Business Performance Improvement – A Starting Point (Part 2)

four direction sign isolated on white background

four direction sign isolated on white background

I’m pleased to share with you Part 2 of a guest article by my colleague Nicholas Scott. In case you missed it, you can read Part 1 here.  It provides a useful overview and guide to main business performance methods. I have found that many business owners, executives and managers either don’t know of all of these methods, or are confused as to how they differ. Even among professional practioners, we have discussions on their definition and application!

Each of the methods moves your organization to a different result or destination. Just like when you travel, you need to know your destination. If your destination is Paris, then don’t get on the flight to New York! In the same way, choose the right improvement method. So, before you start your improvement journey, you need to know where each of the methods will take you before you get on board.

–Jeff Pallister

Business Performance Improvement A Starting Point (Part 2)

by Nicholas Scott, Traverse Technical Management Consulting Ltd.

Business performance improvement. A powerful concept but, where do you begin?

Quality Management

What is it?

Quality Management (QM) is a system that focuses on the achievement of organizational results. By developing a system of documented business process, QM seeks to develop a consistent and continually improving system that is focused on the needs of the customer. In the context of QM, quality is defined as: How effectively a product or service meets a set of defined or expected requirements.

QM Principles

  • Principle 1: Customer focus
  • Principle 2: Leadership
  • Principle 3: Involvement of people
  • Principle 4: Process approach
  • Principle 5: System approach to management
  • Principle 6: Continual improvement
  • Principle 7: Factual approach to decision makin
  • Principle 8: Mutually beneficial supplier relationships

How advanced is it?

QM can be applied to any size business (even one person) and at any stage of development.

Organizational Excellence 

The Organizational Excellence (OE) model contains criteria that enable comparative evaluation of organizational performance and this is applicable to all activities and all interested parties of an organization. Assessment criteria in OE models provide a basis for an organization to compare its performance with the performance of other organizations. OE shares its roots with QM but extends the scope of implementation to all aspects of the organization. As such its value to the organization is significantly higher.

OE Principles

1. Leadership involvement:  ensuring senior management is committed and actively involved in establishing and communicating direction.

2. Alignment: understanding the organization is a system of interrelated and interconnected work processes and all activities need to be aligned with the established direction.

3. Focus on the customer:  ensuring the primary aim of everyone in the organization is to understand and meet the needs of the customer.

4. People involvement:  nurturing and reinforcing cooperation and teamwork and giving employees the opportunity to develop their full potential.

5. Prevention based process management: establishing consistency in work processes and developing a mindset of prevention.

6. Partnership development: developing and maintaining value\uc0\u8208 adding relationships with suppliers and partners.

7. Continuous improvement: harnessing the collective knowledge, skills, and creativity of stakeholders to relentlessly pursue improvement.

8. Data based decision making: basing decisions on performance measurement findings.

9. Societal commitment: striving to understand and demonstrate corporate commitment to society.

How advanced is it?

Like quality management, Organizational Excellence can be applied to any size organization and has the benefit of being able to take the temperature of the organization. It is an excellent diagnostic tool and leads itself nicely into other options.

Common Themes 

Leadership Organization leaders, top management, whatever you may call it, must be the driving force behind the system. Lack of leadership will inevitably kill any improvement project.

Customers The customer is always the driving force for the required output. The implementation of any management philosophy without a clear drive to improve the customers experience will not work

Involvement of people  While leadership must drive the change, not involving everyone in the organization, to some degree, will also result in a poor result.

Continuous improvement  All of the methods realize that change is an ongoing process.

Final Thoughts

Each of the discussed management techniques has a solid basis in past business success and each of the improvement models share many similar philosophies.

I believe that Organizational Excellence is the best starting point for all organizations for the simple reason that it allows for a self-diagnosis as the first step that covers all elements of the organization. This missing step is what can cause other systems to fail because other issue such as effective leadership or communication can cause a complete failure of improvement projects.

As the OE effort continues, a solid quality management system will be developed as part of the process. Along the way, additional tools such as Lean and Six Sigma can be brought to bear in areas where they will provide the greatest benefit to the organization.

Reprinted with permission  2013 Traverse Technical Management Consulting Ltd.

In the meantime, don’t forget about my book which is for sale on Amazon. It is a fictional process improvement story that every business owner and manager can relate to.

Get it on Amazon