Encouraging Enterprise and Enhancing Business Performance

James DiggesNational ManagerSAI Global

2

Scope

– Latest trends in Global Excellence Models– Sustainable success – Latest practices in Business High Performance

Business Excellence Solutions– To assist organisations to develop their capability to

continuously improve performance in a sustainable manner

3

SAI Global Limited

SOURCES OF INFORMATION APPLIED INFORMATION SERVICES

PUBLICATIONS COMPLIANCE TRAINING ASSURANCE

Develop and license Information

Add valuepublish and distribute

Deliverawareness communication & monitoring solutions

Enhancethrough training and consulting services

Assurethrough independent assessment

4

What is Excellence

THEORY

PlanningPlanningReflection

Experiences

5

6

Popularity of Business Excellence?

– 76 countries have a business excellence awards– Interest worldwide is high – Increasing numbers in the Public Sector and not for profit,

together with corporate organisations– Requirement to progress from a conformance mindset to one of

performance

7

Barriers to the use of business excellence

Source: Booz Hamilton, Dec 2003. Assessment of Leadership Attitudes About the Baldrige National Quality Programme, NIST.

8

Business excellence leads to sustainable success

– Baldrige Index (US) – www.quality.nist.gov– Hendrick and Singhal’s (US)– Hausner (Australia)– Australian Business Excellence Index– EFQM study (Europe)– As demonstrated by 1,000’s of business worldwide

9

Business Excellence Index

– The Business Excellence Index compares the performance, over 16 years, of the Australian Stock Exchange-listed Australian Business Excellence Awards winners against the Australian Stock Exchange All Ordinaries Index.

– SAI Global commissioned SIRCA to conduct the study which includes results to 30 June 2006. The Index was first commissioned in 2003.

Business Excellence Award winning organisations continue to outperform the Australian All Ords by over 3 to 1

10

All applicantsprivate - average

Award winnersprivate - highest

527

734

Large – privateaverage

Small – privateaverage

530

515

Publicaverage

Publichighest

541

669

Competitive gap is widening

Large organisations still do better

Public entering demonstrating commitment

Scores from EQA APPLICANTS, 2001 to 2005Gap is widening between leaders and followers in Europe

Source: EFQM Analysis

11

Benefits of using the ABEF by length of use

12

Improvement over time in process

0

100

200

300

400

500

600

700

800

900

0 1 2 3 4 5 6 7

Sco

re

MinMax

Years in process

13

What does this mean?

– The process of improvement varies, however:– It can’t happen without CEO leadership, supported by a

process of self and external evaluation– It is hard to get to 650!– Biggest improvement occurs between 2-3 years– Improvement can be continuous over time– The average improvement per year was 52 points with a

range of 2 to 117

14

Benefits: Business Excellence Models

– Improved Results– Systems Thinking– Deployment of Vision– Holistic Approach– Cultural Change– Capability Development– Continuous Improvement– Adaptability

15

Towards Excellence Criteria

– Create a value proposition

– Generate engagement

– Provide Improvement Toolsets

– Measure Improvement

16

BusinessExcellence

Awards

ExcellenceAssessment

Proving Progress beyond ISO Certification

External Business Excellence Assessment Score & Concrete feedback

Driving Excellence5 – Element Model towards Business Excellence

Six Sigma application

ISO 9004Quality Management Guidelines - Business Management Systems View

ISO 9001 : 2000Quality Management System- Requirements

Business Improvement

Recognition of Excellence

External Assessment

Business Excellence

Quality Assurance

Traditional model of progression

17

Achieving Sustainable Excellence

Understand theBusiness

Excellence Frameworkand Principles

Clarify Strengthsand Opportunitiesfor Improvement

Lead andManage the

Change

Understandthe

System

ApplyImprovementTechniques

Review Improvements

Common Understanding of the System and Priorities

Agreedi.e. System Outcomes

Allocation of Resources for Working ON the

System

Approval to Implement and Accountability

Assignment

OFI’s from Other

Sources

Systems Thinking

18

19

Management Criteria

No. General Criteria Brief Explanation

1. Strategic Initiatives

Environmental analysis, strategy formulation, performance planning and evaluation

2. Leadership Perspectives

Setting direction, motivating people, performance management

3. Quality Imperatives

Work processes, quality systems and customer satisfaction

4. Corporate Culture

Beliefs systems, positive values, and ethics

5. Corporate Social Responsibility

Commitment to contribute to nation and society

20

Best Practice of Award Winners

– Honeywell– Vero Insurance– Boeing Australia– Tasmanian Alkaloids (division of Johnson & Johnson)– Queensland Emergency Services– Doric Group (Construction)– LeasePlan Australia (Fleet Rental)– Australian Defence Force– Schefenacker Vision Systems Australia– ING Funds Management – Suncorp Metway– Southern Pathology (division of Sonic Healthcare)– BHP Research– Ericsson Australia

21

Strategic Initiatives

– Break down the siloed approach to market analysis – Mutually agreed plans– Effective management of tangible and intangible resources– Understanding and influencing the current and future operating

environment– Reporting for decision makers at all levels– Improving the focus on Sustainability

22

Understanding Capability

– What capability is required to achieve the stated objectives– What is the current capability– What are the possible future capabilities required to meet

planned objectives– How is that capability going to be generated– How will adjustments to the strategy translate into adjustments

in the capability development plan

23

Leadership Perspectives

– The transition from technical to functional management– Leadership

– Competitive Decision Making– Integrated Risk Management– Accountability throughout the organisation– Effective balancing of opportunities, risk and resourcing

24

Understand Individual PerformanceDashboard showing

the integrated position of

Objectives vs Risk exposures

Dashboard showing the integrated

position of Objectives vs Risk

exposures

Know if my personalised

objectives are on Track

Know if my personalised

objectives are on Track

25

Key Performance Indicators – Integrated Risk & Performance

Objective: To have effective & efficient IT operations

KPI: IT Uptime

KPI Target: Obj Achievement: 99.9%

Risk Trigger: 98%

Risks of non-achievement:1) Poor IT Infrastructure2) Poor Backup procedures3) Lack of IT secondary

controls

Risk Trigger, review linked risk & activate action plans (corrective

mitigation plans)

26

Quality Imperatives

– Integrated Continuous Improvement / Innovation System– Identification– Qualification– Action plans– Adoption of the solution

– Quality– Real time assessment– Teams trained to design and implement solutions

– Information to improve decision-making– Maximising the application of information and knowledge– Reducing the re-invention of the wheel– Integrating the customer into the organisational system– Reducing variation in the customer experience– Customer perception of value– Integrated understanding of stakeholder requirements

27

Knowledge Cycle Objectives

AccessReviewCreateCollate

Apply

Store

Value

Cost

28

Bank of America

– To deliver consistent, high-quality service, Bank of America has undertaken a pioneering effort to apply Six Sigma process improvement discipline to virtually every facet of the company’s operations.

– The resulting process improvements have contributed to increases in revenue growth, operating efficiency and—perhaps most importantly—customer delight, which has increased 25%. The company considers customers “delighted” when they rate us 9 or 10 on a 10-point scale.

– Research shows that delighted customers are far more likely to stay with the company and recommend us to others.

– Equally important, delighting customers is simply the right way to do business.

29

To Improve Quality

– Reduced process variation– Increased people capability– Strategic leadership– Effective measurement systems– Focus on customer outcomes

In short we require a holistic framework that guides us in improving quality through improvement of all aspects of our business

30

Corporate Culture

– Coaching and mentoring– Succession planning– Time and well being– Achieving employer of choice status in times of full employment

31

Corporate Social Responsibility

– Balanced approach to achieving individual and organisational outcomes

– Matching donations– Team building exercises to build community facilities– Time and resources for charity work

– Sustainability is determined by an organisation's ability to create and deliver value for all stakeholders

– Community– Nation– Environment– Future generations

32

The Future

– Integrated approach– Decision Making– Stakeholder Management– Actioning Opportunities for Improvement– Performance Measurement– Continuous Improvement

33

More information

James Digges National ManagerAustraliaSAI Global Limited

Call+61 2 8206 6842

Emailjames.digges@saiglobal.com