CUSTOMER FOCUS/TQM CUSTOMER FOCUS

Customer focus means that there are conscious efforts on the part of the company to understand and anticipate the customer needs and expectations better. To understand the customers needs better and focus on their unique needs, the companies segment their customers based on their buying behaviours, use of products and services, or any other criteria which enables the companies to focus on the specific groups of customers. By such grouping companies can select the target groups and direct the strategies to meet those needs most profitably. A customer focused company creates more loyal customers, who generate more lifetime business through positive referrals. Basic drivers for understanding and anticipating customer needs are: Classifying customers in different segments based on structured criteria Gathering customers needs and expectations through structured mechanisms (surveys, focus groups etc.) Understanding how customers use a companys products and services Being aware of competitors offerings Proactive involvement with customers for their future requirements and plans Customer perceptions and needs particularly differences among key customer segments, must be addressed through strategic planning to build the required capabilities (products, technologies, service levels, employee training etc.) Designing management systems to be responsive (promptly and effectively) to customers queries Determining, measuring, and improving the right factors that drive customer satisfaction

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LEADERSHIP AND CONSTANCY OF PURPOSE/TQM LEADERSHIP

Leadership in the organizational context is the ability to anticipate and envision the future. By word (espousing the values) and by personal example (enacting the values), they inspire the whole organization by effectively influencing the behaviours, thoughts, and feelings of those working with them. To bring vision to life leaders create strategic alignment in the whole organization. They ensure appropriate design of hard systems (policies, procedures, processes, systems, performances etc.) and soft systems (values, commitment, motivation, loyalty, communication etc.) to pursue progress towards the vision. An important perspective of leadership is developing trust and win-win proposition with partners and customers and encouraging collaboration to build strong and reliable supply chain. Leaders continuously strive for developing a social relevance to the organizations operations and thus ensuring sustained development on all fronts. Leaders develop other leaders at all levels (not followers) for continued success of the organization. Developing teachable point of view from their experience and sharing with others is very important in reinforcing a culture of excellence all around. Leaders establish constancy of purpose by putting in place mechanisms to anticipate and assess the impact of future changes, re-assess the changes in systems and culture of the organization needed to counter / adopt the changes, and take pragmatic decisions to implement the changes necessary to make vision a concrete reality even in the changed environment. Simply put, the basic elements of organizational leadership are: Ability to envision, and translate it into reality Strategic intelligence Espousing and enacting values Culture building Alignment of business and social interests Social relevance Teach others to be leaders as well Decision making Develop and spread trust at all levels Empowerment Developing win-win propositions with external partners Teamwork

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Distinguishing timeless tenets (ideology, values etc.) from organizational practices and strategies Managing change

PEOPLE DEVELOPMENT AND INVOLVEMENT/INVOLVMENT OF PEOPE

Development and involvement are the means of ensuring people commitment and loyalty for the organization. The correlation between necessity of enhancing skills / knowledge of the people and the business outcome must be clearly established by the strategic management processes. This link provides context for the organization to develop its people for mutual benefit. For developmental programs to be successful the people must feel the need for the knowledge / skill to accomplish their tasks, which can be established through cascading of the high level strategic goals at individual level. People involvement starts with their participation in exercise to gain consensus, extends to involvement in improvement activities and ultimately culminating in empowerment to make decisions in the business interests of the company. Through development, people are equipped with necessary wherewithal to accomplish the business goals and through involvement of people the organization ensures that the acquired knowledge and skills are put to use in the most productive way which enable companies to achieve their targeted business goals. Critical success factors influencing people development and involvement are: Creating compelling need for development among people Aligning individual goals with those of organizational goals Providing opportunities to put the learning acquired through training into use and thus enriching people experience Empowering people to use their knowledge and experience for the benefit of the organization Building long term relationship through care for people and encouraging participative decision making Devising management systems and rewards schemes encouraging people involvement and commitment

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MANAGEMENT BY PROCESSES AND FACTS

Management by processes entails design and deployment of systems that ensure implementation of policies, strategies, and action plans through a set of integrated processes (systematic and defined ways)system approach to meet the stakeholders requirements. An important aspect of management by processes is a clear definition of process stakeholders (suppliers of inputs required by the process, customers using the output from the processes, and personnel responsible for carrying out different activities of the process), outcomes of the processes, key factors (measures and control parameters) in the process that influence the outcomes( FACTUAL APPROACH to decision making ) . The process performance can only be optimised through a clear understanding of how different units of work (tasks) fit into the whole end-to-end process. The process performance (in terms of measures defined) when documented and analyzed scientifically and compared with desirable outcomes generate facts on the basis of which the processes can be effectively managed and improved continuously on day-to-day basis. This factual information( FACTUAL APPROACH to decision making ) supports decisions at all levels that improves the process performance further. The other part of management by processes and facts is that there is a well defined process for gathering expectations of the stakeholders, changes in the environment, and competitors activity and formulating the organizations policy & strategy, which truly addresses the needs and expectations of all stakeholders (strategy based on facts and true projections). Elements that support management by processes and facts: Structured mechanism to gather expectations of all stakeholders and relevant external data Gaining clarity on what expectations will be fulfilled in the best interest of company and addressing the same through policy and strategy Design of well defined systems / processes (process stakeholders, process boundaries, process requirements and deliverables, and process measures) to implement the strategy Defining the ownership of end-to-end process for optimizing the performance of the process as a whole (individual tasks focusing on overall process goal) Mechanisms to measure, analyse, and compare process measures with desirables to improve the process performance

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CONTINUOUS LEARNING, INNOVATION AND IMPROVEMENT/TQM CONTINUAL IMPROVEMENT

Continuous improvement is a means to ensure meeting and exceeding increasing expectations of customers and other stakeholders and overcoming the challenges posed by changing market forces. Improvement backed by innovation through generation of ideas for new or improved work practices, products, and services and translation of ideas into reality (strategies, products, processes, business models etc.) gives a company unique advantage in the market place. Organizational learning is not only through the experience of its people but also through understanding the needs and expectation of its stakeholders. Learning provides a company with what and how of improvements to be taken up. The prerequisites for organizational learning, innovation, and improvement include: Establishing clear organizational goals and strategies to achieve the same Establishing right priorities and measures Reviewing implementation of strategies against the plans is a major source of organizational learning Establishing management systems (structures and processes) by designing appropriate feedback and review mechanisms that encourage innovation rather than process compliance Establishing a culture of finding ways of improvement in contrast with the culture of finding faults (basic barrier to innovation) Use of scientific analytical tools / statistical tools that provide new insights into performance Readiness on the part of leaders to listen to and support innovative ideas and concepts (creating and sustaining innovative culture) Shattering the notion that we are the best and instead look for best practices for triggering innovative ideas

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PARTNERSHIP DEVELOPMENT MUTUALLY BENEFICIAL SUUPLIER RELATIONSHIP

In the prevailing competitive landscape, alliances have become prerequisites due to following reasons: Increased competition from several countries Fast obsolescence of technology Fusion of technologies Increased capital intensity in manufacturing

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In short, the major factors influencing the success of an organization lie outside the boundary and control of the organization, more so in a dynamically changing environment. In such an environment, partnerships are a means to ensure high level of operational linkages with the resources that are critical for the success of the organization and yet beyond its control. Strategy formulation process should identify the partnership opportunities to complement the core capabilities available with the firm by leveraging the core competency of the partners in creating value for the ultimate customers. Core capability and value chain analysis help firms to identify which capabilities to own and protect and which can be performed better by what kind of partners. Success of partnerships depends upon various factors such as: The ability of managers to build trust with the partners and thus strengthening the relationships The creativity with which partners are chosen, contracts negotiated, performance indicators identified, and management structure established and monitored (partnerships are organized and managed) Taking a broad, strategic view of capability sourcing (to realize the full potential of sourcing, companies must forget the old peripheral and tactical view and make it a core strategic function) Managerial skills to survive amid increasingly fluid industry boundaries (knowledge of what and when to keep vital data confidential and when to share with partners)

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CORPORATE SOCIAL RESPONSIBILITY ISO 9004 5.2.2

The context of social responsibility gains prominence from the fact that companies are no longer a means of running economic activity, but have grown on to become the environment in which we live in. Social responsibility goes beyond basic commitment to justice and law of the land (avoiding wrongs, honouring contracts, obeying laws by the written letter

etc.) and encompasses fullest commitment to welfare of humanity in general (promote human dignity, improve community, follow the law by its spirit etc.). What companies are expected to concentrate on is civic positioning, apart from market positioning by building a stock of reputation capital to gain extra mileage of goodwill (which comes handy during times of difficulties and crisis). The leadership challenge is charting a reasonably workable strategy that is both financially and morally sustainable. This requires both intelligence and imagination and will to engage with external partners and industry wide coordination with governmental and non-governmental agencies. The question for leaders to answer is not whether or not ethics pay; it is how ethics can be made to pay. In general, following elements drive the corporate social responsibility of companies: Building reliable and fair relations with non financial stakeholders and meeting their expectations Creating social relevance of the business activity (essentially a leadership responsibility) Involving community in the achievement of business goals (creating job opportunities, development of local ancillary and downstream industry etc.) Compliance to local laws Eliminating negative impact of companys operations Protecting natural environment Information disclosure (product risks, environmental risks etc.)

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RESULTS ORIENTATION ISO 9004 5.2.2

Agility and flexibility is the hallmark of companies, who are focused on results. To be agile an excellent company needs to be always aware of its environment and measure and anticipate the needs and expectation of all stakeholders. They also monitor the perception of their stakeholders. Agile companies are well informed of need to effect changes in the path they are taking to achieve the results but to act upon such information, companies require flexibility in their management systems in order to sustain or improve upon the desired results. Flexibility may be defined as the ability of a company to change with the changing environment and business needs. Agility provides a company the capability to change proactively, rather than as a reactive action for survival. Such excellent companies understand, prioritize, and balance the needs of all stakeholders with long term success in view. Excellent companies always compare their performance with their competitors and that of best in class organizations, looking constantly for opportunities for improvements. Agile and flexible companies are always on a lookout for triggers and learning by analogies to improve themselves. Enablers for agility and flexibility include: Close customer relationship to understand their emerging needs and requirements Effective manufacturing and information technology Close supplier and partner relationships Empowering employees as decision makers Management system that supports achievement of goals Monitoring perception of relevant stakeholders Comprehensive measurement of their own performance Comparing with the best in class / industry results An organizational culture of learning

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excellence in business. While ISO is presented as standard, that sets the requirements to achieve excellence, EFQM is non-prescriptive model, which recognizes that there are many ways to approach excellence. The basic focus of ISO is meeting customer needs and providing customer satisfaction trough effective system and process, whereas EFQM focuses on overall performance of the company and customer satisfaction is just part of it. This is, in my opinion, the main difference in the scope of the models. As far as scope of models is concerned it is important to mention the principles of the models. Each model has its own principles, most of which are the

same. Despite the similarity of the principles, some of them are covered by each model in different scope. ISO EFQM

Customer focus Leadership Involvement of people Process approach System approach to management Factual approach to decision-making Continual improvement improvement Mutually beneficial supplier relationships

Customer focus Leadership and constancy of Purpose People development and involvement

Management by process and facts

Continuous learning, innovation and

Partnership development Public Responsibility Result orientation

Both of them have a customer focus, leadership and people involvement. However EFQM gives an emphasis not only on peoples involvement, but also on their development. Development and involvement of people is presented as non-separated process. The models also recognize the importance of the process and management of this process and that decision should be made on facts. Despite the fact that each model has continual improvement as a principle, the EFQM includes innovations and learning as principles to sustainable success. As far as partnership development is concerned ISO is limited only with beneficial relationships with the suppliers, while the EFQM focuses on satisfying the needs of all stakeholders, including shareholders, suppliers, customers and employees. Moreover, EFQM includes principles such as Public responsibility and Result orientation, which are not covered in ISO. Thus, the comparison of the principles shows that although ISO and EFQM have many common things, EFQM covers them in wider scope. However, this is just a comparison on the theoretical level. The interesting thing that we discussed with our team is which model of comparison is right. At the beginning we thought that both of the models have similar scope, that they have things in common and aspects which ISO has and EFQM doesnt have and vice versa, then after comparing the principles we understood that EFQM has a broader scope and understood that ISO may be part of EFQM, however we can't say it, because despite the fact that EFQM has a wider approach, ISO has aspects that EFQM does not cover.

As far differences of the models are concerned, one of the significant differences is the way models measure and assess the performance of the organization. While ISO uses so called Quality Audit, EFQM uses Self-assessment approach. Differences of QA and SA QA comparison of the organizational performance evidence with the standard to find out whether findings comply or not with the standard; SA identification of strengths, weaknesses and opportunities for further development of the organization in areas presented by EFQM criteria; SA QA- comparison is made with the static standard; SA- comparison in dynamic with the continually improving points of excellence; QA-is implemented by qualified external auditor; SA- is implemented by trained employees within the company QA function-based process and covers just one process in organization at one audit time SA- covers all functions and processes in organization QA- single procedure SA five different approaches depends on maturity of organization and effort put in the

Advantages of SA measures both effectiveness and efficiency of the organization involves people at all levels in process of self-assessment

internally motivated process, which helps to identify own strengths, weaknesses and opportunities integrates the findings of assessment into business plans and operations encourages the improvement within the organization flexible and less formal approach

Disadvantages of SA

- since SA involves its own people in the process of assessment subjectivity may negatively affect reliability of the findings - has different approaches for assessing the organizations performance and none of them are universally applicable Benefits of QA single procedure for assessment objective and independent process

Weaknesses of QA is limited to looking for non-compliances with the standard and if the results comply with the standard there is no need for changes; comparison is made with the static standards findings often is not integrated in further plans and operations of the organization

often neither auditors nor managers are interested in usage of audit findings for improvements often is used for external purposes such as reputation or ratings

independent process which is implemented by auditor and managers, restricted opportunities for participation of employees. Thus, the comparison between QA and SA shows that both of the approaches have differences, advantages and weaknesses. However, the comparison helps to understand that SA has more advantages for the companys development and improvement; it is more oriented towards people, their involvement and assessment of their own activities and therefore their development. As for the QA, despite the fact that findings of audit can be more reliable because of independent auditor, these findings often can not enable changes and improvement. However, I do not believe that the ISO do not have advantages more than I found out, so many companies nowadays uses ISO? Why? May be this is because EFQM is more reliable on the theoretical level, but it is not the case in practice, may be it is harder to use EFQM in real life than ISO? It is opportunity for further exploration))))