How Do You Know You’re Good?

Most people who run a business love that business. It’s like one of your children. Running a business is pretty demanding; it would be hard to rise to that challenge if you weren’t deeply invested in that business. Unfortunately, when you care very deeply about something, it’s hard to judge it objectively. More unfortunately, it is critical that, as a business leader, you have a clear idea of where you need to improve.

At MicroPilot we are involved in two different programs that provide us with an unbiased view of our business: ISO 9001 and Competitive Edge. A critical element of each program is an onsite visit by an outside party. In the case of ISO 9001 it’s an audit, and in the case of the Competitive Edge program it’s a benchmarking exercise.

ISO 9001 is a well-defined standard and is quite prescriptive. There is a list of processes you must have in order to qualify for the standard. If you are following these processes and have enough documentation and records to show you are following them then you’re in compliance. The audit happens once a year and involves someone outside your business poking through your relevant documentation to see that you are in compliance.

In recognition that one size does not fit all businesses, ISO 9001 has become more and more flexible over the years. Nonetheless, it is only really concerned with quality related aspects of your business and while the auditor usually gives you a list of opportunities for improvement the result of the audit is pretty black and white. You either pass or you don’t. There is no measure of how your business is doing beyond pass.

The other way we measure ourselves at MicroPilot is under a program organized by our local aerospace association called the Competitive Edge. This is a supplier development program developed in the UK by BAE, Rolls-Royce, and Airbus, imported into Canada by our local aerospace association. The reason these aerospace companies developed this program was to improve their supply chain.

Unlike ISO 9001, the Competitive Edge program covers the entire business and the result is not just a pass or fail but a score card of how the various parts of your business are performing.

The Competitive Edge program divides your business up into eleven business functions and measures its performance in each of these business functions. The eleven functions are leadership, intellectual property, risk and project management, infrastructure, sales and operations planning, make vs buy, e-business, collaboration, skills management, lean and strategic business planning. For each area of the business you have a score and progress through five levels from learner to world class. There is a defined set of criteria for each level within each business function and these criteria are used to measure your progress.

The heart of the competitive edge program is the benchmarking exercise. This is an annual event where two consultants come in and spend a day looking through our operation and asking our management team and employees many questions. The process compares our operation to a particular vision of what a perfectly run business would look like. A week later we get our assessment against that perfect company. Our scores for each business function on the learner to world-class scale.

Once we have our assessment there is a priority setting exercise where the management team determines which of the eleven business functions we want to work on over the next year.

We’ve just completed our seventh benchmarking exercise under the Competitive Edge program. Overall, the program has been very positive for MicroPilot. It challenges us to do better and it has exposed weaknesses we didn’t even know existed. It gives us a view of MicroPilot that we wouldn’t have had otherwise as well as some means to measure our progress as an organization.

It hasn’t always been an easy process. It can be a shock to your ego when you find out that you’re not quite as good as you think you are. No measure of your business is going to be perfect. The programs idea of a perfect business is not necessarily going to match perfectly the type of business you’re running. Nonetheless, it’s still valuable and gives a perspective we wouldn’t have otherwise.

There are plenty of these types of programs around. It doesn’t matter that you chose the perfect program, it just matters that you chose one and stick with it, especially when it calls your baby ugly.