Business Excellence Awards – The public sector drive to become world class

When it comes to world-class performance, New Zealand’s public sector organisations are showing the way to private sector enterprise. Of the five entrants that went through to full evaluation in the New Zealand Business Excellence Awards this year, three were from the public sector – Trade New Zealand, ACC’s Healthwise business unit and the Auckland Regional Council. The story was much the same last year when the Navy, Auckland City Council and the ARC took part.

Of the private sector organisations that enter, it is more often than not the smaller, more vital, ambitious and innovative enterprises that willingly measure themselves against the best in the world.

Increasingly though, public sector organisations are adopting best practice management practices and looking to international benchmarks to gauge their performance. The private sector meanwhile shows, with some exceptions of course, surprising disregard for shareholder and other stakeholder interests and almost cynical dismissal of the leadership initiatives of organisations that set themselves world-class performance goals.

New Zealand’s Business Excellence Awards, administered by the New Zealand Business Excellence Foundation, are not, like most business awards, first past the post race. Instead, they record levels of excellence reached after an exhaustive and demanding performance and process evaluation based on the internationally recognised Malcolm Baldrige Awards, similar process to that followed by the European and Australian Business Excellence Awards. Reaching one of the four levels of achievement – Gold, Silver, Bronze or Progress – is often less important for entrants than the commitment to continuous improvement and world-class performance.

The process is so demanding that only two New Zealand enterprises in the past 11 years have achieved gold world-class status. Thames Toyota in 1993 and Telecom’s Yellow Pages Directories in 1995 were awarded National Quality Awards, the equivalent of what is now called National Business Excellence Award or Gold Award.

Trade New Zealand made dramatic entrance this year by picking up Silver or Achievement Award, first time up. The achievement means the organisation is already 75 percent of the way to world-class performance and four times better than an average local organisation.

“We’re just over the moon,” exclaimed the organisation’s irrepressible chief executive Fran Wilde when she heard the news. And from an organisational and political perspective the timing of the accomplishment could not have arrived at more auspicious moment. Trade New Zealand is due to merge soon with the rapidly growing and more recently established government department, Industry New Zealand.

The issue for New Zealand, however, is that too few enterprises – and particularly private sector companies – are willing to embrace the concept of world-class performance standards. Despite some market awareness research conducted by the Foundation last year, too few organisations seem aware that the Business Excellence Awards provide process for achieving world-class standard. Mike Watson puts generous spin on managers’ reluctance to participate. “I think more organisations are striving to improve performance and results and aspire to become world-class, but the method by which you determine where you are on the journey is not commonly understood,” he explains. “This provides an opportunity for the Foundation.”

Perhaps. But the evidence of the past is not convincing. This year ARC signed up for the second year in row. Trade New Zealand and ACC’s Healthwise entered for the first time, and Hamilton’s Livestock Improvement Corporation returned after one-year break. That is not as many new participants as the Foundation would like and certainly not as many as New Zealand needs if the country is to make serious inroads into lifting individual corporate performance.

On the other hand, the Foundation is not looking for flood of entries. Given that each entrant requires between 500 and 1000 hours of evaluation and the pool of evaluators is limited by both availability and training, the Foundation couldn’t currently handle more than 10 or 12 entries year. Some large applications need up to eight evaluators to complete the award assessment.

The lack of market awareness of the Business Excellence Awards does, however, beg the question: how many organisations initiate any real action to discover just how to become world class? In country the size of New Zealand even the most cursory research would soon point them in the direction of the Business Excellence Foundation.

The Foundation has, in its current and previous guise as the Quality Foundation, been around for decade and its current chairman and NZIM national president, Doug Matheson, has, almost since its inception, campaigned tirelessly to convert companies to the excellence cause.

Livestock Improvement Corporation CEO Stewart Gordon agrees too few organisations “know much about” the awards and the processes it introduces to take organisations on journey of discovery. And, he adds ruefully as one who has stumbled upon truth others fail to comprehend, managers who are aware “think it’s not for them”. The problem, says Gordon, is that most managers think they are somehow “different or special” and simply can’t be measured.

“But this process can apply to anyone. If it can apply to us, selling semen around the world, and apply to Coca-Cola, it can apply to anyone. Every organisation should take part in these awards,” he enthuses.

When Jo Brosnahan decided she wanted her ARC to become world-class local authority she researched all the options. She came down in favour of the Baldrige-based approach of the Excellence Awards. But she thinks the low number of organisations willing to embrace the awards criteria is reflection of just how little store New Zealand managers and boards put on leadership and excellence. Taking part in the awards is, in her mind, first and foremost “leadership issue”.

She also thinks the firmly entrenched “tall poppy syndrome” gets in the way of managers who might otherwise take the plunge, and then others rationalise themselves out of making the effort by suggesting Baldrige is “just another business award”. It “has nothing really to do with awards” and everything to do with making commitment to “ongoing excellence”, she explains.

To encourage more organisations to sample the fruits of his garden of performance riches, Watson recommends managers ease their teams into the pro-cess with self evaluation, measuring their progress against the awards criteria before finally submitting an award application. They should, he says, “put stake in the ground” and start to track their progress.

Fran Wilde agrees and, given the outstanding results of her organisation’s first excursion into Baldrige territory, who would argue? Trade New Zealand took the self-evaluation process seriously and in 1998, about year after Wilde took over as CEO, the Government’s export development and promotion agency “exhaustively applied the Baldrige criteria throughout its business processes and systems”. It finally submitted its 50-page award application this year. The approach paid off. It is almost unheard of in New Zealand for an organisation to enter the awards and immediately reach Silver – or Achievement-level – status.

Wilde is now convert to the world-class cause and thinks more New Zealand companies should embrace the process and start to lift the standard of corporate performance in New Zealand. In her opinion companies make no real progress until they take measurement of their performance and their outputs seriously. Too many of the large corporations she has worked with are essentially “dysfunctional”, and there is nothing they can do about that until they understand the relevance and importance of leadership and positive culture.

Watson thinks some organisations are put off by

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