To begin, the EFQM Model are the initials of the European Foundation for Quality Management. Created in 1989 and based in Brussels, it is a non-profit foundation. Its goal was to increase the competitiveness of the European Economy, thanks to the sharing knowledge.
It was founded by fourteen CEOs of European business: Bosch, BT, Bull, Ciba-Geigy, Dassault, Electrolux, Fiat, KLM, Nestlé, Olivetti, Philips, Renault, Sulzer, Volkswagen, with the support of the European Commission. It was officially launched in 1991, like the first European quality award. The first awards ceremony took place in Madrid. Like the Malcolm Baldrige Model in the United States or the Deming prices in Japan, the goal of the EFQM model is to help European companies to apply the « Total Quality Management » and a strength to ensure the success of companies.
In 1999, the EFQM model has been reviewed to be used like a strategic management tools, an internal analysis tool for the company self assessment and call the “EFQM Excellence Model”. Today, this networks has more than 800 members. And the awards ceremony are a part of the national forum of EFQM, a big event of European management. And this tool is used by thousands of companies. It can be used by any kind of organization, regardless of sector, size, structure, or maturity.
Nowadays, all organizations and companies are looking for new way to improve their activity, so how does the EFQM models serve?
The EFQM Model consists of an EFQM assessment that enables an organization to determine where they are in the quality process. The assessment starts with a review of the results. Every company needs to measure its performance. The EFQM model was created for improvement of organization based on the principles of the quality management. It is about all the managerials practices but also on the relationship with the employees, the customers, the shareholders. It is composed of 3 dimensions :
The fundamental concepts:
In order to create sustainable success for any organization, a number of main concepts are necessary. These principles are valid regardless of sector, industry or size of organization. The fundamental principles of EFQM and its benefits are:
- Actualizing balanced results: create value for all stakeholders, to ensure sustainable long-term success, to establish mutually beneficial relationships, to make the measurements associated with all stakeholders.
- Adding value for customer: to increase in market share, to minimize transaction costs, long-term success.
- Visionary, inspiring and total leadership – All the organizations need a leader: to maximize the stability and effectiveness of employees, to find out more clearly the direction of the organization, a respectable position in the market, all of the activities in a structured and systematic process, enterprise-wide implementation of consistent and widespread.
- Management via processes: Focus on the desired results, the highest level of employee evaluation and resources, consistency and variability of the results to be kept under control.
- Achieving with employees: the best level of participation, positive attitude, keep their employees, provide opportunities for learning and developing new skills to employees.
- Creativity and maintaining innovation: cost reduction, business agility, opportunity, more productivity from employees.
- Creating cooperation: create value for relationship, to gain a competitive edge, create economies of scale.
- Taking responsibility for a sustainable future: the organization’s reputation increases, performances increase, price increases.
The nine criteria:
The excellence Model is based on the accepting and consistent realizing in everyday practice nine Basic Rules of Excellence:
The enabler criteria, what an organization can manipulate:
- The leadership: the excellence organizations have to be directed by influential, visionary, inspiring people. Which guarantees the success of the company, today and tomorrow.
- The strategy and policy: the strategy must be based on the stakeholders.
- The staff: organization must create a corporate culture (communication, trust..)
- Partnerships and resources: good management internal resources management and external partnerships, and good operational performance. Pay attention to its environmental and societal impacts.
- Processes, product and service: constant improvement for an increasing value.
The “results” criteria, what an organization will achieve:
- The customer results – satisfaction: obtaining and maintaining exceptional results for excellent customer satisfaction. Create good customer value.
- The staff results – people satisfaction: obtaining and maintaining exceptional results for excellent staff satisfaction.
- The societal results – impact on society: obtaining and maintaining exceptional results for excellent intern stakeholders satisfaction (local, national and international society). Maintaining value-adding partnerships.
- Business results: obtaining and maintaining exceptional results for excellent shareholders satisfaction.
Each criteria is composed of under criteria:
- Adequacy of the organizational structure for control and the situation of employee engagement.
- Clarity of authority and responsibility
- Coordination situation between departments.
- Status of activities of committees and project teams.
- State of Staff Activities
- Relations with partner companies
The enabler criteria defines what an organization does, the results are caused by the enablers, and the results are improved thanks to feedback. The arrows emphasise the dynamic nature of the Model.
The last step of EFQM is call RADAR (results, approach, deploy, assess and refine). It is a simple but powerful management tool that can be applied in different ways to help drive continuous improvement. The company must : define the results, plan and develop the approaches, then deploy them and finally evaluate them. The definition of the acronym is:
- determine the results that the company wishes to achieve
- plan and determine possible approaches to arrive at its results, in the present and the future
- ensure the implementation of these approaches
- evaluate the approaches, and depending on the results, refine them.
The RADAR matrix uses the five enabler criteria to determine the results, plan the approaches, ensure the implementation and use the four results criteria for evaluates the approaches. It is currently the most recent version dating From 2013.
The EFQM model is an self assessment, the organization must to do a review of the results, and after The EFQM Model and the assessment gives insight to what level of maturity is an organization is in. The Model suggests using the RADAR Scoring Matrix as a tool for measurement.
The fundamental concepts:
They serve as a basis for the characteristics of an organizational culture of Excellence. It defines the underlying that form the foundation for achieving sustainable excellence in any organisation.
The nine criteria:
For the evaluation of the awards of the EFQM model, each of the Enabler or Results criteria is scored on the basis of the combination of two factors:
- The degree of excellence of the approach, or the results
- The degree of deployment of the approach, or the scope the results
EFQM gives equal weight to “enablers” and “results”. They are both valued at 50%. All nine criteria have different weights:
- Leadership – 10%
- People – 9%
- Policy & Strategy – 8%
- Partnerships & Resources – 9%
- Processes – 14%
- People Results – 9%
- Customer Results – 20%
- Society Results – 6%
- Key Performance Results – 15%
In the end, each of the EFQM « sub-criteria » is scored and calculated using the RADAR matrix. This gives a total of 32 ratings, with an overall maximum rating of 1,000 points. Today, the most mature European organisations have scores of around 700 points. The criteria provide a framework to help organisations to convert the fundamental concepts and RADAR thinking into practice.
The RADAR matrix allows an assessment of the degree of excellence of any organization, it is about defining each phase of the matrix as regularly as possible. It is the basis for implementation of continuous improvements in the organization.
- In the Plan phase: it is necessary to check that the approaches are judicious, to satisfy the needs of the stakeholders. Defined and developed processes aligned with strategy.
- In the Do phase: Put in place the approaches, in all areas of the organization. Check that the tools used exist to correctly measure the effectiveness
- In the Check and Act phases: Verifying the effectiveness of approaches and their deployment, and measuring their effectiveness: benchmarking is performed, e.g. in sector / best in class. Check that the improvement of approaches is based on learning activity and performance measurements.
- In the results phase: Evaluating the results according to the fields of activity, Set the appropriate targets, compare internally and externally of the organizations, and to finish, find the link between the approach and the results
- If you can not measure your process, organization system with the Radar Matrix, you will not be able to measure your performance and you will not be able to improve.
An EFQM assessment is therefore a complete « check-up » of your management system, with a diagnosis of its strengths and weaknesses and a 1000 point rating to assess your future progress. But it is also possible to win one of the EFQM model awards.
An example of a companies who use the EFQM model:
It’s the factory of Robert Bosch, situated in Rodez (France) who won the awards of “ support remarkable results » & « To develop organizational capacities » in 2015. The plant manufactures components for energy saving and reducing engine emissions. He was reward for the plant deployment strategy, the alignment of human resources strategy, the high-level of the operations, and the excellence of maintenance. The judges recognized the systematic deployment of approaches of excellence. The model plays also a vital role in increasing motivation of the associates. This has been possible thanks to the use of efqm best practices. Bosch uses the Model as a tool to lead their global organisation and frame their strategies. This helps to set and follow common targets and sustain corporate culture in all location worldwide. The Model helps Bosch to focus management attention for running change and improvement activities and to learn if they are continuously improving their business.
The above mentioned EFQM Excellence model has various advantages, which will be explained in more detail as follows.
Unlike other models, the EFQM deliberately leaves the structure of the quality management system open and more flexible. This means that no quality specifications are made with regard to content. Rather, the self-assessment should lead to a quality management system individually tailored to the institution. Thus the model does not propagate the golden way, but shows that there are many procedures to achieve outstanding quality.
In addition, the EFQM model is strongly geared to integrating the organisation’s references to its environment (customers and other cooperation partners) into quality management.
The costs associated with the various awards are graduated and are also based on the size of the company. As a result, the financial expenditure on the part of the organisation can be controlled and depends on the quality level chosen. It should be mentioned that the Excellence Model can in any case be recommended to companies that have already established a quality management system in their company and are now striving for perfection.
Self-assessment as the most important instrument of EFQM can also encourage employees to work more conscientiously.
With the help of the EFQM model, strengths and improvement potentials of the organization are determined at regular intervals and measures derived from them. This strengthens a common awareness for continuous further development throughout the entire organization and creates transparency and openness. The organization learns to react more quickly to changes. With the development of the EFQM model, a comprehensive management system – and not a classic quality management system – was sought. A view of the entire organization, including the interrelationships, is made possible. Processes are better coordinated with each other and shortened in time, thus saving resources and reducing costs. The holistic approach also leads to a better understanding of interrelationships. The top-down approach enables further opportunities. Vision, mission, strategies and organizational goals are defined by the top management and then « broken down » to individual employees. In this way, everyone is guided by the same goals. In addition, with the help of the EFQM model a common vocabulary and a common way of thinking are built up, on the one hand within the own organisation, on the other hand between different organisations (benchmarking). This allows competitive advantages to be developed. A further opportunity is that the model is regularly revised and updated with the latest findings from practice and society. The constructs of the EFQM model are therefore not limited to the perspective of a single researcher. In addition, it can be used as a confidence-building measure by showing the customer that quality is addressed throughout the entire organization by using the EFQM model.
The use of documented evidence or the requirement to provide “proof” (as opposed to testimony) within the self-assessment process is usually limited.
Although the criteria, in theory, covers strategic issues, financial measures and results, the output from assessment will only ever be as good as the inputs allow. In my experience of going through numerous assessments, there is an almost universal reluctance from the senior team to allow unfettered access to this sensitive information “warts and all”. Therefore the principle of “Garbage In – Garbage Out” (GIGO) usually applies.
Although the criteria includes financial performance, it does not do it in sufficient enough detail to allow a realistic assessment of the sustainability of the business. Assessors may well look at how budgets are allocated and managed, which is a good thing in itself, but sustainability is the $10,000 question. Consequently there have been numerous examples of award winners getting into commercial difficulties a very short time after receiving an EFQM based award. It could therefore be argued that the model awards a deceptively high score for companies that are going out of business albeit in an “excellent” way. This feature may well partially explain why it seems to have retained its popularity a little longer within the public sector in the UK. In this sector financial management more or less is management of budgets, and the issue of commercial sustainability is not really a factor in the mix.
The assessment does not identify any clear “rights” and “wrongs” – just a set of “coulds” and “could do betters”. Fair enough, you might think, but in my experience that almost always leads to strangulation of the process by inertia once the assessment is complete. Typically the assessment will yield upwards of 150 strengths and 150 AFIs, with no direction on priorities (that is for the company to decide). The problem is that this wealth of data usually completely overwhelms the organisation and brings the process of improvement via self assessment to a sudden stop. You can have too much information. The process, done properly, is incredibly hungry on resources and often struggles to satisfy even the briefest of cost versus benefit analysis.
Chris Hakes. (2007): The EFQM Excellence Model, For assessing organizational performance – A management guide
Udo Nabitz, Niek Klazinga, Jan Walburg (2000): The EFQM Excellence Model: European and Dutch experiences with the EFQM approach in health care.
Uygur & Sümerli (2013): international Review of Management and Business Research: EFQM Excellence Model
M.Sokovic, D. Pavletic, K. Kern Pipan (2010): Quality Improvement Methodologies – PDCA Cycle, RADAR Matrix, DMAIC and DFSS
J. Michalska (2008): Using the EFQM excellence model to the process assessment