There are three critical components of Excellence in a business context – STRATEGY, LEADEARSHIP AND CULTURE. These combine to provide an indicator of the relative position of the organization in journeying on the road to excellence. It is widely acknowledged that perfection is unattainable, so excellence is striving to be the best version of yourself every day.

 The relationship between these is in most organizations is complex with multiple variables and moving parts. One way of understanding the interactions is to compare Excellence in business to a sailing vessel. When you see a sailing vessel moving in the sea it would appear to have wind in its sails, a direction to move and someone steering the ship. This is not unlike any business. The vessel would appear to be excellent – making the best of the conditions on that day to be the best version of itself.

 The three components are represented by the three intersecting circles of LEADERSHIP. STRATEGY and CULTURE.

When all the three components, LEADERSHIP, STRATEGY and CULTURE align with one another that is where the magic happens.  When seeing a sailing vessel moving along a path with clear direction and control with wind in its sails then it is excellent.

Organizations that can combine the elements of excellence together get to consider the central crossover between these components which is “RETURN ON EXCELLENCE”.

What does that mean ? Most businesses have sales cycles that are not instantaneous. Typically, this could be 6-12 months of activity before getting the sale and the corresponding revenue. The financial measures at the end of the sales period reflect activities that took place 6-12 months prior.  If there is now a decline in revenue and profits, actions being taken now may only yield results in 6-12 months’ time. These are often known as lagging indicators due to the time lag between activity and result.

The Business Excellence Indicator measures non-financial aspects of the business that are seen by many as a leading indicators of company health and performance.  The areas measured would indicate on a relative scale the current “health” of the business and areas to potentially improve to increase the leading indicators.  The idea of using leading indicators of performance is that improvements in these should “lead” the financial or “lagging” indicators and bring them along for increased future performance.