Mr S Iswaran at the Business Excellence Awards dinner, 19 Oct 2011

SPEECH BY MR S ISWARAN, MINISTER, PRIME MINISTER’S OFFICE AND SECOND MINISTER FOR HOME AFFAIRS AND TRADE & INDUSTRY AT THE BUSINESS EXCELLENCE AWARDS DINNER AT 1900 HRS ON WEDNESDAY, 19 OCTOBER 2011 AT ISLAND BALLROOM, SHANGRI-LA HOTEL, SINGAPORE

Professor Cham Tao Soon, Chairman, SQA Governing Council 

Distinguished Guests

Ladies and Gentlemen

Good Evening

Introduction

I am pleased to join you for the 2011 Business Excellence Awards Dinner.

We are here tonight to recognise organisations who have distinguished themselves with their outstanding management capabilities, to bring out the best in their people; foster creativity and innovation; and, ultimately, deliver superior performance and results.

What is Excellence and Why is it Important?

Aristotle had this to say about Excellence.“Excellence is an art won by training and habituation.We do not act rightly because we have virtue or excellence, but rather we have those (virtue or excellence) because we have acted rightly.We are what we repeatedly do.Excellence, then, is not an act but a habit.”

Tonight’s awards recipients and others like them have successfully evolved business practices and management habits which have resulted in their outstanding performance.A culture of excellence is an integral part of their organisational DNA.How have they been able to do this?

Confucius described it this way: “The will to win, the desire to succeed, the urge to reach your full potential – these are the keys that will unlock the door to personal excellence.”

In other words, the habits and practices that underpin excellence can be sustained only if they emanate from a deep personal conviction to do one’s best.It means that our people, all members of our team, must believe and dedicate themselves to this mission.Not easy but important.Why?

In a globally competitive environment, excellence allows businesses to differentiate themselves.In this crowded market place, companies that create more value in their products and services through innovation, expand their markets, and diversify into promising adjacent industries, will thrive and separate themselves from the rest.

Business Excellence (BE) Framework – A Tool for Improving Organisational Excellence

According to a McKinsey study[1] this year, differences in organisations’ internal capabilities account for up to 50 per cent of variations in their performance. It confirms what we know intuitively - those with strong internal systems, a robust organisational DNA, will achieve better results in terms of growth and financial performance.

One tool that can help organizations strengthen their management systems and processes holistically, is the internationally-benchmarked Business Excellence framework. It provides standards for managing people, innovation and service, which are key enablers of business excellence.

The BE framework helps organisations to assess their performance, identify gaps, and take action for improvement. It encourages a systems-based approach to management, with the adoption of a robust measurement system, to assess and monitor performance.Measurement allows organisations to compare and benchmark their performance against the best-in-class in their industry. It motivates organisations to implement self-assessment, to initiate actions to close performance gaps, and to, in turn, become the best-in-class. This pursuit of higher quality and standards, and through them, better performance, is the manifestation of the spirit of business excellence.

Business Excellence Organisations as Role Models of Resilience

Many organisations have come to recognise the value of adopting the BE framework. Today, some 850 organisations, employing about 550,000 employees, or about 20 per cent of Singapore’s workforce, have adopted and been certified in accordance with the Business Excellence framework.

Let me share two examples of organisations that have done so and how it has helped them become more resilient in challenging times.

The first is Greenpac (S) Pte Ltd, a home-grown company founded in 2002, which provides innovative, environmental-friendly packaging solutions that are customised to the customer’s individual needs. The Business Excellence framework helped Greenpac to effectively assess business risks before commercialising these packaging solutions. Some considerations included the efficacy of the packaging solution in “greening” the customer’s supply chain, the cost incurred, operational efficiency and international compliance. Despite the global economic crisis in 2008, Greenpac was able to sustain its business by expanding its customer base and moving into new industry sectors. Greenpac performed better than its competitors in terms of revenue growth and return on equity. It was awarded the Singapore Quality Class STAR last year.Greenpac’s commitment to business excellence also led it to clinch the ASEAN Business Award in the “Most ASEAN Admired Enterprise for Corporate Social Responsibility (SME Category)” in 2010

The second example is one of this year’s Singapore Quality Award winners, which will be announced later. It is a leading global manufacturer and supplier of industrial automation control systems, field instruments and avionics products. Its products are sold in 100 countries and it contributes about 31 per centof the overall revenue of its Group of businesses. By using the Business Excellence framework, this organisation was able to address the challenge of managing its operations successfully in difficult times by means of cost management, employee engagement and innovation. It rallied and motivated staff to cut costs, saving some $2 million annually over the last four years. As a result, it recorded a healthy gross margin over the same period, despite the 2008 global economic crisis.

Sharing Productivity Gains

Employees also play a key role in an organisation’s journey towards higher productivity and business excellence. The business excellence journey of every company is anchored by its employees. It is, therefore, important to align employees’ aspirations and efforts with the organisation’s goals.

One way to rally and motivate employees is through productivity gainsharing. By recognising and rewarding employees for their contributions, productivity gainsharing promotes teamwork and fosters a culture of continuous improvement.

I am therefore pleased that SPRING Singapore has worked with the Singapore National Employers Federation (SNEF) and National Trades Union Congress (NTUC), to publish the “Guide to Productivity Gainsharing”. It is a detailed manual on designing and implementing a productivity gainsharing scheme within an organisation. It complements SPRING’s “Guide to Productivity Measurement” and both these guides are now available online at the Productivity@Work website. I urge all our companies to tap on these useful resources.

Business Excellence and Future Business Leaders

The Business Excellence initiative plays an important role in helping to build competitive and robust organisations. I am therefore pleased to announce that the concepts and key elements of the BE framework will be incorporated in the business curricula of our tertiary institutions. Three institutions of higher learning will introduce the course on a pilot basis next year. They are the National University of Singapore, SIM University and Nanyang Polytechnic. The course will be extended to other tertiary institutions after the pilot phase.

It will give our graduates a firm grounding in business excellence and better prepare them for their career, whether they choose to start their own business or work in organisations.

The emergence of more business leaders who are conversant in this discipline and able to implement robust management systems and practices, will undoubtedly spur more organisations to work towards greater business excellence.

Conclusion

Many of you present this evening, and the organisations that you represent, are already on the business excellence journey.As Aristotle and Confucius have counselled, your collective commitment to excellence will help evolve and sustain habits and practices that will ensure success in the evolving business environment.Tonight, nine organisations will be recognised for distinguishing themselves in business excellence. I congratulate them on their outstanding achievements and hope that they serve as inspirations for all of us to excel in our endeavours. I wish you a pleasant evening.Thank you

[1]Aaron De Smet, Mark Loch and Bill Schaninger, “The Link Between Profits and Organizational Performance”, McKinsey Quarterly