I read a book quite a few years ago by John Guaspari titled "I Know It When I See It." It was a fable about a company named Punctuation, Inc. that manufactured punctuation products like commas, periods, apostrophes, question marks, etc. Their customers were lawyers who bought commas by the truckload to use after every "whereas" and "therefore" as well as comic strip artists who needed punctuation (#&?@%) in place of profanity in family newspapers.

Punctuation Inc. had competition come and go over the years. There was Excite Inc. that specialized in exclamation points but OSHA closed them down because of the noise level in the factory and Disappear Inc. that was eventually shut down as a black market company that would sell punctuation which would vanish when written. But Process Inc. had become a real competitor.

The Boss at Punctuation Inc. did some market research on Process Inc. by asking people who were buying Process Inc.'s products why they bought those instead of Punctuation Inc.'s. In every case, he was told because of quality. When the Boss asked them how they knew what quality was and they all told him, "I know it when they see it."

Like at Punctuation Inc., we all know Excellence when we see it. You can see it in your departmental or functional group by the results produced or the "pride of workmanship." You can see in the people that you lead by their willingness to do whatever it takes to get the job done or their ability to resolve differences constructively. You can see it in your supplier relationships by the trust that exists between your company and their account managers. Most importantly, you can see it in the financial performance and other key performance metrics.

The Criteria for Performance Excellence are used by judges in determining the winner of the Malcolm Baldrige National Quality Award. These criteria can be found at

http://baldrige.nist.gov/PDF_files/2005_Business_Criteria.pdf. The criteria can be used as a framework for any organization, business unit, technical department or support function in focusing on achieving excellence.

I utilize the criteria as a framework in assessing the level of quality and excellence in an organization. The following describes some ways that I know Excellence when I see it:

Leadership

I know excellence when I see senior leadership teams that have their strategic pillars (mission, vision and values) memorized. They restate these strategic pillars often and model their contents through their everyday actions, their decisions and how they respond to crises. They enjoy dialogue with all levels of people in their organization on how these pillars are a foundation for achieving organizational goals. For example, I have seen an executive in a planning session bring up a question, "If our vision is ..., then what change in ... will we need to make to take another step towards achieving that vision?"

I see Excellence when an organization's leadership sees a healthy coexistence between senior leadership accountability and oversight through a system of governance. These organizations appreciate the independent assessments of external and internal auditors and are genuinely focused on the interests of stakeholders and stockholders.

I don't need to interpret laws and regulations to know if behavior is ethical. If your eyes and ears are open, you can see though the "window" that most people open for you. What I mean is that we can determine whether people are ethical simply by tuning in and observing people's behaviors, decisions and actions. My guess is those close to the situation at Enron probably saw behavior that was unethical. They may not have had the desire or mechanism to correct it but they probably knew a lack of ethics when they saw it.

I also see Excellence in leadership when funds are well used to prevent illegal and unethical acts from occurring rather than defending against accusations of those acts.

Strategic Planning

I know a good business strategy when I see it because it clearly differentiates the unique value or advantage being delivered. Also, a great strategy deployment is one that is translated from the executive suite to the front lines.

One client, a restaurant company, had a strategy to differentiate itself through its service to guests. The company measured its service effectiveness through increases in same store sales. They further measured the components of same store sales – customer counts (number of guests) and per-person check averages. The Vice President of Operations developed a program to increase per-person check averages. He translated the program down to the front-line staff who serve the guest – the wait staff. He took the overall increase needed from approximately 20 stores and cascaded the dollars down to additional regions, stores, shifts, wait staff. He also cascaded it down in terms of additional appetizers that needed to be sold by each staff per shift over their current average. He also created a program a salesmanship contest where wait staff were recognized for their success in increasing check averages. The process contributed to a substantial increase in same store sales.

Customer and Market Knowledge

I know excellence when I see a company that initiates a true two-way dialogue to understand what customers really want and how effective the company is at meeting those expectations. Customer surveys don’t build relationships. Customer focus groups and customer interviews with the company (supplier) present can build relationships while understanding what a customer really needs/wants. A customer wants value and they want suppliers/vendors that can provide more value than their competitors. A technology client providing outsourcing services did annual interviews with high volume users at one of their large outsourcing customer sites. They improved the quality of their performance and increased their scope of services because:

• They earned increased trust from the users just by listening to their complaints and then taking action quickly to resolve any issues
• The customer users were impressed that the outsource provider would make the effort to interview them individually

Measurement, Analysis and Knowledge Management

As Dr. Deming said, “If you can’t measure it, you can’t improve it.” An excellent organization learns from its experiences. I facilitated lessons learned sessions for a client after a multi-company team finished construction on a large physical plant facility. In the lessons learned sessions, the client analyzed their performance in safety, construction and teamwork and discussed lessons learned. They not only shared knowledge to leverage in future projects but they also reflected on the lessons in team member alignment -- how (through collaboration) they moved the project from an expected failure to a clear success in a number of metric categories.

Human Resources Focus

There is no one right system for definition of roles, clarifying accountabilities and managing performance. I know an excellent human resources focus when I see it because it is consistent with the company or unit's business strategy. Think about companies like Wal-Mart or Dell that have an Operational Excellence strategy (from The Discipline of Market Leaders book by Michael Treacy and Fred Wiersema) to differentiate itself from other competitors in the marketplace. Success with an Operational Excellence strategy is when higher profits are generated through hassle-free service at the lowest total cost. This is accomplished through common systems across units, driving cost savings within the company and in the supply chain, reliability/quality, etc. From a human resources standpoint, this is accomplished through:

• Effective, repeatable recruiting processes that drive outside agency hiring fees down without reducing the quality of hires.
• Ensuring that roles and responsibilities include the expectation of taking complexity out of the job function
• Designing organizational reporting structures that enable delivering a "hassle-free" product/service
• Training and development that addresses organizational needs to become an Operational Excellence company/unit - teamwork, process improvement, quality systems, effective negotiating, etc.
• Compensation, benefits and rewards systems that recognize and incentivize units, teams and individuals that achieve progress in Operational Excellence.

Process Management

I know excellence in process management when I see it because they are leveraging process models for value creation - whether it's manufacturing procsses or a project management model for major plant or facilities projects. One energy client uses a 5-Phase model to ensure value is maximized throughout the project cycle. In the "feasibility" phase, they utilize consistent practices to determine if the project is worth pursuing. This results in "killing" more projects at early stages that wouldn't deliver in the marketplace (before too much cost is incurred) and it also results in higher rates of return on projects they proceed with.

Process management is also about creating excellence in key support processes - facilities management, contracting, recruiting, accounts payable, disaster recovery, etc. Excellence can be achieved through continuous process improvement and its ancestors/siblings (Total Quality Management, Process Reengineering, Six Sigma, ISO, etc.) by making improvements or innovations. The challenge in achieving excellence is not getting a commitment to improve processes but in overcoming the obstacle of getting the stakeholders to come to agreement on outcomes, approach and decisions related to the process improvements.

Results

I know excellence in Results when I see them. Financial performance measures are among the most important indicators but there are many others that should be considered:

• Product and service outcomes vs. competitors - market share is a great measure of the excellence of your products/services
• Success with customer or segment groups - customer loyalty measures how often a customer buys but also how often and how many products/services they buy out of your portfolio of offerings
• Human resources performance - The trends in employee retention performance is a great measure that tells you how effective your human resource programs are in attracting and retaining top quality talent
• Organizational effectiveness - Productivity and cycle time are just a couple of key measures in determining how Excellent your organizational effectiveness is.
• Leadership and social responsibility - Regulatory compliance is one indicator of the level of stakeholder's trust in senior leadership. Compliance may take the form of audit findings of taxing authorities, external/internal audit findings, number of legal settlements and judgments against the company, etc.

We all know excellence when we see it because it's really mostly common sense. But many organizations struggle in achieving Excellence:

• The organization or team really does not operate through a sense of shared purpose, vision and values there is no common foundation for change.
• The focus on Excellence becomes a project rather than an everyday job function
• The team or organization puts more effort into ideas for achieving excellence than following through to ensure those ideas get implemented.

Excellence must be something we focus on every day to translate the effort into value. As Aristotle once said, "We are what we repeatedly do. Excellence, then, is not an act, but a habit."