the categories. The last one is—what is it, Bill?—results. People didn’t start with the results, and we didn’t press for that. But as we got them interested, we kept pointing to them. Bill’s a master at this. Just working and saying, “Look at this. This is where we’re going. This is where we’re headed. That results things is what this is all about.” If we don’t get results, we are just spinning our wheels and having fun.

Gregg Profozich [00:16:57] A question broadly for the three of you. You can take turns answering. What’s been your approach in how to implement the Baldrige framework? Was it bottom-up? Was it top-down? Was it a combination of both? How did you approach that? If I’m an SMM thinking about this, listening to the three of your guys’ experience, what advice would you have for how to approach that?

Steve Lamb [00:17:16] Well, I’ll answer first, and then these guys, I’m sure, have their opinions. It was definitely an approach from both for us. Started with a tops down. I set the stage along with Bill and Kevin’s help by explaining the purpose of this journey and that it wasn’t just another layer of non-activity; it wasn’t the business process du jour; that everybody had to read a book in the flavor of the month; read a book and do better. It wasn’t that at all. As I mentioned earlier, we weren’t looking to win the trophy. That was not our target, but instead, creating the structured approach to make the company better. From the top, that’s where we started, but I think with Bill and Kevin’s help, they also rallied the troops from the bottom and got them interested in a variety of ways. I’ll let them talk about that.

Kevin Thorne [00:18:06] You’re going to expand on this, but I think one of the things we learned the first time we did this was the 262 rule. Twenty percent of the people in an organization are going to gravitate to this and think it’s the greatest thing in the world; 20% of the people are going to actively resist you in every way possible that they can; and then 60% of the organization’s in the middle waiting to see who’s going to win that tug-of-war. We did start as a top-down at the director level VP level, with Bill, and I, and Steve, and the rest of the executive staff, too. Most everybody got on board with this thing pretty quickly because you spend a little bit of time with it, and the evidence is just overwhelming the benefit this can have to the company. Our approach was to take these people that were enthusiastic and quickly put them on teams and sign them up to be engaged with the senior leadership to work through these categories. Then their enthusiasm spread out into the 60% that were on the fence. We were able to convert many, if not most, of the naysayers onto the program because they’d see just really what it does for the company. When we wrote for the prospector, when we wrote that first application that defined our company, and we circulated it with the leadership of the company—I think, Steve, you can talk to this more, too—everybody’s like, “Wow, this really describes our company. This is what we’re all about. This is something we should use as a recruiting tool. This is good stuff.” I think once you got to that point, the fire was lit. I think we’ve gotten most everybody on board, and we’re going to continue.

Steve Lamb [00:19:35] I think that’s a really good point. As we went through the application process… There was challenges, for sure, and timing issues. If the application didn’t have a timeframe, we’d probably still be working on it. But it makes you get up and move quicker. But people that did get involved, that did see it, could really see the value in it. They were able to recruit the others. That was all-important. By the end of the day… The teams that we formed weren’t running real smooth in the beginning, but at the end of the day, they really came together. It was fun to watch.

Bill Bregar [00:20:07] I would just add that I think it is a top-down program. If service is the only department, it’s going to leverage the Baldrige criteria. I tried to present that. The 262 rule that Kevin said would say well, that’s service. It’s applicable to them; it’s not applicable to engineering, or manufacturing, or marketing. Just wouldn’t be the same. I think that prospector award, getting the energized people involved in that, understanding the questions, and thinking about “Gee, how do we do that? How do we answer that? What is our process? Gee, what results do we have to show for what we’ve done there?” really got them even more energized than they were before. Eventually, that’s why it’s a journey. It picks up speed as it goes along. But I think most companies, when it’s first started, are going to say, “Gee, I can barely get through the day as it is. How does this layer on?” Like Kevin said, this doesn’t layer on; this is how you do your work. I think Steve has really drove the point. This is not about the trophy. Whether we ever apply for that trophy or not, this is all about the processes, leveraging our customers, how we can exceed their needs more on every front is the right approach to improving the business. I think we’re seeing results of that. I’m certainly energized to continue to see the improvements.

Steve Lamb [00:21:36] One of the things that helped us get people involved and enthused about it is once we started to get this stuff down on paper, it clearly described our company. A lot of people stepped back and said, “Wow, we do a lot of great stuff.” Then you start benchmarking and you say, “Well, not too many companies do it as well as we do.” Then the momentum starts growing, because they take pride in what they’re doing. They say, “Hey, there’s a there there. This stuff is real. By the way, this isn’t a whole new program we got to learn. A lot of it we’re doing already.” That was huge, I think, in getting people on board.

Gregg Profozich [00:22:12] It sounds like that was one of the "aha" moments if you will, that this is not really something new; it’s not a new layer; it’s just doing what we’re doing better in all the things we’re already doing. Were there other aha moments that came along through applying the criteria?

Kevin Thorne [00:22:25] Gregg, I wanted to touch on that. One of the things that I think Bill and I learned as we went through more in-depth training on the criterion. I actually trained to be an examiner and did one site visit. For people that are embarking on this journey, don’t underestimate. You will underestimate but try not to underestimate the importance of the organizational profile. That five pages up front force you as a company to write down what you say is important. What happens is the executives get around, and they say a whole bunch of things are important. Then you go through the application, but you’re not spending as much time on those things that you say are important as you have in the organizational profile. It’s this accountability check because there may be a lot of things that you think are important and you want to be important, but they’re not a lot of things that you’re spending time on to prove that they’re important. That’s just so powerful to us as an executive team because we had to sit down and come to grips with what is important, and to put it in there, and then to make sure that every aspect of our business is aligned with and supporting what’s important. It’s one of the most powerful alignment tools that I think the criteria brings to accompany that organizational profile.

Bill Bregar [00:23:35] I agree with that, as well, Kevin. We won that Baldrige Award in ’96 at ADAC. I’ve spoken to this most of my career. I did not realize until last year, when I went through that training, how important that profile is. If you don’t spend enough time on that and you don’t understand your profile, it’s more than just an organizational chart and how many divisions you’ve got, and that. If you don’t really spend time on that profile… It sets up to six categories. Without there’s some real disconnects there.

Gregg Profozich [00:24:06] You guys have mentioned a bunch of times now as we’ve been talking through things the results you’ve gotten. The results come at the end, but they started to show up when you started to follow the process and apply their criteria. Can you talk a little bit in some general terms about some of the results you’ve seen both here at Mizuho as well as at ADAC have been?

Bill Bregar [00:24:23] At the highest level—revenue growth, profitability, customer satisfaction, efficiency in the factory. We’ve gone lean, and we can measure that many different ways. But even with those high-level metrics, I’m going through right now… We’ve tried to define our key work processes and our key support processes, and with those what’s the elevator pitch for that process, and what are the key performance indicator metrics that would validate that process? I think what you have to be very careful of, you can end up with 1,000 metrics that really don’t get you to the gist of that process. I think you need to spend time there in defining those work and support processes and what are the key, not just metrics, the key performance indicators for those metrics and then trending those. I always say we do a quarterly business review, and we review a lot of metrics in the company. I’m always asking, “Are you improving, treading water, I call it, or getting worse?” If you’re not improving, even if you’re just flat, you need to understand that. Now, if it’s a customer sat and you’re getting 99.5 out of 100, and you are the benchmark, and the other benchmarks out there are 82.5, it’s okay to be flat. You’d want to watch to make sure you don’t drop something. But then there’s other metrics out there that if you look at the benchmark, hey, we’ve really got some runway in front of us here. Then if you can get some conversations going through some contacts to find out how they’re doing what they’re doing is even better, you can leverage that and move things a lot faster.

Steve Lamb [00:26:13] I think this whole notion of metrics is a huge one, and it comes out of people really looking deeply into the processes and what they’re trying to accomplish. We have a lot of very talented people here. They all have great ideas and great motivations and want to do the right thing. But until you start looking at the metrics, not the worthless many, which is a term I learned from Bill, but the real important few, you use metrics to really see what you’re doing, to prove those results of what you’re accomplishing. Until you do that, it’s just a lot of fun talk. We have taken that to a level of sophistication here in our quarterly review process that Bill mentioned. We call it the dash process. It’s a very formal process. We get together once a quarter, and we look at our overall business objectives. They’re assigned to an owner, and they have a team behind them. They report out every quarter what did you say you’re going to do, what did you do, and what are you going to do next quarter. It’s just a rolling look at the business. We use real metrics that are meaningful, and we challenge each other. If we can’t see how useful that metric is, we change it, or we talk about it. But one of the things that I think is a high-level result here is we’ve been undergoing this dash process for many years now. It’s evolving and maturing every year. But now, when people make presentations in dash, they are using Baldrige terminology. They are using the words that mean something very specific in Baldrige. It takes the level of communication way up. It’s not just someone trying to describe what they’re doing, but someone using very specific language that the whole room now understands. That’s a really powerful result in my book.

Gregg Profozich [00:28:01] We’ve been discussing results at a high level and the impacts on the business from revenue growth to profitability, efficiency, et cetera. Process changes I’m imagining, are some of the things that have driven that. Let’s talk a little bit about some specifics on process changes that you’ve made as a result of applying the Baldrige criteria and then some examples of the actual ranges of improvement and the results that you’ve been able to get.

Kevin Thorne [00:28:24] It’s a great question because when we embarked on this journey—well, even before that—we didn’t have a compelling reason to change. Steve, managing the company, has this chart that goes back before the beginning of time. We’ve been growing at about seven and a quarter percent year over year. We just do that on and on. Our profitability grows, our revenue grows, and the company is just on a very stable, steady path forward. When you look at those numbers, why would you want to do anything different? Other companies would give their eyeteeth for this. Also, we’re private. We don’t have outside investors putting influence on us to have to generate specific results quarter over quarter. But we have this notion in the back of our mind. The company has quite a few engineers in it. We are a technology and innovation company. We want to innovate. We say it’s in our DNA. That’s product innovation, but it’s also process innovation. One of the things that the criteria causes us to do is to answer some difficult questions. Leadership and governance. Well, because we’re a private company, we don’t have governance. How do we ensure that we’re managing the company with integrity and the highest sense of ethics? Well, because that’s what we want to do. But then, how do you know? It causes us to ask ourselves these challenging questions about well, what are our processes to make sure that this happens? If we don’t have them, is it important for us to have? A couple of areas that come to mind in terms of things that I think very specifically changed for us, what are your key processes, your work processes. We had to define those. If we say sales is a key work process, well, what are the requirements of sales? Well, maybe it’s more than that. As the team evaluated what their core requirements were, they came up well, it really is about managing relationships. Well, how do you know if your relationships are getting better or worse? How do you measure that? It’s changed the language that we have as a company in terms of what is the process, how do you know if the process is working, what are the core requirements, how do we know if we’re getting better over time. We’ve made some significant strides in strategy. We’ve incorporated the criteria and how we manage the strategic development of the company. If you can’t get your strategy right, then your future is a bit bleak, I would think. Also, around knowledge management. How do you go and take this body of information that the organization has accumulated over the years and ensure that that survives and it’s available for people who come in the next wave of people that want to propel this company forward? Those are a couple of areas that we’ve made some, I think, pretty significant changes to keep processes to make the company better. I’ll just give you one example. In our strategic planning, we’ve come up with these things called strategic action plans as a response to the Baldrige criteria. What are your strategic advantages? What are your challenges? What are your objectives? How are you going to blend all this together in an action plan to get you there? We formalized the process around that language. One of the things that we noticed is that we measured our market dominance in terms of units sold. We don’t have a lot of significant competitors out there. When you’re running around with an 85% market share, it’s hard to understand who are you going to go compete against and what are you going to do next. We changed the way we look at our business. Instead of units sold, we started to look at procedures that we serve. We didn’t have the same kind of market penetration with that. We have something much less than. Well, why not? Highlighting all new areas for us to take and focus the business on because of the way we chose to think about our market share and our strategy differently than we had in the past. A lot of that is attributable to Baldrige asking these difficult questions about how do you do something, and then analyzing that, and then making that process better.

Gregg Profozich [00:31:58] Bill, Steve, anything to add to that?

Bill Bregar [00:32:02] From a service perspective focusing on customers. I’m responsible for the service organization. When a piece of equipment has a problem, they call into tech support, and they help analyze what potentially is wrong. We dispatch an engineer. We get the parts out there. He gets it fixed, and it comes back. What are the key components to really understanding how good you’re doing at service? Well, one is you have to survey, and you should leverage, have to leverage, a third-party, independent, totally neutral survey company. It can’t be self-serving. I can’t pick and choose who I want to survey and throw out the bad scores and keep the good ones. We’ve done this through a national program and did some benchmarking on ten questions that we asked around the service process as well as overall service. It comes down to service cycle time, first-time fix rate, and overall customer satisfaction. Those are probably the top three components. How are you doing and benchmarking against those? Customer satisfaction aggregates those, but to deliver world-class service, you’ve got to have service engineers that are adequately trained that know these products inside and out, and they’ve got the spares to fix it when they get there, and do they fix it the first time they’re there. We’ve invested in trunk stock, and we’ve really analyzed our data to know what is potentially going to fail every day, every week, every month, every quarter. We’ve got spares on the shelf. I set a mantra here: don’t ever, ever, ever, ever, ever miss a shipment that a customer or a service engineer needs. We’ve gotten that. We’ve reduced that from almost 40% missed shipments eight years ago down to 2%, 1% now through improving those processes. The customers have bore that out. We’re selling more tables. I know because of it… I’ve always said the first table service sells the rest of them because if you buy it and you can’t fix it, it doesn’t help the patients, it doesn’t help the doctors. What did they really invest in? I could probably spend a couple hours talking about the service side of this, but it’s a very important component of this business.

Gregg Profozich [00:34:25] Absolutely. That’s an impressive improvement over the eight years from 40%-ish down to 1% or 2%. It speaks volumes to the quality of the work being done within the Baldrige criteria.

Denise Shields [00:34:36] Gregg, I’ll just jump in to say that that is true for every industry that uses the Baldrige. If it’s in healthcare… I’ve got a client that’s a hospital right now. Think about this. They’ve reduced…or actually improved, I should say…their accuracy in the ER. The emergency room accuracy used to be 60% for triage. That’s pretty scary when you think about it, but that’s the nation’s average for accuracy in triage in hospitals. You guys know that because you work with doctors, your surgical tables. But they’ve improved it to 90% because of the Baldrige criteria. There’s schools out there that have improved their graduation rates, reducing high school dropouts. I could go on and on and on. I really applaud that you guys are using the Baldrige to improve your results. That’s what the Baldrige was intended to do is improve results for manufacturing, service, healthcare, education, every sector of American business so that America is a great place and competitive in the international marketplace, as well. Thank you.

Gregg Profozich [00:35:43] Thank you, Denise. I think those are important points, as well. It doesn’t just apply to manufacturing, but of course, that is our focus here today. But thank you for bringing it to our audience to the broader concepts. I also want to go a little broader. It occurs to me that everything we’ve been talking about: is it within your four walls? Are there opportunities, and/or have you applied broad Baldrige criteria to your suppliers or to your customers in any way? Has the Baldrige leaked outside of your four walls of your company because of the impact it’s had?

Kevin Thorne [00:36:14] It has a little bit. One of the things we have… Whether it’s a blessing or a curse depends upon your perspective. But we’re a regulated company. We’re held to the standards of ISO 13485 and the Federal Code of Regulations 21 CFR 820. These regulations set the tone for our regulatory landscape as a business. Those trickle down to our suppliers. Suppliers that seek and get ISO certification have an easier road to being a supplier with us. We’re so new to our journey. But suppliers that would also be going down the Baldrige journey would have an easier road to get qualified and be a member of our team because they’ve demonstrated a commitment to a business ethos that we see making a substantial difference in the way we manage our business. Any supplier that would want to go down that path, we can see the value in what they’re doing, and you could… Well, what do you want in your supply base? You want dependability, repeatability, and you’d like to get it for the lowest price possible. But as we’re learning today in the world of supply chain disruptions, I’ll spend a little bit more for dependability. A supplier that uses the Baldrige criteria to manage their business I believe, would be a more dependable supplier, and they would be somebody I would prefer to do business with in the future.

Gregg Profozich [00:37:34] In a competitive situation then, what a supplier… I think I hear you saying that a supplier using the Baldrige criteria as a performance improvement tool would have a competitive advantage in winning business with you.

Kevin Thorne [00:37:47] Absolutely would, because they bring an element of business rigor that I know is present, and I don’t know that it necessarily would be present in somebody else. Maybe. I have much greater confidence in their ability to say what they do and do what they say than a company that hasn’t practiced these principles.

Bill Bregar [00:38:08] It would demonstrate a systematic approach to continuous improvement that would improve their operation and ours at the same time.

Gregg Profozich [00:38:16] I think I hear as I’m listening to you talk about the benefits of a supplier in a competitive situation or a regular supplier being a Baldrige participant in some way; it sounds like it gives more credibility in your guys’ mind. Is there a credibility angle, or is there credibility you think in Baldrige participation? Certainly, award gives a certain amount of accolades and notoriety. But within that application, regardless of whether or not you apply for an award, in your mind, is there a credibility that exists within those organizations?

Kevin Thorne [00:38:44] Well, again, applying for the award is one process of it. It really is adopting the criteria. I think what we’re talking about here. Whether you choose to apply or you just choose to adopt the criteria and base your business on performance excellence, that’s really the key in my mind. A business that’s well-structured, that understands its dependencies, that is measuring itself. One of the elements of the criteria is how do you know that…? For current and future threats, how do you take into account the idea of what could go wrong in the future? If you’re doing those kinds of things, you are going to be better prepared to deal with all of the uncertainties that business brings you every day. We’re in operations and service. Friday at 3:30 is when the world breaks, so we have to be prepared to deal with the Fridays at 3:30. It’s the same thing with our customers. We talked about outside the four walls. Right now, the greatest segment of growth in the Baldrige is in healthcare, and that happens to be our customers. Our customers get what this criteria is all about. We’ve talked with a few of them that are engaged in this process, and we tell them that we’re embarked on this journey. They get really excited about it, because they’re going through it. They know if we’re going through it, it’s going to make us a better partner to them because we’re speaking the same language, we’re focusing on the things that are about improvement, and about the future, and about transparency, and all of these things that create stronger partnerships than ones that are based on older principles—perhaps not being transparent, and win/lose negotiations, and all of those kinds of things. It makes us a better partner. It makes us think about being stewards in our community. It just makes us better to be part of the ecosystem.

Steve Lamb [00:40:31] Gregg, we’ve been talking about manufacturing processes, and service, and all that, but there’s also an aspect of this that is about the people, the people within the company. We’ve got some great people here, for sure, but it’s really allowed us to take a look at that aspect of what we do, how we treat our people, and really make them the center of our attention if you will. We have a strategic process that’s fairly well-defined, and it ends up with strategic objectives about growing the business and sell more, and all that sort of thing, expanding international. But this past year we added one that… One of our strategic objectives is to make OSI the best place to work. That’s something that I think has really hit home with a lot of people. Going through that journey we’ve started the development of what we call a people strategy, which really includes how we treat people and how they feel here. For a few years now, we’ve implemented an employee engagement survey. We actually measure directly what they think and what they do. We’re using those results to help make those processes better and make their total experience better here. We’re also looking outside at stewardship of our communities. We’ve always been very active in that. We do food drives at the holidays and cook drives and that sort of thing. Just recently, we donated three operating tables to Ukraine that are now in hospitals in Ukraine. All of that is part of the atmosphere here. It wasn’t Malcolm Baldrige made us do it, but it puts a focus on it. I think that’s been very helpful.

Gregg Profozich [00:42:08] I think it’s a very powerful thing. It sounds like from the way you guys are talking, it’s had a very powerful effect on many different aspects of your business, from the people engagement, and the whole top down and bottom up that’s occurred through the implementation, from the results and different ways that you have been able to change processes. You really understand and deeply think about core processes, and what they really are, and what you’re really about, and what are your core strategies. That alignment that comes from having everybody use their words and scratch your heads and look at each other. “That’s not what I said. I meant something slightly different,” and then get that alignment that works through all that. I think I hear you guys saying that all of that happens. Then the bottom line results, as well. Improvements that you’re measuring through the metrics and the ongoing improvements that are happening through your dashboard process and your review process and the evolution that you discussed, the changing of the metrics when things don’t apply any longer, and the alignment around language that has deep meaning, and everybody’s talking from the same lexicon and using the same terms in the same way, and that clarity that comes from it. It sounds like there’s been a tremendous amount of value you gain from all of that. There’s still a couple more questions before we wrap up for today. But if I’m a small or midsize manufacturer and I’m contemplating implementing Baldrige, what advice would you give me as I’m just starting out? What are some of the do’s and don’ts? I’d love to hear from all three of you on this. 

Steve Lamb [00:43:25] Well, first thing is get Bill to come lecture. He’s very passionate about it. You have to have a champion. You have to start. If you don’t have one within the company, I recommend you go outside and get some help. But what’s been really important here, I believe—said it before—is do not enter this process with your eye on an award, on a trophy. You have to convince everybody that you’re doing this for all the right reasons, meaning you’re trying to improve the business, make it a stronger business, make it a more profitable business, make it a more solid place for them to work. I can’t emphasize that enough. If you want to just win it so that you can put a trophy on the wall, okay, great. They don’t just hand them out; you got to do the work. But to get buy-in at all levels, you got to make sure and let them know what the real goal is, and that is improving the company.

Kevin Thorne [00:44:19] Echoing what Steve said, for sure, because it’s hard to motivate an organization around winning an award. It’s much more effective to motivate an organization about making it a better place. But I think that I would to a certain degree start small, especially for some of the smaller organizations. Then, like I said earlier on, knowing what I know now, one of probably the best things a small company can do is to just focus on the org profile. It forces you to sit down and write what’s important to you as a business and to get clarity among that with the senior leadership. That’s not an easy thing to do because many strongly opinionated people who run businesses have their own ideas about what’s important. Getting an entire team to agree about what’s important can be one of the most powerful things a small start-up manufacturing type organization… Probably not start-up, because they tend to be somewhat focused, but a manufacturing organization. To get that leadership aligned around what’s most important to the business can be one of the single most important things they do. Start small, focus on that, and then if you found that to be powerful, then start to pick a couple of categories. Just pick something that you think is an area that needs improvement. If it happens to be strategy, or people, or measurements, pick one of those, and dive deep into that, and see what it does for your organization. I think what you’ll see then is this whole body works well together. We all catch on, and it will grow from there. Denise, you can tell me precisely, but just the 17 elements, probably on about 19 pages of text. It’s not a huge document, but so much is contained in there when you try to read through the nuance of the questions and how interdependent everything is, it can be a huge undertaking. But pick something, and dive into it, and just get started. I think the fever will catch on for most people.

Denise Shields [00:46:20] Kevin, I agree with you. I also want to just share that the Baldrige Performance Excellence Program actually has state-based programs to support those that are just getting started. We’re the ones that have the criteria books. We have training. We have organizational profile shops and all kinds of different support mechanisms including application writing, consulting, whatever an organization may need. I would encourage those that might be interested and don’t know how to get started to contact the California Council for Excellence and just start asking questions. We’re here to support you guys. That’s exactly the purpose of our state Baldrige program.

Bill Bregar [00:46:59] I got just a couple of things to add, maybe for someone starting on this journey. I’ve said it already. It is a top-down. I don’t think it’s a grassroots environment unless you can convince the executives hey, I’m doing it. Look how I’m improving. Let’s take this across the company. It really is a top-down approach. I get asked all the time. We talked about it. Is it about the trophy? If you go google, they show the results of the companies that have won the Baldrige Award how much they’ve grown in revenue, and profit, and market share. All that goes into play, but if you think about it, it wasn’t the trophy that did that; it was the process improvements over the journey that drove those results. It wasn’t the fact that you got the trophy. But I’ve always said if you could run a 9-second 100-meter dash and you’re in the Olympics, would you turn down the gold medal? Probably not. I haven’t seen anyone turn down a medal. But it really is about the journey, the criteria. Kevin has said this, and I’ve adopted it. Most of the company has. What’s the biggest room in the world? The room for improvement. This is just a criteria to get after that. Don’t be overwhelmed, because when you first see all those… There’s basic questions. There’s multilayer questions. You may have standard operating procedures and work instructions, but if you make them think, “How would you answer this question?” just watch them think, “Oh, gee, I never thought about it that way. How would I answer that?” It’s just not the way you documented the SOP or the work instruction. You got to think about it. But don’t get overwhelmed. It’s a journey. It’s well worth the investment. But if you think it’s one-and-done in a year, that’s not going to happen.

Gregg Profozich [00:48:57] Thank you all for that. It sounds like as you’re talking it’s about the questions and the thinking that happens. I’m sitting here listening to you, and it strikes me that you could have a competitor that could buy the exact same equipment you have. They could have the exact same square footage you have. They can buy from the same supplier and have the same set of customers that you have. The thing that differentiates you is your people and how they apply their creativity and their talent to solve the problems of your business. It sounds a lot like the Baldrige criteria is a way to amplify that thinking and really bring it in a structured way to applying it to the operational and to the business problems that you’re trying to solve in your market. Is that a fair assessment?

Kevin Thorne [00:49:41] Yeah, Gregg, it is. The analogy of a crew shell. You got eight people rowing, highly trained, super fit athletes. But there’s that coxswain in the back of the boat that’s going, “Stroke, stroke, stroke.” He’s calling out the cadence. Without something like that that ties that shell together, they’re not going to be effective. That’s what the criteria does. It creates that cadence, that language, those kinds of questions that you have to ask. An example: Mark and I… Mark’s our head of R & D, and he’s my partner on the strategy category. We’re going through our feedback. They said, “Well, we’re not sure that you answered the question ‘How do you do something?’” We’re reading through our application. Well, we did. He goes, “No, we didn’t. We said what we do, but we didn’t really say how do we do something.” It was really illuminating because then we had to go back and say, “Well, okay, if we didn’t answer, how do we do it?” It’s a little bit by hook or by crook at the time we got it done, but we didn’t have that systematic approach. We didn’t have that coxswain giving us that cadence that was thought out before part of an overall approach. That’s what it brings to a company. It brings this unifying concept that gets everybody rowing in the same rhythm.

Gregg Profozich [00:51:01] Anything else to add, Steve, Bill?

Steve Lamb [00:51:02] No, I think we’ve touched on all the bases here, or at least a lot of them. As I said earlier, we still got a long way to go.

Gregg Profozich [00:51:10] Well, on that note, how far do you see Mizuho OSI going on this Baldrige journey?

Kevin Thorne [00:51:15] All the way to world dominance.

Steve Lamb [00:51:20] Well, again, the prize is not the trophy, but if someone wanted to set one on my desk, I’d be happy about that. It’s continuous improvement. When there’s nothing left to do to improve anymore, then we’re probably done. I’m sure we’ll win an award if we get to that point. It’s a journey, for sure.

Kevin Thorne [00:51:37] Just to add to that, one of the things that has crept up into our language… Before we started this journey, like Steve said, we have really great people that work here, and the company has had really great results. What we had in the past was a lot of really smart people doing really good things that generated great results. What we’re trying to change to is keeping those really great, really smart people but now supporting them with really great process that yield now and into the future consistently great results. We’re growing, and we’re breaking that threshold where just because I know what to do, and I know Bill and he knows what to do, and together we’re going to get it done, we’re getting to that size where process becomes more important than sometimes the people because I can’t know what everybody is doing every day now. I have to rely on processes being in place to get the job done. That’s what’s going to propel us from the company that we were a few years ago to the company that we want to be decades from now.

Gregg Profozich [00:52:37] I think it’s a very powerful thing, and it’s definitely a characteristic or a consequence of growth. When it’s three people, you can know what Charlie, Joe, and Sam are doing. When it’s 30 people, not so much. You got to count on the fact that they’re all trained to the best process we can identify, and they’re continuously improving that process. Steve, Kevin, Bill, thank you so much for joining me today and for sharing your perspectives, insights, and expertise with me and our listeners.

Kevin Thorne [00:53:03] Thanks, Gregg. Appreciate it.

Bill Bregar [00:53:04] Thank you.

Gregg Profozich [00:53:05] To our listeners, thank you for joining us for this conversation with Steve Lamb, Kevin Thorne, Bill Bregar, and Denise Shields on the small and medium-sized manufacturers’ perspective on the Baldrige Award. Thank you for listening to Shifting Gears, a podcast from CMTC. If you enjoyed this episode, please share it with others and post it on your social media platforms. You can subscribe to our podcasts on Apple Podcasts, Spotify, or your preferred podcast directory. For more information on our topic, please visit CMTC is a private nonprofit organization that provides technical assistance, workforce development, and consulting services to small and medium-sized manufacturers throughout the state of California. CMTC’s mission is to serve as a trusted adviser providing solutions that increase the productivity and competitiveness of California’s manufacturers. CMTC operates under a cooperative agreement for the state of California with the Hollings Manufacturing Extension Partnership Program, MEP, at the National Institute of Standards and Technology within the Department of Commerce. For more information about CMTC, please visit For more information about the MEP National Network or to find your local MEP center, visit

Topics: Continuous Improvement, Employee Training, Government Support, Innovation & Growth, Quality, Business Growth Strategy & Strategic Planning, Business Management

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