We often use the words Excellence and Quality interchangeably. Quality in its most basic sense is defined as the performance standard / specification vis-à-vis product and service offerings – in line with customer expectations. At a much more holistic level – quality / excellence is being more effective and efficient than the present in alignment with stakeholder requirements.
One of the simplest and best definitions of Excellence, I have come across – `Excellence is when people / organizations strive to be the best they can be`.
Frameworks such as EFQM look at an organization pursuing the journey of excellence vis-à-vis it`s Leadership, People, Processes, Strategy and Partnerships enabling achieving higher levels of employee, customer & supplier engagement and satisfaction, and superior financial results.
In pursuit of this goal of superior results through Excellence, several organizations across geographies, industries and sizes have rolled out formal improvement efforts / programs (either afresh or graduating from some shape or form of informal / small scale initiatives). These initiatives are targeted towards improving the performance levels vis-à-vis efficiency and effectiveness – in turn – expecting (and also delivering) better top and bottom-line financial results.
As per a survey done by Process Excellence Network (PEX) in October 2011, more than 70% of the 676 global respondents cited increasing efficiency or reducing costs were the primary, secondary or tertiary drivers for their improvement program. Achieving Customer Satisfaction was considered to be the key primary driver by 40% of the respondents. These initiatives have been leveraging varying methodologies such as Lean, Six Sigma, TPM, BPM, TOC etc. to achieve the goals of cost reduction / customer satisfaction enhancement.
However, while some of these organizations have been successful in their pursuit of excellence and better results compared to others, others haven`t been as successful, and few not at all. While we have new programs being rolled out, we have also seen several other organizations de-emphasizing or even stopping their improvement efforts. As per the PEX survey, while 51.6% of the survey respondents mentioned that their efforts are being expanded –33% shared that either the efforts & interest has peaked or experiencing declining returns or dismantled all together.
While there are a large number of different reasons for failure / non-success, which vary from an organization to another in terms of severity and occurrence – there are a few critical themes observed through my experiences.
At one of the large and leading industrial firms (2011 Revenues $ 38 billion), an excellence journey was kicked off in 2009 and the results have been inspiring (estimated $1 billion savings for 2012). During one of my recent interactions with the leader of the Quality function at this organization – I got to hear the mantras of success (below).
Towards the end of the discussion – he highlighted that to be successful, above everything else – an organization and its people need to have the humility and openness to change.
In my experience, the fundamental differentiator amongst the successful / excellent and the not so successful organizations has been attaining a state of perpetuity. An environment where the internal and external stakeholders identify with excellence, where being better is part of the organizational culture.
This is the BHAG (Big Hairy Audacious Goal) for any organization`s leadership…
In a recent publication, consulting firm Booz Allen highlighted the clear difference in EBIT performance over 10 years between organizations having different levels of “culture scores” http://www.booz.com/media/file/BoozCo-Perspective-on-Organizational-Culture.pdf. Right from Peter Drucker days, we have often heard `Culture eats Strategy for breakfast / lunch`. Jonathan Becher, Chief Marketing Officer at SAP, as part of his award winning story at the Human Capital Prize on Leadership recently highlighted his perspectives on the dominance of culture towards making SAP a successful organization http://www.managementexchange.com/story/culture-eats-strategy, and he`s indeed not an exception.
Having read, practiced, and experienced several dimensions of excellence – I have crystallized on five key enablers for the Culture of Excellence, and a sustainable transformation. More on this later!