Business Excellence Delivers Better Outcomes

Jeff Ryall

The textile, clothing and footwear industry has undergone massive structural change in recent years, in the face of relentless competitive pressures. Reductions to tariff barrier protection has exposed the sector to the full force of import competition. Low labour cost, high volume producers, often utilising modern equipment and without the social on-costs that are taken for granted as an essential part of the Australian business environment pose a major challenge.

This scenario is often perceived as bleak.  Yet there are many companies which have the potential to achieve a profitable and sustainable future.  This is not confined to the domestic market.  They can also be successful exporters, provided they are able to identify and leverage competitive advantage.

To do this, firms requires higher performance capability than for commodity-based markets.  They need to differentiate and target selected markets, and then attain inherent efficiencies that go with this.  Once firms are able to perform well in their chosen markets, they are more able to build their image, and then leverage their value proposition through brand strategy.1

In the work we have done, we have found that although they are diverse in the kinds of products they make, the common features of these successful TCF firms are an underlying recognition that competitive advantage lies not in producing commodity products, but in leveraging unique and differentiating capabilities.  These are typically a blend of:

• the ability to meet specific market segments responsively (with flexibility, short supply runs and short lead times),
• ensuring high levels of quality,
• minimising unnecessary cost through output productivity and internal efficiency, 
• deployment of appropriate modern technology, and
• unique design capability. 

When these are done well there is the potential to create brand value.

Yet within the sector there is typically a lack of understanding of what the dimensions of 'doing this well' are, and the practical knowledge of how to go about achieving high performance.

This capability is termed 'Business Excellence'.

At the outset, each of the participants in this program demonstrated at least an intuitive understanding, and often more, of these underlying principles.  Yet from within any business it is often difficult to know what the building blocks of business excellence that underpin high levels of performance are, much less how to go about implementing and developing them.

The Baldrige Criteria for Business Excellence

The Program framework was based on the internationally-recognised Baldrige Criteria for Business Excellence.  This is an established and proven framework, embraced at the national recognition level in a number of countries, and in Australia has been applied for more than a decade by many organisations.  When properly applied, it has been objectively shown that the principles of best practice boost organisational value and deliver better outcomes to all stakeholders. 

There are seven key performance categories within the Baldrige business excellence model:

1. Leadership
2. Strategic planning
3. Customer and market focus
4. Measurement analysis and knowledge management
5. Human resource focus
6. Process management
7. Business results.

Commence With Self Assessment

Quality Award Partners® developed a 56-question self-assessment instrument. This enables each company to establish a baseline performance measure across the seven business excellence categories of the Baldrige Criteria for Business Excellence.  The results from this quickly showed what the general level of performance of each company was, as well as the specific strengths and areas for improvement focus.

Naturally, for each of the participating firms, the areas of high relevance within the program differed, although there were typically commonalities in the area of leadership and business/marketing strategy, human resource focus, and measurement and performance management.

Then Select a Starting Point

Participants were provided with a business excellence methodology and model.  This interfaced with the workshop program, to provide knowhow on application of the key performance drivers that ultimately deliver better business outcomes.  Then, within the program, two themes were consistently presented:

1. The need to establish effective control and management systems throughout the organisation in order to consolidate performance and conduct effective analysis.
2. Then to develop improvement activities in areas of significance to each firm, and its customers.

In some cases these were very simple and basic.  Once properly implemented, they opened the door to impressive levels of performance improvement.

Focus on Results

When approaching business excellence, regardless of the point of entry, all participants made significant gains that will strengthen their business across a broad range of indicators.

As participants had conducted a self-assessment at the commencement of the program, it was possible to conduct the same assessment at the conclusion to gauge the benefits of applying the content of the program on their performance. 

Examples of the kinds of performance improvements that were achieved by three participants (CLETS Australia, Harold Boot and Scuttle Clothing) are contained within the report.  These case studies provide examples that are consistent in the magnitude of improvement and positive business impact.  They also illustrate three different ways that Business Excellence has been applied.

What can be learned from this?

Key Learnings

1.  Just start!  Almost any point of entry will work

Firms that participated in the program each started in different ways:  for one, by just starting toolbox meetings that then led to better communications, better processes, and improvement ideas; for another by measuring product and customer profitability.  The key was that they STARTED, and in ways that were meaningful for the firm. 

2.  Focus on improving areas of comparative weakness

All participants demonstrated that they had improved.  This improvement tended to be across all 7 categories of the Business Excellence framework, with the lowest-scoring categories generally showing most improvement, while those categories that initially scored highest tended to show stability throughout the program.  This aligned with verbal feedback through the program from participants, that they were focussing on strengthening those aspects of their business that they perceived to be weakest, or in which they felt problems were present.

3.  Balance your performance across the performance categories

At the end of the program, there was generally a better-balanced relationship between the criteria.  This is essential as a basis of building an excellent firm.  Even if one or more aspects of a firm's operations are done well, if there are weaknesses in important areas, those weaknesses will ultimately translate into sub-optimal performance overall.

  

You can download a full copy of the Business Excellence Program TCF Report 2005, including self assessment results and case studies. (2 Mb)

Is moving to a business excellence approach the next step for you? Have you made good gains over past years, but are looking for a driver to even better performance?  Or are you unsure of where to go next to strengthen your  organisation?

Quality Award Partners® has extensive knowhow and experience in working with organisations, large and small, in both the public and private sector, to implement and assess performance to the Criteria for Business Excellence.  Contact us now to find out how you can apply this powerful tool, to drive meaningful improvement in areas that will make a bottom line difference.

 

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