Balanced Scorecards

score2So you have implemented your management system and have achieved certification or accreditation and you are feeling both relieved and very pleased with yourself.

You look back and say ‘it was worth it’ and you are glad it is all over – not quite.

You have only just started this journey, you have taken the first step on this journey, for that is what it is – if you do it properly. Implementing a management system is not about gaining a Certification, it is about:

  • benefiting your business;
  • constantly improving the way you do business;
  • increasing customer satisfaction with your products and / or services.

You need to implement a Continuous Improvement (CI) programme to gain maximum benefit from your efforts. CI is a process which stresses adaptability, teamwork, and attention to detail, it builds on the accumulated experience within your employees that operate your business processes and involves the gradual improvement of existing processes and not the whole-scale redesign or re-engineering of processes. This can be done internally with your own employees, but the optimum benefit is from using an experienced external consultant to assist you in designing and performing your CI process.

The reasons for having a CI process are really twofold:

  • once a change initiative (e.g. implementation of a management system) has achieved its goals, it is all too easy for the energy, enthusiasm and momentum to vanish, as the demands of your daily operations overwhelm those involved in implementing the change. This can ‘undo’ all the progress achieved from the change initiative, build up a level of scepticism in your employees and make the next change initiative harder to implement;
  • in some cases your front line employees, who are the primary ones affected by the change initiative, feel ignored and do not become integrated in the change initiative and so feel little ownership of, or involvement in, the change initiative. This can lead to apathy in adopting the new ways of doing things, and – in some cases – overt obstruction.

Both these scenarios lead to:

  • potential cost savings are not realised;
  • sub-optimal levels of customer service;
  • the damage to internal morale and effectiveness is significant.

There are some important lessons to learn in the CI process:

  • CI engages the knowledge and experience of your employees in the improvement activity – identifying areas of improved customer service or cost reduction. This draws on their detailed knowledge of their own process – a level of understanding that their line managers will rarely have themselves;
  • CI makes your managers and staff see process improvement as part of their job – and not simply ‘something that managers do’;
  • even small changes can make a significant impact;
  • it is OK to fail, so long as you learn from the failure and don’t repeat it;
  • significant cost savings can be realised from a well-run CI process as well as measurable improvements to customer service and satisfaction – critical in competitive market places.

Service Offering

The SIRM Philosophy is:

Every time we do something, we should do it better than the last time. We must be able to repeat our successes and learn from our mistakes.”

Do not forget that:

“SIRM ‘s success lies not in what we do but in what your people continue doing after we’ve gone.”

W Edwards Deming defined his fourteen key principles for management to transform business effectiveness and they arehere. He also proposed the seven ‘deadly diseases’ and they arehere. SIRM , from its experience, has defined a number of key barriers to the successful embedding of quality in any organisation and enabling continuous improvement, these arehere. Have fun and run a self assessment on yourself and your organisation, based on these three documents and see how well you do – you may want to contact SIRM after you do the test!

To implement an appropriate CI process, SIRM has adopted the IMPROVE Model:

  • I Identify and select a process for improvement and where you ‘want to be’ compared with ‘where you are now’;
  • M Map the critical process including objectives, KPIs, inputs and outputs;
  • P Prepare analysis of process performance;
  • R Research and develop gaps and possible solutions for achieving your goals;
  • O Organize and implement improvements to your existing process;
  • V Verify and document results;
  • E Evaluate and plan for continuous improvement and start again!

Approach

There are a number of tools and methodologies that SIRM uses to achieve a comprehensive CI process, these include:

ISO 9004

ISO 9004 is a companion standard to ISO 9001 and deals with the CI process, it provides guidance for the continual improvement of your overall performance, efficiency and effectiveness based on a process-based approach. It focuses on meeting the needs and expectations of customers and other relevant parties, over the long term, and in a balanced way.

Compared to ISO 9001, which ensures quality management of products and services, while enhancing customer satisfaction, ISO 9004 provides a broader perspective of quality management, particularly for performance improvement. It will prove useful to you, if Top Management wishes to move beyond ISO 9001, in pursuit of ongoing improvement, measured through the satisfaction of customers and other stakeholders.

Total Quality Management (TQM)

TQM is an integrated approach by your management to focus all functions and levels within your organization on quality and continuous improvement.

Over the years TQM has become very important for improving process capabilities in order to achieve them and sustain competitive advantages. TQM focuses on encouraging a continuous flow of incremental improvements from the ‘front line’ workforce.

TQM is not a complete solution formula as viewed by many – formulas can not solve managerial problems, but a lasting commitment to the process of continuous improvement can TQM requires a cultural transformation within your organisation and to institute the process, your management and Consultants must bring about a cultural transformation wherein all employees shed their individualism for a unified set of corporate values.

With TQM, quality is not the product but the process.

Six Sigma

Six Sigma is a process originally developed by Motorola to systematically improve processes by eliminating defects. It uses statistical processes to measure a process in terms of defects and allows your organisation to define its vision in numerical terms. There are a number of tools and techniques used to support the process. Defects are then isolated and eliminated thereby reducing the overall costs and costs of rework during production and post production maintenance.

It uses the DMAIC process:

  • Define;
  • Measure;
  • Analyse;
  • Improve
  • Control

Capability Maturity Models (CMMs)

The Capability Maturity Model (CMM) was developed by Carnegie Mellon University. CMM states that it “is specifically developed to support an organization’s need to assess and improve their systems engineering capability”. It can easily coexist with any business process and has defined 5 levels of maturity:

  • level 1 – Initial – process is unpredictable, poorly controlled and reactive;
  • level 2 – Managed – process is characterised but is often reactive;
  • level 3 – Defined – process is defined, repeatable and proactive;
  • level 4 – Quantitatively Managed – process is measured and controlled;
  • level 5 Optimised – focus on process improvement.

There are a number of CMM models that can be used for different processes within your organisation, these include but are not limited to:

  • BCMM – Business Continuity Maturity Model;
  • BSIMM – Building Security In Maturity Model;
  • CMMI – Capability Maturity Model Integration – there are various models for Services, Development etc – can be used for any part of the business;
  • H&SMM – Health and Safety Maturity Model;
  • IQMM – International Quality Maturity Model (Dipsticks);
  • ISM3 – Information Security Management Maturity Model;
  • ITSMMM – IT Service Management Maturity Model;
  • OSIMM – Open Group Service Integration Maturity Model;
  • P3M3 – Portfolio, Programme and Project Management Maturity Model;
  • P-CMM – People – Capability Maturity Model
  • SSE-CMM – Systems Security Engineering – Capability Maturity Model;

ServQual / RATER

Since its inception, ServQual has become a popular method for measuring service quality. Service quality is defined as the result of the comparison that customers make between their expectations about service and their perceptions of the manner in which service has been performed. It involves measuring both customer perceptions and expectations of service along key service quality dimensions. Examining differences or gaps between the desired level of service and that actually delivered reveals where improvements in the service mix are required.

The best method for gaining a better understanding of your customers’ needs and expectations is to ask them. However, before you do this, it is usful to put some work into obtaining a view of your services from your customers’ perspective. The RATER Model can be used to do this. It defines five dimensions that customers are believed to consider in their assessments of service quality:

  • Reliability – ability to perform the service dependably and accurately;
  • Assurance – employees’ knowledge and courtesy and their ability to inspire trust and confidence;
  • Tangibles – appearance of physical facilities, equipment, personnel and communication materials;
  • Empathy – caring, individualised attention given to customers;
  • Responsiveness – willingness to help customers, provide prompt service and solve problems.

These five dimensions have been found to be relevant for a wide range of organizations and sectors, although the importance of each dimension will vary from industry to industry and you must evaluate it for your own organisation. You can use this model to identify and assess customer expectations, to plan and improve services, and to measure customer satisfaction.

European Foundation for Quality Management (EFQM)

The EFQM excellence model consists of nine criteria, these being broken down into five Enablers and four Results elements and is applicable to all size organisations in all sectors:

The enablers are:

  • leadership, which drives
  • policy and strategy, which is implemented by
  • people and
  • partnerships and resources through various
  • processes.

This delivers:

  • customer results;
  • people results;
  • society results;
  • key performance results.

The results are then analysed and used as a means of both monitoring improvements as well as the driver for further adjustments of the business in order to further improve results i.e. continuous improvement.

The model can be used in four ways:

  • as a framework which you can use to help develop your vision and goals for the future in a tangible, measurable way;
  • as a framework which you can use to help identify and understand the systemic nature of your business, the key linkages and ’cause and effect’ relationships;
  • as the basis for the EFQM Excellence Award, a process which allows you to recognise your most successful customer experience (internal and external) and promote them to achieve the organizational targets identified by your mission statements;
  • as a diagnostic tool for assessing the current health of your organisation. Through this process, you are better able to balance your priorities, allocate resources and generate realistic business plans. This fourth, diagnostic use, is also known as self-assessment

The EFQM Model is a non-prescriptive framework that allows for enough flexibility to be adapted to any type of organisation, regardless of size or sector. In addition, the Excellence Model is considered an over-arching framework that can be used alongside other tools and standards such as IIP, Charter Mark, Balanced Scorecard, etc

Balanced Scorecards

Balanced scorecards were invented in the 1990’s to provide a clear definition of what an organisation should measure in order to ‘balance’ the financial perspective.

The Balanced Scorecard is a management system – not just a measurement system – that enables you to clarify your vision and strategy and to translate this into action. It provides feedback from internal processes and external outcomes in order to continuously improve strategic performance and results. When properly deployed it can transform strategic planning from an academic exercise to the nerve centre of your organisation.

It covers four perspectives:

  • business process perspective;
  • customer perspective;
  • financial perspective
  • learning and growth perspective;

The balanced scorecard builds on previous methods such as TQM and other processes that focus on customer satisfaction, metric analysis and continuous improvement. Balanced Scorecards can be built for any organisation or process within that organisation whatever industry sector they are from.

Benefits

The SIRM approach embeds continuous improvement into your product or service delivery cycle by:

  • aligning continuous improvement with your business needs;
  • empowering employees to act to continuously improve your performance;
  • ensuring all of your processes and procedures are documented and tested and, where required, optimised using mathematical modelling;
  • ensuring that critical staff have trained alternates;
  • ensuring that processes and procedures for recovery are documented and tested;
  • improving customer satisfaction;
  • increasing customer confidence in your products and services;
  • increasing reputation and so sales;
  • managing and treating significant risks to reduce them to an acceptable level in line with risk appetite;
  • providing processes and procedures to immediately respond to incidents affecting product and service delivery;
  • reducing costs by streamlining processes and reducing defects;
  • using a variety of quality tools and methodologies (see above for some that we use) according to your needs;
  • working with you to determine and define (and in some cases refine) your business goals and objectives;