Core principles of business excellence
Culture, performance and results are strongly influenced by how well a business follows four core excellence principles. These are:
1. Relentless focus on creating customer value and eliminate waste
The primary goal of business is to create loyal customers: customers who are low-maintenance, who return willingly and who recommend the business to others.
This is founded on a relentless focus on developing throughout the business:
- A clear understanding of what the customer wants and will pay for (or pay more for)
- A deep understanding of the internal systems and processes that serve the customer – which is all of them
- Where the waste is in the processes. (Waste being any use of time or resource that does not add recoverable value.) Explore our guide to process excellence here
- A continuous-improvement practice that rigorously and systematically looks for ways to improve quality, cost and delivery performance by removing waste. Read our guide to developing a continuous improvement culture here
PDCA thinking is the key to consistently high performance and continuous improvement
2. Quality comes first
There are two complementary aspects of quality:
- External quality – meeting the customers’ needs for functionality, availability and cost (the key to loyalty)
- Internal quality – the effective management and development of people and processes to produce what the customer will pay for, right first time, every time, and with zero waste
Poor quality is the biggest unmanaged expenditure in most businesses. The need for rework, refunds, time spent handling customer complaints etc. adds no chargeable value. The cost of it sucks money directly off the bottom line and pours it straight down the drain. It also clogs up the value stream, impeding the progress of the next piece of work for the customer. Download our guide to what quality means and why it matters here.
3. PDCA thinking
PDCA thinking is the key to consistently high performance and continuous improvement. It focuses time, energy and resource on the highest-value priorities and enhances the speed and impact of learning cycles. PDCA thinking brings the discipline to consistently:
- Plan: Define a goal, the method for achieving it and the measure by which success will be assessed
- Do: Execute the plan
- Check: That the plan was followed and that the outcomes were as expected. And if not, to ascertain why not
- Act: On the lessons learned during ‘check’, and to adjust the method, goal or measure in response to what has been learned
Explore our guide to PDCA thinking here
4. Ensure consistent and rigorous discipline in the execution of value-enabling activities
Time in business is spent on three types of activity:
- Value-adding: Activities that contribute directly to serving the customer right first time, every time
- Waste: Activities that either add no value (e.g. pointless bureaucracy), impede value-creation (e.g. time spent waiting for information, decisions or materials) or actively destroy value (e.g. poor management that routinely demoralises people or drives processes into overburden)
- Value-enabling: Activities that underpin and optimise value-adding activities and avoid waste. This includes planning, communication, review, process improvement, and developing people. Explore our guide to value-enabling time here
The key to minimising waste and optimising the amount and quality of value-adding time is maintaining an optimal balance between value-adding and value-enabling time, and making sure that the value-enabling activities are executed well.
Four powerful principles
These four principles underpin excellence in operational performance, customer loyalty, financial results and long-term competitiveness.
Where could enhancing the application of any of these principles reduce hassle and improve results for you and your business?
Let’s get to work
Over 27 years of practice, we have developed a comprehensive, time-tested and field-proven business-improvement model and toolkit. We partner with ambitious businesses to identify strategic breakthrough opportunities in capability, performance and results, and we provide the tools, support, training and coaching to complement their existing expertise and help them achieve these.
If you’re aiming to build or optimise a business system using sound principles, values and standards to deliver consistently excellent and continuously improving results, we can help you develop and implement a strategy to accelerate progress and amplify the impact of your journey.
To get in touch, contact us here to book a free consultation.
Discover more of our tools and methodology in our book Toward Excellence.
