Microsoft Word - The Business Excellence Model.docx

The Business Excellence Model (BEM) (First published in the 1990s)

John Seddon, widely known for his critical view of ISO 9000, might be expected to level the same

criticisms at the Business Excellence Model. However, John jokes that he only has two problems with

the BEM: Content and Method. He says the BEM cannot be faulted in the way of ISO 9000 because,

unlike ISO 9000, the BEM has no theory and, as the guidance indicates, you can interpret it in

whatever way you choose. All the more reason to get it right, first time.

If you are not familiar with the Business Excellence Model (BEM), you will be in the near future. British

and European Governments are committed to encouraging organisations to use it. The SME sector is

to be encouraged to use the BEM by Business Links and TECs – the Government has already set

targets to get the ball rolling. Whatever you think or believe about excellence, quality, models and

fads, this one is definitely coming.

What is the Business Excellence Model?

The Business Excellence Model is a nine-box model, originally developed by the European

Foundation for Quality Management (EFQM). Its purpose is to "support the management of

Western European organisations in accelerating the process of making quality a decisive

influence for achieving global competitive advantage" (EFQM publication).

How does the Model work?

The idea is that you conduct a Self-Assessment by comparing your organisation to the Model. The

Model presents a plausible logic. Results - financial, customer satisfaction, people satisfaction and

impact on society are achieved through acting on Enablers - leadership, policy and strategy, people

management, resources and process management. By improving the ‘how’, it is argued, improved

results - the ‘what’ - will follow. But how well does a Self-Assessment describe the relationships

between results and enablers? Can managers act with confidence in their actions leading to

improvement?

Many early users of the Model are disenchanted, they haven’t seen a rise in quality, excellence or the

bottom line. This is how a director of an engineering organisation spoke of her experience with Self-

Assessment:

"We did what most companies would do. Some of us were trained as assessors and we

did a company assessment, identified gaps, prioritised actions and so on. It was after

about two years, as we were going round the cycle for the third time, that we suddenly

stopped ourselves and asked what we were getting out of it. It may seem silly, but we

had not thought to question it. We implicitly assumed it would be beneficial, perhaps

because we were told to believe it to be so. However, when we questioned what we had

been achieving, the bottom-line benefits were not obvious."

Rather than drop the use of the BEM, her management team carried on questioning what they had

learned. She now advises others:

"My advice to anyone using the BEM is start with processes. We didn’t appreciate how

important processes were. We now know that we didn’t get the quantum leap we were

hoping for because we went down the scoring route – Self-Assessment by comparison

to the Model. We should have started with a definition of our work processes and

focused on the value work – how we deliver what matters to our customers. Once we

discovered these ideas we were on our way."

This is, perhaps, the most important point to emphasise. If it were to be put more broadly, the advice

is that change should not start with comparison to a model, it should start with a thorough

understanding of the ‘what and why’ of current performance.

The problem of method

Self-Assessment by comparison to the Model is an unreliable method for starting change. In so many

cases I have found that it does not lead to a good understanding of what is going on in an

organisation – ‘how the work works’ - and hence leads managers to decisions and actions that have

little or no basis in knowledge. The consequence is often plausible but fruitless actions for

improvement.

My first encounter with the idea of Self-Assessment was in 1994. A UK subsidiary of a US company

was using the Baldrige Model (the American equivalent of the BEM). Self-Assessment in each of the

business units generated a list of areas for improvement. These became projects and were assigned

managers. After two years, a repeated Self-Assessment and little having happened, managers re-

defined the projects, amalgamated some, dropped others and then put more managerial resource

onto the new list to ensure they got done - otherwise bonuses would suffer. Managers did not look

forward to Self-Assessment, they had become cynical about whether the process had any value.

Performance improvement Self-Assessment

Figure 1: The Vanguard Approach to Self-Assessment

The Vanguard Guide to Business Excellence encourages managers to start the process of Self-

Assessment in a different place. Whether managers seek to improve performance or simply score

their organisation, the best starting-place is a thorough understanding of the ‘what and why’ of current

performance – to understand their current organisation as a system, warts and all. When managers

start in this way, they have more confidence in actions for improvement producing results.

Take for example a professional services firm. They had conducted a Self-Assessment by the usual

method and it led them to conclude the following: A good score for processes, as all processes were

clear and documented and a good score for customer satisfaction, as they were achieving 95%

attainment of service standards. However, senior management was conscious that morale was low

and thus decided to conduct a staff survey (as encouraged by current guidance). They also decided

to train their managers as coaches (again, encouraged by current guidance), justifying the need by

pointing to the fact that the professionals had never received management training and arguing that

this was a probable cause of low morale. Furthermore, they decided to construct and publish the

organisation’s mission and values, something the current guidance encouraged which they had never

previously thought of doing.

Taking a systems view of the organisation, however, painted a wholly different picture. The starting

place was to look outside-in. While the clients of the firm were other business professionals, the

customers were consumers and what mattered to the consumers was the time it took to deal with

their needs. The organisation currently had no measures of time taken to deal with cases, relying

instead on measures of service standards. When ‘end-to-end’ times were established the managers

had a shock. In broad terms it was taking over one hundred days to resolve cases that in themselves

should take no more than a few days to complete. One inevitable consequence was progress chasing

by the consumers. Administrative staff in branches would receive as many as a hundred progress

chasing calls every week. In turn it was difficult to respond to these properly because the professional

staff were out on the road progressing other cases. It also became apparent that the professional staff

were unable to ‘close’ cases in the minimal number of visits because they had insufficient information

to hand, this being largely due to central administrators focusing on shifting files quickly to meet

service standards.

The senior managers learned that they were creating their own problems. The focus on service

standards and working to procedures was creating work. Parts of the organisation were meeting their

service standards but the expense of the whole. The systems perspective led the managers to re-

design the work. The first step in the new process was to determine what work had to be done to

resolve each and every case. It soon became apparent that it made no sense to treat all work to the

same process but instead ensure that each piece of work created its own process – doing only the

work required to close the case. When the solution was implemented the time taken to resolve cases

fell dramatically and, as a consequence, consumer progress chasing calls ceased. Administrative

staff now spent less time fire-fighting.

Fire-fighting had been one cause of low morale, the new way of working removed another. Now every

case was controlled by the staff who did the work, addressing demand – what came in, value – what it

required to be closed, and flow !h how to do that and only that. The natural consequence was a rise in

morale, for people felt in control of the work instead of feeling ‘controlled’ by the requirement to meet

arbitrary standards and duty-bound to avoid being paid attention to for failure to meet the standards.

Managers had understood the work of the organisation as a system, something they could not have

achieved from the usual method of Self-Assessment. They were able to act on the system, producing

improvements in service efficiency and morale, all at the same time. By contrast, the original course

of action would have led no-where, except, perhaps to cynicism.

The problem with content

Quality is, quite simply, a better way to do work. Most of our organisations are designed and managed

on mass-production principles: Top-down hierarchy, functional specialisation of work, measurement of

budgets, targets, standards and so on. Quality teaches managers to work in a different and better way

(see figure 2). Rather than think top-down, you think outside-in. The design of work is less concerned

with functional issues and more concerned with the nature of demand and flow. To work this way

requires different and better measures – measures of capability and variation. This way of thinking is

distinguishably different from mass-production thinking, the two are diametrically opposed – they

cannot co-exist.

Mass-production Thinking

Quality thinking

Top-down, hierarchy

Perspective

Outside-in, system

Functional specialisation and

procedures

Design of work

Demand, value

And flow

Contractual

Attitude to customers

What matters?

Separated from work

Decision-making

Integrated with work

Output, targets, activity,

standards:

Related to budget

Measurement

Capability, variation:

Related to purpose

Contractual

Attitude to suppliers

Co-operative

Control budgets, manage

people

Management ethos

Learn through action on the

system

Figure 2: Traditional thinking versus Systems thinking

Rather than making this distinction explicit, the current BEM guidance is interspersed with ‘mass-

production’ ideas and thinking.

Some examples:

The current guidance encourages the use of ‘targets’ and ‘standards’. As we saw with the example of

the professional services firm, it is more important to know what you are predictably achieving than to

set arbitrary targets and standards. The reader of the current guidance is given no help in

understanding the pitfalls of such measures and how to develop more useful measures (of capability

and variation).

The current guidance talks of management as a ‘review’ function. By contrast we have found that

managers who see themselves as hands-on leaders achieve far more in terms of staff morale and

performance improvement.

The current guidance treats people management as distinguishable from the design of work (the

reason for so much alienation in the work-place). This is why, for example it encourages staff surveys.

Staff surveys will only measure symptoms. As we saw with our case study, the causes generally lie

elsewhere and, in our experience, they are usually found in the design of the work.

By continuing to promulgate these ideas the current guidance runs the risk of not helping managers

on their quality journey, providing yet another false start. Less any managers should doubt the need

to understand quality thinking, they might dwell on the fact that Toyota use less man hours making a

Lexus than a German competitor uses re-working a comparable luxury vehicle at the end of the line

after it has been made. Should managers think this all belongs in the ‘too difficult’ drawer, it is well to

remind them that most organisations don’t make cars and many are as simple as our professional

services firm. In organisations that don’t make things, rapid change can be achieved by changing

work methods in accordance with quality thinking.

Managers need practical contrasts between what they do today and what they might do instead if they

are to change the way they think and work. Based on what we have seen happening in organisations,

The Vanguard Guide compares ‘traditional!e or ‘less helpful’ interpretations of the BEM with ‘quality

thinking’ or ‘more helpful’ interpretations. Managers can thus make their own choices for interpretation

and can test the value of their assumptions in terms of impact on performance.

That, after all, is the reason why any manager ought to be interested in quality – it is a better way to

do work, it produces more for less. If managers don’t get value from their experience with the BEM, it

will pass into history as just another fad.