Jerry Vieira

Chief executive officers and business owners of small- to mid-size firms face the same challenges that CEOs of more mature, large companies grapple with everyday. At any size business, the role of CEO is demanding. The challenge is to get (and keep) the gears of business running smoothly, while constantly improving their speed and effectiveness.

Developing de­pend­able and reliable business processes is a key differentiator be­tween companies that consistently achieve positive momentum and those that don’t.  Without process effectiveness and efficiency, sound decisions about new investments are impeded, projects get stalled, products take too long to get to market, the sales cycle is elongated, and customer acceptance and satisfaction are at risk. 

But business processes don’t run independent of people and peoples’ behaviors are the second essential ingredient in the quest for performance excellence. So, how does a CEO integrate people and processes to assure that their company develops a culture of performance excellence? 

Starting point: a performance excellence culture self-assessment

If you are wondering about the degree to which your firm has a culture of performance excellence, take the 12-point assessment test that follows. For each of the bulleted lines, rate your culture on a scale of one to five, with five being highest. For each item ask, “To what degree is this discipline practiced consistently across our business?”

• Objectives Setting: clear, strategically sound, economic, quantitative, everyone has them, specific, coordinated.
  
• Project Planning: detailed, timelines, milestones, adequate funding, good team selection.
  
• Ownership/Leadership: clarity, singular project manager responsibility and authority, project leadership skills in place.
  
• Sense of Urgency: deadlines, criticality understood, people willing to work late/weekends to accelerate progress and overcome barriers.
  
• Expectations: clear, documented, measurable.
  
• Accountability: both rewards and consequences clear.
  
• Measurements / Metrics: both process and outcome metrics.
  
• Checkpoints / Progress Feedback: frequent, working sessions vis-à-vis formal reviews.
  
• Individual Performance Management: individual goals, targets and roles.
  
• Training Programs: consistency across business for all critical roles.
  
• Process Consistency: proven business processes, training, conformance, effective tools.

 Priorities: clear, commonly understood, good time management, clear understanding of the difference between importance and urgency.

A perfect score is 60 points. It is not uncommon for firms to score less than 30.

Performance Excellence requires these disciplines. If they are in place, there is a much higher probability of success for any business initiative in any firm of any size.

The following are the seven laws of Performance Excellence:

The law of economic value

The source of all economic value in your firm is a customer’s willingness to exchange his cash for what, in his perception, will return greater economic or emotional value in return.

Sound business initiatives must ultimately result in positive economic or emotional impact on customers for those initiatives to return value to your firm.

The law of speed

Business process speed increases return on assets, which, in turn increases your firm’s economic value. It’s not difficult to figure that if your new product launch process is operating quickly, it provides opportunities for more new products to be launched each year – and opportunities to manage multiple launches in parallel. The positive competitive impact is enormous.

The law of focus

As in war, successful business strategy requires the focus of overwhelming superior force on the most strategic point.

Thomas Bonoma, as a Harvard Professor, wrote a book called “The Marketing Edge” in which he revealed the results of his research into why strategies succeed or fail. One of the most important ingredients of success was focus.

The law of leadership

Performance Excellence disciplines start at the top.

Hands-off management simply does not work. At some point, a highly visible leader needs to establish and set uncompromising expectations for performance excellence – while being a prime, highly visible example of their practice. And the lost art is the ability to get down, roll up your sleeves and work side by side with your managers to grind away at the problems through to positive outcomes.

The law of barriers

Roadblocks rarely remove themselves.

Even if they eventually do, you do not have the time nor can you afford the risk that they might not.  Roadblocks are difficult to know about if there are few checkpoints and progress metrics. Frequent checkpoints are crucial to both this law and the law of speed. But checkpoints are not enough. Checkpoints are ineffective if executives don’t have the courage to dig in to identify, confront, get commitment, and provide support to remove roadblocks.

The law of measurement

Measurement reveals the reality of progress.

Management-by-objectives is a great business practice, but may have misled generations of managers to believe that outcome metrics were adequate and process metrics and checkpoints were not needed. The objectives were either met or they weren't. It made things simple. But emphasis only on outcomes can lead to abuse in achieving them (sic Enron). The right process metrics assure productive and ethical behaviors on the road to achieving the desired outcomes.

The law of trust

Trust bonds people to purpose.

This last law comes from the realization that we are all in this together. Our fates, as team members, are inextricably linked to one another. Our ability to trust one another (including the trust we build with our customers) makes it all work. High individual self-interest is easily recognized and creates an enormous amount of sand and friction in the organizational gears. Finally, the law of trust allows us to feel good about how we expend our personal energies and to what we are committed – creating a strong and steady tail wind for all the other laws.

Jerry Vieira is president and founder of The QMP Group Inc., a management consulting firm that helps business-to-business companies rapidly turn underperforming divisions, products and services into significant profit contributors. For information regarding QMP Performance Excellence Workshops, Turnaround and Transformation Programs, or Market Strategy services call QMP at (503) 318-2696, e-mail the company at qmp@qmpassociates.com or visit the company’s Web site at www.TheQMPGroup.com.