January 2015

A measure of success

The Tata group's 20-year-old business excellence model is the bedrock for the growth of the Tata brand and its reputation across the world

Twenty years ago, Tata group embarked on a search for excellence that has had a far-reaching and lasting impact on the entire organisation. Since its launch in 1994, the Tata Business Excellence Model (TBEM) has enhanced the value and reputation of the Tata brand. It has spurred the growth of individual Tata companies and laid the foundation for them to go global. And it has helped Tata companies to come together around shared vision and values.

'In the past 20 years, some of our companies have become global leaders, some have achieved leadership positions in India and most have got better in customer relations, in operational excellence, in profit orientation, in strategising and in competitiveness,' explains group chairman Cyrus P Mistry. 'TBEM has been the glue in binding the group together and enhancing the Tata brand.'

So what is TBEM?

Genesis of change
In 1994, chairman Ratan Tata was faced with the challenge of making the Tata marque a symbol of excellence across a group of diverse, independently run companies. His solution was a group-wide platform to encourage, support and recognise companies working to embed the tenets of business excellence in their operations. TBEM was born.

The methodology was modelled on the US' Malcolm Baldrige National Quality Award. What made TBEM unique, however, was that it was the first pan-Tata initiative: it connected companies throughout the group, and people across businesses and geographies. It was also the first step in making Tata companies conscious about the quality they deliver to customers and within their own organisations. But the early years weren't easy.

'Our companies were single-stakeholder focused businesses,' explains Sunil Sinha, former head of Tata Quality Management Services (TQMS), which runs TBEM. 'They thought only of revenues and profits and only about one stakeholder: the investor. Over the past 20 years, TBEM has helped improve customer focus, performance and strategic planning. But the most important change is that the leadership team in Tata companies is now more receptive to feedback.'

Ratan Tata was serious about the need to drive quality to create a global brand. He made TBEM mandatory within the Brand Equity and Business Promotion agreement, which every Tata company signs as a commitment to act ethically and excellently in exchange for the right to use the Tata brand.

'That was a time when many of our companies had their heads in the sand,' Ratan Tata explained in his 2008 publication The Business of Excellence. 'The dominant impression was that we were less nimble than others, more resistant to change and extremely set in our ways. What we needed to do was benchmark ourselves against the brightest and the best, and get away from doing things the way we had done them in the past. The Tata Business Excellence Model set the tone and created the foundation for what, I believe, was perhaps one of the more critical transformation initiatives the group has undertaken in recent times.'

Measuring excellence
TBEM addresses key aspects of business excellence, such as leadership, strategic planning, customer focus, measurement, analysis and knowledge management, workforce focus, process management, and business results.

The model includes a tough assessment process that gives feedback to companies on the ways they can improve – provided by leaders and experts from other parts of the Tata group. Companies are scored on a scale of 1,000 points. Attaining more than 650 points brings with it TBEM's grand prize, the JRD Quality Value (QV) Award, named after former chairman JRD Tata. The award is announced on his birthday, 29 July, every year.

The measurement side of TBEM is crucial and demonstrates its impact on the group. From the 12 companies that participated in the JRD QV Award in 1995, the numbers have gone up steadily, hitting a peak of 60 companies in 2010. The average company score has increased dramatically, from 215 in 1995, to 463 in 2004 and 492 in 2013.

A side effect of that TBEM journey is the cohesiveness it has brought about among Tata companies. Managers and leaders who participate in the assessment and evaluation processes find themselves learning from other companies, sharing best practices and becoming part of a network of expert resources. Best practice learning has no boundaries within the group.

Towards tomorrow
From a business excellence initiative that merely looked at processes within a company, TBEM has become a versatile change-management platform. In 2003, a pan-Tata movement to improve corporate governance and knowledge management became part of TBEM. The group's efforts to mitigate climate change and drive innovation became a part of TBEM in 2007. Safety metrics came under the TBEM lens in 2009.

In the past few years, TBEM has again transformed to remain relevant to its audience. The mark for winning the JRD QV Award has been raised from 600 to 650, a level denoting 'true excellence'. The TBEM process has now been expanded to include engagement with the company board on opportunities for improvement.

Three levels of assessment are offered. Mature companies, for example, can opt for an advanced assessment process involving deeper engagements, longer on-site assessments, scrutiny from more senior assessors and so on. Tata Motors, Tata Consultancy Services, Titan and Tata Steel have opted for this. TQMS also o?ers diagnostic processes, such as deep-dive and dip-check assessments. 'The TBEM infrastructure and systems have to become more modern, more relevant to the current times,' explains S Padmanabhan, executive chairman of TQMS.

One of the best examples of TBEM's impact is found at Jaguar Land Rover. CEO Dr Ralf Speth concluded TBEM would be the perfect framework to guide and measure Jaguar Land Rover's new integrated processes.

Its first full assessment took place in November 2011.

'Jaguar Land Rover decided on a bold move to go straight to a full assessment in its first year of TBEM deployment,' says Richard Shore, former director for business transformation at Jaguar Land Rover. 'This accelerated Jaguar Land Rover through the early-adoption phase and ensured rapid company-wide deployment of TBEM's core principles.'

In that first assessment, Jaguar Land Rover was in the score band of 451-500 points, placing it at the 'good performance' level. It enabled the company to gain a wealth of learning from the UK-centric assessment, which included encouraging feedback on the cascade of its exciting 'creating our future' vision for employees.

In 2012, it reached 525 points. And, in 2013, it broke into the 'emerging industry leader' category, with 560 points. With each application and assessment, Jaguar Land Rover's insights into its own business grew sharper. The 2013 assessment, for example, was global: the team visited six overseas markets, global suppliers, and all production and development facilities.

Cultural change
With TBEM, Jaguar Land Rover has created a framework to support cultural change. Benchmarks have helped to create awareness of the need for continuous improvement, as well as helping to break down functional silos and support collaborative working. The initiative also has a place in the induction process for new employees.

'Right from the start of our TBEM journey, we have never lost sight that the main goal is to improve the business,' adds Shore. 'This "fast to 500" mentality drove a high pace of improvement. We've always followed the principle that TBEM should integrate existing initiatives and not sit as an additional initiative in its own right. This has played a large part in the engagement of hearts and minds throughout Jaguar Land Rover.'

The push to improve scores within the TBEM programme has tangible benefits in many areas. It's hard to demonstrate excellence in one area without raising the game of an entire organisation.

'As the journey continues, we need to give an impetus to human relations, customer centricity, performance systems and operational excellence,' explains chairman Mistry. That means developing and sharing skills and best practice. 'We need to create a culture of agility and the culture of a learning organisation. We need to create more leaders, be more sensitive to our customers and treat them as our ambassadors, and enhance the performance culture and performance management in our companies. Additionally, we need to create longterm value for all our stakeholders: customers, financial stakeholders, employees, value-chain partners and society.'

Or, as TQMS executive chairman Padmanabhan puts it: 'We need to encourage our larger companies to share business and leadership capabilities, identify and deploy best practices, and practise rigour in performance review and management. We can replicate the best processes of our bigger companies in our smaller companies.'

And, because the programme rests on assessments conducted by leaders from other companies in the Tata group, TBEM is a highly e?ective way of cross-pollinating management ideas.

'Every year has afforded me the opportunity to take best practices from the companies that I've mentored and implement them at Tata Technologies,' says CEO Warren Harris. For example? 'The Strategy Booklet, gleaned from Tata Steel, is used annually to cascade our corporate strategy to all our employees.'

That sentiment is echoed by Prasad Menon, chairman of TQMS, and former MD of Tata Chemicals and Tata Power.

'My first encounter with TBEM was when I became the mentor for Tata Steel in 2001,' he recalls. 'It opened up a great deal of learning for my organisation, Tata Chemicals, and I remember telling Dr JJ Irani [then president and MD at Tata Steel] that I was going to steal many of their ideas shamelessly. Of course, Tata Steel was delighted to share whatever they had done.

'This opportunity to network, share ideas, take help across company boundaries, and help to set benchmarks – this is the great feature of TBEM.'

This article first appeared in issue 2 of Perspective, the magazine for Tata in Europe