Strategies to Implement the Business Initiatives - Essay Example

?Implementing Business Initiatives: Challenges, Benefits and Pitfalls Introduction A business initiative refers to a formal initiative by a government, inter-governmental body or standard-setting and accreditation agency that aims at improving businesses and management systems of organisations, so that businesses can run in a holistic environment where all the related parties are benefited equally. It works by assisting organisations to formulate wholesome business plans and strategies, improving efficiency of the workforce, empowering employees, recognising responsibility to environment and society and fulfilling them, improving customer service, maintaining quality of operations and evaluating performance to understand weaknesses and plug the gaps. In today’s competitive world, every organisation wants to stay ahead of others, for which they strive to run more efficient businesses aimed at achieving maximum benefits using minimum resources. This has led to a formal, structured business process in which an organisation first sets a vision derived from its core values and ethics, develops a business plan based on its goals and priorities and then formulates business strategies to achieve the goals and hence put the business plan in action. A major business plan can often redefine the direction in which the organisation will proceed in the near or distant future (Bianca, 2013). There are several motivators that can cause an organisation to formulate a business plan and develop strategies to implement the plan such as, market-related motivators like, improving customer satisfaction, evolving with changing market dynamics and targeting a new market segment, competition-related motivators like, increasing market share, expanding product line, diversifying business, improving product quality, mergers and acquisitions, outperforming competitors and toppling market leaders, economic motivators like, job cuts and pay cuts, increasing market share and sales volume, reducing operational and manufacturing costs and improving productivity, operations-related motivators like, increasing productivity of employees, improving working environment and work culture and adopting new technology, environment-related motivators like, discontinuing using toxic chemicals, reducing pollution and carbon footprint, lowering energy consumption and adopting biomaterials as well as brand-equity motivators like, increasing brand visibility and recognition, creating brand loyalty and improving brand perception and brand image. Sometimes, multiple motivators may closely interact together. For instance, an organisation may decide to reduce its carbon footprint, improve the environment and be eligible for receiving special tax incentives from the government. Another organisation may want to introduce several new lines of products to target new market segments, create brand equity and generate more revenues. This means that at the core, every new move that an organisation makes is primarily tied to its commercial benefits. Almost all business plans and strategies are designed privately by organisations in consultation with internal employees. Such parties often tend to focus only on the desired outcomes and ignore the associated negative implications. This leads to achieving the desired goals at the cost of several other exploitations which not only backfire at the organisations, but also harm the entire society. The growing list of poor business plans and strategies of organisations around the world has prompted governments to undertake several measures that help organisations to take a holistic approach during chalking out initiatives, so that all the parties involved (such as, employees, customers and investors) reap the benefits together. This has led to the creation of several business standards that draw from benchmark business practices in their respective industries and these standards are promoted to organisations for adoption. The adoption of a business standard helps an organisation to become eligible for recognition and/or accreditation by the standard-setting board. Such a recognition and/or accreditation is often perceived as a hallmark of excellence by industry insiders as well as the customers, who are repeatedly exposed to awareness campaigns by the standard-setting boards and are advised to deal with recognised organisations with the promise of better products and services. Thus, getting recognised or accredited by a standard-setting board, by complying with its business initiative, is a lucrative affair for organisations, as such that this can be a great marketing or promotional tool to provide leverage to their businesses. This report discusses the various business standards and accreditation systems (collectively known as business initiatives) that work across many industries in response to poorly planned business plans and strategies and their interaction with the decision-making process of organisations about adopting them. It studies the challenges that organisations face while formulating business plans that can comply with all the requirements of recognised business initiatives, so that they can be accredited and acknowledged by the institutions, offering such initiatives, with the belief that adopting a recognised business initiative holds the potential to earn the confidence of customers and boost sales volume. Business initiatives across various industries Some of the internationally-acclaimed business initiatives are IIP, CSE, ISO 9000 and QuEST. Investors in People (IIP) The Investors In People (IIP) is an internationally recognised British standard-setting and accreditation agency that believes that the key to a successful business lies with its human resource and assists organisations in harnessing the potential of the employees by instilling leadership qualities in them, improving the corporate work culture and increasing the involvement of each employee (Investors In People, 2013a). It has formulated the IIP Standard that requires every organisation to consult its employees, experts, investors and general public to frame business plan and strategies, which do not contradict with its vision, core values and objectives and contribute to the society by fulfilling its corporate social responsibility (CSR) duties. It also constantly measures the performance of its plans and strategies through performance indicators and articulates the evaluation results among its employees and investors, so that continuous improvement efforts can be made. It conducts fair and efficient recruitment to obtain a talented workforce, takes care of the employees by providing them with sufficient resources of learning to adapt with changing processes, encouraging ideas and feedbacks from them, mentoring them properly for developing leadership qualities in all the employees, helping managers understand their roles and responsibilities better to perform them effectively and recognising and awarding employee efforts and contributions. It is an entirely people-driven business initiative which suggests that an organisation can run an efficient business process if it invests in the learning, empowerment, involvement and improvement of its people. Once the basic requirements of the IIP Standard are met, an organisation is considered to be an IIP organisation and can choose to meet additional requirements of the IIP for being eligible for accreditation. The accreditation system of the IIP is: 126 additional requirements for Gold accreditation, 76 additional requirements for Silver accreditation and 26 additional requirements for Bronze accreditation (Investors In People, 2013b). Customer Service Excellence (CSE) The Customer Service Excellence (CSE) (earlier known as Charter Mark) is a business assessment standard and accreditation program offered by the Cabinet Office of the UK government. It is primarily targeted towards organisations providing services such as, organisations that belong to transport, tourism, telecom, education, housing, and health and hospitality sectors, among others. It aims to encourage customer-oriented service processes by enabling organisations to reframe their operations with customers as the top priority. It evaluates key performance parameters such as, attitude of the people at the point-of-contact, professionalism of the organisation, timeliness of service delivery and the priority placed on customers in terms of the quality of service and the information and transparency extended for customer’s learning and understanding of the service to be received (Customer Service Excellence, 2013a). The CSE program is designed in a series of steps such as, segmentation of customers as per their needs, consultation with the different customer segments to derive unique, tailor-made services for each segment and customer as opposed to “mass produced” service offerings, evaluate and measure the level of customer satisfaction, collect customer opinions on the services and the shortfalls they experience, alter service offerings to make them better, implement the learning from customers into the organisation’s vision, objectives, business plan and strategies to plug the service gaps, implement customer-oriented training programs, empower employees by involving them in the process and encouraging feedback and suggestions and empowering customers by means of easily accessible full disclosure of complete, accurate and transparent information regarding the nature and scope of services provided, expectations to keep on the organisation, unbiased comparison of the services with competitors, charges and payments associated and limitations of the services provided (Customer Service Excellence, 2013b). Once an organisation fulfils the requirements of the CSE standard, it is acknowledged with the Customer Service Excellence hallmark certification by one of the many awarding bodies that have ties with the CSE program (Customer Service Excellence, 2013c). ISO 9000 The ISO 9000 is a business initiative by the International Organization for Standardization (ISO) aimed at maintaining and managing the quality of an organisation’s operations (ISO, 2013). It consists of a series of business standards that organisations can follow to achieve better management, better quality and greater customer-orientation (The British Assessment Bureau, 2013). These standards apply to all organisations regardless of their products, services, business sizes and the sectors in which they operate, except for Electronic Engineering and Information Technology, which are guided by separate standards (iSixSigma, 2013). Among the many standards under the ISO series are ISO 9000:2005 that lays down the basic concepts of quality management systems, ISO 9001:2008 that enlists the requirements of quality management systems for all organisations who operate their businesses through steps such as, design and development of new products, production of new or existing products, testing and inspection of finished products, installation of the finished products and post-sales servicing, ISO 9004:2009 that guides an organisation’s quality management system for improving its effectiveness and the ISO 19011:2011 that focuses on assessment issues such as, in-house as well as independent audits of quality management systems of organisations. The underlying parameters that the ISO 9000 series seeks to improve are an organisation’s level of customer-orientation, quality of leadership provided by the organisation’s management and their effectiveness towards achieving business goals, empowerment of the employees and their involvement in the organisation, the ability of the management to analyse problems and tackling them effectively, the ability of the management to run the business process efficiently by proper utilisation of resources and efficient coordination between all the interconnected sub-processes, the focus of the organisation on improvement of performance, the quality of decisions taken at managerial levels and the kind of relationship existing between an organisation and its vendors and suppliers (American Society for Quality, n.d.; ISO, 2012). QuEST The Quality Excellence for Suppliers of Telecommunications (QuEST) Forum is an initiative that is exclusively aimed at the Information and Communication Technologies (ICT) sector. It thrives to improve the quality of products and services offered to the customers of the ICT sector and improve their performance and reliability by means of implementation of the TL 9000 standard that participating organisations are expected to meet, highlight the benchmark performances of the sector to facilitate their adoption by others, sharing industry-relevant data, and also, measurement and evaluation of the performances of participating organisations. The TL 9000 was developed by the QuEST Forum to install a quality management system in the ICT sector. It is built primarily based on the ISO 9001:2008 standard, with 90 additional requirements that apply to the telecom industry. Organisations willing to be certified under the TL 9000 standard are required by the QuEST Forum to fully comply with all the requirements of ISO 9001:2008, along with the industry-specific requirements pertaining to hardware, software and/or other products and services. The TL 9000 places emphasis on the reliability of a product as a key performance indicator of an organisation. It stresses on managing the development of software products and product life cycles, greater importance on engineering and installation of ICT products, facilitating the link between the telecom organisations and their vendors and submission of quality and performance evaluation results to a common databank for it to be processed and benchmark practices can be shared. The QuEST Forum operates in work groups and regional hubs across the world where participating organisations, who are often competitors of each other, come under a collaborative environment to share data and address common problems in new, innovative ways (QuEST Forum, 2011; QuEST Forum, 2010a; QuEST Forum, 2010b; QuEST Forum, 2009). Implications of adopting business initiatives - challenges, benefits and pitfalls While there are several business initiatives by different bodies to implement efficient quality management systems and create a holistic business atmosphere, the effectiveness of adopting such initiatives is still under scrutiny of organisations, owing mainly to the trade-off between the costs and benefits of adoption. While some organisations have benefited from receiving recognition or accreditation to business initiatives, others still choose to distance themselves from these efforts. Investors In People initiative assesses and accredits all large and small companies willing to adhere to the IIP Standard. Among the success stories is Geoplan Spatial Intelligence Ltd, a small organisation with less than 50 employees that has successfully been able to beat the 2000s recession and emerge as a profitable Spatial Data and Mapping solutions business. Before entering the IIP program, it was incurring losses of ?500,000 annually and in contrast, through the IIP program, it made profits of ?400,000 in 2011 alone (Geoplan, 2013; Investors In People, 2013c; Investors In People, n.d.). On the other side of the success spectrum is Royal Mint, the largest exporting mint in the world. According to Royal Mint, the IIP Standard has helped to evaluate performance and involve employees in organisational decision-making (Investors In People, 2013d). However, the IIP Standard has Geoplan as the only small organisation which has seen the benefits of adoption. Most of the success stories of IIP consist of already successful businesses like, Bupa, Vauxhall and BMW, who apply for accreditation and certification not with the expectation of gaining something, but simply to let others know of their quality and commitment to compliance. A 2006 analysis of the 39,126 IIP-recognised organisations had found that there was a duplication of 10%, which means there were actually 35,213 recognised organisations. Moreover, there was a sharp contrast between the number of committed organisations, willing to comply with the IIP Standard and the number of recognised organisations, who were acknowledged as IIP compliant. As of 1998, there were 35,000 committed organisations but only 8,825 recognised organisations. The study also found a declining trend in the adoption of the IIP Standard. Several organisations find the initiative flawed, with blurry definitions of words such as, “clear purpose”, “learning requirements”, “environment” and “fair”, which can lead to multiple interpretations. Also, the standard seems to be more of a checklist of the organisational processes to be in place and less of a performance improvement tool. Also, the standard relies on a workforce hierarchy that is absent in small businesses, thereby making the implementation ineffective for them. It believes in empowerment and leadership qualities in every employee, but this is neither very easy to develop nor is it always effective. It takes at least three years to complete the assessment process of the IIP and involves high costs and excessive paperwork. Overall, the study had concluded that IIP Standard is a questionable tool with limited tangible benefits. It also observed that most of the organisations claiming benefits from the IIP Standard had parallel quality management programs running around the same time. In 2005, the Essential Guide to British Quangos named Investors In People as one of the nine most useless quasi-autonomous non-governmental organisations (Higgins and Cohen, 2006; BBC, 2005). Customer Service Excellence has also been adopted by a large number of organisations with varying degrees of successes, including Leeds Metropolitan University, Liverpool Housing Trust and Birmingham City Council. However, it demands complete replacement of traditional management practices along with huge investments to re-train the workforce, implement customer-oriented strategies and involve customer into designing new services. Moreover, neither do customers always give honest feedbacks nor do they exactly know what they want. Lastly, organisations find it extremely difficult to change the mindset and working style of older and more valuable employees compared to newer recruits. Thus, implementation of customer-driven policies against the will of seasoned employees often leads to attrition and loss of talent (Dunnett, 2013). ISO 9000 promises business leverage by increasing an organisation’s reach to global markets, providing consistent product and service quality, increasing productivity and reducing wastage of resources such as, time, raw materials and energy. It also promises organisations of increasing market share by providing competitive advantage, improve customer service and help fulfil environmental responsibilities by reducing environmental pollution (Inc., 2013; Jakobsen, n.d.). Many organisations seek to work only with ISO certified partners and many customers increasingly prefer ISO-certified products and services in expectation of consistent quality. Today, over 1 million organisations across 170 countries have adopted ISO 9000 (ISO, n.d.). However, many organisations recommend critical understanding of ISO 9000 before adopting it. Many organisations have enrolled into ISO 9000 certification, only to back out later realising that their objectives cannot be fulfilled under the scope of the certification. The cost and time associated with achieving the certification is very high, particularly for small businesses. The degree of documentation and standardisation of tasks under ISO 9000 certification has been said to be too elaborate, often leading to excessive bureaucracy and lack of operational simplicity and flexibility, thereby defeating its purpose. It is also said that the certification is too general and does not address the issues of any specific industry (Inc., 2013; Jakobsen, n.d.). Above all, after going through the process, organisations are not “ISO certified”, since ISO is merely a standard-setting body which has appointed certification agencies (IQS, 2013). As per a 1996 survey by Quality Systems Update, the cost of ISO certification for a small business was $71,000 and took 18 to 20 months. A 1992 study of 600 British organisations had found only 15% benefiting from certification. Another 1997 study of 1000 organisations in Australia and New Zealand had concluded that quality certification has no impact on business performance (Heras, Casadesus and Dick, 2002). Also, a study in Kazakhstan claimed that managers found ISO 9000 to be a good tool to improve vendor relations and quality of products, but not to cut operational costs, boost profits or improve efficiency of the management (Moldashev, 2009). The initiatives by QuEST Forum have found immediate adoption by the ICT industry since introduction. Between 1998 and 2012, more than 1500 organisations opted for TL 9000 certification. In the QuEST Forum Best Practices Conference of 2011, 86% of the organisations stated that the business initiative has improved their operations significantly by providing high quality business solutions, better performance measurement tools and higher customer satisfaction. Also, 85% of the organisations stated that their revenues increased after adhering to TL 9000 (BIZPHYX, 2012). As a result, several high-profile multinational ICT companies such as, Cisco Systems, AT&T and ZTE Corporation, are TL 9000-certified today (QuEST Forum, 2010c). However, certain organisations have revealed several pitfalls of the initiative in the same conference. Some organisations have stated that TL 9000 particularly does not give any leverage to small local businesses as larger organisations like to deal exclusively with long time, trusted nation-wide or international vendors. They stated that they are ignored even after certification of the quality of their products. Certain organisations also stated that obtaining and promoting the TL 9000 certification has led to losing deals from non-TL 9000 certified organisations, perhaps on grounds of ego. 22% of the participants in the conference had stated that on the whole, investment in the QuEST initiative compliance was not worth it. One organisation also stated that the TL 9000 certification had restricted it from working with diverse clients and expanding into other sectors such as, advertising and digital media (BIZPHYX, 2012). Conclusion All business initiatives promise organisations with higher customer service, efficient operations, better decision-making and consistent product quality, all of which translate to greater sales and profits. The promised benefits of business initiatives, along with the prestige of being called a recognised organisation, have made adoption of business initiatives as a great vehicle for marketing and promotion to customers. Widespread and growing awareness among consumers regarding various business standards has also drawn the attention of managers to consider their adoption. However, it is very important to review the advantages and disadvantages of adopting a business standard. The truth that an organisation must understand is that business initiatives are more about achieving perfection in the business practice and commercial success is only one of the effects, not an absolute result. The adoption of a business initiative is a costly procedure that requires large investments of time, money and efforts, with no guarantee of proportional increase in revenues. Business initiatives like, websites and brochures, highlight only the success stories and do not warn about the potential pitfalls, but then they are not to be blamed. After all, the organisations setting such standards are merely marketing their products to their potential clients. It is the duty of every organisation to understand its objectives, compare with the potential benefits promised by a business initiative, analyse the potential problems and justify the investment required to adopt the initiative. It is an environment where the organisations themselves are consumers. Hence, they ought to go through the consumer decision-making process, instead of falling for a glitzy promotional campaign. Reference List American Society for Quality, no date. ISO 9000 and Other Standards. [online] Available at: [Accessed 2 December 2013]. BBC, 2005. UK's 'useless' quangos under fire. [online] Available at: [Accessed 3 December 2013]. BIZPHYX, 2012. 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