Business Excellence cannot be defined precisely, but there are a number of characteristics we might identify as being part of the concept of Business Excellence. I guess it’s a little like the classic cafeteria menu. Pick one from Column A and two from Column B. You don’t have to adopt all of these characteristics in order to achieve Business Excellence, and there may be other items that I don’t list that seem to work for your organization.
The key concept here isn’t meeting some classic definition of Business Excellence. You don’t say “We do these things so we must be an excellent company”, or “We want to achieve Business Excellence so we have to do these things.” Since Business Excellence is more a state of mind or attitude, it’s up to you, your employees and your customers to decide what works best for your unique organization.
Structuring a business to achieve success is an imprecise process at its best. There is no precise definition of what it takes to become en excellent business. Some characteristics in some industries seem to be applicable, but other characteristics in the same industry don’t work from business to business. If you want to follow the path to Business Excellence, you have to discover what works for you as a unique organization.
Having said all of this as an introduction, let’s discuss some of the characteristics that might be of interest to you. If you are interested in learning more, you might want to use GoogleBlogSearch to find other articles and blogs that relate to Business Excellence, Best Business Practices or similar topics.
Business Excellence is dedicated people working with and serving other equally dedicated people so that both can achieve shared and mutually beneficial goals.
People are at the heart of every enterprise: owners, managers, employees, suppliers and customers. When you come right down to it, business is all about people working with other people. It’s these person-to-person relationships that are the real driving force behind the concept of Business Excellence.
Products, services, production machinery, buildings, software, hardware and all of the other physical items that comprise a business and a business relationship contribute to these person-to-person relationships. However, customers are real people who need to be served by other real people, not some machine.
Employees at all levels in the organization will have an effect on this person-to-person relationship with your customers. Give them the support and the tools to do their jobs well. Employees are the most valuable asset any company has, and they should become the focus of the company, not something that can be discarded at will.
I know this sounds old-fashioned, but honesty is one of the cornerstones Business Excellence. It’s equal at the top with respect and the notion that people matter. In some respects it binds these other two elements together. If you start with the assumption that the enterprise is the people (employees, customers and suppliers), and you treat each person with respect because that’s the way you would like to be treated, then it follows that you will be honest with everyone because that’s the only way a sense of trust can be established and maintained.
If the people with whom I work really matter to me, then I must be honest with them for that is the only way we will be able to improve our performance each day. If someone asks for my opinion, I will give them my honest opinion, not what I believe they want to hear. They will accept my opinion for what it is because they know that what I have said has nothing to do with them personally.
Honesty is a trait that is at the center of all effective human relationships, and it should be at the center of all effective business relationships. Business Excellence requires honesty and if you cannot be honest, then you are not practicing Business Excellence.
If I am dealing with a customer, I will tell that customer exactly what my product can and cannot do. I will tell them exactly what I will do and not do with respect to the services I provide. If I see that a problem is developing and I will not be able to deliver my products or services on-time, I will tell my customer the truth for that is what they expect.
At the same time, I had better determine the cause of the problem and fix it. My customer may appreciate my honesty, but in the long run they will not appreciate a relationship filled with excuses.
Business Excellence also requires honesty for all internal business relationships. I will keep my employees informed concerning the health of the enterprise and our future plans (vision), particularly as they might relate to my employees. As a manager I will counsel those who I manage to help them improve their performance. I will listen to all of their suggestions, whether they relate to improving performance or the way they perceive they are being treated. I will answer them honestly, and I will treat them with respect. As an employee I will be honest with my fellow workers as well as those to whom I report, for they have treated me in the exact same way.
If people are honest, they can communicate. If people communicate, they can understand. If they understand, they know what is expected of them and can meet these expectations. Through honesty people can improve and therefore the organization can improve and achieve Business Excellence.
I think this is the most important factor contributing to the achievement of Business Excellence. If owners and managers respect their employees, it’s far more likely that employees will respect their jobs and their customers on whom the company depends so heavily.
I know this is a simple concept, but that’s what this approach to Business Excellence is all about. Respect means you listen to people with your heart as well as your ears. Respect means you show people their contribution really matters. Respect means you accept all people for what they really are, rather than what you think they should be.
Above all else, respect is neither earned nor trumpeted in some employee manual. You don’t say you respect people, nor do you expect that people have to do something to earn your respect. Respect isn’t practiced, nor is Business Excellence. It’s a way of life.
I’m not talking about the technology of how people stay in touch, but the process of sharing critical information throughout the organization. Business Excellence is all about Informed people working together (and therefore better) toward a common or shared goal. It’s just that simple. If they know what’s happening, where the organization is heading, or why certain decisions are being made, they will feel more like a member of a team rather than just an employee who comes to a physical place, does some work and then goes home.
If people are included in the “life” of the organization, they will be more willing to contribute to the success of the organization. A secondary benefit derived from open communications may be innovation. Rather than tapping the brains of just a select few, the combining of a diverse and larger source of ideas and opinions may lead to better decisions, better products, new markets and greater productivity.
If Business Excellence is no more than an attitude that is focused on success, then management style should be an attitude that focuses on what’s positive about each person and each situation.
Problems carry with them the stigma of failure. Problems should be looked on as “opportunities for improvement.” Think about it for a moment. You made a mistake. The person to whom you report wants to talk to you about it. If this is treated as a problem, it’s like being called before the school principal. The stigma attached to being sent to the principal’s office is the deterrent that will prevent you from the behavior that caused the problem. That may work in an educational setting, but it doesn’t work in a business setting.
You want people to think for themselves and try new ways of accomplishing tasks, for that’s the path to innovation. Now turn this problem into an opportunity for improvement. The manager becomes the coach and the cheerleader. You know your effort will be applauded, even if you failed. Yes, you will sit down and learn from this mistake, but from a positive point of reference rather than a negative one. Learning will take place. The reason the mistake was made will be identified. However, personal initiative will not be dampened.
Do What You Know How to Do and Do it Very Well
If you look at all of the mergers and acquisitions over the past several years, how many have really succeeded? I would say very few. If you are committed to growth, stick to those markets in which you have some expertise. Why should you branch out into markets in which you have little knowledge or experience? Determine what it is you do very well and then expand from that solid base.
The more things you try to do, the less time you have to do any one thing well. That’s just common sense. Rather than trying to carry out several critical tasks at once, or expand into multiple markets simultaneously, concentrate on a single issue, do it very well, and then move on to the next issue.
All of us have seen people who try to do ten things simultaneously. It just doesn’t work. This trait will become particularly important as you begin to look at your organization, and determine what needs to be changed in order to achieve Business Excellence. Deal with a single subject area at a time. Spend whatever time is required to understand what needs to be done to maximize its effectiveness. Create and implement the process of change. Only then should you move on to the next issue.
You will notice that I didn’t put customers first on this list when most people would say that they should be. Under normal circumstances customers should always occupy the highest rung in any corporate ladder, but in this instance I have to first construct the foundation for this customer emphasis. That’s a key Business Excellence concept. Customers will not be first on the minds of every employee until these employees feel as though they come first in the mind and heart of the organization.
You cannot walk into the office one morning and say “We must dedicate ourselves to our customers from this day forward.” You must first demonstrate to your employees that they are the most important asset in your company. Once people feel as though they really matter, they will be more than willing to help you refocus the organization’s gaze on your customers.
Without customers, there would be no business. Customers are the life blood by which companies grow and prosper. They are the only entity that has any significant effect on the financial success of a business enterprise. They have the power to give you business, and they have the power to give that same business to your competition. In addition, customers are the only entity that has any significant effect on the reputation of any business enterprise. They have the power to make you prosperous, and they have the power to destroy you.
I know this sounds rather melodramatic, but it’s true, and it should be the guiding principle for any enterprise, no matter how small or large. If you are going to practice Business Excellence, you must dedicate yourself to your customers, but only after every employee feels as though they matter and therefore can contribute in a significant way.
Every person should ask the same question “How can I serve our customers more effectively?” Notice I don’t use the term “efficiently” as that is related to productivity and profitability, not customer service. I think we have lost this customer focus, and the tragedy is that many companies don’t even realize it.
Given the ever changing business environment, what needs to be done very well today may not be true two or three years from now. Yes, you will identify specific inefficiencies that need to be corrected to compete more favorably today, but make sure the changes you make include the ability to change quickly in order to meet the needs of the future which of course may be completely unknown today.
This is a difficult concept to understand, much less undertake, particularly since you don’t know what’s going to be required of your organization in the future. In the end, it comes down to two things. Try to look as far into the future as practical so you can begin to meet those competitive opportunities or requirements as early as possible (As the Boy Scout motto says “Be prepared.”).
The second objective is to make sure your employees are on this same course. They must be encouraged to develop an ability to adapt as well. Actually, they can be the prime contributors to adaptability. If you keep them informed, ask for their active participation, and give them the ability to look to the future just as you need to do so, they will be able to help you become more adaptable.
Business isn’t as complex as our organizational structures seem to indicate. That’s part of the problem. There are so many layers in many organizations that making a single decision takes forever. Opportunities for growth through the development of new products or entry into new markets are lost, simple because it takes too long to get this huge battleship turned around. Bureaucracies just cannot move that quickly. That’s their fatal flaw.
On the other hand, small companies thrive because they can make a decision and enact plans far more rapidly than larger organizations. If smaller companies can react more quickly, larger ones should be able to do exactly the same thing. There shouldn’t be any difference in the reaction time.
Actually there are several solutions to this problem.
- Keep the present organizational structure, but drive the decision making process closer to customers and new markets.
- Keep the organizational structure the same, but commit to making decisions more rapidly. Flatten out the organizational structure and therefore eliminate the delays inherent in a convoluted chain of command.
- Finally, break the company into semi-autonomous units that operate just as if they were smaller businesses. I guess the one phrase that best describes this characteristic is “Never stop being an entrepreneur.”
You don’t have to be a small company to compete more effectively. Companies that adopt Business Excellence act like a small company even if they aren’t.
Freedom Tempered by Responsibility
As you might have sensed from our discussions so far, I believe in a reliance on the power that lies within each individual. People will tend to become far more productive if they are given the freedom to do their jobs the way they feel is most appropriate.
Business Excellence is all about giving power to individual people who can work smarter and move more quickly. Stifle this freedom of thought and action by strict work rules or oppressive management systems and attitudes, and you end up with no more than a robot.
Unfortunately freedom cannot be unlimited, no matter how powerful a stimulant to innovation and productivity it can become. Certain things needs to be done, and in some cases in certain ways. This doesn’t impede innovation or productivity, just channels it along lines that avoid utter chaos. That’s the balancing act you have to manage when practicing Business Excellence.
As long as people understand and accept the necessary limits to their freedom, they will maximize their productivity within those limits.
The difference between an entrepreneur and a bureaucracy is not just how quickly the entrepreneur can react to new opportunities, but that the entrepreneur is looking for opportunities to act. “We need to refer this to a committee.” is the pit into which many good ideas are thrown. By the time the committee gets through studying the opportunity or problem, it’s too late.
If a problem is identified, fix it! If an opportunity appears, grasp it! Although I refer to the actions of committees, maybe the best solution is to ban all committees. Figure out another way people can band together to study opportunities and make group decisions, but never call that group a committee or let that group act like a committee. This is just another form of bureaucracy and Business Excellence abhors a bureaucracy.
Successful companies thrive because they lead, rather than follow. This doesn’t just imply that you should be looking to develop new products and services constantly, but also looking for better ways to run your business. Business Excellence is a process that never stops. New products are important, but significant profits can be earned through increased productivity as well.
Encourage Wild Ideas
There’s a huge difference between incremental product improvements and revolutionary products. Both should be encouraged. Rather than concentrating on why an idea might fail, turn the tables by asking why it might succeed. That’s the difference between companies that take calculated risks, knowing that some ideas will fail, but others will succeed.
Every company needs a few people who are really out there on the fringe, whether it’s suggesting new products and services or new ways of practicing Business Excellence. As we mentioned earlier, Business Excellence isn’t a precise way of doing business. It’s a method by which people are constantly looking to improve, which means of course that each organization will approach the concept of Business Excellence differently.
What is it that separates companies that succeed from those that just survive? Why do some companies expand and prosper, while others remain essentially stagnant or whither away and die? The truly successful company is willing to challenge itself and risk failure. This is not as much a gamble as one might think. The successful company knows where the edge of the precipice is. It knows the limits of its capabilities and exercises its capabilities to those limits, but not beyond.
While it can be said that experience is the best possible source of knowledge, and that failure teaches us valuable lessons, companies can afford but one failure. They are not cats with nine lives. Companies that practice Business Excellence recognize the value of experience, particularly failure, but they depart from the norm because it also recognizes that there are countless examples from which it can draw this experience. The experience does not have to be its own.
This is the mark of the winner. It studies the successes and failures of others, and notes the factors that contribute to both. It knows its own capabilities, and of greater importance its limitations. It applies all of this information to its benefit. Finally, it knows that it will be successful only if it is willing to not just approach failure, but to challenge it.
If you are committed to innovation and aren’t stifled by a fear of failure, how do you avoid giant mistakes? Innovation will increase your risk of failure. That’s the nature of coming to market with products and services before your competition. You can’t bottle projects up in committee while they are being studied to death. That impedes progress.
Rather than studying something analytically, bring in your customers. Let them participate in the brainstorming that is an integral part of innovation. Let them help you design new products and services. Then test against a larger customer base. If the idea doesn’t work, be ready to cut your losses quickly. If the idea proves to be worthwhile, the path to market release is that much quicker.
If failure leads to criticism (verbal or non-verbal) people will avoid the threat of criticism by not trying in the first place. This applies to new products and services as well as to new ways of working. Creativity will die if criticism is allowed to be the only “reward” for failure.
Companies grow and prosper because people are willing to do things differently. That’s what developing new products and services is all about. That’s also a key attitude that characterizes Business Excellence.
Doing something others have not thought to do. You want people to walk to the precipice of failure (but not fall). That’s where radical ideas become powerful competitive advantages. Some people will exceed the limits of caution in their zeal to succeed, but the passion is what you want.
If you crush innovation and risk taking in a single individual, you will retard or crush it in all others. Rather than criticizing failure, or taking steps to prevent failure and therefore stifling the creativity that breeds innovation, celebrate the effort. Show people it’s OK to try. Then, very quietly in the background, determine the cause for failure so you and others may learn.
Leadership and Business Excellence
Small companies thrive because they have very few rules or controls, but as a company grows it needs control systems to guard against chaos. The problem is that these control systems have a tendency in the long run to stifle the free thinking that enabled the company to succeed in the first place.
What you need to do is recapture the spirit of the entrepreneur while maintaining control. That’s where you have to practice Business Excellence and blend management styles; borrowing the passion and freedom of the entrepreneur, the dedication to control found in old-style managers and the guiding hand of leaders who are able to gather all of the critical forces and management personalities into one cohesive forward-thinking whole.
The entrepreneur typically is a person with high energy and tremendous focus. Entrepreneurs don’t rely on others for assistance, but rather utilize their own energy to get the job going. This is the person you would look to spearhead new product development where single-minded passion is required.
Unfortunately this person isn’t very interested in an on-going business management position. They are not interested in the details of management, and probably need quite a bit of assistance just to keep their offices tidy. Passion and creativity they have in abundance. Management skills are almost non-existent, but that’s OK. You will provide the management that’s needed, but without stifling the creativity that is critical to your success.
Managers are the only personality type that places any faith in administrative systems. Actually they place all of their trust in administrative systems, knowing that people, while important, will come and go, and can’t be relied on to be there when required. The system will be there. They pay attention to the details so the company can function at its highest point of efficiency.
Even though many companies are adopting a team approach to management, every company needs dedicated managers. They make sure everything works like it should.
Leaders place their faith in people. Ideas and systems aren’t as important as people when it comes to making the difference between success and failure. The leader looks to people for advice and strength. Leaders motivate people by the sheer power of their personality, but sometimes have little faith in systems of any kind.
Leaders are the personality type you need when adopting new principles such as Business Excellence. By their very nature they lead people from one place to another, whether it’s in battle or in business.
As you can see, no one personality type is appropriate for all situations. You need a blend of all three; not necessarily in the same person, but then the true leaders of tomorrow’s business world will have the ability to become each of the three personality types as the need arises.
If you are to achieve Business Excellence, you will need to lead people, rather than dictating what they should do. That’s where the real power of the collective minds of the entire enterprise can be brought to bear. At the same time, you will need to install management systems that control people’s actions.
Control in this sense isn’t negative control, but positive control. Rather than being seen as restricting freedom, modern management control systems must channel people’s energies along the most effective paths. Finally, modern companies will have to foster a sense of entrepreneurship that allows people to release their creative talents. Companies must innovate, or they will stagnate and eventually die.
Having said all of this, let’s spend a few minutes looking at some of the traits of these Business Excellence leaders who will help us prosper without losing our way.
- There is no static definition of leadership, but rather the application of thought and action to produce the maximum return from people in a particular situation at a particular point in time. If any definition were to be constructed, it would be this: “Great leaders take ordinary people and help them accomplish extraordinary results.”
- Few people are born leaders. Most people learn how to be leaders by looking inward and asking “How would I like to be led?”
- Leaders ask themselves “What needs to be done?” rather than “What do I want?”
- Leaders know that the only way they can make a difference is to help those being led make a difference.
- Leaders recognize that there is little difference between themselves and those being led. Real greatness lies in inspiring greatness in those around you, whether you are a leader or a follower.
- Leaders understand that their actions speak far more loudly than do their words. Leadership must be lived, not spoken.
- Leaders inspire people to be the best they can be, and by doing so the company becomes the best it can be. The motivation has to be personal first, and once the needs of the individual have been met, the needs of the corporation can be addressed. Terms such as self-worth, personal security and self-determination aren’t just words to be bandied about by Human Resource departments. They are the key to unlocking the potential of the organization by unlocking the potential of each individual within the organization.
- Leaders understand that trust is the critical element that inspires action. You can’t tell people to trust you. You have to demonstrate by your actions that you can be trusted. Once this sense of trust has been earned, only then will people be willing to listen and subsequently follow.
- Leaders understand concepts such as goals and objectives have very little meaning unless people feel as though they have been given the opportunity to contribute to the establishment of those goals and objectives.
- Leaders care a lot for each individual person, but they expect a lot as well. This isn’t a conflict, for the leader understands that people must take responsibility for their lives if they are to succeed personally. Great leaders don’t just challenge people to maximize their performance; they help them achieve it by setting examples of great performance, and by giving people the training, tools, encouragement and counseling to understand how to find great performances within themselves.
- Leaders critique themselves before they critique others. Leaders aren’t afraid to be critiqued by others, and even encourage it, for they know that learning is a path to success.
- Leaders realize that rank, privilege, popularity and charisma are not marks of the leader, but just the opposite.
- Leaders know that diversity of opinion is the source of real power. They encourage people to think for themselves and speak their minds. They encourage people to increase their own knowledge and strength, and are never afraid of this strength or knowledge.
Defining leadership is an impossible task since the requirements for leadership are dependent on the situation at hand. If there is one common theme throughout our discussions so far, it is that leaders recognize that true power doesn’t rest within themselves but in the people they are being asked to lead. You could go back through the preceding list and ask yourself if you come close to the mark on each item, or you could look at the questions below.
- Do you use the term “I” or “We”?
- Do you look on the position or the individual?
- Do you know the names of your employees?
- Do you know what each person would like to accomplish in their business career?
- Do you help them achieve these aspirations even though you know that some will achieve greatness elsewhere?
- Do you try to give people access to training that will prepare them to move up in the organization as well as giving them job specific training?
- Do you make it a point to walk around and talk to each person frequently; learning from them, listening to them, and showing them that you care about them personally and the contribution they are making or can make?
- Do you work just as hard, if not harder than, the people you supervise?
- Do you always congratulate people in public, and discuss their failures in private?
- Do you always look for something positive to say to people when you are talking to them?
- Do you laugh and encourage laughter?
- Do you ever lose your temper in public?
- Do you meet with each person formally on a regular basis to review their performance?
- Do you meet with each person informally on a regular basis to discuss anything that might be of interest to either person?
- Do you ask people to set their own personal goals and objectives?
- Do you help people determine how they can measure their own progress toward meeting these goals and objectives?
- Do you spend as much time congratulating people for trying and failing as you do reviewing why they failed?
- Do you help people learn from their successes as well as their failures?
- Do you judge people based on their current abilities, or on what their job description might say?
- Do you really listen to people, and let them know by your actions that you have listened to them and understand their point of view or their problem?
- Do you encourage people to drop by your office anytime they have something to say to you or ask you rather than having to set an official appointment?
- Do you keep your office door open?
- Do you let people figure out how they should do specific tasks, even though they might fail?
- Do you try to help people learn how to think more clearly so they can avoid failure?
- If people run into a work-related problem, do you encourage them to solve the problem first before coming to you or someone else?
- Do you meet with people to solicit their input when setting department or group goals and objectives?
- Do you encourage people performing similar work to set group goals and objectives?
- Do you encourage people performing similar work to discuss and enact changes designed to improve the efficiency of their work without your being involved or without your having to give your approval?
- Do you ask people officially to suggest ways you or the company could do better?
- Do you ask that people question your decisions if they believe a particular path you have chosen isn’t well founded?
- Do you hold informal meetings with random groups of people discussing how your department or group can improve its performance?
- Do you make sure each person understands what’s going on in the company, and how the company is doing?
Business Excellence isn’t about business management techniques, although improving the way you run your business is important from the point of view of efficiency. Business Excellence is all about people and how they band together to achieve mutually agreed goals. It’s got to start at the top and work its way down through every layer of the organization. The CEO must embrace the concept and practice it every day. This in turn influences each person (not position) to practice Business Excellence.
Business Excellence isn’t something you can learn by attending a seminar, but people can understand the concept by looking at their managers and the way they practice it. That’s why we have spent this time helping you understand some of the characteristics that mark a person as excellent. Having understood the concept and seen how other people practice it, you can then decide how you would like to practice Business Excellence.