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Achieving and Sustaining Operational and Strategic Excellence

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qualityAs defined by the EFQM, Excellent organizations achieve and sustain outstanding levels of performance that meet or exceed the expectations of all their stakeholders, extending strategic excellence to operational excellence is the strategic imperative for organizations of all sizes, in every market around the world. Increasingly, the only way to differentiate from the competition is to be smarter, more agile, and more aligned. The goal is clear; however, in most organizations, cascading the strategic goals to the operational level is less so.

 

Organizations need to identify and plan their future direction and desired end state by developing strategies that implement their Mission and Vision and exceed the needs and expectations of all stakeholders including society and environment, through employing their strength, identifying and improving their weaknesses, and understanding their internal performance, capabilities, and value proposition. With the desired end state, organizations need to identify, design, manage, and improve processes and operations to deliver this end state and generate increasing value for all stakeholders. Operational excellence should be protracted to all relevant functions, processes and interactions including those that are external to the organization. Achieving operational and strategic excellence is the beginning of a never ending journey. In the relentless, head-snapping global competition, standing still is the quickest way to slip back. Excellence must be resilient and sustainable, maintaining and sustaining excellence is a lot more challenging than achieving it, as after organizations achieved leading positions, they may lose their further directions and are become unable to set the next target. At this stage, the conventional goal setting and organisational learning techniques may cease to be effective. What must be installed is an innovative learning and creative processes.

 

References:

 

 

Managing with Agility to Achieve Business Excellence

 

Slow economic growth and shifting global market priorities have created a complex, risk-laden business environment. Such a turbulent environment demands organizational agility, agility is the ability of the organization to adapt rapidly and cost efficiently in response to changes in the environment, agility can be maintained by maintaining and adapting goods and services to meet customer demands, adjusting to the changes in a business environment and taking advantage of human resources. Agility incorporates flexibility, balance, adaptability, and coordination under one umbrella. The agile organization utilizes key principles of complex adaptive systems and complexity science to achieve success. To forge that agility, successful organizations are aggressively reshaping their culture and business practices through rigorous change management to better adapt to shifting market conditions and more collaborative and robust risk management. According to the EFQM “Excellent organizations are widely recognized for their ability to identify and respond effectively and efficiently to opportunities and threats. The MIT Sloan School of Management’s Center for Information Systems Research Agility research reveals that agile companies show higher profit growth and exhibit superior Business Value relative to their industry groups, other studies also exposes that highly agile organizations are more likely to see increased success with their new initiatives as their counterparts with low agility.

 

 

References:

 

  • Project Management Institute, PMI’s Pulse of the Profession In-Depth Report, Organizational Agility, 2012, http://www.pmi.org/~/media/PDF/Research/Organizational-Agility-In-Depth-Report.ashx.
  • EFQM, The EFQM Excellence Model 2013, http://www.efqm.org/en/.
  • “Business Agility & IT Portfolios,” MIT Sloan School of Management, Center for Information Systems Research, Summer Session 3, June 2006, data from 649 firms, National Science Foundation grant number IIS- 0085725. Agile = Average of firms above sample mean on percent of sales from new products (i.e., 5.6%).
  • Nikos C. Tsourveloudi , Kimon P. Valavanis (2002). “On the Measurement of Enterprise Agility”. Journal of Intelligent and Robotic Systems 33 (3): 329–342. doi:10.1023/A:1015096909316.
  • Dyer, L. and Ericksen, J. (2009). Complexity-based Agile Enterprises: Putting Self-Organizing Emergence to Work. In A. Wilkinson et al. (eds.). The Sage Handbook of Human Resource Management. London: Sage: 436–457.

 

Customer-Centricity: The Only Way to Differentiate from the Competition

 

Organizations have entered the age of the customer, an era where customer experience is the only sustainable source of competitive advantage. Customers’ perceptions have a crucial impact on the organization sustainability. Increasingly, the only way to differentiate from the competition is by consistently adding value for customers by understanding, anticipating and fulfilling their needs and expectations; and to be more agile towards identifying and responding effectively and efficiently to the opportunities and threats. For organizations to succeed, they need to anticipate, define, implement, review, and improve the customer experience. Customer centricity is not just a slogan. It’s an increasingly critical business strategy that is being pushed to the forefront of forward-thinking companies big and small, new and established, traditional and revolutionary.

 

Trotter developed a five-part definition of customer-centricity:

 

  • The customer is the heart of the business;
  • Customers drive the processes, policies, products, and people to all be focused on ensuring that any outcome is being created in support of meeting a customer’s needs, demands, or expectations;
  • The organization uses a proactive approach to engaging, listening, and responding to customers;
  • The organization attracts the customer to its products and services by offering an experience that the customer desires;
  • And finally, the organization places itself in the customer’s circumstances in order to design its products, services, and processes around the customer experience.

 

Gulati presented empirical evidence that truly customer-focused organizations drive higher shareholder value than product-oriented organizations. Gulati tracked nine diverse companies and their performance from 2001 through 2007. They were selected for their varying business models and their genuine commitment and actions toward an outside-in, or customer-centric perspective. In that period customer-focused organizations have delivered higher shareholder returns and they’ve also grown their sales almost double the product-oriented ones. Despite this fact, many organizations are still struggling to fully align themselves to the customer-centric paradigm, challenges identified by (Shah et al.) mainly related to the organizational culture, structure, processes, and financial metrics. To overcome these barriers, the researchers suggests a path to customer centricity that is driven by a strong leadership commitment, organizational realignment, systems and process support, and revised financial metrics.

 

Gulati describes the five key levers that together can help to create a customer centric and resilient organization as:

 

Coordination: Connect, eradicate, or restructure silos to enable swift responses
Cooperation: Align all employees around the shared goals of customer solutions
Clout: Redistribute power to “bridge builders” and customer champions
Capability: Develop employees’ skills at tackling changing customer needs
Connection: Blend your offerings with partners to provide unique customer solutions

 

References:

 

  • Mike Trotter, Customer-Centricity, Sales & Service Excellence, Vol. 6, Issue 3, p1-2, March, 2006.
  • Denish Shah, Roland T. Rust, A. Parasuraman, Richard Staelin, and George S. Day, The Path to Customer Centricity, Journal of Service Research, Vol. 9, No. 2, p. 113-124, November 2006.
  • Ranjay Gulati, Reorganize for Resilience: Putting Customers at the Center of Your Business, Harvard business school publishing corporation, 2009.
  • Chris Crayner, Customer centricity, a journey, not a destination, Merkle Inc., 2011.
  • EFQM, The EFQM Excellence Model 2013, http://www.efqm.org/en/, 2012.

 

Transformational Leadership and Corporate Governance: Achieving Ethical Business Excellence

 

As global social, economic and political problems demand both private and public solutions and in line with the UN millennium development goals the corporate governance is gathering more attention globally and in the Arab world in particular. Building a broader social capacity through civil society, financial institutions, and the public sector allows for more holistic and sustainable solutions to development challenges. Adopting and implementing a well-structured corporate governance strategy enhance governance in both the public and private sectors. As defined by the EFQM Excellent organizations achieve and sustain outstanding levels of performance that meet or exceed the expectations of all their stakeholders. They sustain outstanding results that meet both the short and long term needs of all their stakeholders, within the context of their operating environment. However, society is a key stakeholder for any organization, thus, Excellent Organizations need to meet or exceed the expectations of the society and honor the governance obligations by demonstrating a commitment to the welfare of all stakeholders and by seeking to optimize long-term wealth creation, it should create customer and societal value while eliminate or reduce the environmental footprint of their operations. Leaders play an essential role in driving the organization towards achieving ethical business excellence by establishing a social context within which positive self-regulation of ethical behavior becomes a clear and compelling organizational norm. Transformational leadership integrates ethically-based features to earn the trust of employees and society. Transformational leaders emphasize enhancing the organization overall innovation and creativity and willing to take risks to attain organizational success and eliminate ineffective processes and systems and manage their impact to the environment and society.

 

 

References:

 

  • Cam Caldwell; Rolf D. Dixon; Larry A. Floyd; Joe Chaudoin; Jonathan Post; and Gaynor Cheokas, Transformative Leadership: Achieving Unparalleled Excellence, J. Bus. Ethics, 2012, 109:175–187.
  • Terry Thomas; John R. Schermerhorn, Jr.; and John W. Dienhart, Strategic leadership of ethical behavior in business, Academy of Management Executive, 2004, Vol. 18, No. 2.
  • Melsa Ararat, “Corporate Social Responsibility across the Middle East and North Africa”, World Bank, April, 2006, http://research.sabanciuniv.edu/802/1/stvkaf07a66.pdf.
  • Lowder, B. Tim, The Best Leadership Model for Organizational Change Management: Transformational Verses Servant Leadership, June 14, 2009. Available at SSRN: http://ssrn.com/abstract=1418796 or http://dx.doi.org/10.2139/ssrn.1418796.
  • EFQM, The EFQM Excellence Model 2013, http://www.efqm.org/en/.

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