EFQM Excellence Model

©EFQM 2012 No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means (be this electronically, mechanically, through photocopy or recording, or otherwise) without either the prior written permission of, or a license permitting restricted copying and use for a third party, from the publisher. About EFQM EFQM Shares What Works EFQM is committed to help organisations drive improvement through the use of the EFQM Excellence Model, a comprehensive management framework used by over 30 000 organisations in Europe. For the last 20 years, we manage the development of this Model, incorporating the experiences and learning from these organisations to ensure it reflects reality. To help you implement our Model, we provide training, assessment tools and recognition. But our real talent comes from gathering good practices and integrating those within our portfolio. EFQM, a not-forprofit membership Foundation, aims to share what works, through case studies, online seminars, working groups, conferences and thematic events. We nurture a network of world-class organisations and their leaders who share our passion for business excellence. We believe that the EFQM Model is a common framework that helps us all to improve our businesses. Sharing our member’s enthusiasm, their motivation and the results they achieve; that is what we work for at EFQM. EFQM Excellence Model 2013 The Basis for the Model The EFQM Excellence Model is based on a set of European values, first expressed in the European Convention on Human Rights (1953) and the European Social Charter (revised in 1996). This treaty is ratified by the 47 member states of the Council of Europe and the principles are incorporated into national legislation. The Fundamental Concepts of Excellence build on the foundation of these basic human rights, assuming they are universally applied. Recognising the role business can play in supporting the broader goals of the United Nations, the UN Global Compact (2000) was established. The initiative encourages organisations to actively apply these values, set out as 10 Principles for sustainable and socially responsible business, across their global operations. Whilst a number of these principles are explicitly covered in the EFQM Excellence Model, a number are implicit, including those relating to human rights, corruption, bribery and forced labour, as these are already a legal requirement within Europe. The EFQM Excellence Model assumes that an excellent organisation will respect and comply with the 10 principles of the UN Global Compact, regardless of whether legally obliged to do so. The need for a Model Regardless of sector, size, structure or maturity, organisations need to establish an appropriate management framework to be successful. The EFQM Excellence Model is a practical, non-prescriptive framework that enables organisations to: < Assess where they are on the path to excellence; helping them to understand their key strengths and potential gaps in relation to their stated Vision and Mission. < Provide a common vocabulary and way of thinking about the organisation that facilitates the effective communication of ideas, both within and outside the organisation. < Integrate existing and planned initiatives, removing duplication and identifying gaps. < Provide a basic structure for the organisation’s management system. Whilst there are numerous management tools and techniques commonly used, the EFQM Excellence Model provides an holistic view of the organisation and it can be used to determine how these different methods fit together and complement each other. The Model can therefore be used in conjunction with any number of these tools, based on the needs and function of the organisation, as an overarching framework for developing sustainable excellence. Excellent Organisations achieve and sustain outstanding levels of performance that meet or exceed the expectations of all their stakeholders. All organisations strive to be successful, some fail, some achieve periods of success but ultimately fade from view, and a few achieve sustainable success, gaining deserved respect and admiration. The EFQM Foundation was formed to recognise and promote sustainable success and to provide guidance to those seeking to achieve it. This is realised through a set of three integrated components which comprise the EFQM Excellence Model: The Fundamental Concepts of Excellence: The underlying principles which are the essential foundation of achieving sustainable excellence for any organisation. The EFQM Excellence Model: A framework to help organisations convert the Fundamental Concepts and RADAR logic into practice. RADAR logic: A dynamic assessment framework and powerful management tool that provides the backbone to support an organisation as it addresses the challenges it must overcome if it is to realise its aspiration to achieve sustainable excellence. Using these three integrated components has helped organisations of all sizes and from all sectors to compare themselves with the attributes, qualities and achievements of sustainable organisations. They can use them to develop a culture of excellence, bring consistency to their management style, access good practices, drive innovation and improve their results. Used appropriately, the EFQM Excellence Model, with the associated RADAR logic and Fundamental Concepts, ensures that all the management practices used by an organisation form a coherent system that is continually improved and delivers the intended strategy for the organisation. The 2013 version of the EFQM Model, RADAR logic and Fundamental Concepts builds on years of experience and takes into account the current and future challenges of an organisation. The Fundamental Concepts of Excellence outline the essential foundation for achieving sustainable excellence for any organisation. They can be used as the basis to describe the attributes of an excellent organisational culture. They also serve as a common language for senior management. The EFQM Excellence Model allows Managers / Leaders to understand the cause and effect relationships between what their organisation does and the results it achieves. With the support of RADAR logic it is possible to make a robust assessment of the degree of excellence of any organisation. The RADAR logic provides a structured approach to question the performance of an organisation. It also supports the scoring mechanism behind the EFQM Excellence Award and other recognition or assessment schemes and can help to lead change and manage improvement projects in an organisation. Fundamental Concepts of Excellence Adding Value for Customers Excellent organisations consistently add value for customers by understanding, anticipating and fulfilling needs, expectations and opportunities. In practice, we find that excellent organisations: < Know who their different customers groups are, both existing and potential, and anticipate their different needs and expectations. < Transform needs, expectations and potential requirements into attractive and sustainable value propositions for both existing and potential customers. < Build and maintain a dialogue with customers, based on openness and transparency. < Strive to innovate and create value for their customers, involving them, where appropriate, in the development of new and innovative products, services and experiences. < Ensure people have the necessary resources, competencies and empowerment to maximise the customer experience. < Continually monitor and review the experiences and perceptions of their customers and respond appropriately to any feedback. < Compare their performance with relevant benchmarks and learn from their strengths and opportunities for improvement in order to maximise the value generated for customers. Creating a Sustainable Future Excellent organisations have a positive impact on the world around them by enhancing their performance whilst simultaneously advancing the economic, environmental and social conditions within the communities they touch. In practice, we find that excellent organisations: < Secure their future by defining and communicating a core purpose that provides the basis for their overall Vision, Mission, values, ethics and corporate behaviour. < Understand their key competencies and how they can generate shared value to benefit wider society. < Integrate the concepts of sustainability within their core strategy, value chain and process design and allocate the resources required to deliver these goals. < Consider “People, Planet and Profit” as a reference when balancing the sometimes conflicting imperatives that they face. < Encourage their stakeholders to participate in activities that contribute to wider society. < Allocate resources to provide for long-range needs rather than just short-term gain and, where relevant, become and remain competitive. < Design their product and service portfolio and actively manage the full product lifecycle in a responsible way. < Are able to demonstrate that they measure and optimise the impact of their operations, product lifecycle and services on public health, safety and the environment. < Actively advance the economic, environmental and social standards within their sector. Developing Organisational Capability Excellent organisations enhance their capabilities by effectively managing change within and beyond the organisational boundaries. In practice, we find that excellent organisations: < Analyse operation performance trends to understand their current and potential capabilities and capacities and identify where development is needed to achieve the strategic goals. < Develop an effective and efficient value chain to ensure they can consistently deliver on their promised value proposition. < Develop a culture that continually seeks to improve the effectiveness of collaboration and teamwork throughout their value chain. < Ensure that financial, physical and technological resources are available to support organisational development. < Establish shared values, accountability, ethics and a culture of trust and openness throughout the value chain. < Work together with partners to achieve mutual benefit and enhanced value for their respective stakeholders, supporting one another with expertise, resources and knowledge. < Establish appropriate networks to enable them to identify potential partnership opportunities to enhance their capabilities and ability to generate additional stakeholder value. Harnessing Creativity & Innovation Excellent organisations generate increased value and levels of performance through continual improvement and systematic innovation by harnessing the creativity of their stakeholders. In practice, we find that excellent organisations: < Establish approaches to engage relevant stakeholders and use their collective knowledge in generating ideas and innovation. < Establish and manage learning and collaboration networks to identify opportunities for creativity, innovation and improvement. < Recognise that innovation can apply to products, processes, marketing, organisational structures and business models. < Set clear goals and objectives for innovation, based on an understanding of the market and opportunities, supported by appropriate policies and resources. < Use a structured approach for generating and prioritising creative ideas. < Test and refine the most promising ideas, allocating resources to realise them within appropriate timescales. < Transform ideas into reality within timescales that maximise the advantages that can be gained. Leading with Vision, Inspiration & Integrity Excellent organisations have leaders who shape the future and make it happen, acting as role models for its values and ethics. In practice, we find that excellent organisations have leaders who: < Inspire people and create a culture of involvement, ownership, empowerment, improvement and accountability through their actions, behaviours and experience. < Champion the organisation’s values and are role models for integrity, social responsibility and ethical behaviour, both internally and externally, to develop and enhance the organisation’s reputation. < Set and communicate a clear direction and strategic focus; they unite their people to share and achieve the organisation’s Mission, Vision and goals. < Are flexible; they demonstrate their ability to make sound, timely decisions, based on available information, previous experience and knowledge, with consideration of their potential impact. < Recognise sustainable advantage is dependent on their ability to learn quickly and rapidly respond when necessary. < Promote a culture which supports the generation of new ideas and new ways of thinking to encourage innovation and organisational development. < Are transparent and accountable to their stakeholders and society at large for their performance and ensure their people act ethically, responsibly and with integrity. Managing with Agility Excellent organisations are widely recognised for their ability to identify and respond effectively and efficiently to opportunities and threats. In practice, we find that excellent organisations: < Use mechanisms to identify changes in their external environment and translate these into potential future scenarios for the organisation. < Translate their strategies into aligned processes, projects and organisational structures, ensuring changes can be implemented with appropriate speed throughout the value chain. < Develop a meaningful mix of process performance indicators and related outcome measures, enabling the review of the efficiency and effectiveness of the key processes and their contributions towards the strategic goals. < Use data on the current performance and capabilities of their processes, as well as appropriate benchmarks, to drive creativity, innovation and improvement. < Effectively manage change through structured project management and focused process improvement. < Rapidly adapt their organisational structure to support the achievement of the strategic goals. < Evaluate and develop the technology portfolio to improve the agility of processes, projects and the organisation. Succeeding through the Talent of People Excellent organisations value their people and create a culture of empowerment for the achievement of both organisational and personal goals. In practice, we find that excellent organisations: < Define the skills, competencies and people performance levels required to achieve the Mission, Vision and strategic goals. < Effectively plan to attract, develop and retain the talents required to meet these needs. < Align personal and team objectives, and empower people to realise their full potential in a spirit of true partnership. < Ensure a healthy work / life balance in the reality of 24/7 connectivity, increasing globalisation and new ways of working. < Respect and embrace the diversity of their people and the communities and markets the organisation serves. < Develop people's skills and competencies to ensure their future mobility and employability. < Encourage their people to be ambassadors of the organisations' image and reputation. < Motivate people to become involved in improvement and innovation and recognise their efforts and achievements. < Understand the communication needs of their people and use appropriate strategies and tools to maintain a dialogue. Sustaining Outstanding Results Excellent organisations achieve sustained outstanding results that meet both the short and long term needs of all their stakeholders, within the context of their operating environment. In practice, we find that excellent organisations: < Gather stakeholders’ needs and expectations for input to the development and review of their strategy and supporting policies, remaining alert to any changes. < Identify and understand the key results required to achieve their Mission and evaluate progress towards the Vision and strategic goals. < Define and use a balanced set of results to review progress, provide a view of long and short-term priorities and manage the expectations of the key stakeholders. < Deploy strategy and supporting policies in a systematic manner to achieve the desired set of results, with clearly defined “cause and effect” relationships. < Establish targets based on comparisons of their performance with other organisations, their current and potential organisational capability and their strategic goals. < Evaluate the set of results achieved to improve future performance and provide sustainable benefits to all their stakeholders. < Deliver high levels of stakeholder confidence by adopting effective mechanisms to understand future scenarios and effectively manage strategic, operational and financial risks. < Ensure transparency of financial and non-financial reporting to relevant stakeholders, including appropriate governance bodies, in line with their expectations. < Ensure that their leaders are provided with accurate and sufficient information to support them in timely decision making. The Criterion The EFQM Excellence Model represented in the diagram above is a non-prescriptive framework based on nine criteria. Five of these are ‘Enablers’ and four are ‘Results’. The ‘Enabler’ criteria cover what an organisation does and how it does it. The ‘Results’ criteria cover what an organisation achieves. ‘Results’ are caused by ‘Enablers’ and ‘Enablers’ are improved using feedback from ‘Results’. The arrows emphasise the dynamic nature of the Model, showing learning, creativity and innovation helping to improve the Enablers that in turn lead to improved Results. Each of the nine criteria has a definition, which explains the high level meaning of that criterion. To develop the high level meaning further each criterion is supported by a number of criterion parts. Criterion parts are statements that describe in further examples of what, typically, can be seen in excellent organisations and should be considered in the course of an assessment. Finally, below each criterion part are guidance points. Many of these guidance points are directly linked to the Fundamental Concepts mentioned earlier. Use of these guidance points is not mandatory. They are intended to give examples to aid interpretation of the criterion part. 1. Leadership EFQM CRITERION DEFINITION Excellent organisations have leaders who shape the future and make it happen, acting as role models for its values and ethics and inspiring trust at all times. They are flexible, enabling the organisation to anticipate and react in a timely manner to ensure the on-going success of the organisation. 1a. Leaders develop the mission, vision, values and ethics and act as role models. 1b. Leaders define, monitor, review and drive the improvement of the organisation’s management system and performance. 1c. Leaders engage with external stakeholders. 1d. Leaders reinforce a culture of excellence with the organisation’s people. 1e. Leaders ensure that the organisation is flexible and manages change effectively. 1a. Leaders develop the mission, vision, values and ethics and act as role models. For example, leaders in excellent organisations: < Secure their future by defining and communicating a core purpose that provides the basis for their overall Vision, Mission, values, ethics and corporate behaviour. < Champion the organisation’s values and are role models for integrity, social responsibility and ethical behaviour, both internally and externally, to develop and enhance the organisation’s reputation. < Set and communicate a clear direction and strategic focus; they unite their people to share and achieve the organisation’s Mission, Vision and goals. < Develop and support a shared leadership culture for the organisation and review and improve the effectiveness of personal leadership behaviours. 1b. Leaders define, monitor, review and drive the improvement of the organisation’s management system and performance. For example, leaders in excellent organisations: < Define and use a balanced set of results to review progress, provide a view of long and short term priorities and manage the expectations of the key stakeholders. < Understand and develop the underlying capabilities of the organisation. < Evaluate the set of results achieved to improve future performance and provide sustainable benefits to all their stakeholders. < Base decisions on factually reliable information and use all available knowledge to interpret current and predicted performance of the relevant processes. < Deliver high levels of stakeholder confidence by adopting effective mechanisms to understand future scenarios and effectively manage strategic, operational and financial risks. 1c. Leaders engage with external stakeholders. For example, leaders in excellent organisations: < Use approaches to understand, anticipate and respond to the different needs and expectations of their key stakeholders. < Establish shared values, accountability, ethics and a culture of trust and openness throughout the value chain. < Are transparent and accountable to their stakeholders and society at large for their performance and ensure their people act ethically, responsibly and with integrity. < Ensure transparency of financial & non-financial reporting to relevant stakeholders, including appropriate governance bodies, in line with their expectations. < Encourage their stakeholders to participate in activities that contribute to wider society. 1d. Leaders reinforce a culture of excellence with the organisation’s people. For example, leaders in excellent organisations: < Inspire people and create a culture of involvement, ownership, empowerment, improvement and accountability through their actions, behaviours and experience. < Recognise sustainable advantage is dependent on the ability of leaders to learn quickly and rapidly respond when necessary. < Support people throughout the organisation to achieve their plans, objectives and targets. < Recognising efforts and achievements in a timely and appropriate manner. < Promote a culture which supports the generation of new ideas and new ways of thinking to encourage innovation and organisational development. < Promote and encourage equal opportunities and diversity. 1e. Leaders ensure that the organisation is flexible and manages change effectively. For example, leaders in excellent organisations: < Are flexible; they demonstrate their ability to make sound, timely decisions, based on available information, previous experience and knowledge, with consideration of their potential impact. < Consider “People, Planet and Profit” as a reference when balancing the sometimes conflicting imperatives that they face. < Involve and seek support and contributions from all relevant stakeholders for changes necessary to ensure the sustainable success of the organisation. < Effectively manage change through structured project management and focused process improvement. < Use a structured approach for generating and prioritising creative ideas. < Test and refine the most promising ideas, allocating resources to realise them within appropriate timescales. 2. Strategy EFQM CRITERION DEFINTION Excellent organisations implement their Mission and Vision by developing a stakeholder focused strategy. Policies, plans, objectives and processes are developed and deployed to deliver the strategy. 2a. Strategy is based on understanding the needs and expectations of both stakeholders and the external environment. 2b. Strategy is based on understanding internal performance and capabilities. 2c. Strategy and supporting policies are developed, reviewed and updated. 2d. Strategy and supporting policies are communicated, implemented and monitored. 2a. Strategy is based on understanding the needs and expectations of both stakeholders and the external environment. For example, excellent organisations: < Gather stakeholders’ needs and expectations for input to the development and review of their strategy and supporting policies, remaining alert to any changes. < Identify, analyse and understand external indicators, such as global and local economic, market and societal trends, which may affect the organisation. < Understand and anticipate the long and short-term global and local impact of changes to relevant political, legal, regulatory and compliance requirements. < Use mechanisms to identify changes in their external environment and translate these into potential future scenarios for the organisation. 2b. Strategy is based on understanding internal performance and capabilities. For example, excellent organisations: < Analyse operational performance trends to understand their current and potential capabilities and capacities and identify where development is needed to achieve the strategic goals. < Analyse data and information regarding existing and potential partners’ core competencies and capabilities to understand how they complement the organisation’s capabilities. < Determine the potential impact of new technologies and business models on the performance of the organisation. < Compare their performance with relevant benchmarks to understand their relative strengths and areas for improvement. 2c. Strategy and supporting policies are developed, reviewed and updated. For example, excellent organisations: < Create and maintain a clear strategy and supporting policies to achieve the Mission and Vision of the organisation. < Integrate the concepts of sustainability within their core strategy, value chain and process design and allocate the resources required to deliver these goals. < Identify and understand the key results required to achieve their Mission and evaluate progress towards the Vision and strategic goals. < Adopt effective mechanisms to manage the strategic risks identified through scenario planning. < Understand their key competencies and how they can generate shared value to benefit wider society. 2d. Strategy and supporting policies are communicated, implemented and monitored. For example, excellent organisations: < Translate their strategies into aligned processes, projects and organisational structures, ensuring changes can be implemented with appropriate speed throughout the value chain. < Establish targets based on comparisons of their performance with other organisations, their current and potential organisational capability and their strategic goals. < Ensure that financial, physical and technological resources are available to support organisational development. < Deploy strategy and supporting policies in a systematic manner to achieve the desired set of results, with clearly defined “cause and effect” relationships. < Set clear goals and objectives for innovation, based on an understanding of the market and opportunities, supported by appropriate policies and resources. < Communicate strategy and supporting policies with relevant stakeholders. 3. People EFQM CRITERION DEFINTION Excellent organisations value their people and create a culture that allows the mutually beneficial achievement of organisational and personal goals. They develop the capabilities of their people and promote fairness and equality. They care for, communicate, reward and recognise, in a way that motivates people, builds commitment and enables them to use their skills and knowledge for the benefit of the organisation. 3a. People plans support the organisation’s strategy. 3b. People’s knowledge and capabilities are developed. 3c. People are aligned, involved and empowered. 3d. People communicate effectively throughout the organisation. 3e. People are rewarded, recognised and cared for. 3a. People plans support the organisation’s strategy. For example, excellent organisations: < Have clearly defined the people performance levels required to achieve the strategic goals. < Align people plans with their strategy, the organisational structure, new technologies and key processes. < Rapidly adapt their organisational structure to support the achievement of the strategic goals. < Involve employees, and their representatives, in developing and reviewing the people strategy, policies and plans, adopting creative and innovative approaches when appropriate. < Manage recruitment, career development, mobility and succession planning, supported by appropriate policies, to ensure fairness and equal opportunities. < Use people surveys and other forms of employee feedback to improve people strategies, policies and plans. 3b. People’s knowledge and capabilities are developed. For example, excellent organisations: < Define the skills, competencies and people performance levels required to achieve the Mission, Vision and strategic goals. < Effectively plan to attract, develop and retain the talents required to meet these needs. < Appraise and help people improve their performance and engagement. < Develop people's skills and competencies to ensure their future mobility and employability. < Ensure their people have the necessary competencies, resources and opportunity to be able to maximise their contribution. 3c. People are aligned, involved and empowered. For example, excellent organisations: < Align personal and team objectives, and empower people to realise their full potential in a spirit of true partnership. < Recognise that innovation can apply to products, processes, marketing, organisational structures and business models. < Create a culture of creativity and innovation across the organisation, ensuring people have an open mind-set and can respond quickly to challenges they face. < Encourage their people to be ambassadors of the organisations' image and reputation. < Inspire participation in activities that contribute to wider society. 3d. People communicate effectively throughout the organisation. For example, excellent organisations: < Understand the communication needs of their people and use appropriate strategies and tools to maintain a dialogue. < Communicate a clear direction and strategic focus to ensure that people understand and can demonstrate their contribution to the organisation’s on-going success. < Enable and encourage the sharing of information, knowledge and best practices, achieving a dialogue throughout the organisation. < Develop a culture that continually seeks to improve the effectiveness of collaboration and teamwork throughout their value chain. 3e. People are rewarded, recognised and cared for. For example, excellent organisations: < Align remuneration, benefits and terms of employment with transparent strategies and policies. < Motivate people to become involved in improvement and innovation and recognise their efforts and achievements. < Ensure a healthy work / life balance in the reality of 24/7 connectivity, increasing globalisation and new ways of working. < Promote a culture of mutual support, recognition and care between individuals and between teams. < Respect and embrace the diversity of their people and the communities and markets the organisation serves. 4. Partnerships & Resources EFQM CRITERION DEFINTION Excellent organisations plan and manage external partnerships, suppliers and internal resources in order to support their strategy, policies and the effective operation of processes. They ensure that they effectively manage their environmental and societal impact. 4a. Partners and suppliers are managed for sustainable benefit. 4b. Finances are managed to secure sustained success. 4c. Buildings, equipment, materials and natural resources are managed in a sustainable way. 4d. Technology is managed to support the delivery of strategy. 4e. Information and knowledge are managed to support effective decision making and to build the organisation’s capability. 4a. Partners and suppliers are managed for sustainable benefit. For example, excellent organisations: < Segment partners and suppliers, in line with the organisation’s strategy, and adopt appropriate policies and processes for effectively working together. < Build a sustainable relationship with partners and suppliers based on mutual trust, respect and openness. < Ensure partners and suppliers operate in line with the organisation’s strategies and values. < Establish appropriate networks to enable them to identify potential partnership opportunities to enhance their capabilities and ability to generate additional stakeholder value. < Work together with partners to achieve mutual benefit and enhanced value for their respective stakeholders, supporting one another with expertise, resources and knowledge. 4b. Finances are managed to secure sustained success. For example, excellent organisations: < Use financial strategies, policies and processes to support the overall strategy of the organisation and ensuring financial resilience. < Design the financial planning, control, reporting and review processes to optimise the use of resources. < Allocate resources to provide for long-range needs rather than just short-term gain and, where relevant, become and remain competitive. < Use financial governance processes, tailored to all appropriate levels in the organisation. < Evaluate, select and validate investment in, and divestment of, both tangible and non-tangible assets, respecting their long- term economic, societal and ecological effects. 4c. Buildings, equipment, materials and natural resources are managed in a sustainable way. For example, excellent organisations: < Use strategies, policies and processes for managing buildings, equipment and materials in a financial and environmentally sustainable way. < Optimise the use and effectively manage the lifecycle and physical security of their tangible assets, including buildings, equipment and materials. < Measure and optimise the impact of their operations, product lifecycle and services on public health, safety and the environment. < Minimise their local and global environmental impact, including setting challenging goals for meeting and exceeding legal standards and requirements. < Actively advance the economic, environmental and social standards within their sector. 4d. Technology is managed to support the delivery of strategy. For example, excellent organisations: < Manage a technology portfolio that supports the organisation’s overall strategy. < Evaluate and develop the technology portfolio to improve the agility of processes, projects and the organisation. < Involve relevant stakeholders in the development and deployment of new technologies to maximise the benefits generated. < Identify and evaluate alternative and emerging technologies in the light of their impact on organisational performance and capabilities and the environment. < Use technology to support the culture of creativity and innovation. 4e. Information and knowledge are managed to support effective decision making and to build the organisation’s capability. For example, excellent organisations: < Ensure that their leaders are provided with accurate and sufficient information to support them in timely decision making. < Transform data into information and where relevant into knowledge that can be shared and effectively used. < Establish approaches to engage relevant stakeholders and use their collective knowledge in generating ideas and innovation. < Provide and monitor access to relevant information and knowledge for their people and external users, whilst ensuring both security and the organisation’s intellectual property are protected. < Establish and manage learning and collaboration networks to identify opportunities for creativity, innovation and improvement. < Transform ideas into reality within timescales that maximise the advantages that can be gained. 5. Processes, Products & Services EFQM CRITERION DEFINTION Excellent organisations design, manage and improve processes, products and services to generate increasing value for customers and other stakeholders. 5a. Processes are designed and managed to optimise stakeholder value. 5b. Products and services are developed to create optimum value for customers. 5c. Products and services are effectively promoted and marketed. 5d. Products and services are produced, delivered and managed. 5e. Customer relationships are managed and enhanced. 5a. Processes are designed and managed to optimise stakeholder value. For example, excellent organisations: < Use a framework of key processes to implement the organisation’s strategy. < Manage the end to end processes, including processes that extend beyond the boundaries of the organisation. < Ensure process owners understand their role and responsibility in developing, maintaining and improving processes. < Develop a meaningful mix of process performance indicators and related outcome measures, enabling the review of the efficiency and effectiveness of the key processes and their contributions towards the strategic goals. < Use data on the current performance and capabilities of their processes, as well as appropriate benchmarks, to drive improvement, creativity and innovation. 5b. Products and services are developed to create optimum value for customers. For example, excellent organisations: < Strive to innovate and create value for their customers, involving them and other stakeholders, where appropriate, in the development of new and innovative products, services and experiences. < Use market research, customer surveys and other forms of feedback to anticipate and identify improvements aimed at enhancing the product and service portfolio. < Develop their portfolio in line with the changing needs of existing and potential customer groups. < Design their product and service portfolio and actively manage the full product lifecycle in a responsible way. 5c. Products and services are effectively promoted and marketed. For example, excellent organisations: < Know who their different customers groups are, both existing and potential, and anticipate their different needs and expectations. < Transform needs, expectations and potential requirements into attractive and sustainable value propositions for both existing and potential customers. < Implement the business model by defining their value proposition, “unique selling points”, positioning, target customer groups and distribution channels. < Develop marketing strategies to promote their products and services to target customers and user groups. 5d. Products and services are produced, delivered and managed. For example, excellent organisations: < Produce and deliver products and services to meet, or exceed, customer needs and expectations, in line with the offered value proposition. < Develop an effective and efficient value chain to ensure they can consistently deliver on their promised value proposition. < Ensure people have the necessary resources, competencies and empowerment to maximise the customer experience. < Manage products and services throughout their lifecycle, including reusing and recycling where appropriate, considering any impact on public health, safety and the environment. < Compare their performance with relevant benchmarks and learn from their strengths and opportunities for improvement in order to maximise the value generated for customers. 5e. Customer relationships are managed and enhanced. For example, excellent organisations: < Segment customers, in line with the organisation’s strategy, and adopt appropriate policies and processes for effectively managing the relationship. < Determine and meet customers’ day-to-day and long-term contact requirements. < Build and maintain a dialogue with customers, based on openness and transparency. < Continually monitor and review the experiences and perceptions of their customers and ensure processes are aligned to respond appropriately to any feedback. < Ensure customers are clear on their responsibilities with regards to the use of products and services. 6. Customer Results EFQM CRITERION DEFINTION Excellent organisations achieve and sustain outstanding results that meet or exceed the needs and expectations of their customers. In practice, we find that excellent organisations: < Use a set of perception measures and related performance indicators to determine the successful deployment of their strategy and supporting policies, based on the needs and expectations of their customers. < Set clear targets for the key customer results based on the needs and expectations of their customers, in line with their chosen strategy. < Segment results to understand the experience, needs and expectations of specific customer groups. < Demonstrate positive or sustained good customer results over at least 3 years. < Clearly understand the underlying reasons and drivers of observed trends and the impact these results will have on other performance indicators, perceptions and related outcomes. < Have confidence in their future performance and results based on their understanding of the cause and effect relationships established. < Understand how their key customer results compare to similar organisations and use this data, where relevant, for target setting. 6a. Perceptions These are the customers’ perceptions of the organisation. These may be obtained from a number of sources, including surveys, focus groups, ratings, compliments and complaints. These perceptions should give a clear understanding of the effectiveness, from the customers’ perspective, of the deployment and outcomes of the organisation’s customer strategy, supporting policies and processes. MEASURES COULD INCLUDE PERCEPTIONS OF: < Reputation and image < Product and service value < Product and service delivery < Customer service, relationship and support < Customer loyalty and engagement 6b. Performance Indicators These are the internal measures used by the organisation in order to monitor, understand, predict and improve the performance of the organisation and to predict their impact on the perceptions of its customers. These indicators should give a clear understanding of the deployment and impact of the organisation’s customer strategy, supporting policies and processes. MEASURES COULD INCLUDE PERFORMANCE INDICATORS ON: < Product and service delivery < Customer service, relationships and support < Complaints handling < Involvement of customers and partners in the design of products, processes, etc. 7. People Results EFQM CRITERION DEFINTION Excellent organisations achieve and sustain outstanding results that meet or exceed the needs and expectations of their people. In practice, we find that excellent organisations: < Use a set of perception measures and related performance indicators to determine the successful deployment of their strategy and supporting policies, based on the needs and expectations of their people. < Set clear targets for key people results based on the needs and expectations of their people, in line with their chosen strategy. < Segment results to understand the experience, needs and expectations of specific groups of people within their organisation. < Demonstrate positive or sustained good people results over at least 3 years. < Clearly understand the underlying reasons for and drivers of observed trends and the impact these results will have on other performance indicators and related outcomes. < Have confidence in their future performance and results based on their understanding of the cause and effect relationships established. < Understand how the key people results compare to similar organisations, and use this data, where relevant, for target setting. 7a. Perceptions These are the people’s perception of the organisation. These may be obtained from a number of sources, including surveys, focus groups, interviews and structured appraisals. These perceptions should give a clear understanding of the effectiveness, from the people’s perspective of the deployment and outcomes of the organisation’s people strategy and supporting policies and processes. MEASURES COULD INCLUDE PERCEPTIONS OF: < Satisfaction, involvement and engagement < Motivation and empowerment < Leadership and management < Competency and performance management < Training and career development < Effective communications < Working conditions 7b. Performance Indicators These are the internal measures used by the organisation in order to monitor, understand, predict and improve the performance of the organisation’s people and to predict their impact on perceptions. These indicators should give a clear understanding of the deployment and impact of the organisation’s people strategy and supporting policies and processes. MEASURES COULD INCLUDE PERFORMANCE INDICATORS ON: < Involvement and engagement activities < Competency and performance management activities < Leadership performance < Training and career development activities < Internal communications 8. Society Results EFQM CRITERION DEFINTION Excellent organisations achieve and sustain outstanding results that meet or exceed the needs and expectations of relevant stakeholders within society. In practice, we find that excellent organisations: < Use a set of perception measures and related performance indicators to determine the successful deployment of their strategy and supporting policies, based on the needs and expectations of the relevant external stakeholders. < Set clear targets for key society results based on the needs and expectations of the relevant stakeholders within society, in line with their chosen strategy. < Segment results to understand the experience, needs and expectations of relevant stakeholders within society. < Demonstrate positive or sustained good society results over at least 3 years. < Clearly understand the underlying reasons and drivers of observed trends and the impact these results will have on other performance indicators and related outcomes. < Have confidence in their future performance and results based on their understanding of the cause and effect relationships established. < Understand how their key society results compare to similar organisations and use this data, where relevant, for target setting. 8a. Perceptions This is society’s perception of the organisation. This may be obtained from a number of sources, including surveys, reports, press articles, public meetings, Non-Governmental Organisations, public representatives and governmental authorities. These perceptions should give a clear understanding of the effectiveness, from society’s perspective of the deployment and outcomes of the organisation’s societal and environmental strategy and supporting policies and processes. MEASURES COULD INCLUDE PERCEPTIONS OF: < Environmental impact < Image and reputation < Societal impact < Workplace impact < Awards and media coverage 8b. Performance Indicators These are the internal measures used by the organisation in order to monitor, understand, predict and improve the performance of the organisation and to predict their impact on the perceptions of the relevant stakeholder within society. These indicators should give a clear understanding of the deployment and impact of the organisation’s societal and environmental strategy and supporting policies and processes. MEASURES COULD INCLUDE PERFORMANCE INDICATORS ON: < Environmental, economic and societal activities < Regulatory and governance compliance < Health and safety performance < Responsible sourcing and procurement performance 9. Business Results EFQM CRITERION DEFINTION Excellent organisations achieve and sustain outstanding results that meet or exceed the needs and expectations of their business stakeholders. In practice, we find that excellent organisations: < Develop a set of key financial and non-financial results to determine the successful deployment of their strategy, based on the needs and expectations of their business stakeholders. < Set clear targets for key business results based on the needs and expectations of their business stakeholders, in line with their chosen strategy. < Segment results to understand the performance of specific areas of the organisation and the experience, needs and expectations of business stakeholders. < Demonstrate positive or sustained good business results over at least 3 years. < Clearly understand the underlying reasons and drivers of observed trends and the impact these results will have on other performance indicators and related outcomes. < Have confidence in their future performance and results based on their understanding of the cause and effect relationships established. < Understand how their key business results compare to similar organisations and use this data, where relevant, for target setting. 9a. Business Outcomes These are the key financial and non-financial business outcomes which demonstrate the success of the organisation’s deployment of their strategy. The set of measures and relevant targets will be defined and agreed with the business stakeholders. OUTCOME MEASURES COULD INCLUDE: < Financial outcomes < Business stakeholder perceptions < Performance against budget < Volume of key products or services delivered < Key process outcomes 9b. Business Performance Indicators These are the key financial and non-financial business indicators that are used to measure the organisation’s operational performance. They help monitor, understand, predict and improve the organisation's likely key performance outcomes. MEASURES COULD INCLUDE PERFORMANCE INDICATORS ON: < Financial indicators < Project costs < Key process performance indicators < Partner and supplier performance < Technology, information and knowledge Integration of the Fundamental Concepts within the Criteria As with the 2010 revision of the EFQM Excellence Model, the guidance points from the Fundamental Concepts of Excellence have been integrated into the Criteria. The Fundamental Concepts were reviewed and updated first and these were used as the basis for the guidance points in the criterion parts of the EFQM Excellence Model. This integration provides the link between the high-level overview provided by the Concepts and the detailed analysis achieved through the Criteria. As the guidance points are action-oriented, they have been incorporated into the 5 Enabling Criteria. The Results generated, and which criteria they relate to, will depend on the approaches adopted, the measures used to monitor their efficiency and effectiveness and the operating environment of the organisation in question. The table below illustrates these links: RADAR The RADAR logic is a dynamic assessment framework and powerful management tool that provides a structured approach to questioning the performance of an organisation. At the highest level, RADAR logic states that an organisation needs to: < Determine the Results it is aiming to achieve as part of its strategy. < Plan and develop an integrated set of sound Approaches to deliver the required results both now and in the future. < Deploy the approaches in a systematic way to ensure implementation. < Assess and refine the deployed approaches based on monitoring and analysis of the results achieved and ongoing learning activities. To help support robust analysis, the RADAR elements can be broken down into a series of attributes, shown below: Analysis of ENABLERS Approach < Sound - The approaches have a clear rationale, based on the relevant stakeholder needs, and are process based. < Integrated - The approaches support strategy and are linked to other relevant approaches. Deployment < Implemented - The approaches are implemented in relevant areas, in a timely manner. < Structured - The execution is structured and enables flexibility and organisational agility. Assessment & Refinement < Measurement - The effectiveness and efficiency of the approaches and their deployment are appropriately measured. < Learning & Creativity - Learning & creativity is used to generate opportunities for improvement or innovation. < Improvement & Innovation - Outputs from measurement, learning & creativity are used to evaluate, prioritise and implement improvements & innovations. Analysis of RESULTS Relevance & Usability < Scope & Relevance - A coherent set of results, including key results, are identified that demonstrate the performance of the organisation in terms of its strategy, objectives and the needs and expectations of the relevant stakeholders. < Integrity - Results are timely, reliable & accurate. < Segmentation - Results are appropriately segmented to provide meaningful insights. Performance < Trends - Positive trends or sustained good performance over at least 3 years. < Targets - Relevant targets are set and consistently achieved for the key results, in line with the strategic goals. < Comparisons - Relevant external comparisons are made and are favourable for the key results, in line with the strategic goals. < Confidence - There is confidence that performance levels will be sustained into the future, based on established cause & effect relationships. RADAR for Enablers The Enabler matrix is used to support the analysis of the approaches within the five Enabler criteria: < Leadership < Strategy < People < Partnerships & Resources < Processes, Products & Services Applying the Enablers Matrix Based on all the evidence available, apply the Enabler RADAR to the set of approaches adopted. RADAR contains guidance on what we expect the organisation to demonstrate. The overall score should not exceed that of the approaches adopted. For example, if the approaches are not sound or do not fully cover the criterion part being assessed, no matter how well all other attributes have been scored, the score given will be limited to that given to the soundness of the approaches. RADAR for Results The Results matrix is used to support the analysis of the results within the four Results criteria: < Customer Results < People Results < Society Results < Business Results Results Matrix Based on all the evidence available, apply the Results RADAR to the set of results used. RADAR contains guidance on what we expect the organisation to demonstrate. The overall score cannot exceed that of the “Scope and Relevance” of the results available. For example, if the scope of the results available does not fully cover the criterion part being assessed, in line with the organisation’s strategic goals, the overall score given will be limited to that given to the “Scope and Relevance” of the data available. Scoring for the EFQM Excellence Model The RADAR Assessment and Management tool is the evaluation method used to score organisations applying for the EFQM Excellence Award and most national Excellence awards in Europe. It can also be used by organisations carrying out Self-Assessment and wishing to use a score for benchmarking or other purposes. The underlying principle for scoring using the RADAR is that when an organisation’s performance improves over time, their score against the Model will increase. 50% of the points available are allocated to the Enablers and 50% are allocated to the results. This is to ensure the organisation has the capability to sustain this performance into the future. When an organisation is scored using the RADAR matrix, weights are given to each of the nine criteria to calculate the number of points awarded. These weights were established in 1991 as the result of a wide consultation exercise across Europe. They have been periodically reviewed by EFQM and the diagram below illustrates the current weightings. Generally each criterion part is allocated equal weight within that criterion; for example, each of the 5 criterion parts for Leadership contributes 20% of the 100 points allocated to criterion 1. There are however two exceptions: < Criterion part 6a takes 75% of the points allocated to criterion 6, whilst criterion part 6b takes 25%; < Criterion part 7a takes 75% of the points allocated to criterion 7, whilst criterion part 7b takes 25%. Each criterion part is assessed using the RADAR matrix and a score agreed. These scores are then combined to give a score for that criterion. The weighting is then applied to give an overall score from 0 to 1000 points. Glossary Agility: The organisation's ability to rapidly and efficiently adapt to changes. Approach: The overall way by which something is made to happen; an approach comprises of processes and structured actions within a framework of principles and policies. Benchmarking: A systematic comparison of approaches with other relevant organisations that gains insights that will help the organisation to take action to improve its performance. Business Model: The elements of the business that create and deliver value; these elements normally include the value proposition, the profit formula, key resources and key processes of the organisation. Business Stakeholders: These are the people who provide funding for the organisation; the people who the Management Team ultimately report to. In companies, this could be the owners, shareholders or investors. In the public sector, this could be the government, ministers or politicians. Capabilities: The quality of being able to turn capacity (see below) into action and results by accessing relevant knowledge, competence, expertise, resources and processes. Capacities: A measurement of what can theoretically be achieved, usually expressed in terms of size, volume or number. In organisations, this often refers to what the theoretical maximum output is compared to what the actual output is, with the result being expressed as a percentage. Change Management: An approach for leading the transition of individuals, teams and organizations from their current state to a defined, desired future state. It is an organizational process aimed at helping stakeholders affected to accept and embrace changes in their business environment. Comparisons: Data used to compare the performance of one organisation or process with another. Continual Improvement: The on-going improvement of processes that lead to achievement of higher levels of performance through incremental change. Core Competence: A well performed internal activity or capability that is central to the organisation’s competitiveness, profitability or efficiency. Corporate Governance: A framework of authority and control within an organisation used to help it fulfill its legal, financial and ethical obligations. Creativity: The generation of ideas for new or improved products, services, processes, systems or social interactions. Critical success factors: Limited number (usually between 3 to 8) of characteristics, conditions or variables that have a direct impact on the effectiveness, efficiency and viability of an organisation, programme or project. Culture: The specific collection of Values and Norms that are shared by people and groups in an organisation that control the way they interact with each other and with stakeholders outside the organisation. Customer: The recipient of products or services provided by the organisation. Diversity: The extent to which the people within the organisation recognise, appreciate and utilise, the characteristics that make individuals unique. Diversity can relate to age, race, ethnicity, gender, beliefs, physical abilities & sexual orientation. Employability: A person's capability for gaining and maintaining employment. The meaning can be different depending on the perspective taken. For the individual, this could mean stability or mobility. For the organisation, it could mean flexibility. Empowerment: The process by which individuals or teams are able to take decision making responsibilities, and operate with a degree of autonomy in their actions. Equal opportunity: The practice of ensuring that all people receive fair and equal treatment regardless of gender, age, race, nationality, religion, disability or sexual orientation. Fundamental Concepts of Excellence: The set of key and proven principles upon which the EFQM Excellence Model framework is based. Good / best practice: Superior approaches, policies, processes or methods that lead to exceptional achievement. Since it is difficult to find out what is best, the term “good practice” is preferred by most organisations. Ways to find good practice outside the organisation can include benchmarking and external learning. Innovation: The practical translation of ideas into new products, services, processes, systems or social interactions. Intellectual Capital: The value of an organisation that is not captured in its traditional financial accounts. It represents the intangible assets of an organisation and is often the difference between market and book value. Key Processes: The processes that are of most important for delivering the strategy and driving the value chain of the organisation. Knowledge: Knowledge is expertise and skills acquired by a person through experience and education, involving the theoretical and/or practical understanding of a subject. While data are raw facts and information is data with context and perspective, knowledge is information with guidance/ability for action. Leaders: The people who coordinate and balance the interests and activities of all who have a stake in the organisation. Learning networks: A group of people with a common goal or interest who pool their individual information, knowledge and experience to actively learn together. Management System: The framework of processes, related performance/result indicators and process management and improvement systems used to ensure that the organisation can fulfil its Mission and Vision. Mission: A statement that describes the purpose or “raison d’être” of an organisation, confirmed by its stakeholders. Mobility: The willingness and capability of people to change their job or the working location. Organisational Agility: The ability to respond and adapt, in a timely way, to an emerging threat or opportunity. Organisational Capability: Refers to the ability and capacity of the organisation to achieve specific goals. The organisation can enhance this capability, for example, through external partnerships or internal learning & development. Partner: An external party the organisation strategically chooses to work with, to achieve common objectives and sustained mutual benefit. Partnership: A durable working relationship between the organisation and partners, creating and sharing added value for both parties. Partnerships can be formed e.g. with suppliers, distributors, educational bodies or customers. Strategic partnerships support the strategic objectives of the organisation in a particular way. People: All individuals employed by the organisation (full time, part Perception: The opinion stakeholders have of the organisation. Process: A set of activities that interact with one another because the output from one activity becomes the input for another activity. Processes add value by transforming inputs into outputs, using resources. Products: Commercially distributed goods as a result of a fabrication, manufacturing, or production process that passes through a distribution channel before being consumed or used. In a broad sense, products include a wide range of goods, from commodities to complex installations such as facilities, plants or factories. Purpose Statement: Used by some organisations instead of either the Mission and / or Vision statements. Society: The social infrastructure outside the organisation that can be affected by the organisation. Stakeholder: Person, group or organisation that has a direct or indirect stake or interest in the organisation because it can either affect the organisation or be affected by it. Examples of external stakeholders are owners (shareholders), customers, suppliers, partners, government agencies and representatives of the community or the society. Examples for internal stakeholders are people or groups of people. (See also Business Stakeholders above). Strategy: A high level plan describing the tactics by which an organisation intends to achieve its Mission and Vision, that are subsequently translated into aligned strategic goals and objectives reflecting what the organisation has to do. Value Proposition: The differentiating value the organisation’s products and services offer to customers. Values: Operating philosophies or principles that guide an organisation’s internal conduct as well as its relationship with the external world. Values provide guidance for people on what is good or desirable and what is not. They exert major influence on the behaviour of individuals and teams and serve as broad guidelines in all situations. Vision: Description of what the organisation is attempting to achieve in the long-term future. It is intended to serve as a clear guide for choosing current and future courses of action and, along with the Mission; it is the basis for strategies and policies. Acknowledgements This update of the EFQM Excellence Model was produced in 2012. Inputs were taken from many sources and collated by the Core Team Members, a group of experts representing a diverse range of stakeholder groups: < Representing the EFQM Assessor Community: André van der Geest (PostNL) and Christian Forstner (CF YourAdvantage) < Representing EFQM Partners: Juan de Dios Calatrava (Club Excelencia en Gestión) < Representing EFQM Private Sector Members: Mia Goetvinck (Ricoh) < Representing EFQM Public Sector Members: Anna Beker (Dzierzoniow Town Hall) and Paul Evans (Liverpool John Moores University) < Representing the EFQM Trainer Community: Chris Hakes (LeadershipAgenda Network) and Geoff Carter (PACEPerformance) < Representing EFQM: Matt Fisher (EFQM), Paul Gemoets (EFQM) and Pierre Cachet (EFQM) Hundreds of people have contributed to the review of the Model but the Core Team Members would like to especially thank the following people for their feedback and comments during the review of the proposals and drafts (listed alphabetically): Aad Streng, Alain Smadja, Andre Haynes, Andre Moll, Andreas Dalluege, Andreas Schmidt, BrittMarie Olsson, Celal Seçkin, Claire Ford, Dayvon Goodsell, Deiter Butz, Detlef Bohle, Gerhard Leu, Guy Peeters, Ian May, Jacqueline van Rijswijk, Jacques Segot, Janni Løber, Jean Bastien, Jill Weatherill, Johann Simmel, Juan García-del-Valle, Karmen Kern Pipan, Klaus Garbers, Laurie Bradley, Lene Lindholm, Majd Abbassi, Marie-Odile Vanneraud, Mark Webster, Martin Brander, Mike Gallagher, Mozhgan Sadr, Nicole Mayer, Norman Hughes, Pavlina Ancheva, Peter Hull, Rafael Adajo, Robert Leloup, Roland Lochner, Sally Green, Shawqi Sajwani, Susanne Kaldschmidt, Tani Järvinen, Thierry Kieffer, Thomas Baeuerle, Victoria Michaelidou, Walter Felchlin, Walter Ludwig Getting Involved EFQM is a membership organisation. We rely on input, ideas and suggestions from you to create a vibrant community. If you have any ideas, questions or suggestions, please don’t hesitate to contact us via e-mail (info@efqm.org) or via telephone (+32 2 775 35 11). < Join the EFQM Network for Sustainable Excellence on LinkedIn < Follow @EFQM on Twitter < Find the EFQM page on Facebook < View EFQM videos on YouTube < Meet the EFQM Team Becoming a member Organisations can join the EFQM member community and enjoy some exclusive benefits such as access to free assessment and improvement tools, participation to events, themed webinars and good practice visits. To learn more about our member community, feel free to contact us or to join one of the free introduction meetings at our offices in Brussels. As a member of EFQM, you will enjoy the following exclusive benefits: < Expert advice and support for your organisation’s journey towards excellence. < Access to the EFQM Knowledge Base is a database containing a number of free to download assessment, management and improvement tools; as well as Good Practices identified from the last 3 years of the EFQM Excellence Awards. < Members receive a discount of 20% on EFQM Products & Services, including Training, Publications and Recognition. < There are themed events and webinars throughout the year, with Good Practices and new tools being shared and explained by EFQM and member organisations. For more information, please e-mail mailto:info@efqm.org EFQM Avenue des Olympiades 2 5th Floor B-1140 Brussels – Belgium Tel : +32 2 775 3511 Fax : +32 2 775 3535 Email: mailto:info@efqm.org http://www.efqm.org