If the road to hell is paved with good intentions, then the journey to world-class organisational performance is paved with their effective deployment.
We all know about good intentions. Year’s start is traditionally the time to trot them out, polish them up and start putting them into action. It starts, for example, with dusting off the exercycle, declaring war on excess weight and booking Spanish classes for that mid-year holiday.
Self-improvement strategies however, have nasty habit of falling by the wayside as the year winds up and other priorities creep in. Management improvement strategies often meet similar fate.
It’s sometimes hard to know where to start, how to integrate improvement efforts into every aspect of business life or maintain momentum after chalking up few wins.
Which is about where the NZBEF Awards come into play. For organisations that are strongly committed to being the best they can be, the awards and their underpinning American-formulated Baldrige criteria provide both the framework and the discipline to turn good intentions into tangible performance gains on sustainable basis.
Of five organisations that were evaluated last year, four are in the public sector, pattern of recent years. In that context, it’s interesting to look at how insurance company Vero, the only private sector award entrant this year, has earned increasing recognition for its business performance since adopting the business excellence framework.
It’s no coincidence, says Vero CEO Roger Bell, that the company adds last year’s silver level award to cluster of other plaudits it has collected from both customers and staff since kicking off its self-improvement journey about decade ago. It has earned “Insurer of the Year” recognition from New Zealand intermediaries for three consecutive years and staff nominate it as one of the country’s best places to work.
“It’s only since we’ve been on the Business Excellence journey that we’ve started to get consistently high scores which goes back to why we do it,” says Bell.
“You can have pockets of excellence in your company but unless you operate in framework like Baldrige, it is never fully integrated.”
And that’s common sentiment for those sharing the excellence journey.
As Erina Clayton, performance and planning manager for the Wellington Free Ambulance (WFA) puts it: “Any business organisation is system and if one part isn’t working or aligned with the rest, it can slow you down. Learning that is important.”
Organisational drag can literally be life and death matter for organisations like WFA. Every minute shaved off life-threatening emergency can result in 10 percent increase in survival. But the principle applies across most organisations, irrespective of type or size.
Are we doing okay
For large, public, one-of-a-kind organisation, performance comparisons are hard to come by.
Relevant comparisons were problem for the Accident Compensation Corporation which used to benchmark itself against Australian workers’ compensation schemes – until it moved too far ahead.
“We got so much better, the comparison was no longer relevant,” says chief executive Garry Wilson. “We used to both charge over $2 for $100 of wages on average. We’re now down at $0.85c and the Government has just approved it going to $0.82c. They’re still at $2. That benchmark disappeared on us, so we looked around and found the Baldrige criteria fitted big organisation like ours.”
After three years, ACC is making giant strides toward world class, picking up silver in the latest awards round and now contemplating the stretch to gold. Using its health purchasing division as pilot and champion of the process helped generate internal motivation, says Wilson. “Once we started to apply it and improvements started happening, it became evident to everyone in the corporation that it would work – so the enthusiasm built pretty quickly.”
The real insight came with ACC’s realisation that it could get lot better. “We were in situation where we were doing so well compared to the Australian schemes that we became bit complacent and needed something to give us push,” says Wilson.
The company has also just earned its third corporate governance award and picked up an Australasian risk management award and international recognition for its health and safety programme.
Taking on the business excellence framework requires effort. “But it’s not all consuming, just different way of organising life and it generates some very good results. Our organisation is much more focused and coherent than when we started. Our claimant satisfaction levels now exceed the trading banks where before we were bit below.”
Commercially hard nosed
Vero’s Roger Bell is strong advocate for an improvement formula he describes as tough, commercially hard nosed and action oriented.
“We are adamant that there is nothing like Baldrige that gives such robust, holistic framework for improvement. Without framework that demands we have world-class approach with capital ‘A’, world-class deployment with capital ‘D’ and world-class integration with capital ‘I’, it would have been too difficult to drive those intentions through the whole business,” says Bell. “And you don’t just do it. You have to prove with results that it’s working and that’s important.”
There is, says Bell, “terrific discipline around execution”. Unless the good intentions are deployed, there are no points.
“Some of it is wet paint stuff. The great exciting things you got done only couple of days before the evaluation you can’t disguise. But it’s part of the discipline around continuous improvement and if you don’t go for the application every now and again, then you might let the paint dry out. You can always have good intentions, this is good way to be more disciplined about putting them into action.”
But many companies don’t understand the business excellence framework, either confusing it with ISO ratings or regarding it soft option.
“The biggest frustration I have is having people say it all sounds bit warm and fuzzy. This is the most hard-nosed commercial framework you could adopt and it drives superior results right across the company. Our financial results outperform our peers,” says Bell.
“There is standing invitation to all 1000 of my staff that if they can find anything we have to do under the business excellence programme that doesn’t make us better company, to tell me about it. Not word has been uttered. This is not work for the sake of it or for an award. It simply makes better company.”
The organisations that took part in the 2004 awards specify the value of the feedback they get from evaluators. It’s “goldmine of wonderful information”, say Bell.
Senior executives of awards participating organisations must commit to being trained as NZBEF evaluators. Vero, for instance, now has 10 people who serve as evaluators for other organisations. The approach helps build self knowledge inside the company.
But using neutral outsiders to check progress provides an external mentoring process.
It’s also highly cost-effective one, says Hutt City Council chief executive Rik Hart. “When you look at the cost of [Awards] entry versus the cost of recruiting reputable group of consultants to give that level of feedback, this is very cost-effective option. And it’s less meaningful. It’s possibly even more so given the evaluators are senior executives or CEOs of other organisations. The commentary is from people who are actually doing this sort of stuff.”
For Hutt City, which last year added bronze to its earlier progress award and is now closing the gap on silver, the feedback has proved invaluable. The awards provide an objective accreditation that the council is doing things in relatively businesslike and cost-efficient way. This allows councillors to focus externally rather than internally, says Hart. “It’s improved our processes and councillors are far more aware and appreciative of what we’re doing. Initi
