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Defining & measuring Business excellence

Guest post by: John Heap

Article Overview: Most organisations think they are striving for excellence. But how many companies do we know that we think of as truly excellent? What creates the gap? How can an organisation become excellent .. and how would it know when it was?

Defining & measuring Business excellence

Defining & Measuring Performance Excellence

1. Definition

Simple definition

Business Performance Excellence is achieved when an organization is generating the maximum level of profitability possible given the human, financial, capital, and other resources it possesses

But what about longer-term sustainability, what about social and environmental factors, what about effects on other stakeholders?

The concept of ‘Performance Excellence’ has emerged from the ‘Quality /movement’ rather than the performance/productivity movement but it is in effect a form of ‘super performance’ measure … or form of assessment.

2. Models / Schemes

USA – Baldrige award

The Criteria for the Baldrige award work as an integrated framework for managing an organization. They are simply a set of questions focusing on critical aspects of management that contribute to performance excellence:

• Leadership
• Strategic planning
• Customer focus
• Measurement, analysis, and knowledge management
• Workforce focus
• Process management
• Results

The Criteria serve two main purposes:

• Identify Baldrige Award recipients to serve as role models for other organizations
• Help organizations assess their improvement efforts, diagnose their overall performance management system, and identify their strengths and opportunities for improvement

There are different versions for business/nonprofit, education and healthcare.

Europe – EFQM

The European Foundation for Quality Management has a similar scheme – though the categories are slightly different, the Baldrige and EFQM models of excellence share the same key features;

They take a comprehensive and balanced view of performance and excellence – knowing it is no good excelling in some areas, you have to be good at all things which shape the experience of your customers … and shape your won costs.

They both understand that any measures or assessments you use must relate to your strategic aims … they must tell you whether you are doing what you set out to do ,, .. and tell you how far you have got.

They both know that only self-assessment works. If you use outside assessors who come in once a year or once every 6 months, performance slips in the intervening period. Only the owner or CEO tends to keep his/her finger on the pulse all the time.

Summary

Excellence is a state of mind. It means understanding what it is that your customers really want and will pay for … and then striving to deliver this all of the time. The elements of the excellence models show what you need to deliver on this ‘promise’ but it does all start with the promise itself – the commitment to excellence.

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Article Tags: business excellence, striving for excellence



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