Management Magazine
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The road to world-class performance

By TOM ONGURU

Business Excellence models encourage the use of best practices in areas where their impact will be most beneficial to an organisation’s performance.

Human beings love recognition. Being labelled a winner or the best in any area ignites a feeling of great satisfaction for magnificent achievement. Indeed, any person or organisation, on realisation that outstanding work and superior achievement will lead to an award or recognition, goes to great lengths to make this a reality. At this point, the organisation or individual diligently pursues excellence in strategies, business practices, and stakeholder-related activities.

Business excellence models guide organisations towards sustainable world-class results, and are based on principles that have been tested, tried and proven to work. These models are designed to guide and help organisations to improve performance and achieve world-class levels. 

Use of best practices

In some countries, national bodies use business excellence models as a basis for award programmes, which serve to identify and recognise role model organisations. However, for most organisations, the awards themselves are secondary in importance compared to their desire to achieve widespread take up of the business excellence concepts, since this leads to improved national economic performance. 

The vast majority of organisations use business excellence self-assessments to identify opportunities for improvement — as well as their areas of strength — and put in place actions to move forward. When used as a basis for an organisation’s improvement culture, the business excellence model criteria broadly channel and encourage the use of best practices in areas where their effect will be most beneficial to performance. It is, therefore, imperative that organisations undertake regular self-assessments as a health-check and this will lead to superior performance. 

Continuous self-assessment 

Although the most prominent models are the EFQM Excellence Model by the European Foundation for Quality Management and the Baldrige Criteria for Performance Excellence in the US, national quality bodies and other organisations have developed several other models. They include Spring of Singapore and SAI Global of Australia. Business Excellence models encourage organisations to improve in all aspects of their operations by enabling them to identify strengths and the areas that need improvement. The flexibility of the models means that they can be used by any organisation regardless of size, sector, products, culture or location. The models also encourage adopters to embrace self-assessment on a continuous basis, thereby ensuring that improvements and gains are measured.

While some organisations adopt business excellence to both improve and seek recognition and validation via awards, the majority of companies do this to improve performance and competitive positioning. There is evidence to indicate that organisations that have implemented business excellence successfully have outperformed their peers. 

OPI Business Excellence Model

The Kenya Institute of Management (KIM) introduced Organisational Performance Index (OPI) in 2010 following feedback received from organisations that participated in the Annual Company of the Year Awards (COYA). These companies indicated that they needed a rigorous process capable of assessing processes as well as results in line with global benchmarks. This new development elevated the quality of COYA process beyond just a dipstick survey that led to organisational ‘catwalk’ to a more rigorous, evidence-based objective assessment where the value for participation is not just vested in the winning of awards but quality feedback report. The OPI process culminates in a report that highlights key strengths and opportunities for improvement in participating companies.

How OPI works

Through OPI, participating organizations are rated according to their performance and competitiveness on a scale of 1-10. The model sets a minimum score that an organization must attain to remain competitive.  The rating is determined following a rigorous but exciting internal and external assessment process.  The organization’s processes are assessed and combined with its business results using a weighted formula to determine the scores for a set of global determinants and sectorial indicators. 

The model uses 7 Global Determinants: leadership and management; HR Focus; customer orientation and marketing; financial management; innovation and technology; CSR and environmental focus as well as productivity and quality.

These determinants ensure that organizations define and execute strategies designed to meet the needs of all stakeholders.  Organizations are then assessed according to indicators specific to their particular sector to enable them benchmark performance and competitiveness against industry peers. Some of the sectors that are dominant in Kenya’s corporate scene agriculture; education and training; financial services; general consumer services; government; and utilities; healthcare; hospitality; manufacturing; pharmaceuticals; food processing and telecommunications.

The value of OPI

Organizations undergo a rigorous and exciting self-assessment process, enabling leadership teams to identify critical issues which impact productivity and performance yet which may remain “white elephants” or go unnoticed during business as usual. In this way, OPI enables leadership teams to hold up a mirror reflecting the real state of their organization, empowering decision makers to develop strategies based on an accurate and comprehensive understanding of current performance and to prioritise critical areas of intervention to boost future performance. 

Over the last eight years, KIM has seen great improvement in organizations that have embraced OPI to an extent where some companies have had a bottom line growth of up to 20 per cent because. Some companies have also grown from family SMEs to big corporates as a result of taking seriously recommendations highlighted in the OPI feedback report

The writer is the Head of Business Solutions Centre at The Kenya Institute of Management. Email: tonguru@kim.ac.ke

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