How to develop an excellent organisation The How to... Series Most organisations know where they should be improving their performance. The difficult part is obtaining detailed, impartial advice to set them in the right direction. The British Quality Foundation has responded to this need by producing a series of ‘How to...’ books. The authors are experts on their subjects and the books are suitable for organisations of all sizes in all sectors. While they do not provide the complete solution, by following the ideas and approaches the reader will find a route to implementing performance improvement and achieving greater productivity and competitiveness. How to develop an excellent organisation Contents Introduction 2 What Do We Mean By Excellent? 3 The Fundamental Concepts of Excellence 5 The Excellence Model 12 Where Are You Starting From? 15 How to Pan Your Journey 20 How to Chart Your Progress 22 Recognition Schemes 26 Why it Matters 28 This book answers the question ‘How can we develop an excellent organisation?’ Other books in this series include: How to measure and manage business performance How to design and implement a corporate social responsibility strategy How to identify and manage the organisation’s key processes How to become an Investor in Excellence How to develop and make effective use of a balanced scorecard How to benchmark your business processes How to establish customer requirements and measure customer satisfaction Acknowledgement The British Quality Foundation is grateful to TQMI Consultancy for their help in producing this book. TQMI is an improvement consultancy providing practical support to organisations striving to achieve excellence. It operates in over 40 countries and has supported over 1000 public and private sector clients. TQMI tailors and utilises appropriate tools and approaches to help clients on their journey towards excellence. It adopts a pragmatic approach to help clients bridge the performance gap between where they are today and their future aspirations. [email protected] © 2005 The British Quality Foundation 1 2 How to develop an excellent organisation How to develop an excellent organisation Introduction What Do We Mean By Excellent? This booklet is an easy-to-read, practical guide for those who are striving to develop a means of achieving excellence in their organisations. It is intended that, by following the ideas and approaches suggested, the reader will be able to see a path towards excellence regardless of where they are starting. According to the Chambers’ dictionary, the definition of excellent is ‘surpassing others in some good quality and of great value or worth’ but clearly different people will have different views on what constitutes quality, value and worth. If we ask our customers and clients what an excellent organisation means to them, they will probably say reliable products and services, people who know what they are talking about, value for money, and a prompt response when things go wrong. If we ask our shareholders or other financial stakeholders, their response will probably include return on investment, growth potential, clear direction for the organisation and demonstrable improvements in efficiency and productivity. Our employees are likely to say decent terms and conditions, job security, opportunities for advancement and development, job satisfaction and leaders and managers they respect. Our immediate neighbours may think job opportunities, support for community activities and minimal disruption to local amenity indicates an excellent organisation, while the wider community may include environmental policies and other social responsibility issues. Our suppliers may well judge excellence on the basis of security of contracts, prompt payment and the development of long-term collaborative relationships. So what does ‘excellent’ mean in an organisation? All of the above! Developing an excellent organisation will therefore involve balancing all these competing demands and making progress on all areas of the way business is done. Another complication is that excellence is not a static state what may be considered excellent today will be regarded as the norm and ‘to be expected’ tomorrow. A look at the 3 4 How to develop an excellent organisation How to develop an excellent organisation developments in the motor car over the last 20 years is a very graphic example of how quickly customer expectations change and how much more demanding customers are of their suppliers. So developing an excellent organisation is effectively a never-ending journey, requiring us to sustain all the improvements we make and to continue to seek further improvements. No matter how close we may think we are to excellence, there can be no end to our efforts. When the founder members of the European Foundation for Quality Management were developing the Excellence Model in the 1990s, they realised that despite all the different ways of describing an excellent organisation, there was a set of fundamental concepts that were universally applicable regardless of organisation. This means that there is no one prescribed way of developing an excellent organisation that must be followed, but whatever approach is developed and adopted, it must be consistent with the fundamental concepts. The Fundamental Concepts of Excellence There are eight fundamental concepts that underpin the whole framework of the Excellence Model. The Model does not prescribe how any organisation should approach the journey towards excellence but any approach will need to keep these fundamental concepts at the centre of its thinking and they can act as a ‘touchstone’ for the choices made. Corporate social responsibility Results orientation Customer focus Later sections of this booklet will explore the development of approaches that are suitable for organisations at various stages of the journey. People development & involvement Management by processes and facts Continuous learning, innovation & improvement Partnership development Leadership & constancy of purpose 5