Introduction
The EFQM model in the United Arab Emirates (UAE) is adopted in the same way as in other countries where it is used as a model for generating and sustains business excellence. The need for European Foundation for Quality Management (EFQM) in the UAE arose due to a gap in financial performance and stakeholder demand for businesses and public organizations in the country. The model serves as a link for business operations and stakeholder needs. It answers three questions relating to delivery of solutions to customers, the manner of achieving the goal of delivery, and evaluating people who work for the organization. This report looks at Sheikh Khalifa Excellence Award (SKEA) with emphasis being on participation by Abu Dhabi Islamic Bank in the award process.
Sheikh Khalifa Excellence Award (SKEA)
The SKEA has operated successful for 14 years since its launch in 1999. The award began after the creation of a blueprint to facilitate the development of a common method for achieving continuous improvement and to enhance competitiveness. The award focused on the business sector of Abu Dhabi; however, its scope was extended to cover the UAE (Sheikh Khalifa Excellence Award 2015).
This was the first attempt in Abu Dhabi that looked at presenting and using internationally accredited excellence methodologies to the local UAE context. It adopted the EFQM excellence model. Eventually, it played a role as a pioneer award program that other award programs launched later in the UAE would follow in their structure and motivation.
History of implementation
The awards have been implemented since 1999. Implementation is voluntary, where participating organization acquire self-assessment tools and use them to evaluate their achievements. They then improve various practices and measure their improvement to report to the award management committee. The SKEA has a management hierarchy led by a higher committee supervising activities of associates, technical coordinators and administration coordinators (El Tigani 2014).
Benefits of implementation including trend analysis of before and after
Organizations that participate in the SKEA do so because they want to measure success and target future improvement. They recognize this achievement as one of the main benefits of the award participation, and their implementation of EFQM model. Other benefits are to highlight and share best practices, to establish a vision and a role model for excellence, to support customer wishes and to gain public recognition from winning awards. Another benefit is interdivisional comparisons that companies can make in their industries or across different sectors.
The SKEA cycle allows companies to have a greater understanding of how their organizations work. Through participation, they are able to go through the Award Model as a form of mirror that shows them every aspect of their organization. They can pin point their strategies and their achievements. Therefore, participants are able to paint a picture of the whole organization in a unique, comprehensive and highly beneficial way that no other business-planning tool is able to achieve.
The SKEA model is able to work as an overall model for planning and improvement. In this regard, the model captures all aspects of business activity. With sufficient information and outlook of an organization’s performance, the model assists in planning and improvement of activities undertaken by an organization. Beyond that, the model helps organizations to align customer focus and quality management with business strategy. Unlike other business improvement tools that will look at customer service and management development as independent outcomes and activities in an organization, the SKEA model for self-assessment ties the indicatives to the common results that an organization is seeking to achieve. In addition, the self-assessment will ensure that these initiatives receive proper direction. Beyond the above points, prioritization of resources is also a major benefit of implementing the self-assessment initiative under the SKEA model.
Challenges they face while working on the model
Language barriers can affect the implementation of the EFQM model as it is adopted by SKEA. Translation of key concepts into Arabic for understanding by local businesses is a problem. Access to EFQM products that will support self-assessment as part of SKEA may also be a problem for some organizations. Some organizations may also opine that SKEA model is only useful for elite organization and this can limit their willingness to participate in the award process (El Tigani 2014).
Organization progressing the final score year by year
Organizations that participate in the award annually come from different sectors of the UAE economy. The main ones include manufacturing, services, tourism, finance, construction, professional, education, health, education, oil & gas, voluntary organizations, and government departments. The companies from these sectors compete in three categories namely diamond, gold and silver (Kassem 2014). There have been 13 cycles of the award so far. Winning companies have increased to more than 20 in the latest cycle.
The impact of the whole excellence movement on the UAE in general
Organizations seeking to win the award have to understand the criteria used, they also need to understand themselves, and must have an inherent interest on improvement. Due to the application of the award model in the UAE, the number of organization that is self-assessing continues to increase. Part of the process requires organizations to self-assess, and then improve their operations based on the different assessment categories. After doing that, they apply for the award and wait for announcement of the winners. Overall, they are able to improve their operations regards product and services offered to the market (El Tigani 2014).
Abu Dhabi Islamic Bank
The Abu Dhabi Islamic Bank (ADIB) is a top-level financial institution serving the UAE market. Its involvement with the Sheikh Khalifa Excellence Award is part of the company’s strive to become a top global financial institutions with a reputation for excellence in service delivery and internal operations.
In 2012, ADIB won in the Gold Category of the SKEA, a prestigious award that recognizes UAE companies and institutions that have make notable achievements in procedures and operations to meet global best standards.
The purpose of the award, to the organization, was to reinforce the notion of quality within the company’s culture. It serves as a challenge for the company to continue providing excellent products and services in addition to sustain a robust and highly efficient operation. This ensures that product and service delivery aspects of the business are in a constant state of improvement.
The company has been expanding its operations throughout the UAE. From 2009 to 2012, it increased its branch network to 73 and ensured that services and products offered at each brand achieved the highest standards set in the company. Eventually, this approach ensured that overall, the organization emerged as the most qualified to receive the SKEA for 2012.
In the country, excellence awards are instrumental in improving overall competitiveness of public and private sector organizations.
Dedication to be on the journey of excellence
The ADIB has been a recipient of several excellence awards in the past year and this is proof of the company’s commitment to excellence. The company has been growing its business and at the same time incorporating various business practices and using strategic tools to ensure that, it is able to achieve top-tier level of quality and customer service in its product and service offerings. The company continually seeks to be a focal organization for highlight the potential of the UAE financial industry. It explores growth in a sustainable way and relies on innovation of products and practices to maintain its position as a top institution in the financial sector of the UAE.
Summary of ADIB analysis of excellence
Adding Value for Customers
A strategy for the ADIB is to build market leadership within the UAE, and this strategy identifies wholesale, personal, community banking, business and private banking as the key customer service units for the organization. Therefore, the company aims to increase its retail presence as a way of building market leadership and as a means of ensuring that it provides sufficient access to cards, transaction banking, corporate finance, treasury and investment banking as well as wealth management (Abu Dhabi Islamic Bank 2013).
Creating a Sustainable Future
The ADIB recognizes the need to become an integrated financial service provide so that it is able to leverage on its previous success to capture emergent financial market segments.
Developing Organisational Capability
The company expanded in 2007 to include a new strategic shareholder in addition to its founder shareholders who are members of the ruling family of Abu Dhabi. It also acquired 49 percent of National Bank for Development that is in Egypt, in the same year. In 2008, the company adopted a new management strategy and refined its vision and mission. In 2012, it acquired the Saudi Instalment House that is in Saudi Arabia to expand its business prospects.
Harnessing Creativity & Innovation
The company has been able to recognize emergent market opportunities and align its operations to create products in the respective sectors. Currently, it allows its customers to access real estate management, insurance and brokerage activities. The company was the first in the world to issue a Sharia compliant hybrid perpetual tier 1 sukuk. The offer was valued at USD 1 billion and in the following year, the company fully repaid AED 2.2 billion Tier 2 wakala capital. It has been using the innovative financial instruments supported by Islamic banking strategies to grow its potential and provide comprehensive services for its clients (ADIB 2014).
Leading with Vision, Inspiration & Integrity
The company is relying on the increased acceptance of Islamic banking in the world to grow its business across borders. It is getting banking licenses in different countries and has sustained its operations so far with high calibre of financial management. The company is also a recipient of a number of excellence awards that highlights its commitment to achievement of its vision (ADIB 2015).
Managing with Agility
Through its efforts to manage growth and take up opportunities for increasing its presence across different market segments, the company has had a sustainable profitability history. In 2013, it realized AED 1.45 billion as net profit. The organization structure of ADIB follows its business interest such that a particular business unit can respond to its unique working environment independently. At the same time, the overall leadership of the organization is able to direct the focus on different departments. Moreover, partnerships, subsidiaries and operations in non-financial services allow the organization to be able to alter its orientation to its market in reflection to change in demand. The business can concentrate on a growing demand area at a time and still have the capacity to capture an emerging trend in another business area.
Abu Dhabi Islamic Bank has a business model that has made it become a leader in the financial sector of UAE. The model set up in 2007 gained traction with all key segments in UAE. Therefore, ADIB will continue to grow its business in the UAE and abroad based. The company has been able to scale back its operations to respond to tightening of demand in its current markets. At the same time, its management model also allowed it to significantly expand it 2013 as it pursued its growth strategy.
Succeeding through the Talent of People
The company continues to work hard to recruit and train talented young people who are UAE nationals. At the end of 2013, the company has 941 UAE nationals working in different divisions of the bank. This follows a commitment by the organization to the emiritisation policy of government. With the 941 employees, its emiratisation rate was 48 percent. Besides its employees, the company also invests in activities that benefit its stakeholder community.
It runs a ‘Smartmoney’ financial literacy program, and undertakes a number of community outreach programs. It also sponsors humanitarian and cultural activities that provide its employees with inspiration outlets that help the organization to come up with creative ideas for sustaining and growing its business (Abu Dhabi Islamic Bank 2013). Besides that, the company relies on leadership by a board of directors dedicated to overseeing the business and its partnerships.
Sustaining Outstanding Results
The business has achieved growth in all its business segments within the last decade. Its main banking activities in customer financing helped it to grow its Tier 1 capital. It has also been able to sustain operations in net customer financing assets above the market average. Moreover, the growth in business has not come at the expense of the company’s liquidity position.
In 2013, its assets grew by 19.8 percent to reach AED 103.2 billion and its momentum on profit growth continues. The company is concentrating on improving its capital base so that it can continue to earn profits. In the last quarter of 2014, it gained a 19.3 percent rise in its profits due to the setting aside of less cash for bad loans. As part of its excellence commitment, the bank opted to focus on growth especially in its Tier 1 core capital. Its financial ratios remain above the minimum set by the UAE central bank and this is an indication of the potential of the bank to sustain its profitable operations (Reuters 2015).
Detailed feedback
The SKEA considers leadership of organization as a measure of how they act as role models for their industry. It evaluates leaders conduct in ensuring that their organizations continue to succeed. ADIB has benefited through engaging external stakeholders in its growth and its option to go for flexible strategies and allow its leadership to manage change effectively. In fact, the company’s expansion has been a beneficiary of the excellent change management leadership. The organization’s leadership needs to consider implementing measures for monitoring the improvement of its management system so that it can highlight the causes of its success in a comprehensive manner.
Strategy is also a criterion for self-assessment under SKEA, and it concerns the understanding of the needs and expectations of stakeholders and the external environment of an organization. In this regard, ADIB excels in understanding customer needs, and paying attention to its community through various outreach programs. It also has an understanding of its internal performance and capabilities that have been instrumental in its choice of business growth areas. However, the business can excel further by keeping its policies updated and ensuring that there is sufficient communication, implementation and monitoring of any policy adopted as part of the excellence program.
ADIB should ensure that its partnerships support its goal of improving services and products to stakeholders and customers. So far, it has management to demonstrate sufficient financial management excellence. Besides that, the company is using technologies that are relevant for provision of products and services to its customer base. It needs to ensure that the technology used and any systems in place benefits management practices, especially in the task of decision-making.
To achieve SKEA, an organization has to demonstrate that it has processes, products and services that increase value for customers and stakeholders. It has to keep on managing customer relationships and to have robust ways of improving product and service production, delivery and management. The management model of ADIB fulfils these requirements. However, the rate of creating optimum value for customers has room from improvement as the business increases its scope and intelligence for its operations.
The bank takes its leadership position seriously, and continuously seeks fresh talent to improve its organization knowledge, and make it agile enough to take on growth opportunities. It is building internal programs for ensuring that locals are able to find positions within its structure. This will enable it to become relevant to its community and increase its support and commitment shown by customers. For the bank to keep succeeding, it has to look beyond its recruitment strategy and ensure that it adequately manages organization knowledge and develops a favourable environment for people from different generations to work in. as it expands globally, it will attract talent that has different cultural backgrounds and will require established and versatile communication strategies within the organization.
Conclusion
The reporting of financial performance helps to compare customer results of the company with its rivals. They also help to forecast future results for ADIB. Nevertheless, the company needs to be ready to embrace any new indicators for customer results so that it can provide a comprehensive outlook of its business to stakeholders. Besides customers, it must also consider people results, which concern the measure of its achievements that goes to benefit its members and the community. In this category, ADIB will need to explore additional ways of engaging its internal and external community in development initiatives.
Eventually, this should lead to affirmative results for its society. Already its participation and use of the SKEA model is serving as a guide for other organization to pursue excellence and this increase the overall professionalism of the financial sector of the UAE. However, the company will have to segment its results to realize meaningful performance level indicators for different focus areas of the organization. In the end, ADIB has been able to develop and sustain good key results for the last three years.
Reference List
Abu Dhabi Islamic Bank 2013, ‘Annual report 2013’, Annual Report, Abu Dhabi Islamic Bank, Abu Dhabi. Web.
ADIB 2014, Investor presentation. Web.
ADIB 2015, Banking as it should be. Web.
El Tigani, HM 2014, Sheikh Khalifa Excellence Award. Web.
Kassem, M 2014, Managers to go for gold with Sheikh Khalifa Excellence Award. Web.
Reuters 2015, Abu Dhabi Islamic Bank Q4 net profit rises 19.3%. Web.
Sheikh Khalifa Excellence Award 2015, Welcom to SKEA. Web.