IPM founder tells what Baldrige award means to company, and what principles can mean for yours
C. Richard Panico founded Integrated Project Management Co. in 1988 with the idea to develop a business firmly grounded in key ethical and professional disciplines.
Over the past 30 years, the Burr Ridge-based company has received numerous accolades, including Forbes's 25 Best Small Companies in America, Inc's honor roll of fastest growing companies, Best Places to Work honors from Fortune and Crain's Chicago Business, and the Daily Herald Business Ledger's Annual Awards for Business Excellence in 2011.
In November, however, IPM received the crowning achievement — the 2018 Malcolm Baldrige National Quality Award for small business from the U.S. Department of Commerce. The award — named for former Commerce Secretary Malcolm Baldrige Jr., who served under President Ronald Reagan and was known for bringing sweeping reforms to federal government operations — is given annually to American organizations to raise awareness of quality management and systems based on concepts and values developed by Baldrige during his career.
IPM is one of five organizations in Illinois — and the first small business in the state — to receive the award since its inception in 1988. The company will join the other 2018 recipients at a ceremony during the 31st annual Quest for Excellence Conference in Washington D.C. in April.
We asked Panico, who is also president and CEO, to tell us what the Baldrige Award means for his business, and offer advice on how business leaders can apply Baldrige principles to their operations.
Q: Why did IPM decide to apply for the Baldrige award?
A: We chose to pursue the Malcolm Baldrige National Quality Award for several reasons. While the focus seems to be on achieving the award, the value lies in the pursuit, or what we and the Baldrige folks refer to as “the journey.” IPM's primary reason for embarking on the journey was to improve our performance, competitiveness, and sustainability.
Additionally, we wanted to escalate our obsession with continuous improvement to a higher and more discriminating level. Having access to this proven process that evaluates every critical element of a business enterprise: leadership, strategy, customer service, measurement, analysis, knowledge management, workforce, operations, and results, provided a unique opportunity to understand the true “state of our company” and identify objectively, clearly, and concisely opportunities for improvement.
While we apply a disciplined approach to continuous improvement through our annual business planning process, the Baldrige process allowed us to see and examine gaps that were not identified or whose magnitudes were not defined. One of the primary elements of Our Vision is to celebrate our 100th anniversary. To accomplish this, we must remain relevant and competitive in the marketplace. That requires IPM to continually evolve in every aspect of our business model and process. The speed and magnitude of change requires us to be more insightful and nimbler. The application of thew Baldrige journey was identified as a methodology that would provide greater discipline in planning our future while improving our competitiveness along the way.
Q; What does the award mean for your company?
A: The award is validation of the high-performance caliber of our people and the effectiveness of IPM's business model and processes that enable our sustained growth and competitiveness. It places us in a distinguished group of other high-performing enterprises and further differentiates IPM. It is a well-known fact that it takes many years to achieve the award and some companies are never able to achieve the Baldrige level of quality and performance. For our clients, the award adds another level of assurance that our work will be of the highest quality, performed with uncompromising honesty and integrity.
Q: What values and practices are the foundation of IPM, and how do they align with the award?
A: Our values are clearly defined. They include honesty, integrity, caring, responsibility, excellence, humility, respect, and spirituality. These values drive our expectations of conduct for all our IPM family members, beginning with the executive team. They also form the governance of our culture, which I consider our greatest competitive advantage.
IPM is a family of committed people who share values and are committed to Our Mission & Beliefs. This was recognized by the Baldrige examiners through a review of our application and further enforced during the site visit and interviews with our people.
Specifically, within the Organizational Profile, we described our mission, vision, and values. These documents were not created for the purpose of winning the award; they have been part of IPM's existence for decades. This was recognized and validated by the examiners.
Q; How much of those values and practices come from your personal beliefs, and the way you conduct your personal and professional life?
A: An organization is always a reflection of its leader(s). When I started the company, my intent was to create an environment that reflected my values and then find others who shared them. There is no doubt that IPM's values and behavioral practices stem from my personal beliefs which are a direct result of my upbringing and a father with uncompromising honesty and integrity. My father “could not be bought.” In other words, his honesty and integrity were not for sale at any price. I have inherited this deep belief and it permeates IPM's culture. Quite frankly, I've never been good at separating personal and professional life, nor do I want to be good at it. I've been accused of taking business personally. When your decisions impact other humans and their families, business should always be personal.
Q: As the founder and CEO, how do you make sure those values and practices are ingrained in the workforce?
A; Values are easy to identify and post. This is easy, and most companies do this well. Consistently displaying and promoting these values through behavior and decision making aligned with these values requires a different and deep commitment.
I am constantly mindful of our Fundamental Values and understand the critical influence I exert on our culture by “walking the talk” consistently. There is no better promotion than by example. I regularly refer to our values, so they are top-of-mind and continually reinforced.
Additionally, all our IPM family members understand that compliance to our values is not arbitrary. If you lie, you get fired. If you are disrespectful to others, you get fired. This has been the case for 30 years and our zero-tolerance policy has worked well to preserve our culture. I still interview every person we hire. During my interview, I make it clear that we are not joining them, rather they are joining us. This requires candidates to decide whether they share our values and want to join our family.
Q: What were key challenges that the company had to overcome to achieve this level of business quality?
A: Our greatest challenge was and is applying process discipline — actually utilizing the methodologies that we've developed — in all we do while relentlessly searching for ways to improve outcomes. This involved getting rid of practices and processes that were producing limited or diminishing value, and introducing new processes that better contribute to our ability to ensure high-quality results. An example spurred by the Baldrige process is an improvement to our resource planning process, which now further integrates our employees' career path and experience desires into consulting assignment considerations.
Another significant challenge was ensuring we incorporated change management as we evolved our business model and processes. It is relatively easy to improve processes and procedures on paper; it is quite different and more challenging to modify human behaviors and heuristic tendencies to new ways of doing things. Fortunately, as a consulting company whose focus is to ensure our clients plan, execute, and sustain performance, we only had to apply the same discipline to our own business.
Lastly, but nonetheless a very formidable and practical challenge, was to take on this significant time and resource-consuming effort while managing daily operations and ensuring outstanding results for our clients. We tackled this by applying what we do best, project management, to the Baldrige endeavor, including assigning a dedicated project manager and support resources.
Most importantly, the Baldrige pursuit was incorporated as part of our Strategic Plan as a Strategic Initiative.
“For IPM, it's not about the award at all, but rather the opportunity to position the organization for continued, profitable growth.”
Rich Panico, IPM Founder, President & CEO
Q: Only a select few organizations are awarded this honor annually. Do you believe any business can improve itself to win the award? What key elements do you think need to be in place for a business to earn consideration?
A: There is no doubt that any business can benefit from the Baldrige journey. As noted, it requires a leadership commitment that includes establishing pursuit of the award as a priority and supporting it accordingly.
For immature organizations, it is an excellent process for establishing a model and practices that will support insightful strategy development to ensure competitiveness and controlled scalability. The process will help these organizations readily identify major constraints to quality, growth, profitability, and differentiation, among others.
For mature companies that have been successful and continually evolved, it provides an opportunity to accelerate growth and competitiveness. The process will uncover previously obscure improvement opportunities and drive a more objective and critical review of every aspect of the business. For a business to receive consideration for the award, it must be able to display a strong ability to be self-reflective, critical, and committed to continual improvement.
The Baldrige pursuit is demanding and requires the full commitment of the organization to ultimately achieve the award. It is most important to understand and accept that it's not about the award at all, but rather the opportunity to position the organization for continued, profitable growth. The journey doesn't end with achievement of the award; it is an “improvement forever” mentality and process that becomes part of the company's DNA.
Q: Are there any experiences you could cite that exemplify what IPM and Baldrige-level quality are all about?
A: I'll begin by citing our people. We go through great lengths to recruit outstanding leaders who not only have requisite educational and experiential backgrounds but who, most importantly, are cultural “fits.” There is no doubt that our people are our most important assets. Everything we provide to the outside world flows through our people. They hold the key to quality and for this reason, we invest significantly in their training, development, and well-being. We typically average fewer than one hire per 100 resumes and have turned away work rather than compromise our hiring standards.
Our business planning process also exemplifies Baldrige quality. Since the company's inception, we have continually evolved our strategic planning process and have applied it with discipline. It has provided the organization with a well-defined road map to our Vision and Strategic Goals thus aligning the organization to what is most important to sustain progress and growth. The outcome has been sustainable growth and profitability for 30 years.
Another example is IPM's quality results, measured by how often we meet or exceed customer expectations. We measure this through surveys at the end of each project, including calculation of a Net Promotor Score (NPS). NPS is an index ranging from -100 to +100 which measures the willingness of customers to recommend a company's products or services to others. IPM's average NPS was 64 in 2018, placing us in the excellent/world class range. Additionally, a three-year average of survey results rated our meeting of client expectations at 9.0/10.
“IPM will rely on components of the Baldrige process, integrated with our business planning process, to understand our competitors better, craft strategies with insight and foresight, and lead rather than follow.”
Rich Panico, IPM Founder, President & CEO
Q: Now that you have received the honor, what are the challenges ahead for IPM? How do you maintain that level of quality ... or can you get better?
A: There certainly are challenges ahead. Market dynamics are as a volatile as ever and change is accelerating at an ever-increasing pace. This means we must remain vigilant and disciplined in evolving our business model, services, and processes. Success is studied by competitors and replicated quickly. It is incumbent upon us to never be lulled into a false sense of security because of our success. The world of consulting, like other industries, is faced with having to provide greater value. The Baldrige process will help us focus on continually understanding what customers need and value most. We then must be able to rapidly and efficiently evolve capabilities without compromising our quality.
Additionally, there will be increased competition requiring us to differentiate our value proposition and stand out among the field. Again, we will rely on components of the Baldrige process, integrated with our business planning process, to understand our competitors better, craft strategies with insight and foresight, and lead rather than follow.
Q: What would you consider “starting points” for a business owner that is looking for ways to improve his company?
A: Certainly, the Baldrige process is an outstanding starting point to improve any business. Our first step was to really dig in and learn what would be required. To do this, I and another member of our management team went through Examiner training. While I had no intention of becoming an examiner, I really wanted to understand the effort required by my organization to embark on the journey. I quickly validated my assumption: this would require an intensely committed effort by many people in the company.
Therefore, my first recommendation to any organization that desires to go on the journey is to understand what is required in terms of time and resources.
Second, acknowledge the reality that the journey takes years, not months, to achieve, and that the value is in the journey; one that will (or should) continue beyond achieving the award.
Third, ensure the entire organization is on board. No one can impose the Baldrige process on your organization or do it to you. It requires stakeholders across the entire organization to be committed to actively pursue improvements.
Fourth, incorporate change management right out of the gate. Change is difficult for any organization, especially when it disrupts years of practices and habits that seemed to work just fine.
Lastly, treasure the successes along the way. There will be many improvements that positively impact the business well before achieving the award.
This is the beauty of the Baldrige pursuit, you don't have to achieve the award to be a big winner — the benefits accrue to the business along the way. Be patient, disciplined, and persistent.
Malcolm Baldrige National Quality Award recipients from Illinois
2018: Integrated Project Management Company, Burr Ridge (Small Business)
2010: Advocate Good Samaritan Hospital, Downers Grove (Health Care)
2003: Community Consolidated School District 15, Palatine (Education)
2002: Motorola Inc. Commercial, Government and Industrial Solutions Sector (CGISS) (now Motorola Government and Enterprise Mobility Solutions), Schaumburg (Manufacturing)
1988: Motorola, Schaumburg (Manufacturing)
Source: U.S. Commerce Department