Assessing Business Excellence

Les Porter, Steve Tanner

• Publisher: Routledge
• Year: 2012
• ISBN:
  9781136427893
• Edition: 2
• Topic: Business
• Subtopic: Business General
• Index: Business

Assessing Business Excellence presents a strategic framework for business excellence and total quality management and shows how you can be actively involved in continuous improvement by systematically reviewing your business activities and results against holistic business excellence frameworks.For all practitioners who seek to use total quality management to improve their organization's effectiveness, efficiency and responsiveness, this title is the essential route map to business excellence. From two leading expert authors comes a book where the most recognized quality award criteria are used to explore the concepts of business excellence and self-assessment. This book:
* Introduces the major business excellence and total quality frameworks including The Malcolm Baldrige National Quality Award and the European Quality Award and ISO9000: 2000
* Compares the frameworks and identifies their strengths and limitations
* Introduces the self-assessment process
* Explores the main approaches to self-assessment
* Illustrates the practical benefits of self-assessment through case examples

Part One The Case for Business Excellence

DOI: 10.4324/9780080493930-1

1 Introducing Business Excellence

DOI: 10.4324/9780080493930-2

1.1 Introduction

In the last two decades, organizations have experienced a period of great change in their markets and operations. International competition has meant that many organizations have faced an increasingly turbulent and hostile environment. Customers have become more demanding, competition has become more intense and sophisticated, and the pace of technological change has quickened. Regulators and consumer groups have also added to these pressures. As a result, many organizations have adopted a range of improvement approaches in response to these forces. We have seen the growing adoption of quality management systems standards such as ISO9000, the emergence of total quality management (TQM), business process engineering (BPR), business excellence, performance excellence, lean thinking, Six Sigma etc. The battle weary could be excused from taking a rather jaundiced view of this ever lengthening list of ‘quality’ offers, but, by and large, they fit into an integrated approach to organizational improvement.

The involvement of people in the continuous improvement and transformation of business processes is a fundamental theme that runs through all of these quality improvement, process improvement and excellence approaches. By definition, this requires measurement and an understanding of how superior performance can be achieved. Assessing business excellence or organizational excellence is an essential part of a learning and measurement process, which involves people in self-assessment and allows organizations to identify strengths and improvement opportunities as well as enabling the progress of excellence programmes to be monitored in a systematic way. Self-assessment is a comprehensive, systematic and regular review of an organization's activities and results referenced against an appropriate business excellence model. These types of business or organizational assessments are one of the most powerful organizational learning tools available. In this book we describe the main excellence frameworks, and explain how they may be used to drive organizational improvement using the process of self-assessment.

As part of setting the scene for understanding where ‘assessing business excellence’ fits in, we need to understand the pedigree of the excellence models.

1.2 Business Excellence – The Pedigree

In the 1980s, many Western organizations woke up to the fact that quality was a strategic differentiator and not just the preserve of someone in quality control! The decade saw a shift in emphasis from quality control to quality assurance, and the emergence of ideas such as company-wide quality control, total quality (TQ), and total quality management (TQM). Quality systems standards such as BS5750:1979 and the international standard ISO9000:1987 were an important element of many quality programmes in the 1980s and 1990s; however, these standards had only a small impact on the early development of the award excellence frameworks, whereas TQ and TQM approaches had a profound influence.

Many of the ideas associated with TQM-type approaches have been used to develop the excellence frameworks that are the main subject of this book. Indeed all the excellence models are founded on TQM concepts, but they have also taken TQM thinking beyond its original remit to achieve better organizational integration. We need to be clear on what we mean by TQM, given the importance of TQM in the pedigree of all the excellence models.

Total quality management (TQM) is an approach that focuses on improving the organization's effectiveness, efficiency and responsiveness to customers' and other stakeholders' needs by actively harnessing people's skills and competencies in the pursuit of achieving sustained improvements to organizational performance. One of the critical success factors for TQM is strong leadership. Leaders need to be able to motivate and empower people to engage in TQM.

The achievement of business or organizational excellence is at the core of TQM. Results are the milestones of achievement and progress. If they are not captured on a regular basis, it becomes very difficult to maintain momentum, commitment and, more importantly, the motivation and desire to achieve higher performance standards. Furthermore the results captured must be consistent with the pursuit of improving the organization's overall performance. This requires a fundamental understanding of how sustained excellent organizational results are achieved. Customer perceived quality has been shown to be directly associated with profitability, and many studies have suggested a strong and identifiable link between a TQM approach and superior financial performance. These links will be explored in some detail in Chapter 2.

The 1990s saw the emergence of techniques such as business process re-engineering (BPR) and the balanced scorecard. Both these techniques had an influence on the development of the various excellence models; the influence of the scorecard being the greater. BPR brought a ‘green field’ approach to the radical redesign of key business processes by challenging basic assumptions and embracing change. The aim of BPR is to bring about a step-change in performance in cost, quality and customer satisfaction. The balanced scorecard is in essence a measurement system that enables the effective translation of strategy into action by developing an understanding of the cause and effect relationships that deliver the desired strategic outcomes. It attempts to link the ‘people’ dimensions of learning and growth to the process issues of quality and time, then to the customer dimensions of delivery and loyalty and, finally, to financial outcomes such as return on capital employed (ROCE). All the excellence frameworks include this fundamental conceptual thinking.

Whilst the interest in explicit TQM programmes has declined in some countries in recent years, its successor in all but name, Six Sigma, has seen a dramatic increase in application. Six Sigma is not new; its origins can be traced to Motorola in the early 1980s. Six Sigma is a disciplined methodology for improving organizations' processes, based on extremely rigorous data gathering and analysis. The approach focuses on helping organizations produce products and services better, faster and cheaper by improving the capability of processes to meet customer requirements. Six Sigma identifies and eliminates costs that add no value to customers. Unlike simple cost-cutting programmes, Six Sigma delivers cost cuts whilst retaining or improving value to the customer.

The term ‘Six Sigma’ is based on a statistical rationale. Six Sigma performance is the goal, and equates to 3.4 defects per million process, product or service opportunities. The focus is on reducing variability to achieve the goal. Many of the features of Six Sigma can be traced back to the earlier TQM thinking and, while Six Sigma has not really influenced the development of the excellence models, there is genuine interest about where Six Sigma fits into them. We address this in section 1.7.

Several common themes...

Table of contents

• Cover Page
• Half-Title Page
• Dedication
• Title Page
• Copyright Page
• Table of Contents
• Preface
• Acknowledgements
• Part One The Case for Business Excellence
• Part Two The Excellence Frameworks
• Part Three Self-Assessment
• Further reading
• Index