Performance Excellence: An Elixir for Greater Profit Margins

Performance Excellence - An Elixir - Qimpro

We all need to adopt a Performance Excellence model in our respective organizations / institutions, for survival and success. This is a fact. Not an opinion.

Performance Excellence, as explained in the IMC Ramkrishna Bajaj National Quality Award Model is all about delighting customers, employees, society, and Mother Earth. In order to delight customers we must first delight our employees and society. All this without harming Mother Earth.

In the language of management (MONEY), the value offered by adopting a Performance Excellence model in an organization / institution is Greater Profit Margins. No one is against that.

With greater profit margins an organization / institution becomes more competitive. One can outbid a competitor by offering our product / service at a price that is lower than the cost to produce a similar product / service by the competitor!

That calls for a celebration. Customers are delighted. Customers become loyal. 


Let us start with the definition of Quality. Quality = Customer Delight.

Customer delight is accomplished when the product / service offered :

  • Has the right and differentiating features
  • Has freedom from deficiencies.

The right and differentiating product / service features:

  • Grab market share
  • Define the market price.

Together, the above increase your Revenues.

On the other hand freedom from deficiencies ensures:

  • Reduced waste
  • Reduced warranty costs
  • Reduced cycle time of processes.

Together, the above lower your Costs.

Increased Revenues with Lower Costs deliver Greater Profit Margins.

As Sherlock Homes would have said: Elementary my dear Mr Watson.

Random Thoughts:

  1. Performance Excellence is not fully delegable
  2. Adopting a Performance Excellence model can help build a Quality Culture. Example: Ratan Tata’s initiative of mandating adoption of the Tata Business Excellence Model, across the Group, in 1995
  3. Recognition without implementation delivers Fake Awards
  4. Recognition without assessment also delivers Fake Awards

7 thoughts on “Performance Excellence: An Elixir for Greater Profit Margins”

  • Performance Excellence Model like the RBNQA embodies the right management leadership journey . It fact it is the very purpose of TOP Management – Aligning everyone in the organisation. in the journey of continuous quality improvement – processes and people and outcomes of profits happens

  • In this global competitive market, it is becoming more and more difficult for organizations to survive as profits are getting squeezed. Performance excellence is not only now “nice to have” thing, but has become “Must Have” for survival.

  • The US Commerce Department’s National Institute of Standards and Technology has compared winners of the Malcolm Baldrige National Quality Award to the Standard & Poor’s 500. The Baldrige group consistently has outperformed the S&P 500.

    The Baldrige Index is a fictitious stock fund made up of publicly-traded U.S. companies that received the Malcolm Baldrige National Quality Award between 1990 and 1999. In the 2000 study, NIST “invested” a hypothetical $1,000 in each of the whole company winners–ADAC Laboratories (1996 winner), Eastman Chemical Company (1993 winner), Federal Express Corp. (1990 winner), and Solectron Corp. (a winner in 1991 and 1997). Another hypothetical $1,000 was invested in the S&P 500 for the same time period.

    The investments were tracked from the first business day of the month following the announcement of award recipients through Dec. 1, 2000. Adjustments were made for stock splits.

    NIST has conducted the Baldrige Index study since 1995. That year it outperformed the S&P 500 by 6.5 to 1, and has beat it each year since.

    NIST also tracked a similar hypothetical investment in a group made up of the whole company winners and the parent companies of 18 subsidiary winners. This group outperformed the S&P 500 by about 4.2 to 1, achieving a 685 percent return on investment, compared to a 163 percent return for the S&P 500.

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