20 September 2015

Business Excellence: How to activate your inner excellence – blog series 2 of 10

Mediocracy Instead of Excellence(For the German version of this post, click Link).
Then there are the spectacular crashes like Nokia, Kodak or General Motors. Most firms however get stuck in mediocracy. These firms do survive, but ultimately offer only weak returns, jobs without great career prospects and a customer service that leaves a lot to be desired. Often success depends on a charismatic entrepreneur, when he leaves then the company falls apart.

In fact only few companies achieve the leap to the desired top performance – to Business Excellence. This article investigates the fundamental reasons for these challenges and possible approaches to overcome these.

The points of departure for companies often are astounding comparable. While one company evolves and generates high growth and profits, languishes the other company and will be taken over in the best case. The difference should be pointed out with an example from real life.

From Top to Flop – a Real Life Example
A topical example concerns a furniture manufacturer which boasted nearly €300 million of sales. The most reputable Lean consultants implemented a brand new process flow production system with all the modern methods – top notch. Their designs captured prestigious awards. The quality management scored coveted certificates. Internationalization was pushed globally.
However, during the crisis strong distortions appeared and a comprehensive efficiency program was launched. Despite all, revenue tanked continuously. Then the thunderbolt: a loss of 15% of sales, which dealt the company a heavy blow. 

The executive management was fired at once. The company could be saved from immediate insolvency just due to massive business retreat, generous credit write-offs and a change of ownership. The mid-term future and the jobs are still uncertain.

In contrast to that a direct competitor, which –  starting out from a difficult situation –  pursued an excellence strategy. With an investment of more than €10 million in automatization and process integration this company outperformed its competition with higher customer attraction and better process mastery. A considerate and effective customer strategy won them gradually market shares. A few years down the road the initially dismissed underdog managed to surpass the former darling of the stock exchange and achieved market leadership. The future looks promising and further growth is pursued aggressively.

This real example demonstrates that the required methods and conditions are available to all competitors. But only the challenger has effectively exploited his chance and achieved with decisive measures the desired excellence.

Naturally, every success has many fathers and a profitable business performance is never guaranteed. Therefore a more profound investigation of the root causes for consistent, sustainable Business Excellence is much-needed.  

> >  This blog post is number 2 of the blog series “Business Excellence: How to Activate Your Inner Excellence.”  To be continued….

For further information about the path to Business Excellence contact the author Andreas Sattlberger, Executive Advisor for Business Excellence at the firm procon in Vienna, Austria. You can reach him at sattlberger@procon.at