Opportunities and risks of using excellence models

Introduction

The rapid development of quality in the last quarter of the 20th century brought about a number of quality models, most of them conceived as templates for assessing organisations – or parts thereof -from a quality perspective. Some of them took the form of standards (national and international); others were conceived for granting quality awards, others for organisational improvement (in that case the use of models goes beyond assessment). In fact, quality models are the most significant outcome of the extraordinary season of quality that we have lived in and which now seems somehow on the decline. A decline that in part can be ascribed to the fashion syndrome, that continuously calls for something new; in part to wrong approaches; in part to distortions induced by specific interests that have little to do with promotion of quality. Inappropriate use of models is among the causes of the decline.

Nonetheless models are still a great opportunity for organisational improvement. Their potential has been little exploited up to now. ISO 9000 Standards, Award Models, TQM Models, Excellence Models, Contingency Models: we have the opportunity of a plurality of choices, that can cover most of our needs. But the risk of misusing them is still high. Each model has its optimum area of utilisation. Opportunities are high if the right model is chosen for the right purpose. We will discuss in the following opportunities and risks connected with the use of quality/improvement related models, in particular excellence models. Since the latter are still all the rage, we will start by discussing the risk that lies in the very use of the word excellence.

Risks associated with the use of the word excellence

The trend that emerged at the end of the 1990s, to replace the term TQM (Total Quality Management) with the word "excellence", seems to derive more from opportunistic market-related than from rational reasons (Dale, 2001). TQM was no longer selling well in the second part of the 1990s, due to a kind of rejection by top management whose initial enthusiasm had often turned into disappointment. In reality, what happened recalls to mind the fox and the grapes tale, where the suspicion arises that management's claims that "the grapes are sour" (the grapes of TQM and continuous improvement) is an excuse for their inability to grasp them. Whatever the reason, organisations that were born to disseminate the TQM and continuous improvement's concepts sensed the new mood and adapted to it by substituting the old terms with the new one - "excellence" - more attractive for top management. And that particularly in Europe. In fact, the 1998 edition of the EFQM Model sanctioned the transition from quality to excellence (Nabitz et al, 1999) in the European awards' environment. Later on, EFQM introduced the "Levels of excellence" recognition (EFQM, 2002), that in fact recognises organisational quality levels, likely on the way to excellence but still away from it. Today, the term excellence as a substitute for quality is widely used, not only in relation to awards and recognition, but also in relation to self-assessment. Dale reports of organisations that "...in response to the new language of excellence, are replacing the word quality with excellence in their documentation, albeit with little intellectual thought" (Dale, 2001).

The word excellence (from the Latin verb excellere) means to exceed all others in the concerned area. It represents the absolute superlative. For that reason its use in the case of quality awards seems correct, when such awards aim at identifying the absolute best organisations, in relation to those "qualities" that are sought for (normally those qualities that are appreciated by the customers and stakeholders and make the organisation successful). All other uses of the word excellence in the field of quality – typically as a substitute for TQM – are dangerous and quite often wrong. In particular the use of the expression "Excellence Models" outside the specific area of awards, for self-assessment or even the so called "level of excellence" assessments, is objectionable.

Supporters of the new mood could argue that the extension of "Excellence Models" to assessment of not-yet-excellent organisations is justified when those organisations aim at excellence. Such extension takes normally either the form of "level of excellence" assessment or of self-assessment: in none of them does the term excellence seem appropriate. The expression "measuring (or better estimating) level of excellence" makes sense when the level is high, since only in that case the organisation is within the area of excellence. It makes little sense when the level is low (does it make sense to measure the level of gigantism of a dwarf?). It seems obvious that "level of quality" or more precisely "level of organisational quality" is the correct expression, where that level can span from negative to positive, from total inadequacy to excellence.

Extension of the term excellence to self-assessment makes even less sense since organisational diagnosis should be the main objective of self-assessment, not scoring. Then: why not using more pertinent expressions, like "Organisational Quality Models" or, if we want to underline the fact that the purpose is continuous improvement, "Performance Improvement Models", or "Organisational Improvement Models" or, if we want a short expression, "Improvement Models"?

In conclusion, the word excellence should be parsimoniously used in relation to organisational quality. If used, it should be only in relation to quality recognition that aims at selecting the best organisations.

Models and approaches in such cases should guarantee that uncertainty of measure is very low at the upper end of the scale, since they are supposed to correctly discriminate between high quality organisations; it can be higher at lower levels, where they should act as a high-pass filter only.

In the case of models that are conceived for use by any organisation – whatever their quality level – as a help to improve performance, the word "excellence" should be avoided. In fact, beyond the formal aspect that the word does not represent the concept, its use inevitably implies a risk that is typical of any overstatement: developing disbelief and scepticism. We have the word quality, which perfectly fits the purpose. Why not use it?

The word "quality" remains undetermined until an adjective qualifies it – like low, high, excellent – or a measurement quantifies it. If we want to emphasise the fact that continuous improvement is the purpose, the word "improvement" could be used (implying quality improvement, where the qualities considered are those appreciated by customers and stakeholders).

Excellence, a hard to reach peak and an unstable state

The distance between a good company and an excellent one can be abysmal. Only people who had direct experience know what an excellent organisation really is. The good company can make good products, the excellent company wins customers' trust, makes people proud to belong to it and willing to devote themselves to its aims, enjoys pleasant internal climate. Excellent companies have better defences and stronger antibodies that make them less sensitive to external storms and internal diseases. Organisations can grow up into excellence only if they become a team that shares fundamental organisational values, first among them respect for people, whatever the level, and dedication to customers.

It is because the intangibles are at the root of excellence that excellent companies are so rare. Among the intangibles, the absolute first prerequisite is leadership. It takes inspiration and leadership to transform a number – sometimes a high number – of people assembled together into a winning team. The second prerequisite is high quality people. That brings forth another variable: the environment, which can be more or less favourable to creativity, shared value, desire for self-fulfilment, competition. In a favourable environment (and sometimes also in a less favourable one) leaders can further develop people skills, creating virtuous cycles.

Excellence is then for few – by definition – while quality improvement is for everybody. It can be misleading to sell the concept of excellence as something that can be achieved at different degrees – even mediocre - by quite a large number of organisations and certified by external assessors who, quite often, cannot go deep into the most critical intangible aspects, if nothing else for time reasons. Certainly, excellence models can help understand what excellence is all about; however, their high intangible content should be strongly underlined by those organisations that promote them, to make it clear how uphill the road to excellence is. A mechanistic view of organisations, that is still disseminated and should not be encouraged, leads us to believe that by following the model literally the high peak can be achieved. That is a simplistic view of organisation, that leads to disappointment and finally to the fox and grape syndrome. What the models indicate can be pursued in a myriad of ways and the "how's" determine the level of quality that will be reached. Few leaders accomplish them in ways that lead to excellence.

Leadership is the main factor in determining how the organisation "is"; then organisational behaviours follow, that permeate processes (what the organisation does); then results come. Quite often people involved are under the illusion that replicating what is visible and tangible (mainly in the process area) in excellent organisations will lead to identical result. In reality, since "how the organisation is" stays at the root of excellence, simply copying the external manifestations without changing "the being" does not help much. A long and often painful cultural transformation process is needed to acquire the essential characteristics of leadership and the human and social qualities that are indispensable to aim at the top.

If reaching the peaks of excellence is difficult, remaining at the peak seems to be far from easy. The history of industry abounds with examples of excellent companies that suddenly turned into mediocrity, then quite often disappeared. The main reason was the leader leaving the scene – and that is the clear proof that excellence is closely linked to the figure of the leader, to the capacity of creating that magic balance that makes customers loyal to the company and stakeholders committed to the common goals (Conti, 2002/1). If top management loses the focus on organisational quality (the key to outcome quality), then falling from excellence to average is common. Too many priorities, too many exceptional circumstances, too many special causes of variation are around any corner, ready to distract management attention from the very principles, values and rules on which organisational quality is founded.

External factors too conspire against excellence, every day. Changes in markets, competitors, technology, challenge the company's way of doing business, making it difficult to maintain customer focus, keep the team spirit high, master the technology, keep processes under control. While such business related changes become more and more neurotic, social and political changes relate to the global scenario increasingly add their effects. The conclusion is that excellence positions are challenged continuously, every day. They are won and lost every day. Being in the leading pack of those who strive to win everyday battles is important, not just being at the top. That means that what is really fundamental is the concept of continuous improvement as a way first not to lose positions, then possibly to gain some in the competitive contest. Continuous improvement means hard work, commitment, concentration. Models and methods are there first to help keep the course and suggest what to do.

A real risk for organisations is to be lured by external recognition and spend energies to build the formal and visible aspects that seem to be connected to excellence, losing focus on everyday struggle for improvement. Excellence is like the top of a high mountains: knowing the routes and the difficulties and mastering all the techniques is a prerequisite, but only those who are able to focus intensely on each step, one after the other, to endure pain, to drive away any temptation of self-complacency, can get there. But remaining excellent is like climbing a mountain a day.

Models for excellence and for improvement: no one size fits all

Apart from the risk of creating wrong mental attitudes coming from the use of inaccurate wording, other risks can originate by the models themselves and how they are used. We are offered today a number of quality/TQM/organisational improvement/excellence models. That is an opportunity: we can carefully select the model that best fits our purpose. However, the major award and standard organisations, in promoting their models, have contributed to diffuse the belief that they are general purpose models, that they can cover all the quality needs of any organisation. That is a major risk associated with the use of models.

In short, we can list today the following models, related to organisational quality:

1. ISO 9001:2000 Standard (ISO, 2000)
2. ISO 9004:2000 Standard (ISO, 2000)
3. EFQM Excellence Model (EFQM, 2002)
4. Malcolm Baldrige Model (NIST, 2002)
5. Deming Application Prize Model (Deming Prize, 2002)
6. TQM models, proposed by other organisations, authors, consultants. Among them, models specially conceived for organisational improvement are particularly important.

The above models can be classified according to the purpose, as follows (Conti, 2002/2):

1. Models for conformity assessment
   • ISO 9001 was the typical model of this group; however the new ISO 9001:2000 allows to move to the next group B)
2. Models for conformity and effectiveness (or performance) assessment
   • The new ISO 9000:2001 (1 above) allows this type of assessment for the product-related quality system. The other models listed above from 2) to 6) can be used for conformity and performance assessment of the whole organisational system.
3. Models for excellence recognition
   • Models 3, 4, 5 above were specially conceived for this purpose. Choice normally depends on the geographic area of belonging
4. Models for "level of quality" recognition
   • The same models 3, 4, 5 above fit the purpose, however it is advisable not to use the expression "levels of excellence" but level of quality, for the reasons explained in the previous sections
5. Models for organisational improvement
   • Models 3, 4, 5 above can also be used for organisational improvement; and in fact they have been widely used since they appeared. But – this is the Thesis since long upheld by the author – they, and their approach to assessment, are not optimised for that purpose. They cannot therefore lead to optimum results. However specific models and approaches have been conceived and proposed for organisational improvement (Conti, 1997), that can be classified under 6).

In conclusion, the plurality of models available today is a great opportunity; the great risk is choosing the wrong model in relation to the purpose. Since the biggest challenge today, for any organisation, is continuous performance improvement, making the right choice in this area is of paramount importance. Confusion between models and approaches that are aimed at "levels of excellence" measurement and those that are aimed at continuous organisational improvement is not just a matter of words; it is a matter of substance.

That is why in the following we will deal mostly with the issues of properly differentiating the two cases – excellence estimate and improvement – with emphasis on the latter. Excellence in fact is for few, while improvement is for every organisation.

About models and standards

Models are simplified representations of complex realities, aimed at bringing to light the major cause-effect links, to elaborate theories, to take over the reins of otherwise unmanageable phenomena. The narrower the scope, the more simple and effective the model usually is. General purpose models are in principle complex and less reliable. When models are used for explaining phenomena and acting on them, reducing the gap between the model and the represented reality is an issue. Models should be viewed as working hypotheses that are to be always kept under close scrutiny. Any shortcoming of the model in interpreting the reality should be seen as a stimulus to improve the model. Models are like provisional tools that have got to be continuously improved to better the results. A major risk with such models is to interpret them in a static – or even dogmatic - way.

Models are widely used in physics, biology, economics and organisational sciences. Organisational quality models can be seen as special purpose organisational models. The European Quality Award Model (renamed EFQM Excellence Model by EFQM in 1998) was the first to give quality models a form that could assimilate them to special purpose organisational models. The original idea (Conti, 1990) was in fact to divide the model into two parts: the mission and goals of the organisation (put on the right hand part in the graphic representation); and all those organisational factors that are supposed to be critical in relation to such mission and goals (the "enablers"), put at the left-hand side. Further elaboration by the author has enhanced the "special-purpose" and "organisational- improvement" character of the model. What are the features that give it such character? Figure 1, which represents the author's synthetic view of organisational improvement models (Conti, 1997), highlights them.

Figure 1 – Model for organisational improvement, schematic representation

The right hand part of the model is the part "added" to traditional organisational models, the part that makes it specially conceived for organisational improvement. It represents, as already said, the mission and goals of the organisation (and as such it should be deployed in detail for each specific organisation). It represents those performances that the organisation is committed to improve (where specific improvement goals should be defined in the planning phase). In a performance improvement oriented model this part is fundamental, since organisational improvement initiatives directed to the left hand part depend on the performance improvement goals set at the right hand side. (This part is usually indicated as "results" in excellence models; in fact they become results only in the implementation phase and when the model is used for self-assessment).

Except the case of awards and level of quality measurements, where agreed upon standard models are needed to get comparative results (see below), the left hand part of the model should be allowed to change according to the preference of the interested organisation. That is a crucial point: when models are used by organisations for improvement, no constraints should be imposed on the left-hand part (except the presence of processes as a separate category that should be mandatory). For sure, the suggestions offered by the major models should be considered first, since they have the advantage of a long experience (in measuring excellence, not so much in improvement). But there is no reason why the "enablers" part of the model should not be constructed starting from typical organisational models like, to give some examples, those proposed by McKinsey, St. Gallen University, Kast and Rosenzweigt (Peters et al., 1982; Seghezzi, 2001; Kast et al, 1985). Sometimes managers or experts in organisation are sceptic about "quality" models, because they came out of a rather heterodox area. Much better that they try with their own organisational models, if that makes them enter the logic of organisational improvement. They certainly will come out with interesting alternatives to the existing models or some suggestion for customisation. In fact, customisation of the model is essential for improvement. Customisation makes managers more willing to accept the model, besides making the diagnostic process more accurate.

On the other extreme with respect to customisation is standardisation. Sometimes models need to be standardised, when quality of some organisational outcome should be guaranteed or when getting comparative results is an issue. Take for example business partnership: partners require basic guarantees at least in relation to communication and business handling at the interface. Compliance with ISO 9001 quality system model is a typical requirement. In view of market globalisation, proposing the ISO 9001 model as an international standard, allowing for a formal certification process and mutual recognition of certifications was a fundamental step. Take another example: people safety and environment protection: Creating organisational models as the basis for company certification of compliance and making them international standard (as the ISO 14000 and OHSAS 18001) is another fundamental achievement.

At a lower level (with respect to international standards) we can find "de facto standards", i.e. organisational models that are at the basis of some kinds of organisational measurement: typical the case of awards and the so called excellence levels (or quality levels, see above) recognition. In that case creation of a standard stems from the need of guaranteeing comparable measurements. Not only the model but also the approach needs to be standardised to that aim. How important is for these models to be stable, was demonstrated by the rejection by the EFQM stakeholders of deep changes to the model, in 1998. Keeping comparability (and then undergoing continuous incremental improvement instead of discontinuous changes) was considered more important than being at the leading edge. On the contrary, being at the leading edge is important for improvement models, where internal aims prevail over external constraints.

In conclusion, apart from the terminology problems discussed in the previous section, it is good having international standards for demonstrating or certifying compliance with basic quality system requirements; models for measuring (or better, estimating) organisational excellence (that become de facto standards to assure uniform measuring criteria); and models for organisational improvement. It is a great opportunity. Risks arise when such models are used outside their specific application area, as for examples when excellence models are used for diagnostic self-assessment, that is, assessments aimed at organisational improvement.

This statement can be considered provocative today, given the extended use of award models and standard processes in self-assessment. But progress in self-assessment and in general in the quality culture requires that some taboos are broken.

Enhancing the diagnostic power of self-assessment requires customisation of models and related guidelines as well as a "right-left" diagnostic approach. (Conti, 1997)(See also in the following the section dedicated to self-assessment and corporate learning). Tables 1 and 2 highlight the difference between award-like self-assessment and diagnostic self-assessment.

Linking improvement to the corporate business cycle

In order to make it more effective, self-assessment and improvement planning should be logically and time-wise integrated into the corporate business cycle. That can be done by completing the traditional planning and execution phases with two other phases as important as they are uncommon: annual self-assessment and actions that follow. That would result in a Corporate PDCA Cycle (Plan – Do – Check – Act) according to Shewhart's and Deming's definitions (Deming, 1986).

Theoretically, the corporate business cycle begins with planning – strategic (usually long term) and operational (annual) – therefore with the "Plan" phase. In reality, to be reliable, phase "Plan" needs a plurality of inputs, organisation, competitors, market, technology, environment related: self-assessment (Check) provides invaluable inputs to that aim. Starting the PDCA cycle from "Check" seems more appropriate. If well conceived, the "Check" phase can produce different outputs. The first relates to urgent issues, requiring prompt actions (phase "Act"). The second relates to problems that require appropriate planning to be tackled. They will be dealt with in the following "Plan" phase either within the strategic or the operational plan, depending on their nature.

Quite often today, models are just used for assessment (self- or external). In fact the right hand part is commonly labelled "Results". That is a limited use of organisational improvement models. To fully seize the opportunities they offer, models should be used in any phase of the PDCA cycle. In fact, in the planning phase they help to identify goals within the customer/stakeholder/business related areas and to search for a good balance between them. In the Do phase they help identify the most significant cause effect link between actions taken at the process/systemic factors level and results.

If the model is the "steering compass" that provides the direction, the PDCA cycle is the process that helps to correct the course or to re-address it to aim to new, more challenging targets. In fact the PDCA cycle can be used at two different levels. The first, more traditional, could be better defined as the "Plan, Do, Check, Correct" cycle, where the Check phase is directed at identifying causes that deviate the course from the planned one and the Correct phase aims at redressing it. The second level is typical of the continuous improvement approach and could be better named "Plan, Do, Check, Improve" cycle". While the first cycle can be used as many time as needed during operations – at least its "Check-Act" part – the second should typically be a yearly cycle that matches the annual Corporate Business Cycle and dictates the annual Improvement Plan.

Figure 2 represents the right use of organisational improvement models and level of quality (excellence) assessment models. The former should be regularly used in conjunction with the PDCA cycle, while the second could be used (obviously it is not necessary as the first is) at appropriate time intervals (for example every three years) to have one's own progress measured and to some extent "certified" by an external recognised organisation (like an award or a certification body). The objection that is often made that it is too expensive changing the model for the two assessments reveals poor understanding of the dynamics of organisational improvement. A sharp focus on improvement is incompatible with focus on scoring. Between the two, management focus will inevitably lapse towards the latter. Those who have experienced the latter know the devastating effects that excessive focus on scoring can have on improvement. On the other hand, if the organisation is familiar with an improvement model and the PDCA cycle, it will easily convert to a different model to prepare the application report. It will mostly be a matter of reassembling existing data. For sure additional information will be needed, but that is the price to be paid for any external assessment. There are also benefits, in addition to the specific goal the assessment is aiming at (an "objective" measurement): having visitors is always an occasion to tidy the house up.

Figure 2 – The correct use of diagnostic self-assessment and level of quality assessment

Assessments of the level of organisational quality:

1. Self-assessment that takes a standard award model as reference and follows the standard award guidelines. Outcome: application report.
2. External assessment according to the award criteria

The combination of the improvement model and the PDCA cycle: a powerful factor for corporate learning

If self-assessment is freed from the rituals of scoring and its diagnostic capability is enhanced, then it can become a powerful factor for promoting corporate learning. In fact, nothing is more instructive than identifying one's own weaknesses (strengths too, of course, but that is less painful) and searching for the relevant organisational causes. And nothing is more instructive than doing that in teams: cross-functional and multidisciplinary teams. Some conditions must be present, however, to make that happen:

• Fear is driven out of the organisation (Deming, 1986) so that people are open and sincere in searching for weaknesses. Scoring in particular is forgotten, as an incentive to improper behaviours
• The process is widely participated. People who know and normally have no say should be given voice too. Wide participation is the condition for passing from individual or group learning to organisational learning
• Cross functional problems that normally are lacking in accountability should be carefully examined
• Analysis starts from facts and evidence of symptoms – not from opinions - then a rigorous diagnostic approach is followed.

If self-assessment is part of a PDCA cycle, the learning process is fostered since people go through a complete sequence: they see the planning, the implementation, the analysis of results, the correction and improvement activities, in a never ending improvement sequence.

I suspect that all self-assessment supporters agree on its highly educational and corporate learning potential. Why then do many of them bitterly react against the idea of getting rid of the award models and guidelines' constraints when the issue is improvement oriented self-assessment? For what reason the model and the approach should elude the changes derived from organisational learning?

In fact, if the organisation has a learning attitude, even if it starts by using a standard model (as an award model), it will adapt it according to its own peculiarities and specific needs (the contingency view) and improve it continuously through the PDCA experience. The same holds true for the assessment process. It will differ from the award process since the beginning - because it is diagnostic – and it will improve as a consequence of the continuous learning process.

Differentiation in models, assessment guidelines and assessment processes is the way to go, when improvement is the purpose. If that does not happen, that means that organisational learning does not take place. As already noticed, differentiation is purposely slowed down in the case of awards (or, more generally, when the purpose is estimating excellence), since in that case comparability requires stability of the model and the process. In such cases standardisation is the issue, not differentiation. Organisations that promote the use of the same approach for both excellence measurement and improvement should reconsider their position, since the risk is to slow down the progress of quality.

Concluding remarks

It took a lot of effort to the author in 1991 to convince the colleagues involved in developing the European Quality Award Model, that goals/results should be separated from enablers in order to transform a quality model into a special purpose organisational model, aimed at performance improvement; and that, for an award model, a 500-500 subdivision of weights between enablers and results was better than previous Malcolm Baldrige like solutions that privileged enablers (now the Malcolm Baldrige too has come close to the 500-500 target). In the following ten years the author's effort has been steadily focused on convincing all the colleagues involved in quality improvement worldwide that organisational improvement needs a different model conception and a different assessment process with respect to awards and level of quality assessments. Then the proposal of defining just the principles of the model (what should go on the right hand side, what on the left), leaving it open to customisation; and the characteristics of the process: right-left, highly diagnostic.

Many colleagues have embraced the author's view, but there has never been a public debate on the subject, hopefully involving the awards' and standards' organisations, that seem to perceive themselves as above that kind of public debates. However, they influence managers' choices much more than papers presented at congresses or published in specialised journals. The purpose of this paper is to further stimulate colleagues operating in the organisational improvement area to participate the debate on optimum use of Quality/TQM/Excellence Models. If improper use of models and standards – outside their specific application areas – continues, the fox and the grapes tale will come to our minds more and more frequently in the future.

References

Conti, T., 1990 – Company Quality Assessments, The TQM Magazine, July and August

Conti, T., 1999 – Organisational Self-Assessment, 2nd edition, Kluwer Academic Publishers, Dordrecht, the Netherlands

Conti, T., 2002/1 – Making Stakeholders a Strategic Asset, Proceedings of the 56th AQC, Denver, CO, May 2002, ASQ, Milwaukee

Conti, T., 2002/2 – A Road Map Through the Fogs of Quality and Organisational Assessments, The 7th World Congress for Total Quality Management, Verona, June 2002

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Deming, E, 1986, Out of the Crisis, Cambridge University Press.

Deming Prize, 2002 – http://deming.org/index.cfm?content=52 

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