The EFQM Excellence Model is based upon the need for the man- agement of any organisation to dedicate themselves to the task of encouraging and supporting all employees/members61to success- fully achieve `eight fundamental concepts of excellence' (EFQM, 1999: p. 4). According to EFQM, in order to achieve excellence, something the Foundation defines as `outstanding practice' (EFQM, 1999), it is necessary to apply these concepts in a cyclical way (see Fig. 7.3).
As EFQM advises, the main purpose of using the Excellence Model is for an organisation to understand what it does and, by analysing howit achieves its objectives, create organisational improvement. As subsequent sections of this chapter explain, this model has been used successfully for almost a decade in order to assist in the implementation of excellence in European organisa- tions.
7.6.1 The relationship between regional awards and the EFQM Excellence Model
There is a relationship between the EFQM Excellence Model and British/Regional Quality Awards in that the model is used as the basis for these awards. In the UK, for instance, an award ± the UK Quality Award ± was launched by the British Quality Foundation (BQF)62in 1994. In 1996 the title of this award was changed to the UK Quality Award for Business Excellence, more commonly
Results orientation
Public responsibility Customer focus
Partnership development Leadership and constancy of purpose Continuous learning,
improvement and innovation
Management by the use of processes
and facts Developing people together
with involvement
Fig. 7.3 Interrelationship of the eight fundamentals of excellence.
referred to as the UK Business Excellence Award. In order to recognise that not all potentially excellent organisations feel that they are capable of competing at national level, there are 11 regional Business Excellence Awards. Since 1997, in order to address the different sizes and contexts in which organisations operate, there are separate categories for private and public sector organisations (each of which allows for applications from organisations with more, or with less than, 250 employees). Additionally, since 1998 a category exists for independent small businesses that employ less than 50 employees.
Whilst the likes of the BQF have been successful at promotion of regional quality awards based upon the EFQM Excellence Model, there has been concern by the latter that their intellectual copyright has not been sufficiently recognised.63As a consequence, in 1999, in order to ensure that there is no doubt about their origins, EFQM has taken the decision to reassert its intellectual rights over the national and regional variations of their business excellence model. For this reason, any version must nowexplicitly acknowledge its relation- ship with the EFQM Excellence Model. Additionally, as EFQM stresses, the word `business' has been deliberately removed due to the potential perception that non-business organisations might believe it does not apply to them. As such, the ability of EFQM to propagate the Excellence Model to every organisation in Europe is enhanced. In effect, the EFQM Excellence Model can apply to any organisation in Europe, regardless of size, type of operation or nature of business. As subsequent sections will explain, it is an extremely powerful tool for use in benchmarking by organisations.
7.6.2 The EFQM Excellence Model
The original European Quality Model was launched in 1991 as a result of the interest by the business community in a model that would assist in measuring the effects of introducing TQM. As the BQF explains, `concerns were beginning to surface in Europe in relation to the maintenance of its competitive position within the global economy' (BQF, 1998a). As a consequence, the presidents of 14 leading European companies from both service and manu- facturing industries formed the organisation known as the Eur- opean Foundation for Quality Management (EFQM) in 1989. As those involved in this formation believed, using a prize as recog- nition of what TQM had achieved in the best organisations could assist others to achieve business excellence. During 1990, a task
group from the founder organisations carried out a reviewof the Deming Prize and MBNQA to consider what lessons could be learned from these models in order to develop a European equivalent.
In October 1991, following the review of existing models for business excellence, the EFQM, with support from the European Union and the European Organisation for Quality (EOQ), officially launched what was called the European Quality Award. This model allows any organisation to assess its ability to achieve excellence. In effect, by doing this on a continuous basis, it is then possible to measure howmuch improvement has occurred over a specific period. In particular, there are certain key concepts that the EFQM Excellence Model seeks to address. These are:
. Leadership and consistency of purpose
. People development, involvement and satisfaction . Customer focus
. Supplier partnerships . Processes and measurement
. Continuous improvement and innovation . Public responsibility
. Results orientation
As Fig. 7.4 shows ± the so-called `Nine-box Model' ± the EFQM Excellence Model is based upon a framework that consists of nine
ENABLERS RESULTS
INNOVATION AND LEARNING Leadership
(10%)
Processes (14%) People
(9%)
Policy and strategy
(8%)
People results (9%)
Customer results
(20%)
Partnership and resources
(9%)
Society results (6%)
Key performance
results (15%)
Fig. 7.4 The EFQM Excellence Model1.
criteria (the relative worth of each being shown in brackets). This model, advocates claim, applies to any organisation where the desire of senior management is to achieve the following:
. increase the satisfaction of its customers . motivate its employees
. ensure that its impact on society is enhanced
As a consequence, advocates of this model claim, the results that this organisation achieves will be improved. The EFQM Excellence Model, therefore, is based upon the principle that, using self-assessment, any organisations should be able to achieve the four results criteria through the implementation of the five enabler criteria. (What this involves is described in detail below.) Oakland argues that the EFQM Excellence Model can be regarded as a vital part of benchmarking in order to achieve improvement. In particular, he advises that `systematic reviewand measurement of operations' is essential in produ- cing improvement (Oakland, 1999: p. 99). As he contends, this model provides the basis upon which the central principle of the contribution of people can be utilised by identifying pro- cesses that can be improved:
The EFQM model [recognises] that processes are the means by which a company or organisation harnesses and releases the talents of its people to produce results performance. Moreover, improvement in the performance can be achieved only by improving the processes by involving the people. (Oakland, 1999)
Porter and Tanner reinforce this message by stating that the
`philosophy of the model is that superior performance is achieved by involving people in improving their processes' (Porter & Tanner, 1996: p. 120). As they explain, in order that people can `do their best', it is essential ± as Deming recommended ± that quality is seen by senior management in any organisation as `a strategic impera- tive'. As the next section describes, it is therefore no surprise that in the `Nine-box Model', the first criterion that is seen is that of leadership. As Fig. 7.4 shows, this aspect of the model is what is called anenabler. As the next two sections describe, the enabler and results criteria have certain sub-criteria which assist an organisation in understanding the sort of things that the EFQM Excellence Model attempts to assess.
The EFQM Excellence Model enablers
The five criteria of leadership ± people, policy and strategy, part- nership and resources, and processes ± are what are known as enablers; aspects of what the organisation does in pursuit of its overall objectives. They are concerned with how an organisation must attempt to do whatever is necessary in pursuance of its objectives. As such, and as will be explained in detail in the section which deals with how an assessment is carried out, enablers are manifested in statements and descriptions which an organisation provides in its application.
In order to provide additional information of the sort of things that an organisation should address, each of the enabler criteria is split into sub-criteria. As well as defining these sub-criteria, EFQM provides indicative suggestions of the things that an assessor will be seeking to find when scoring an application. (What this involves is explained in a subsequent section.) In addition, where they are likely to be considered `critical' by the EFQM, the book includes descriptions of established business standards or initiatives that might assist an organisation in seeking to create organisational excellence using the EFQM Excellence Model.
Criterion 1
Criterion 1 deals with leadership ± how the management of an organisation inspire and lead people to achieve organisational excellence.
Sub-criteria
1(a) Leaders develop the mission, vision and values and are role models of a culture of excellence
2(b) Leaders are personally involved in ensuring the organisa- tion's management system is developed, implemented and continuously improved
1(c) Leaders are involved with customers, partners and repre- sentatives of society
1(d) Leaders motivate, support and recognise the organisation's people
Good leadership is, as previous chapters have stressed, an essential part of ensuring that an organisation, or more particularly its people, are being managed in a way that ensures that quality
improvement and excellence are accepted parts of the culture. As Porter and Tanner contend, `[criterion one] looks at howthe executive team and all the other managers inspire, drive and reflect total quality as the organisation's fundamental process for continuous improvement'. (Porter & Tanner, 1996: p. 124).
As the sub-criteria shown above suggest, there are particular indicators of behaviour that managers in an organisation should demonstrate in pursuance of these objectives. As a consequence, the sort of things which managers should be doing (and therefore described in its written application64) would include:
. That there is evidence of all managers being actively involved in the encouragement and support of all efforts to improve the day- to-day processes
. That there is a clear indication that managers recognise what their employees do, and demonstrate recognition
. That managers demonstrate their dedication to improvement by showing how they are prepared to review their own methods of management
. That managers are willing to dedicate, at the very least, sufficient resources to ensure that people are able to implement potential improvement initiatives
. In order to showtheir commitment to benchmarking, managers are actively involved in carrying out comparison with other organisations. (Being involved in the assessment of organisations which have applied to the EFQM Excellence Model would be seen as an excellent demonstration of this)
A business initiative exists which EFQM considers to be critical in any organisation's attempt to comply with the criterion of leadership: Tomorrow's Company.65 This is an initiative which seeks to propagate a philosophy that `advocates an inclusive approach, focused on stakeholder relationships to achieve business improvement' (BQF, 1998a: p. 17). As those who advocate this initiative stress, it is not intended to be a standard like, for instance, ISO 9000 (BSI, 1994) or Investors in People, both of which are described below. What Tomorrow's Company does do, how- ever, is, on the basis of a study which involved 8000 business leaders and influential thinkers, to provide ideas for action which will assist managers of any organisation to create organisational improvement and excellence. As such, it would provide valuable guidance for considering the sort of things that would be required for criterion 1.
Criterion 2
Criterion 2 is about policy and strategy ± howthe organisation ensures that what is formulated as part of the corporate decision- making process is translated into plans and actions.
Sub-criteria
2(a) Policy and strategy are based on the present and future needs and expectations of the stakeholders
2(b) Policy and strategy are based on information from perfor- mance measurement, research, learning and creativity- related activities
2(c) Policy and strategy are developed, reviewed and updated 2(d) Policy and strategy are deployed through a framework of key
processes
2(e) Policy and strategy are communicated and implemented Any organisation, in order to ensure that, at the very least, it survives, and better still, flourishes, needs to have some idea of where it is going, and the objectives it must achieve; this involves the need to engage in planning policy and strategy. As Porter and Tanner explain, `[criterion 2] looks at howthe organisation's policy and strategy reflect the concept of total quality and howthe prin- ciples of total quality are used in the formulation, deployment, reviewand improvement of policy and strategy'. (Porter & Tanner, 1996: p. 127).
As these sub-criteria would strongly suggest, this criterion concerns the methods and statements that determine the way in which the organisation is managed in order to achieve `corporate'66 objectives. As a consequence, developing policy and strategy is an activity that will almost always be carried out by senior managers.
The policy and strategy of an organisation should include explanations of the following:
. Mission± this is the main purpose or reason that an organisation exists
. Values± these are the things that all members of the organisation subscibe to, and would articulate as being central to the organi- sation's purpose, e.g. commitment to improvement in customer service and relationships, truth and honesty in supplier rela- tionships, support and development of people
. Vision ± this is the prediction of howsenior management wish their organisation to develop in the future
Criterion 3
Criterion 3 concerns people ± howthe organisation ensures that its key resource (i.e. its employees) is utilised and supported to enable them to contribute fully.
Sub-criteria
3(a) People resources are planned, managed and improved 3(b) People's knowledge and competencies are identified, devel-
oped and sustained
3(c) People are involved and empowered
3(d) People and the organisation have a dialogue 3(e) People are rewarded, recognised and cared for
In previous chapters, a great deal of emphasis was placed upon the involvement of people in quality improvement. As Dr Deming always stressed, `Quality is people not products'. This sentiment is explicitly recognised in this criterion. As the sub-criteria indicate, an organisation considering submission against the EFQM Model should have robust methods of ensuring exactly howpeople ± `its key resource' ± are being `utilised and supported'. This criterion has a direct relationship with two existing UK awards that seek to achieve exactly this aspiration. These awards are the Investors in People Standard (IIP)67and Management Standards ± Management Charter Initiative and Vocational Qualifications.
IIP This seeks to encourage organisations to ensure that its employees are developed and supported to their fullest potential and is viewed as an essential part of organisational improvement.
As note 67 clearly indicates, criterion 3 and the Investors in People Standard are, to all intents and purposes, identical in what they seek to achieve. For this reason, any organisation that has already com- plied with IIP should be well-developed with respect to how it manages people. Indeed, the documentLinks to the Business Excel- lence Modelcontends that because IIP `evaluates the investment in training and development to assess achievement against business objectives and improve future effectiveness', it is regarded as being
`critical' (BQF, 1998b: p. 32).
Management Standards ± Management Charter Initiative and Vocational Qualifications These are qualifications which are intended to assist managers and supervisors learn what best practice is and, more
especially, how they can learn to use such knowledge in their own organisations to create improvement. The aim of using these stan- dards is, according to BQF, `individual development, corporate gain' (BQF, 1998b: p. 19). In addition, there are four aims of using them:
(1) To create appropriate organisational structures
(2) To use them as a means of analysing skills and, as a result, identify potential areas for improvement in the performance of individual managers or supervisors
(3) To provide a method of benchmarking
(4) To assist in the achievement of other standards described in this chapter (particularly, the BQF stresses, in self-assessing against the EFQM Excellence Award)
Within the Management Standards there are the following roles:
. Manage activities . Manage resources . Manage people . Manage information . Manage energy . Manage quality . Manage projects
Any organisation which intends to use this initiative will, with assistance from their local TEC (Enterprise Company in Scotland), use them to identify organisational or individual management issues that require change. The effectiveness of training or educa- tional programmes to address these problems can be monitored by these standards. The benefit of doing this, according to BQF is that they:
. . . provide a comprehensive and flexible benchmark of best management practice that can be used to improve aspects of an organisation's performance through management development (BQF, 1998b: p. 21).
As such, they provide a very valuable mechanism for an organi- sation to ensure that it has provided support for its managers and supervisors which will allow it to effectively deal with criterion 3 of the EFQM Excellence Model.
Criterion 4
Criterion 4 deals with partnership and resources ± how the orga- nisation has developed and managed its relationship with external parties and effectively used things like finance, buildings, equip- ment, materials and technology in pursuit of corporate objectives defined in the policy and strategy section.
Sub-criteria
4(a) External partnerships are managed 4(b) Finances are managed
4(c) Buildings, equipment and materials are managed 4(d) Technology is managed
4(e) Information and knowledge are managed
This criterion can be considered to have a direct link to criterion 2 in that it considers howthe organisation develops its relationships with partners, and effectively uses its resources to operationalise policy and strategy. As such, an organisation which is considering howit might assess itself against the EFQM Excellence Model must ensure that every aspect of its partnerships and resources have been examined to create continuous improvement.
Criterion 5
Criterion 5 deals with processes ± how the organisation shows the way it manages and reviews all processes that are carried out.
Sub-criteria
5(a) Processes are systematically designed and managed
5(b) All processes are improved, as needed, using innovation in order to fully satisfy and generate increasing value for cus- tomers and other stakeholders
5(c) Products and services are designed and developed based on customer needs and expectations
5(d) Products and services are produced, delivered and serviced 5(e) Customer relationships are managed and enhanced
Processes are the method by which any activity, regardless of size or importance, is carried out ± i.e. the way in which all of the things that should contribute to the desired result are actually achieved. As
has been explained in Chapter 5, processes should be considered as a vital aspect of benchmarking, and more especially, howoverall improvement can occur.
Like criterion 3 (People), this criterion is considered to be closely aligned to an existing Standard for quality assurance: ISO 9000 (BSI, 1994). Therefore, an organisation that has previously achieved accreditation to ISO 9000 will need to have implemented a quality system that seeks to effectively manage its day-to-day processes. As such, and concomitant with what this criterion seeks to explore, the operation of such a quality management system should be carried out in a way that ensures the key objective of customer satisfaction is consistently attained. Moreover, the quality management system should be operated so as to ensure that improvement is consistently sustained with respect to every aspect of all the day-to-day processes.
The EFQM Excellence Model results
These parts of the Excellence Model, namely criteria 6±9, assess what the organisation has achieved as a consequence of having developed and implemented the enablers which are described above. The results represent thewhats of achievement. There is a direct connection between the two: results occur because of the successful implementation of the enablers. Enablers tend to be statements about howit will seek to achieve certain things. How- ever, results tend to be manifested by more objective numerical data than is possible for enablers. As such, these data can be pre- sented in a submission for assessment that has been included in financial statements or elicited from surveys that have been carried out.All of the results criteria contained in the Excellence Model have two sub-criteria that are shown below. As for the enablers, descriptions are given of established business standards or initiatives that might assist an organisation in creating organisa- tional excellence using the EFQM Excellence Model.
Criterion 6
Criterion 6 concerns customer results ± what an organisation has achieved in terms of satisfaction of its external customers is a consequence of its efforts.