Strategy AssociatesInsights The Pathway to High Performance

The Pathway to High Performance

“Computer power is now 8,000 times less expensive than it was 30 years ago. If we had similar progress in automotive technology, today you could buy a Lexus for about $2. It would travel at the speed of sound and go about 600 miles on a thimble of gas.”

–John Naisbitt, Global Paradox

Changing quality systems requires intelligence and courage: intelligence to know that change is absolutely and courage to initiate it. Those individuals who need a mountain of support before acting do not have to look far. Books, magazines, and trade publications document the impact of competition in the global marketplace. Even companies that market their products and services domestically, without foreign competitors, feel the pressure of stiffer competition and higher customer expectations.

No industries have been more besieged than electronics and manufacturing. Since 1970, the market share of electronic goods manufactured in the United States has plummeted. American made telephones accounted for 99 percent of the market in 1970 but only 25 percent twenty years later. The percentage of audiotape recorders manufactured in the U.S. dropped from 40 percent to 1 percent. Color televisions made by U.S. companies accounted for 98 percent of all TVs sold in this country in 1970 and in 1990, their share was 10 percent. And the list goes on.

On the other hand, Companies that have adopted the Roadmap to Excellence can anticipate the following benefits:

  • Shareholder Value: a 44% higher stock price return
  • Operating Income: a 48% higher growth, with smaller firms experiencing a 63% return
  • Sales: a 37% higher growth in sales
  • Jobs: a 21% increase in jobs for small firms

Development of the Management Team: as well as greater sustainability.

The Path to High Performance consists of nine stages that an organization can potentially go through, depending upon where it starts out in the first place. These stagers are dependent upon the overall score that the organization receives in its quality system assessment as follows:

  • 0-150–Accidental Success: Signifies that success is most probably an accident. Processes are not defined and leadership is viewed as chaotic.
  • 151-250–Single Strong Leader: This level is marked by a single strong leader with management by decree. The company reacts to each change in the marketplace.
  • 251-350–Basic Quality Systems in Place: This stage is marked by a functional quality system in place. The key processes are under control and there is a reactive improvement system at work.
  • 351-450–Planning and Measurement Deployed: Signifies a good performer with strong leadership. Planning and measurement systems are beginning to be deployed.
  • 451-550–Continuous Improvement of Supply Chain: This level is the mark of a leading company who supports process management throughout the entire supply chain of operations. Supplier Quality management is underway, along with well-developed customer and market research programs. The planning and measurement systems have been well integrated and proactive improvement structures are in place.
  • 551-650–Development of Best Practices: This level signifies the transition to high performance with improvement cycles in place, such as the Plan-Do-Study-Act cycle, sometimes called Kaizen. The use of comparison data and Benchmarking is widespread. The organization is starting to integrate and deploy internal best practices throughout all areas of operation.
  • 651-750–Integrated High-Performance Systems: The organization has achieved the level of becoming a high-performance enterprise with planning and forecasting based upon well-developed research programs. All systems are integrated and all HR processes are aligned, with customers involved to a high level of participation.
  • 751-875–World Class Leader: This is one of the highest levels achieved by any organization signified by a high degree of technology which is fully integrated. Deployment has been achieved to more than 75% of major functions and 60-70% of support areas. The organization is exemplified by its extraordinary orientation towards its customers, its community, and its employees. Leaders are found at all levels and innovation drives the company.
  • 876-1000–Best-Of-The-Best: This is a level rarely ever achieved by only a handful of organizations. Its systems have gone through many iterations showing evaluations and improvements with integration and deployment almost fully completed, including all support functions. Excellent trends show dramatic, breakthrough improvements over a number of years and results are clearly superior to all competitors on most, if not all, indices.

Getting assessed using the Roadmap for Excellence material is the organizational equivalent of getting a three-day physical. The problem is that most organizations have not figured out how to use the information for improvement planning. The most effective approach seems to be to prioritize the areas for improvement before proceeding to develop action plans, using this toolkit as the guide. With this approach, you take the 120 or so areas for improvement and select the most important 10-20 to work on over a six to twelve month period.

Organizations performing assessments often reach a plateau between 300 and 400 points. This is not too difficult for an organization that does some training, implements some process improvement teams, and starts measuring customer satisfaction. Getting to the 500-600 level, on the other hand, requires some major changes in the organization’s leadership, culture, and overall systems. Changing these features in an organization requires risk, and taking risks is something that most organizations do not do well, especially if they are not in trouble.

Companies that are unwilling or unable to make the changes needed to break out of the 300-400 point range are unlikely to stick with an improvement effort, and the results of training and process improvement teams will be short-lived. In organizations that reach the over 500 plateau, the Roadmap is not a program or an initiative; it is–or is becoming–a way of life.

A strategic business plan should focus on results before defining strategies and activities. Because two-thirds of the Sterling/Baldrige criteria deal with an organization’s approaches and activities, rather than results, it is sometimes to use these categories as a strategic planning tool. However, the assessment can provide input to the business plan, as long as the data is used to develop concrete business goals, along with the weaknesses in the company’s approach being identified and used as input for the development of business strategies. Accordingly, a separate plan is usually needed to focus on the improvement areas for improving the score.

However, meeting the Roadmap criteria does not require a separate set of activities distinct from those involved in running the organization. Goals to improve performance in the area of customer satisfaction, quality, and other results areas need to go into the company’s overall business plan, and not produced as a separate document. The Roadmap should be used, along with other data, to develop your strategic business plan. The key to making it all happen is to get senior executives involved in the assessment and review of the findings. Only a strong commitment among the senior executives will enable the organization to travel on its journey to high performance and organizational excellence.

A Quality System Self-Assessment survey can be used to identify the current level (score) that the organization is at and the various opportunity areas for potential improvement. This instrument is modeled after the Baldrige, Sterling, and European Awards Self-Assessment instruments.