All words which when associated with business denote aspiration or achievement in the search for something more! Which business in some way does not aspire to be bigger, better or greater? Which person does not aspire to something more?
Research into “business improvement” is not new. Scientific Management, the Human Relations School, the emergence of Management Theory and then Management schools followed by Business Schools all are a step in the journey. Business schools in Australia only emerged in the mid to late 1970’s.
In the early 1980’s Tom Peters published his seminal text – In Search of Excellence. After extensive research, he highlighted 9 characteristics of excellent businesses. It was a phenomenon – It was the first set of business education packages on the market. Consultants sold the “In Search of Excellence’ packages to whoever was interested. It was the start of the conversation about culture in businesses.
A Short Overview of Selected Models
In Search of Excellence (1984)
- Managing for Ambiguity and Paradox
- A bias for action
- Close to the customer
- Autonomy and Entrepreneurship
- Productivity through people
- Hands-on Value driven
- Stick to the knotting
- Simple Form, lean staff
- Simultaneous Loose-Tight Properties
These characteristics plus the myriad of others which have emerged over the past 40 years are all a part of the journey of business improvement.
In the late 80’s Quality became the buzz. Japan had arisen as a leading business nation. The US was dropping behind – what was happening?
As the story goes Edward Demmings a US academic went to Japan and introduced Statistical Process Control in their manufacturing businesses. As it happened the Japanese culture was very “collaborative ” in their search for agreement. When the US academic system studied it what they in fact “discovered” was a “team-based culture” with statistical measuring systems in place to measure “quality”.
As it evolved the term Total Quality Management emerged as the next set of “packages” to be flogged to the business world. In Australia, it took hold with force. It was the time of Economic restructuring and it was a major FAD in the business world. Who cares whether there were 7 or 8 principles or 14 points? Who can argue with Quality (and performance measurement)? Over time this process focus evolved with concepts like Kaizen and 6 Sigma – It was/is an industry in its own right!
World Class and Benchmarking
These concepts emerged again in the late 80’s early 90’s. These were focussed on encouraging Australian business to think about competing in the global marketplace. It seems to me there were two elements:
- Focusing on a Global Market and what it meant for business in Australia
- Creating measuring systems to measure comparative business performance both within Australia and Internationally.
James Collins published a body of work starting with Beyond Entrepreneurship in 1992.
Subsequently, he published:
Built to Last (1994)
Good to Great (2001)
How the Mighty Fall (2009)
Great by Choice (2012)
The Greatness movement emerged. Collins’ work certainly raised the bar and identified at least one “absolute” measure of high performance or “great performance”.
In his work Good to Great defines Greatness:
“The good-to-great examples that made the final cut into the study attained extraordinary results, averaging cumulative stock returns 6.9 times the general market in the 15 years following their transition points. To put this in perspective, General Electric (considered by many to be the best-led company in America at the end of the 20thcentury) outperformed the market by 2.8 times over the 15-year period 1985-2000.) Furthermore if you invested $1 in a Mutual fund of the Good to Great companies in 1965, holding each company at the General market rate until the date of transition and simultaneously invested $1 in a general market stock fund, your $1 in the g t g fund taken out in Jan 2000 would have multiplied by 471 times compared to 56 times in the market.”
On reflection, many of the businesses on which the research was based would not today be considered Great although in their life at some stage they have been great. What does this tell us about greatness?
A term which has evolved in the late 90’s- early 2000’s. Early Management Theory had as its focus, improvement in business mostly focussing on productivity.eg as mentioned earlier Scientific Management and the Human Relations School.
All of the concepts mentioned in this paper have as their focus – the search for improvement or better or more profitable business.
The stock market focusses the mind of CEO’s and Boards. The pursuit of profitability, shareholder value and market capitalisation are driving forces. The stock market certainly has an impact on the measurement of performance and there is serious discussion in the financial papers on the relative performance of many businesses.
One statistic related to High Performance is the lifespan of Public Companies. This number gets less focus. It does not matter which data I read, it all says the average lifespan of a public company has dropped from over 60 years in the 1950’s to somewhere between 15 and 20 years now?
Is this High Performance?
It is interesting to reflect that research in Health Care is about extending human life. If the lifespan of the human population was declining what sort of a conversation would we be having?
Can you even contemplate the amount of money being spent to prolong life?
- Medical Research
- Road Safety
- Pool Safety
- Other areas
A Way of thinking about it?
Excellence. Quality. World Class. Great. High Performance.
Each of these words and concepts has aspiration inbuilt. There are few in our society who do not aspire to …something? What is not obvious always clear is the definition of aspiration. Words are meaningless without very specific descriptors and/ or measures. It just might be that within these concepts is the answer to some of the BIG questions:
What difference do we make in the lives of our customers?
What is our unique contribution to the community in which we operate?
In what ways are we changing the world?
These questions are difficult. They lead to a level of thinking which raises aspiration. Having a core purpose (or a noble purpose) is identified by Collins and Porras as one element contributing to Great Businesses.
What is Core Purpose?
The organisation’s fundamental reasons for existence beyond just making money – a perpetual guiding star on the horizon; not to be confused with specific goals or strategies.
William Damon in his book on Noble Purpose uses a scientific definition for a similar concept:
“Purpose is a stable and generalised intention to accomplish something both meaningful to the self and of consequence to the world beyond the self.”
Choosing a management model is an important decision. What is more important is how it is used. Is it lip service or is it commitment?
Over 40 years now these words have been proselytised in Australia. Are our businesses any better now than they were 40 years ago?
In my view any one of the words above named can serve as a platform management model for your business. It really doesn’t matter which one you choose, But choose one!
Creating a culture and a shared understanding of what it really means is both the challenge and the commitment. It requires a discipline that few have.
Be the walking example of the model you believe in! (or don’t bother!)
When a customer walks into your business they need to be able to see and experience the WORD?