Most of us have heard the anecdote that "a majority of Baldrige Award winners have gone bankrupt." I don’t know if that’s true, but I wouldn’t be surprised. Perhaps there’s a similar situation with the Shingo Prize. We’ve blogged several times about the problems with the Shingo Prize, and it’s propensity to be awarded to bankrupt companies like Delphi. As we’ve stated many times, the bottom line metric of lean is profit, and bankruptcy doesn’t quite achieve that.
Our friend Mark Graban at the Lean Blog apparently had some spare analytical time on his hands. He looked at past Shingo Prize winners from an investment standpoint, and concluded that the Prize isn’t exactly a positive indicator.
If you invested in the Prize winners since 2001 you would have a net return of… -75%. Ouch.
Ok, perhaps Delphi should be removed since the bankruptcy has killed their value and they also represent a majority of winners. But even with that rather arbitrary change, the net return of Shingo Prize winners is still -55%.
If you weight the private companies using the Russell Small Cap index as a proxy, the net return is still -59%.
What’s wrong with this picture? Sure there are other factors involved in a company’s performance and I’m sure some people will go to great lengths to rationalize the results, but this is definitely an interesting data point.