Business excellence has been embedded in the Tata Group through a holistic methodology that enables companies to heed the call of quality

Words such as 'quality' and 'business excellence' have become so much a part of the management lexicon that they are sometimes taken for granted, observed more in the breach or by faddish rote. Not so in the Tata Group, where they have been embraced with a passion that reflects a deeper understanding of their significance to the health and wealth of all entrepreneurial activity.

The quality movement in the Tata Group is defined by a framework known as the Tata Business Excellence Model (TBEM), which has been adapted from the renowned Malcolm Baldrige archetype. The Model works under the aegis of Tata Quality Management Services (TQMS), an in-house organisation mandated to help different Tata companies achieve their business objectives through specific processes. These processes — which have come to characterise the Tata way of enhancing and conducting its business endeavours — essentially relate to two factors: business excellence and business ethics.

TQMS plays the role of supporter and facilitator in the journey that Tata enterprises undertake to reach the peaks of business eminence while, at the same time, adhering to the highest ethical standards. There are, primarily, two tools that define the pathways and scope of this journey. The first of these is TBEM and the other is the Tata code of conduct.

While quality has always been one of the cornerstones of the Tata way of business, the need to introduce a formal system that calibrated how different group companies were faring on this scale began being felt in the early 1990s. That led to the institution, in 1995, of the JRD Quality Value Awards, the forerunner to TBEM. Named after JRD Tata, the late chairman of the group and a crusader for the cause of business excellence in Tata companies, the awards have now been incorporated in TBEM. Companies taking the TBEM road vie for gold and silver every year, and the winners are presented the honours on July 29, JRD's birth anniversary.

Speaking at the 2001 edition of the JRD QV Awards, Group chairman Ratan Tata touched on the TBEM imperative. "Without being critical, it is true that many of our companies had their heads in the sand and were resting on past glories," he said. "In the course of time, the view gained ground that we were less nimble than others, more resistant to change and more set in our ways. What we needed to do, of course, was benchmark ourselves against the best, get away from doing things the way we were, and put certain processes in place.

"Instead of just putting together an award with a cursory kind of assessment process, we thought out a robust and comprehensive process which I think we are all benefiting from now. This process has, in fact, set the tone and laid the foundation for what I believe is one of the important changes we have made in the group over the last five years." In the years since Mr Tata made these points, the call of quality has resonated across the group in even stronger fashion.

A basic building block of the quality movement in the group is the corporate governance doctrine of every Tata company and their overall philosophy, which has been articulated through the term 'Leadership with Trust'. There is a formal arrangement that governs the relationship between individual Tata companies and the superstructure that is the Tata Group. In order to use the Tata nomenclature, a group company has to sign a contract called the Brand Equity and Business Promotion (BEBP) Agreement. This places an obligation on the company signing on to adopt TBEM as a means to attaining business leadership.

The TBEM methodology has been moulded to deliver strategic direction and drive business improvement. It contains elements that enable companies following its directives to capture the best of global business processes and practices. The model has retained its relevance thanks to the dynamism built into its core. This translates into an ability to evolve and stay in step with ever-changing business performance parameters.

TQMS helps Tata companies gain insights on their strengths and their opportunities for improvement. This is managed through an annual process of 'applications and assessments'. Each company writes an application wherein it describes, in the context of the TBEM matrix, what it does and how it does it. This submission is then gauged by trained assessors, who study the application, visit the company and interact with its people. The assessors map out the strengths and improvement opportunities existing in the company before providing their feedback to its leadership team.

TQMS trains and certifies assessors, who are selected from across the group, and it designs and administers an assessment apparatus that helps them evaluate different Tata companies. The point person in each company is the 'corporate quality head', nominated by the CEO as the business excellence process owner. Typically, each company has a network of business excellence people from a variety of functions and locations.

The commitment a company makes when it signs the BEBP contract compels it to attain explicit business excellence scores over specific time periods. A result-driven scoring mechanism enables the company to track its progress over time, and ensure that it keeps improving. There is also an annually administered, group-wide recognition system for companies that exceed a certain score, thereby reflecting excellence, industry leadership and consistent improvement.

TQMS also has an 'assurance module' that captures how executives perceive their own company's progress on the TBEM chart. This module provides objective feedback to the management of each organisation as well as the Tata Group Corporate Centre on the perceptions of company insiders on the progress made in business ethics and business excellence.

The TQMS surveys explore whether a structure is in place in the company, whether processes are deployed, whether senior, middle and junior management are personally involved in leading and supporting the processes, whether change and improvement initiatives are vibrant, and whether planning and review mechanisms are being used by the leadership to stimulate continuous advancement.

Implicit in the TQMS approach is the belief that its wide-ranging methodology will enable Tata companies to become exemplars - on business as well as ethical parameters — in their respective spheres.

The TBEM matrix is used for the organisational self-assessment of Tata companies, recognition and awards, and for providing feedback to applicants. In addition, TBEM plays three important supportive roles in strengthening the competitiveness of Tata companies:

• It helps improve business excellence practices, capabilities and results.
• It facilitates communication and sharing of best practices among Tata companies.
• It serves as a working tool for understanding and managing performance, for providing planning guidance, and for identifying learning opportunities.
  

The TBEM methodology comprises a set of questions that applicant Tata companies have to answer. Its main objectives are to enhance value to customers and contribute to marketplace success; maximise enterprise-wide effectiveness and capabilities; and deliver organisational and personal learning. The methodology is built on the following set of interrelated core values and concepts: visionary leadership; customer-driven excellence; organisational and personal learning; valuing of employees and partners; agility; future focus; managing for innovation; management by fact; social responsibility; results and value creation; and systems perspective.

The core values and concepts of TBEM are embodied in seven categories: Leadership; strategic planning; customer and market focus; measurement, analysis and knowledge management; human resource focus; process management; and business results. The TBEM system focuses on certain key areas of business performance: customer-focused results; product and service results; financial and market results; human resource results; organisational effectiveness results; governance and social responsibility results.

The set of questions to be addressed by an applicant for TBEM-based assessment comprises result-oriented requirements. However, TBEM does not offer any prescriptions, and with good reason. The focus is on results, not on procedures, tools or organisational structures. Companies are encouraged to develop and demonstrate creative, adaptive and flexible approaches for meeting basic requirements.

In the same speech quoted earlier, Mr Tata also said: "When we started [the TBEM] process, some of us, and certainly I, felt frustrated because I sensed a great deal of cynicism among many people who thought all this was unnecessary, that it was just a fad." Time — and TBEM — has proven how much attitudes have changed, and how far down the road Tata companies following the methodology have come.