“Mastering the Fourth Industrial Revolution” was the focal point of discussions at the reputed World Economic Forum 2016. Majority of the participants at Davos agreed that the global economy is on the cusp of a Fourth Industrial Revolution and that it’s unlike anything we’ve ever experienced. On this year’s annual meeting, Salesforce CEO Marc Benioff observed that, “As a society, we are entering an uncharted territory” [1].
Being a management practitioner with an engineering perspective and products orientation, I have similar views as mentioned above. Today, we stand on the verge of a gigantic transformation in socio-economic frame of the world, fueled by four distinct forces of change:
- Accelerating advancements in technologies: clever software, new processes (notably 3D printing), sensors, virtual reality, blurring lines across industries, nanotechnology, biomimicry, social media, renewable/advanced energy sources, and a whole range of web-based services.
- Rise of artificial Intelligence in various forms such as digitalization of workflows, business process automations, quick-witted robots, and analytics.
- Shifting demographics in terms of urbanization, multi-generational workforce, aging population, rising younger population, changing demand patterns, and emerging talent paradigm.
- Societal concerns of what we leave behind for the next generations in terms of climate sustenance, availability of drinkable water, clean/renewable energy sources and the norms of community living with safety, equity and equality.
The confluence of these forces together build a transformative paradigm that will be unlike anything humankind has experienced earlier – in terms of its scale, scope, complexity, reach as well as uncertainty about how it unfolds.
In order to leverage this transformative force for the larger good of the humankind and the society at large, we all have an important and unique role to play. Organizations and leaders, in particular, need to do their bit by maximizing the benefits for all of their stakeholders. In this emerging world where everyone will be competing globally, good will not be good enough anymore, ‘excellence’ will be essential for growth, success and sustained relevance. It is the pursuit of excellence that will prepare and enable the effectiveness of an organization to respond to these distinct changes.
A key constituent of Business Excellence deployment is Operational Excellence which links the business intent with process execution. The benefits of Operational Excellence comprise measures of continual improvements (enhanced on-time delivery, inventory turns, lead time, performance to budget and quality). However, the actual impact of Operational Excellence on an organization is much deeper and multi dimensional. While direct benefits include economic efficiency in short term (1 year) and long term (5 years), indirect benefits include achievement of cost effectiveness (or saving) and potential of increasing market reach (and revenues).
Several research studies substantiate the benefits of excellence journey. e.g. year 2011 studies by Albert N. Link of the University of North Carolina at Greensboro and John T. Scott of Dartmouth College found dramatic increases in benefit-to-cost ratio for organizations using Baldrige criteria compared to those who did not use it., These increases were even more dramatic when the gains from increased customer satisfaction and higher sales were also factored in, even in cases of organizations not otherwise eligible for the Baldrige award. The Baldrige Performance Excellence Program (BPEP) Award is a formal recognition of the performance excellence for both public and private U.S. organizations given by the President of the United States [2]. BPEP is acknowledged as a benchmark standard for organizational performance excellence globally.
Several organizations have already started acknowledging business excellence model as a foundation for their growth. For instance, India’s Tata Group started its excellence journey two decades ago and developed a key framework which has enhanced its reputation and and supported its growth. This key framework was the ‘Tata Business Excellence Model’ (TBEM). TBEM covers business aspects ranging from strategy and leadership, to safety and climate change. Adapted from the renowned Malcolm Baldrige model, TBEM encourages continuous improvements through a formal system of benchmarking and assessment.
In The Business of Excellence publication (2008), Ratan Tata highlighted, “There was a time when many of our companies had their heads in the sand. The dominant impression was that we were less nimble than others, more resistant to change and extremely set in our ways. What we needed to do was benchmark ourselves against the brightest and the best, and get away from doing things the way we had done in the past. The Tata Business Excellence Model set the tone and created the foundation for what, I believe, was perhaps one of the most critical transformation initiatives the group has undertaken in recent times.”
Acknowledging this, in the 2014 issue of Tata Review, Group Chairman Cyrus P Mistry highlighted the behind-the-scenes role played by TBEM: “In the last 20 years of our business excellence journey, some of our companies have become global leaders, some have achieved leadership positions in India and most have got better in customer relations, in operational excellence, in profit orientation, in strategizing and in competitiveness. TBEM has been the glue in binding the group together and enhancing the Tata brand.” [3]
Hence, excellence is not a destination, but a journey that an organization takes in its strive for being better than the best of yesterday. More than anything else excellence is about commitment, discipline and focus that an organization shows and its results are seen in terms of overall performance, shareholder’s values, care for society, and perpetual sustenance beyond challenges and obstacles.
“We are what we repeatedly do. Excellence, then, is not an act, but a habit”.
– Aristotle
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References:
- Recap of Davos 2016: http://www.weforum.org/agenda/2016/01/a-recap-of-davos-2016
- Research Study – Economic Study Shows Value of Baldrige-Based Performance Excellence: http://www.nist.gov/baldrige/baldrige-011812.cfm
- Tata group example and quote: https://www.tata.com/newsroom/tata-defence-journey
