The number of competitors long-distance runners consistently leave in their wake provides something of clue to their personal level of excellence. But when it comes to talking organisational performance, the criteria are more complex, the measures more diverse and the evaluation process can be exhaustive.
You could call the Business Excellence Awards (see box) the organisational equivalent of the Olympics but, participants are less concerned with the gong they might earn – in 10 years only two New Zealand companies have made it to gold – as the process involved in getting there. The awards are long-distance journey, designed to keep improving organisational fitness.
As with any Olympian endeavour, success requires tough-minded approach. One of last year’s winners half-jokingly likened writing the 50-page awards submission to “drinking flaming gasoline”. But most agree the rigorous self-questioning process, whether applied to public or private-sector bodies, is learning experience that boosts organisation-wide performance.
As this year’s entrants head for the starting blocks, Management looks at what benefits last year’s winners gained from the process and how they got to be front runners in the chase for business excellence and world-class performance.
It’s the way we do things
Auckland Regional Council started training for the Business Excellence (BusEx) journey five years ago. It has entered the awards three years running and is one of just two organisations that earned silver in 2003 (after two bronzes). But for ARC chief executive Jo Brosnahan, it’s not case of collecting gongs.
“The awards are nice to have, but I’m more concerned about ensuring we’re on constant improvement journey,” she says. It has apparently, been described as journey from “unconscious incompetence” (not knowing where or how you are going wrong), through “conscious incompetence” (identifying weaknesses), to “conscious competence” (addressing problem areas), and finally “unconscious competence” (top performance and continual improvement as an organisational norm).
Brosnahan first became involved with New Zealand’s Business Excellence Foundation – then the NZ Quality Foundation – back in the early ’90s when she was with the Northland Regional Council. She rates the American Baldrige Awards criteria, on which the Business Excellence Awards are based, highly. “They’re the best I know in terms of providing model whereby you can essentially raise performance throughout every component of an organisation in way that really works.”
She regards the awards evaluation procedure as an annual audit of the enterprise that identifies where process, systems and leadership gains have been made and what still needs improving. “I know it’s unusual, but we have evaluated every year because I believe that unless you have targets, you don’t apply the necessary focus. We use it as part of the way we do things.”
She has noticed major staff mindset change in the past year. “Previously, it was considered an imposed process. Now they see it as their own. They understand it and are committed. They can see what benefits the process brings to their own sphere of work.”
Brosnahan is unsure whether ARC will enter again this year because the organisation is facing some big structural changes. However, any changes ARC does undertake will be managed in way that is consistent with the business excellence process.
ARC: Key Strengths
Leadership and leadership framework; organisational culture; the “effective design process”.
Building business sustainability
Last year’s only other silver level award winner could hardly be more different than the ARC. That in itself highlights the universal applicability of the BusEx framework.
Morrinsville-based Degussa Peroxide is private enterprise manufacturer rather than public sector service provider. Nevertheless, its experience of the process is similar.
Managing director Tom Barratt echoes Brosnahan in describing it primarily as an audit process. “It’s not about getting an award, but is business tool through which to improve business performance.”
The business was an early adopter of ISO quality standards and like Brosnahan, Barratt checked out the then Quality Foundation framework in the 1990s. When the company changed both ownership and structure at the turn of the century, he saw the awards as good tool to test its performance.
“We had to absorb range of different business functions on site, we didn’t know if we were doing good job or not and we were remote from our parent company. The multinational Degussa is based in Germany. So [the Awards process] provided low-cost way of identifying what is good company and the processes that go into determining that.”
Degussa’s inaugural 2001 entry earned it Progress Award but Barratt felt there was more value to be gained. The initial submission was, he says, too formal, too full of jargon and didn’t generate much employee buy-in. Last year’s effort was more useful with major benefits gained from greater integration of the different processes used to operate and manage the business.
“Our business involves complex manufacturing process so most people tend to be focused in that area, focused on how to make the stuff and do it more efficiently. But being an efficient business is lot more than being an efficient manufacturer. It needs to be efficient in how it goes to market, how it motivates people, knowing where the business is going and understanding sustainability,” he adds.
“Going through the submission pro-cess forces you to look at those issues. That was major benefit for us. It was big step change and we learned lot. Our business is definitely more stable now. We also have more robust strategic planning process than we had two years ago and we’ve probably built more kudos with our parent company.”
Degussa Peroxide: Key Strengths
Excellent customer relationship focus and processes; very strong ethics; continuous improvement process.
A matter of measurement
How do you know you’re improving if you don’t apply some objective measurement? Addressing the question delivered bronze commendation for first-time awards entrant NZ Aluminium Smelters.
David Bloor, the company’s manager for health, safety, environment and community relations suggests: “I guess we took ourselves for granted, thinking we were doing okay. Then you are given criteria to measure yourself against with specific questions you must answer and you realise there’s stuff you just don’t know about and areas that you are not measuring but should be.”
The company struggled, for instance, with customer relations. As purely manufacturing facility, the smelter’s relationship with end customers is arms’ length and via joint venture partners Comalco and Sumitomo. It wasn’t so much that it was negligent about customer care but it had been left to others. The awards submission process prompted re-evaluation of the approach.
“Instead of leaving customer satisfaction to our sales group in Brisbane we now take more hands-on approach by creating an ongoing dialogue on the issue,” says Bloor.
As commodity price-taker operating in world market, the company can’t easily pass cost increases on to its customers. “The price of metal is reducing year-on-year,” he adds, “so in terms of staying in business, we’re forced down the path of continuous improvement and we can choose to do that in number of ways. I think we’ll almost certainly go for another award next year because we see value in it.”
NZ Aluminium Smelters: Key Strengths
Very good operational production pro-cesses: excellent safety processes and focus; very sound foundation from which to make excellent progress quickly.
Naval alignment
The Royal New Zealand Navy latched onto the Business Excellence framework in 1998 to help make better use of its stretched resources and is two-time bronze award winner, first in 2001 and then last year with greatly increased score. The process ha
