Douglas Kenya Company Awards

8/3/2019 Douglas Kenya Company Awards

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KIM Company of the Year

Awards 2011

The Journey to ExcellenceA Brief History and Evaluation

Dr Alex Douglas

Editor The TQM Journal

Reader in Services QualityManagement

Liver ool ohn Moores Universit , UK


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History of Quality Improvement Strategies

Guilds

Inspection

Quality Control

Process Control

Quality Assurance

Total Quality Management

Excellence


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The Rise of the QualityGurus

.


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1970s and1980s -The Quality Crises

A notoriously imprecise term;

Declining citations since end of 1980s 1990s - Total Quality has failed

Emergence of Excellence.

2000+ Re-emergence of TQM in India andChina;

The TQM Age


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Models of Excellence

The Deming Prize (Japan)

The Malcolm Baldrige National Quality Award

(USA)

The European Quality Award (EFQM) Other national and regional awards based on the

EFQM Model or Baldrige

- e.g. Finland, Brazil, Australia, India, Kenya! Increasing use for organisational self-assessment;

External assessment for Quality Awards.


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Developed from the experience of successful

organisations

Based on a Total Quality Model Tests how effectively the organisation applies

excellence principles

Frameworks to which all other activities andinitiatives can be related

Largely, but not entirely, similar

Background


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EFQM Excellence Model:

Fundamental Concepts Results Orientation

Customer Focus

Leadership and Constancy of Purpose

Management by Processes and Facts

People Development and Involvement

Continuous Learning, Innovation and Improvement

Partnership Development Corporate Social Responsibility


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EFQM Excellence Model

RESULTS 50%ENABLERS 50%

Key

Performance

Results

15%

People9%

Policy &Strategy

8%

Leadership

10%

Partnerships& Resources

9%

PeopleResults

9%

CustomerResults

20%

Processes

14%

SocietyResults

6%

INNOVATION & LEARNING

EFQM 1999. The Model is a registered trademark of the EFQM


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ProcessesPeople

Results

Improvement Strategy:

LEADERS

HIP


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Kenya - Organisational Performance Index

Leadership and Management

HR Focus

Customer Orientation and Marketing

Financial Management

Innovation, Technology and Information Management

Corporate Social Responsibility and Environmental Focus

Productivity and Quality


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Time

300: Good organisation, quality assurance in place, starting continuous

improvement

500: Very good organisation, sustaining improvement, process orientation, clear

performance improvement

700: Excellent organisation, improvement a way of life, empowered employees,

sector benchmark, sustained excellent business results

BUT

The Journey to World Class


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Does Investing in

Excellence Pay? Across Europe a large number ofcompanies have invested in asystematic approach to pursuing

Excellence;

Many more have not;

Who is right?

Does Excellence pay off on thebottom-line?


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Any Evidence?

The danger of self-evident truth;the Quality Religion ?

Phil Crosby no such thing as theeconomics of quality;

Case Studies or Surveys; reliance

on management perception! BUT - what is the objective

evidence?


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Vinod Singhal and Kevin Hendricks - USBaldrige study 1990s (ManagementScience 1997);

Used publicly available data to compareperformance of Excellence Award winnersand other companies in their sectors;

Found Award winning companies havesuperior performance on share price andusual financial measures, for up to fiveyears following an award;

The erfect investment ortfolio!

The Excellence

Strategy Pays!


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Data collected 2005-6;

Commissioned by EFQM and BQF;

Undertaken by the Excellence Team thenat the Centre of Quality Excellence at theUniversity of Leicester - Tony Bendell,Louise Boulter and Hanida Abas.

A European Study : 2005-6


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Methodology Identify award winners that have

effectively implemented the principles ofExcellence;

Identify the year in which a companyreceived a first award;

Collect accounting data for the awardwinning companies;

Identify comparison companies;

Collect accounting data for the comparisoncompanies;

Calculate the performance differencesbetween each award winner and its

comparison company.


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Size of Study All available European, National and Regional Award

winners 1990 2004; Numbers reduced due to requirement to be publicly listed

plus match pair requirement; Overall analysis thus based on population of 120 Award

winning companies and their Comparison companies 85 European head-officed companies: 70.8%

35 Non-European head-officed companies: 29.2%


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A d Wi O Y B f t O


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Award Winners: One Year Before to OneYear After WinningImprovements within a short period of time after havingreceived a first award

Compared to the comparison companies award winnersexperience further mean increases in performance by anaverage of:

8% in sales3% in sales over assets

13% in capital expenditure over assets

10% in capital expenditure over sales12% in assets

3% in employees

1.5% reduction in total cost over sales


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Award Winners: Three Year Improvements in

Financial Performance After the First Award

Compared to the comparison companies award

winners experience further mean increases in

performance by an average of: 36% in share value

17% in Revenue/Sales

20% in Assets

5% in Sales over Assets 1.5% reduction in Total Cost over Sales

.


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Award Winners: One Year Before to FiveYears After Winning

Award winners experience even greaterincreases in growth and cost efficiencymeasures;

Compared to the comparison companies,award winning companies indicate higherperformance by an average:

77% in sales

18% in operating income

28% in capital expenditure over assets 30% in expenditure over sales

40% in assets

4.4% reduction in costs over sales


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Summary of Findings:

An Excellence strategy appears to pay! Improvements in Excellence-focussed

companies compared to the comparisoncompanies are more about

increased/improved sales and assets etc thancost reduction;

Award winning companies have superior

performance on share price and usual financialmeasures, for up to five years following an award;

Performance over time is complex and variesbetween companies, markets and countries.


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However.. Quality improvement is not just about

money!

Quality is an essential property ofproducts and services;

Quality management is an activity vitalto society;

Quality products now enable us to livelonger, healthier lives and haveliberated us from the drudgery enduredby past generations;

Qualit is delivered b eo le to eo le,


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And finally..

High quality products are those thatmeet customer needs, do not failduring use, and pose no threat to

human well-beingJoseph Juran,

2003

Thank you for listening enjoy your evening!

Douglas Kenya Company Awards

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