Performance Excellence: An Elixir for Greater Profit Margins
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.
- Performance Excellence is not fully delegable
- 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
- Recognition without implementation delivers Fake Awards
- Recognition without assessment also delivers Fake Awards