Spotlight

Citation

Oakland, P. (2000), "Spotlight", Measuring Business Excellence, Vol. 4 No. 4. https://doi.org/10.1108/mbe.2000.26704dab.001

Spotlight

Professor Oakland is Executive Chairman of Oakland Consulting plc and head of its research and education division, the European Centre for Business Excellence. He holds a Chair in Business Excellence/Quality Management at Leeds University Business School and Visiting Chairs at the University of Bradford and UMIST. Professor Oakland's most recent book is Total Organizational Excellence: Achieving World-Class Performance (Butterworth-Heinemann, 1999).

Keywords: Business excellence, Awards, Performance

This "spotlight" interview is the first in a series of interviews with key figures in the field of business excellence. In this issue Professor John Oakland talks to Sarah Powell about the US and European quality awards, discusses concerns that an obsession with self-assessment scores deflects attention from improvement opportunities, and emphasizes the importance of the development of people.

Spotlight: Are there any major differences between the Malcolm Baldrige National Quality Award and the European Business Excellence Model (BEM) approaches to organizational improvement?

John Oakland: The first Baldrige Award was made in 1987, some five years before the European Award was launched, which means the European model was able to build on its performance. For example, an early Baldrige Award winner went into liquidation, leading to the realization that business results needed to be included to reflect organizational performance as well as quality. In addition, the European Award introduced an "Impact on society" criterion. Adding "Business results" and "Impact on society" meant the European Award had nine elements compared with the seven elements of the Baldrige Award. Since then both "Business results" and "Societal satisfaction" criteria have been included in the Baldrige Award.

The European Foundation for Quality Management (EFQM) and the US National Institute of Standards and Technology (NIST) which runs the Baldrige Award, have worked closely together to develop the two models which are now very similar; both are very good in my view.

Spotlight: To what degree is the BEM used "generically" and to what degree does it need to be customized to suit individual organizations/specific organizational priorities? I understand that the weightings for each of the criteria used in scoring self-assessment may be modified to suit specific organizational needs.

John Oakland: The model is often used in two ways, either with a view to gaining an award or as a self-assessment framework. Most people tend to use it as the latter, i.e. they use it to see how they are doing, in much the same way as if they were intending to apply for an award.

There are various methods of self-assessment. The most expensive and all-encompassing is the award simulation process, which involves writing a 75-page submission document and getting a team to assess it (team members may be internal or external assessors). But, if you are not applying for an award, there are other methods which are much simpler and better.

If you only intend to use the model for self-assessment, you can use it as it stands to benchmark your organization against another which also uses it. So you could, for example, benchmark yourself against the BBC, if that organization were using it, say, for recruitment. You could effectively examine the BBC's people-management methods and make a comparison to gauge your level of performance. When people are using the model for self-assessment, it is usually with the prescribed weightings.

Organizations can also use the model as a business planning tool and we do a lot of work with organizations using it in this way. The question to ask then is: What do we need to do to improve the organization? For example, the BEM model suggests that leaders need to establish a vision and a mission for the organization and to determine its values.

Not everyone wants to follow the model slavishly. An organization could, for example, be in the public sector and wish to put more emphasis on one area than on another. But, generally, I would say, most organizations use the model as it is, only making minor modifications, because it really is an excellent model both for businesses and public sector organizations.

Spotlight: Is the EFQM improved excellence model, introduced in April 1999, even more effective in that respect?

John Oakland: I think it is because it talks about key performance results as opposed to business results and these are more applicable to non-commercial organizations: charities, public sector organizations and so on. The new model also includes partnerships, innovation and learning.

Spotlight: You have noted the concern (expressed initially by Tito Conti), that organizations can become obsessed with self-assessment scores, deflecting their attention from improvement opportunities. Do you think this problem is effectively solved by the new excellence model?

John Oakland: No, I don't think it is. It is, admittedly, a better instrument but, if organizations use it badly, it won't overcome this problem. What Tito Conti said was, I think, absolutely right. Many people start using the model initially for self-assessment without really understanding the underlying concepts behind it; they then tend to focus primarily on the number of points gained. You even get league-tabling based on self-assessment in organizations which encourages concentration on the scores rather than the rationale behind the concept, which is the identification of areas that need improvement.

I think this problem persists and it is undoubtedly still a challenge for organizations, and especially the ones that are just starting to use it, and notably for self-assessment. But, as organizations use the model more and become more familiar with it, they do begin to understand what it is all about.

Spotlight: As a consultant, presumably it is your role to help organizations to use the model to best effect, deflecting them from any obsession with scores?

John Oakland: Yes, absolutely. As consultants we work alongside organizations to help them to use the model properly. There is considerable work that needs to be done in many organizations before they do anything extensive in the way of self-assessment. That said, clearly there is a need for a rapid review to ascertain how many of the required criteria are, or are not, already in place. But we always emphasize that the focus should be on gaining an understanding of the processes, or on measuring customer results – not on the scores.

Many organizations do not measure customer results – they really must start doing that. They also fail to measure employee results and employee satisfaction. We often advise our clients not to bother with self-assessment initially until such measurements are in place. Then the focus should be on the areas for improvement, not the scores.

Spotlight: What are the main issues discussed in your recent book, Total Organizational Excellence: Achieving World-Class Performance?

John Oakland: The book presents a framework that organizations can follow, almost step-by-step, to identify the key issues in terms of the direction of the business, asking questions such as: What are the things that we want to achieve? What is our mission? What are our critical success factors? How will we know when we have achieved these? What are the key performance indicators?

Having established and discussed these "whats" and their measurement, the book then explores the "hows", seeking to define the things the organization needs to do particularly well, i.e. the processes. The rest of the framework focuses on these processes: understanding them; mapping them; breaking them down; wrapping systems round them; benchmarking against other organizations; doing business process re-engineering (most organizations are re-inventing their purchasing processes because of IT, the Internet and so on); continuously improving processes; developing people who need better or different training; and then measuring everything.

So the book effectively offers a framework, a picture if you like, and each chapter in the book addresses a part of this framework. It encompasses self-assessment and all the elements of the business excellence model. There is considerable overlap between what we call the TOE (the total organizational excellence model) and the BEM frameworks.

Organizations can effectively use this book as a textbook; it is used on MBA programmes at the University of Leeds and also in organizations. The framework was first presented in a book of case studies written by Les Porter and myself[1]. We developed it into the current framework, presented it at numerous conferences and were complimented for its value in putting everything in context. The format adopted takes the "buzz" words, such as business process re-engineering, continuous improvement, benchmarking, and self-assessment, and really puts them into a very user-friendly framework.

Spotlight: A final question here: motivation at all levels of an organization seems to be a major key to business improvement and excellence. What are the principal means of achieving this?

John Oakland: A simple model of what we call the "customer/supplier chains" recognizes that you can only achieve total quality if everybody in the organization behaves as if the people to whom they pass on their work, even if not external customers, should be treated as customers. Employees must understand what the needs of these people are, and those of the departments they serve. Employees must "interrogate" their processes to ascertain how well they are doing in serving them effectively.

You must add to this the management systems created to run the processes, and then the tools and techniques such as statistical process control which help measure how well things are done and perhaps also how well the customer is satisfied.

The third and most important factor concerns the people and teams of people involved in the various processes. I believe that involvement is the key to improvement, i.e. getting involved in understanding what people do, where their output goes, who receives it, and what they think of it, and in getting feedback from the customer flowing back to their processes and back to them, so that they can better understand where the customer encounters problems and how things can be improved.

We talk a lot about processes and process thinking, i.e. thinking about the process, the nature of the inputs and the outputs, etc. The key to improving performance is improving processes. This involves people. As such it is very much in line with the basics of the business excellence model which states that performance can only be improved if people are involved. Building teams of people around processes is very important.

I believe that, as we are seeing dramatic changes in the way business operates, the introduction of new technology and the Internet and the effect these are having on business, starting with procurement and purchasing activities and working back into the organization, we need increasingly to approach things with a framework such as the BEM or TOE so as to help people fully to understand all the elements of what they are doing. People will always be massively important to an organization in terms of helping others to be motivated, recruiting the right people, and developing the right IT and process capability. The fact is that many, many organizational tasks will be replaced by technology over years to come and we really need to understand how best to implement that technology, and how best to bring our people on board.

Reference

1. Oakland, J.S. and Porter, L.J., Cases in Total Quality Management, Butterworth-Heinemann, London, 1994.