Frequently I am asked to identify the
critical factors for any organisation to achieve performance excellence — how do you put all the organisational pieces together, in holistic or total sense, to achieve superior organisational performance.
Before identifying the critical organisational elements to achieve performance excellence it is important to appreciate that most organisation’s strategic resource has already moved from capital and labour to information/knowledge/innovation. And more than that, knowledge based on sound information is now not only the lifeblood, the critical resource, but also that information and knowledge is today instantly available to every single person throughout the organisation.
Clearly this means managers no longer have role as the communications link providing information to employees so they can do their job. However, those employees throughout the organisation need new skills, systems, techniques and tools in order to analyse, interpret and apply information and knowledge, to continuously improve the way the organisation works. But systems, techniques and tools are of little use, or effectiveness, without supportive culture, incentives and relationships. So managers must become leaders, and integrate the hard and soft sides of management. These leaders must maintain culture that encourages and supports innovation.
That brings me to the three critical determinants of the achievement of superior levels of performance in any organisation:
* The processes, or systems
* Measurement and benchmarking.
Let me examine each of the three and begin with leadership. Everything you want to do depends on having the right sort of leadership, at all levels. In practice, the difference between management and leadership is fundamental.
They are at opposite ends of the range of styles by which people run their organisations.
Managers focus on stability, on delegating tasks to others, on monitoring and supervising, on control through systems and procedures, on standardising people by shrinking their authority. Leaders focus on control through inspiring and gaining commitment to common strategic vision and sense of purpose, on empowering others to achieve levels of excellence by expanding their authority, on motivating and coaching, on change and continuous improvement.
Leadership is having clear vision, clear strategic intent, for the organisation, and working on the organisation achieving the vision and strategic intent. For any organisation to achieve its real potential the whole organisation and every individual in it must be focused on common vision, common sense of purpose.
Developing vision or statement of strategic intent is the easy part. Good deployment is the hard part. The leader must create the deployment process through which the people throughout the organisation, gain and commit to common sense of what they are doing and where they are all going.
As leaders, CEOs and management have to move from managing staff to managing an environment. To move from managers who know all the answers to managers whose job is to create nourishing environment for personal commitment, innovation and growth. They must shift their role of what manager does from manager as order-giver to manager as facilitator. This quickly drops out order-givers. True leadership is not giving orders. Leadership involves empowerment and accountability. The big challenge organisations face today in achieving performance excellence is not the retraining of workers, but the retraining of managers. Development of managers is critical success factor in the pursuit of excellence.
My final point on leadership is that within your area of responsibility you must create and sustain learning environment. Leaders must be capable of spending large percentage of their time looking and thinking ahead, and outside the framework of the organisation. Past thinking and solutions have little to offer the future. Leaders must recognise that the knowledge and skills and behaviours that made them effective in the past might now be unhelpful — even counter productive. Leaders are not made to order, they make themselves that way through learning. Learning organisations led by learning leaders and staffed by learning employees, will outperform any other. It is the leader’s job to bring that about.
I have focused at some length on leadership because, as I said, leadership comes first, everything else depends on having the right sort of leadership. You absolutely have to move from management to leadership, or performance excellence is beyond your reach.
The second determinant of excellence is processes or systems. Processes simply are “the way things are done round here”. Usually processes grow up over time to solve every problem that ever occurred, or every issue raised by an auditor. When you learn the tools of excellence management and begin on the continuous improvement path commonly you find tremendous opportunity in process improvement.
Fundamentally, you must work at continuously improving processes that are focused and simple through the effective application of the tools and techniques of process improvement.
This involves improvement teams that are cross-departmental, ie natural work groups, and where possible include customer and supplier. This approach brings the significant and important benefit of being able to change the process or system quickly in response to changing customer requirements. Performance excellence depends on process excellence.
The third determinant is measurement and benchmarking. You must measure achievement, performance or progress against every key objective, goal, output and outcome. But more than that… you simply won’t get anywhere focusing merely on how you are going against your own target or compared with last year… the question is, how are you going compared with the rest of the world, with best practices wherever they are. You have to work hard on measuring the right things against the best there is.
That’s my three key determinants for achieving business excellence; leadership, the processes or systems, measurement and benchmarking. They are the fundamental building blocks of total excellence model for your organisation.
For some years, leading organisations throughout the world, through quality organisations in most countries, have continually developed model, framework, that provides not only model for achieving the highest level of performance but also provides basis for self assessment of how they are going, framework for benchmarking with others and method for identifying best practice.
This is known as the proven and widely used “Model for Performance Excellence”; the Baldrige Award Criteria, available through and supported by the New Zealand Quality Foundation. The NZ Quality Foundation is also releasing simplified version designed particularly for small and medium New Zealand organisations.
The model describes the core values and culture that leaders must strive to bring about as the way of life throughout the organisation, as well as the integrated management framework outlining how the day-to-day organisation should actually work.
The model provides the basis for bringing about culture of continuous improvement and innovation so essential to the achievement of performance excellence. It enables organisations to react and respond to changes in their market, their customer needs or their competition.
NZIM has adopted the Model for Performance Excellence as fundamental to the way both National and Divisions operate. NZIM is committed to the achievement of excellence in everything it does and in the services it provides. NZIM, in partnership with the New Zealand Quality Foundation, provides range of training courses for the staff of organisations pursuing performance excellence using the Model for Performance Excellence.
Doug Matheson is Life FNZIM, and Chairman of the New Zealand I
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