The BaldrigePlus Newsletter
Issue 15, Monday, April 24th 2000
Award skeptics
According to the April Emerald Now, MCB Press’ newsletter, approval of quality awards like Europe’s Business Excellence Model and the USA’s Malcolm Baldrige Award is not universal. There’s a view, according to editor Sarah Powell (www.mcb.co.uk/emrld/now/editorial.htm), that award processes can hobble organizations, creating more paperwork than improvement. In the past, she says, too much emphasis may have been put on improvement initiatives, too little on business results.
To cast some contemporary light on this subject, Powell interviewed Prof John Oakland, executive chairman of Oakland Consulting plc and head of its research and education division (the European Centre for Business Excellence). Oakland holds a chair in business excellence/quality management at Leeds University Business School and visiting chairs at the University of Bradford and UMIST. He’s the author of best-selling books including Total Organizational Excellence, Total Quality Management, Statistical Process Control, and Production and Operations Management. If anyone’s got a grip on what’s happening in European quality, he does. Read the full interview a www.mcb.co.uk/emrld/now/spotlight.htm
How is the Business Excellence Model (BEM) usually applied, Powell asked (I’m summarising). In two ways, said Oakland, “either with a view to gaining an award or as a self-assessment framework.” But mostly (just like Baldrige) the latter.
Self-assessment can go the full-strength “award simulation” route – a 75-page submission and assessment (using either internal or external assessors).
If self-assessment is the goal, the BEM can be used ‘out of the box,’ to benchmark against other organizations which also use it … the BBC, say, if that organization were using it for recruitment. “You could effectively examine the BBC's people-management methods and [compare] your level of performance.”
“Organizations can also use the model as a business planning tool,” said Oakland, “and we do a lot of [that] work. The question to ask then is: What do we need to do to improve the organization?”
Not everyone uses the BEM ‘out of the box’ however. Some organizations, in the public sector for example, might want to change things around to better suite their own modus operandi.
What about the EFQM Improved Excellence Model introduced in April 1999, asked Powell. Even better, said Oakland, “because it talks about key performance results as opposed to business results and these are more applicable to non-commercial organizations: charities, public sector organizations and so on. The new model also includes partnerships, innovation and learning.”
And the concern that organizations can become obsessed with self-assessment scores, rather than improvement opportunities. Is that solved by the new model?
No, said Oakland. The new BEM is better, but on its own won't overcome the problem. Many organisations start using the model for self-assessment without really understanding the underlying concepts behind it; focusing on the number of points gained. “You even get league-tabling based on self-assessment which encourages concentration on the scores rather than the rationale behind the concept, which is the identification of areas that need improvement.”
This, incidentally, is the essence (as I understand it) of the Demingite criticism of awards schemes. Aiming just for the numbers, the Demmers say, is not only to create perverse incentives, but also to risk distorting or even destroying the processes you are trying to improve.
This problem is undoubtedly still a challenge for organizations, according to Oakland, especially newcomers to the awards schemes, and notably those self-assessing. As consultants we help organizations to use the model properly, he said. Often there’s considerable work to be done before self-assessment can start.
“[While] there is a need for a rapid review to ascertain how many of the required criteria are, or are not, already in place … we always emphasize that the focus should be on gaining an understanding of the processes – not on the scores.”
Asked about his new book – Total Organizational Excellence: Achieving World-Class Performance (this was, after all, a virtual TV chat show) Prof Oakland said that it “presents a framework that organizations can follow, almost step-by-step, to identify the key issues in terms of the direction of the business, asking questions such as: What are the things that we want to achieve? What is our mission? What are our critical success factors? How will we know when we have achieved these? What are the key performance indicators?
Having established and discussed the ‘whats’ and their measurement, the book then explores the ‘hows,’ seeking to define what the organization needs to do well, then focusing on these processes: understanding them; mapping them; breaking them down; wrapping systems round them; benchmarking against other organizations; doing business process re-engineering – joining the internet-driven re-invention of purchasing, and so on – continuously improving processes; developing people who need better or different training; and then measuring everything.
If motivation is the key to business improvement and excellence, asked Powell, “What are the principal means of achieving this?”
Oakland. First, adopt a ‘customer’ viewpoint. Everyone’s a customer.
Second, look hard at your process management, and tools and techniques like statistical process control. Measurement matters.
But most important, understand what people do, where their output goes, who receives it, and what they think of it. Get feedback from the customer flowing back to process owners, so they better understand where the customer encounters problems and how things can be improved. The Business Excellence Model states that performance can only be improved if people are involved. Building teams of people around processes is very important.
Shameless self promotion
(1) We’re looking for a sponsor (or several). This newsletter goes to about 600 email addresses, with a guestimated readership of 2,000 plus. It gets bounced around a lot of senior managements. Baldrigeplus.com delivers about 1,000 individual web sessions per week. Most of those readers and visitors have an active interest in business excellence and performance improvement. Sound like your audience? Call us about sponsoring the newsletter and the web site.
(2) And we’re here to help
So you’re in the thick of an award application? Need a fresh viewpoint and some constructive criticism? Worried about your interpretation of one of the award requirements? You’d appreciate some best practice models? We can respond quickly (email a request as you leave your desk at the end of the day, we’ll deliver an overnight response for the next morning) and cheaply. We’ll be happy to act as your personal Help Desk.
Mail to macalex1@xtra.co.nz
References
John S Oakland, 1999. Total Organizational Excellence, Achieving World-Class Performance (Butterworth-Heinemann).
John S Oakland and Leslie J Porter, 1994. Cases in Total Quality Management (Butterworth-Heinemann).
Further reading Full text at www.mcb.co.uk/emrld/now/articles.htm
Laszlo, George P, 1997. US and Canadian national quality awards: increased emphasis on business results. TQM Magazine; 09:5; pp.381-383. Read the full article (pdf)
Azhashemi, Masoud A and Samuel KM Ho, 1999. Achieving service excellence: a new Japanese approach versus the European framework. Managing Service Quality; 09: 1; pp.40-46. Read the full article (pdf)
van der Wiele, A, ART Williams, BG Dale, G Carter, F Kolb, DM Luzon, A Schmidt, and M Wallace, 1996. Self-assessment: A study of progress in Europe's leading organizations in quality management practices. International Journal of Quality & Reliability Management; 13: 1; pp.84-104. Read the full article (pdf)
Patton, Fred, 1999. Oops, the future is past and we almost missed it! - Integrating quality and behavioural management methodologies. Journal of Workplace Learning; 11: 7; pp.266-277. Read the full article (pdf)
Nabitz, U W and NS Klazinga, 1999. EFQM approach and the Dutch quality Award, in the International Journal of Health Care Quality Assurance, Vol. 12, No. 2.
McAdam, Rodney and Edel O'Neill, 1999. Taking a critical perspective to the European Business Excellence Model using a balanced scorecard approach: a case study in the service sector, in Managing Service Quality, Vol. 9, No. 3.
Shergold, Kevin and Deborah M Reed, 1996. Striving for excellence: how self-assessment using the Business Excellence Model can result in step improvements in all areas of business activities, in TQM Magazine, Vol. 8, No. 6.
Donnelly, Mike, 2000. A radical scoring system for the European Foundation for Quality Management Business Excellence Model, in Managerial Auditing Journal, Vol. 15.
Note on internet addresses
Rather than live links, we've included the adddresses to off-site resources in full - cut and past to your browser.