Approach to business and management has become more structured in modern times. Numerous tools in form of models and frameworks are available to business mangers to perform effectively in the complex business world. However, from my experience, managers often feel overwhelmed and lost in deluge of these models and frameworks. This happens when managers lose touch with the original thinking and intent behind frameworks and models.
In my following post, the first in 2012, I have tried to clarify, with graphical illustrations, a selection of business models and frameworks which often confound business managers.
Selection Criteria: Choice of a business excellence model hence would primarily be governed by the geographical region in which company is operating. A US company could go for Malcolm Baldrige and an European company could go for EFQM. A company can also in turn look at its customer base to decide which model to go for to enhance its image. Other factor that could influence the choice would be availability of consultancy support for implementation.
Selection Criteria: Both the models have global appeal. The choice is fairly simple here. Companies need to select the one which gels well with their internal systems. For instance, companies with strong 'Lean' focus would prefer to go for Lean Policy Deployment Matrix.
Refer the figure below. The business strategy is defined in terms of strategic objectives and strategic initiatives are launched to meet them. Targets are cascaded to every level which ensures overall achievement of strategy objectives.
Business Excellence frameworks
Refer the figure below. The internal assessment and benchmarking throws up the performance gaps. The process improvement programs are launched to close the gaps. These are on-going programs which cover both governing and operational processes. For instance, strategy formulation and implementation processes (which is a governing process) itself needs improvement on on-going basis. An improvement program can also be about improving the balanced scorecard process itself.
The differences are quite evident by now. They are summarized below. As evident, both have different intent and differ in their approach.
- Both categories’ frameworks drill down to local actions and targets. This essentially means that quarterly performance targets of employees will have measures coming from both.
- The initiatives under the two categories can potentially overlap. This is evident from the figure below. A strategic initiative to reduce product development time (essentially to increase speed to market) will closely match with process improvement efforts for product development. Similarly, strategic initiative of multiskilling will have bearing on employees’ incentives and rewards process.
Combining them would be a mistake as it will dilute the original intent behind the frameworks. However, given the areas of intersection and limited organizational resources, it is imperative to avoid conflict and align both frameworks within an organization. A common steering committee which is responsible for both frameworks (Strategy Performance Management and Business Excellence) can ensure the alignment in both planning and end results.