Singapore Government Press Release
Media Relations Division, Ministry of Information, Communications and the Arts
MITA Building, 140 Hill Street, 2nd Storey, Singapore 179369

Tel: 6837-9666

_____________________________________________________________

Mr Cedric Foo, Minister of State for Defence

and Chairman, SPRING

Dr Cham Tao Soon,

Chairman, SQA Governing Council

Distinguished Guests, Ladies and Gentlemen

I am pleased to join you this evening for the Singapore Quality Award (SQA) presentation ceremony.

The Singapore Quality Awards signify excellence. They reflect excellence in the organisational processes that are now well recognised as being key attributes for success in any company or organisation. These attributes have become more important than ever before, in the more interconnected and fast changing environment that virtually all organisations now face. Organisations have to be more nimble, innovative and focused on quality if they are to find and keep the edge that distinguishes them from the rest of the field. They have to develop organisational cultures that enable them to question what they do continually, and find better ways of doing things.

Both costs and capabilities are critical, for organisations to survive and do well in this environment. The end of the economic boom of the 1990s - and especially the collapse of the new economy bubble in the US and elsewhere - has led to a renewed focus on costs in the corporate world. Even competitive companies are taking decisive measures to prune costs, scale back non-essential operations or switch out of unprofitable activities to those which yield higher returns. It is not just the immediate difficulties of business conditions over the last few years that has prompted this cost consciousness. Companies sense a more fundamental shift in the environment. Markets are growing more slowly, life has become more competitive in virtually every sector, and the competition will very likely get even sharper. Every company engaged in the global marketplace knows that the new discipline of keeping costs down, and ensuring flexibility of wages and work practices, is here to stay.

However, every organisation also knows that success ultimately rests on its capabilities, and the quality of service it provides to its customers or clients. Cutting costs alone will not work, and especially not if it erodes the capabilities that really matter. The search for improvement in skills, in the quality of products and services, and in responding to the customer has to be relentless. A recent McKinsey study of 1,200 companies, over the past 20 years, confirms this. Industry leaders like Intel were able to race ahead of the pack by focusing on developing capabilities for future growth, in areas such as technology, innovation, operation and customer relationship.

Service excellence is one of the key facets that differentiate successful organisations from the rest. The competition is no longer centred on what you sell, but also how you sell it and how you go about the business. Relationships are critical, both with customers and suppliers.

How does Singapore fare in service quality? The World Economic Forum, in its Global Competitiveness Report, ranked Singapore 15^th on customer orientation in 2002. This was down from 8^th position in 1998. A closer look at the rankings shows that while Singapore’s scores have remained largely constant, other countries’ scores have been improving. In other words, Singapore has not improved fast enough.

We have to do much better than this. To move ahead, we have to move beyond service quality to service excellence. We have to move beyond meeting the needs of customers, to exceeding their expectations. The best organisations are focused on exceeding the expectations of their customers and delighting them. They rally their entire staff around this objective. For example, the Ritz Carlton itself (where we are at this evening) moved away two years ago from thinking of itself as just a manager of hotels. Its aim is to provide each and everyone of their guests with what they call the Ideal Home Experience.

To help spur our companies and organisations to enhance their service capabilities, I am pleased to announce this evening the launch of the Singapore Service Class. The Singapore Service Class Programme, which will be administered by SPRING, provides organisations with a framework for adopting a total approach towards service excellence. It will help organisations assess their service capabilities, identify gaps and improve service delivery. Organisations that have a management processes capable of securing continuous service excellence will be accorded the "Singapore Service Class" status.

The Singapore Service Class is modeled on the global Unisys Service Excellence model, which was based on a study of over 1,000 service organisations worldwide, including leading players like Disney and Federal Express. The total approach of the Singapore Service Class starts from leadership and strategy driven by the senior management of an organisation, and covers key aspects such as the gathering of customer intelligence, training of staff and monitoring of customer satisfaction. To ensure its relevance in Sinagpore, the model has been field tested by SPRING on over 100 organisations in Singapore. SPRING will help organisations implement the service excellence framework through a range of programmes, such as implementation clinics, development workshops and learning circles.

Since the launch of the SQA framework in 1994, a total of 380 organisations, with about 284,000 employees, have attained the Singapore Quality Class (SQC) standard of excellence. These organisations come from a wide range of sectors – such as manufacturing, logistics, healthcare, education and government.

Since the Civil Service adopted the SQA framework in 1999, over 100 public sector organisations have attained the SQC status. Two of them have gone on to win the SQA. This year another two public sector organisations will receive the SQA.

Most of the SQC recipients however are private sector enterprises, including the very large as well as the small. 11 of the 13 SQA recipients so far are also from the private sector. This year, another private sector company will join this distinguished list.

However, I notice that all the SQA recipients so far are from among the big boys - MNCs, GLCs and government bodies. We should aim to get a few SMEs on the list soon. I suggest that SPRING works with our outstanding SMEs to achieve this.

The SQA is not just about celebrating organisations for their outstanding management practices and processes. There is evidence that organisations that score well on the SQA framework also stand out in actual performance. In Australia, a study done this year by Standards Australia found that winners of the Australian Business Excellence Award, which is similar to the SQA, outperformed the stock market benchmark by 3.5 to 1. A portfolio comprising the award recipients generated a 263% return, outperforming the stock market benchmark of 75%, over a period of over 10 years years.

Similarly, a five-year study done by America’s leading business schools, including Harvard and Wharton, called the Evergreen project, has found a clear, compelling relationship between business success and management practices in eight key areas. Six of these are covered in the SQA framework, namely development of a performance culture, leadership, strategic planning, operational execution, innovation, and talent management. Companies that scored well in these areas were consistently ahead of their competitors. Over a ten-year period, these companies saw average sales growth of 415%, five times higher than that of other companies (83%). Their growth in operating income growth was 326%, fifteen times higher than the rest of the field (22%).

The evidence is clear. It pays for organisations to stay focused on quality, and to fashion an organisational culture that aims at continuous innovation.

I am pleased to note that despite tough and uncertain times, we have many Award recipients tonight. They have demonstrated their conviction to stay focused on business excellence. Let us be inspired by their spirit and determination. My warmest congratulations to all winners.