The word “improvement” is right there in the company name – but building that ethic into corporate culture is not just matter of semantics. For Livestock Improvement Corporation, it’s become way of life.
In December, the company finished off record year for profitability by becoming the only agricultural company in Australasia to reach “silver” status in the international ranking of business excellence. But it wasn’t an overnight effort – as chief executive Stuart Gordon explains.
“We’re very proud of this because we’ve done something we’ve been working on for seven years.”
Back then, the company was casting about for business tool that could track and measure how well it was living up to its vision of world leadership in pastoral livestock solutions.
“We’d always been at the forefront of herd improvement around the world but wanted to put the business itself to the test. staff member brought up the Baldrige criteria [see “Building excellence”] because it’s regarded as the most rigorous system for evaluating performance,” says Gordon.
“So in 2000 we started using that with the view that, at least, the gains would include improved strategy, business pro-cesses and customer service – and the very best would be stepping onto the awards podium with some of the best companies in the world.”
The company earned “progress” award in its first year, moved on to pick up “bronze” two years later and can now rank itself amongst just eight New Zealand organisations that have made the “silver” grade.
That pretty much confirms its business processes, strategy and company focus are right up there with the world’s best companies, says Gordon.
“It really is an excellent system for focusing on key areas for improvement and measuring progress – and you also have the ongoing independent validation from external evaluators.
“I mean we can’t wait to get the feedback every time we [go for an award] so we can look at what else we can do – what gaps need filling.”
A biggie was the customer feedback loop, says Gordon.
“We had real gap between people working in the field and head office processes right across the company. When someone went to see customer and there was an enquiry or complaint – it is ensuring that is followed up, that others know of it and can use that information. We really didn’t have that happening.
“This system helped us focus on the major gap we had there and to close it.”
That gradually started to happen as people understood the value to the company of recording frontline communications with customers.
“If it’s recorded then we can learn from it and everyone else who deals with the same customer knows about their issues,” says Gordon.
“It takes long time for people across the organisation to accept ‘Okay, I’ve been talking to customer, now I have an action to do’.”
The company was quite realistic about what it would be able to achieve in any one year, says Gordon.
“We bedded changes down so they just became part of what we do before moving on to the next one. So it’s not something special we do for the awards – it’s something we do as an organisation and you need to have an absolute commitment over long period to achieve that.”
The improvements are now so engrained in the culture, Gordon reckons they’re less dependent on specific champions.
“Sure, there always have to be some mentors around it – but I believe it will just carry on.”
When the company moved from beneath the NZ Dairy Board umbrella in 2002 and became user-owned farmer cooperative, it made commitment to its shareholders that it would exceed expectations – and it’s lived up to its word.
“We’re talking about climbing up from effectively making $2 million year to making $10 million and there’s no doubt that [Business Excellence] is part of that – it’s very much part of the culture of the organisation.”
Fired up about excellence
If there were more fire fighters, fewer people would die as result of fire – right? Well no. thorough analysis of fire statistics shows 90 percent of deaths happen before the fire service is even notified.
“The understanding from that is that if we’re serious about saving lives and properties what’s needed isn’t more fire stations but more community education,” says Mike Hall, New Zealand Fire Service national commander and chief executive.
He cites the above as an example of how the service is now driven by more critical appraisal about how it relates to its clients and what it’s doing in the fire safety area.
“We’ve got rid of myth and legend and we’re better at analysing the data and using it to drive day-to-day operations. Our targets are now based on rigorous analysis of facts and data. It makes us more professional and businesslike in what we do.”
When Hall came from Queensland Fire and Rescue to head this country’s national fire service nearly five years ago he also brought experience of how the Baldrige criteria had worked as business improvement tool there – and found an organisation that was ready to embrace it.
“The New Zealand Fire Service had had its difficulties over the years and one of my jobs was to fix those difficulties. I guess I was lucky in that when I came here, the organisation was looking for way forward. There was realisation that what they’d been doing wasn’t really working and people were sensitised to do things in new way.”
The fact that the Business Excellence framework has international credentials also helped senior management buy in.
“Once we looked at the thing in more detail and saw the workload, it was bit daunting but there was an understanding we needed some structural skeleton there to work to that would bind the organisation together to move forward in common direction.”
One of the challenges, says Hall, was integrating the disparate and geographically scattered functions of what is pretty complex organisational structure.
“There was lack of tie-in between individual business disciplines and the strategic goals and objectives of the organisation. So we put in strategy integration teams, project review teams and technology integration groups to ensure all the disparate parts of the organisation were coordinated.”
Hall owns to being very “anti-silo” and says these initiatives prompted people to work together in groups.
“It made them, in collegial sense, assess the individual element of the organisation from joint strategy perspective. That was one of the key effects of adopting the business excellence model.”
Also important is the fact that NZFS is being benchmarked as business not as fire service.
“There is some validity to benchmarking against other fire services but there are also some real catches because services can be very different in the way they operate.”
For instance, it would make no sense to compare New Zealand’s nationwide service against city-based service like Melbourne.
“Really in my position as CEO I have to understand that I’m running business that happens to be providing fire and rescue cover for people in New Zealand – and the way we run the business is generic to any business.”
The process kicked off seriously about three years ago with the introduction of “Firex 500” – with the target of achieving an excellence rating of 500 points by the end of last year. It achieved that goal with the bestowing of “progress” award – but its progress is not so much finish line as state of being, says Hall.
“We set out to improve the business using the structure not to win an award per se and it’s important for our people to understand that the drivers we got for our business from this framework stand on their own merit and will continue to function as tool for ongoing business improvement.
“It has certainly focused the whole organisation on doing things more efficiently and that is tied into where we’re going and what we want to do. We’ve got rid of the silos and we’ve just had the best audit report ever in the organisation this year. So there are spin-offs all round. People now ha
