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Evolving The Efqm Model For Business Excellence


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Evolving The Efqm Model For Business Excellence

  1. 1. Evolving the EFQM Model for Business Excellence What does a successful business excellence framework look like, and how does that need to be adapted to reflect the changing business environment? In this Process Excellence Network interview, Matt Fisher, Chief Operating Officer atEFQM, describes the organization’s model for business excellence and discusses howinstability in the Euro-zone has been impacting excellence models.PEX Network: Could you tell me a bit more about EFQMs model for businessexcellence?Matt Fisher: Yes, the model itself was developed in 1990, based on work that had beendone by Deming, the Japanese Quality Award, and the Baldridge Prize. It was actuallyinstigated by the European Commission suggesting to large organizations in Europe thatwe needed something similar for European organizations to remain competitive in theglobal market place. So the model was developed then by a group of experts led bylarge organizations in Europe. And since then it’s been developed and adapted so it’snow a generic model that can be applied to any organization regardless of size, sector ormaturity.PEX Network: And what actually goes into that business model? What does it looklike?M Fisher: Well the most recognizable part of the model is the nine-box framework.There are five enablers, the things that you do within your organization, and there arefour result areas that you’re looking to achieve. And those result areas focus on the mainstakeholders within an organization.So you’re looking at your key results - they’re your financials and non-financials, yourcustomer results, your people results, and society results. And then to drive those resultswithin an organization you need to look at your leadership, how you form your strategyand implement your strategy, how you manage your people, how you manage yourpartnerships and resources, and how you manage your processes, products andservices.PEX Network: So it’s really a holistic approach, it sounds like.M Fisher: Yes, it’s a holistic framework that gives you an overview and an in depthinsight into an organization, and I think one of the key differences between some of theother quality models is the focus on strategy development and strategy implementation,and going back to leadership. So it does allow you to look at the entire organization andsee things in the strategic context, and understand it from the strategic perspective.And it avoids getting lost into the detail. I mean, obviously if you’re looking at a wholeorganization and taking a holistic approach you need to understand what’s important,and if you start with the strategies of the organization and the key challenges that they’refacing, it enables you to focus on the right areas. And if you’re employing the model
  2. 2. within your own organization it allows you to make sure that you’re putting the focus andthe attention in the right areas.PEX Network: So I understand that there have been some general changes madeto the model since its inception in the 1990s. Why do you make those changes tothe model?M. Fisher: The model has to keep changing with the business environment, theoperating environment of the people who use it. There have been significant changes, Ithink, to the global environment since 1990, and obviously for the model and even justthe language within the model to keep pace it has to be reviewed and updated. So we’renow reviewing and updating it on a three-year cycle to make sure it keeps pace withchanges.PEX Network: So what are some of the general changes that have been made tothe model over time? How would, say, the business excellence model lookdifferent today than it did 20 years ago?M. Fisher: Well it’s always had the nine boxes, but the content of the nine boxes and theassociated tools that go along with it and support it have changed. So the fundamentalconcepts were introduced, there are eight fundamental concepts, which are then definingthe underlying principles of the excellence model. So there’s a value set, a system ofbeliefs, and based on that, they provide red threads that run through the entire model, soit’s the basic foundations.And then there’s the RADAR logic, which is the equivalent of a PDCA cycle. So the radarlogic stands for Result - defining what you want to achieve - the Approach that you’regoing to take to achieving it, how you Deploy it, how you Assess whether it’s working ornot, and how you Refine and improve what you’re doing. So it’s a continuousimprovement loop.You have three different components within the model, which work at different levels ofdetail and different uses, actually, within the model itself. And in terms of what’schanged, if you take the example, in 1990, when the model first came out, it had one ofthe result areas called impact on society, and in 1990 that was revolutionary. I think now,everyone understands a bit more about CSR, corporate social responsibility, and that’sone area that’s evolved massively in the last 20 years in terms of thinking.So now one of the eight fundamental concepts is taking responsibility for a sustainablefuture. But it’s not just focusing on the results, that’s an output of something that youhave to do within the organization. It starts with leadership and the values that they setand create within the organization, and how they create a culture, which supports thestrong corporate ethics and the focus on sustainability. How you integrate that into yourstrategy so that CSR isn’t just something that you bolt on, something that’s a nice to do,and when times get tough you stop doing it.How do you actually put sustainability into the core of what you do as an organization,how do you make sure that the products and the services you deliver for your customersare sustainable? And in fact how do you make sure your business model itself issustainable, so the organization is going to have a successful result not just today, butinto the future?
  3. 3. PEX Network: In the Euro zone there has been a lot of financial turmoil of late,does this impact at all on the way that companies approach operationalexcellence, what are you seeing from your membership?M. Fisher: One of the things we’re seeing is organizations moving back to a moreholistic approach. I think one of the things that we’ve seen previously was organizationswere applying their business excellence approach, whether this was the model oranything else, to a specific business unit. And they would apply it in lots of business unitsor factories or sales companies, and those sales companies would be performing verywell against whatever tool they were using.But it’s like a process, it’s not just the process boxes that you have to look at, it’s thearrows that move between them. And when you assess a value chain as opposed to justa unit, the score, the result, whatever it is that you’re getting is not as good becausethings drop between the gaps. So you have very, very well defined process boxes, butit’s the arrows that move between the boxes where things fall down.So what we’re starting to see is organizations developing frameworks for corporategovernance. If you use the model at the top level of an organization, you can form aholistic view of the whole system and look at the end-to-end processes. And beyond theend-to-end processes, it allows you to understand your connectivity with your partners’suppliers and also out to customers. So you can understand those inter-connectivity’s,you can start risk assessments on, where do we have financial risk? What is massivelyimportant at the moment in the current economic climate for people to understand whatare those interactions, who is it that we need to influence, where do we need to havethose relationships? And how do we manage those relationships, who are responsiblefor it?Applying it at a corporate level where you’re looking for some standardization ofprocesses. This allows you to work out, where do we need to have a standardizedprocess, how do we feedback from the operating units who have to use theseprocesses? Whether they’re working or not, and making changes to them, and where isit okay to develop their own processes within the framework?So it can be used as a corporate governance tool, and that’s what we’ve been starting tosee over the last four or five years, and it’s partly a reaction to globalization and partly tothe economic downturn.PEX Network: Does it stem also from an increasing awareness of the fact that as abusiness you’re reliable, you rely on not just yourself but you’re actually reliant onsuppliers, on your customers, on a whole host of factors outside of your control,to some extent?M. Fisher: Yes, that’s definitely something that’s been driving the changes within themodel and changes when thinking within organizations. And its how do you manage thatcomplexity? The model provides a framework that helps you to understand where thoseinter-connections are and where you need to manage them.PEX Network: Are there certain trends or factors that are affecting businessexcellence models?M. Fisher: I think the business excellence environment, like anything in business, can bea victim of fads. People pick up on a flavor of the month and they do it for a while, and
  4. 4. sometimes they get results and sometimes they won’t. Quite often it’s driven by oneperson with a very strong view within the organization, and when that person leaves, theprogram dies. I think that’s a big challenge for business excellence that we have to tryand get around.I think the fact that the excellence model’s been around for 20 years and has somepedigree in there; I think one of the reasons for it is that other tools can fit within it. Soyou can use the excellence model in combination with Six Sigma or Lean approaches, orISO standards or any of the other tools that are being used can fit within the framework.What it allows you to do is use the right tool at the right time in the right place in theorganization, because you’re getting that holistic view. I think that’s a very importantfactor for the longevity of business excellence programs, is making sure that you’refocusing on the things that will really have a difference to the organization.PEX Network: Interesting. Now you’re going to be attending the upcoming ProcessExcellence Network’s Benelux Forum in October, what are you looking forward toat the forum?M. Fisher: I’m looking forward to seeing how other organizations have been coping withthe changes that have resulted in the post-economic downturn climate. What is it thatpeople have started to do, looking at the experiences of how this has impacted on theirprograms and what they’ve done differently? I think certainly from the organizations thatwe work with here at the EFQM, the ones that have really had strong programs that werealigned to their strategy have been able to keep those going, and in some cases theseorganizations are emerging stronger from the economic downturn.They’ve been able to focus on the right things, they’ve been able to use down time intheir facilities to focus on product development or working on new innovative ideas andbringing those to the fore, that are now giving them a competitive advantage. So I think itgives me the opportunity to speak to a number of different organizations and see what’sgoing on, what they’ve been able to do and what their concerns for the future are,especially as we have the new version of the model coming up, we’re working on the2013 version at the moment. So understanding what’s changed within the operatingenvironment is very important for us.Editors note: This is a transcript of a Process Perspectives podcast Adapting BusinessExcellence Models to Global Challenges.About PEX NetworkI invite you to join as a member of the PEX Network Group,you will have access to Key Leaders Globally, Events, Webinars, Presentations, Articles,Case Studies, Blog Discussions, White Papers, and Tools and Templates. To accessthis free content please take 2 minutes for a 1 time FREE registration at Network, a division of IQPC, facilitates access to a wealth of relevant content forProcess Excellence, Lean, and Six Sigma practitioners. Further enhanced with an onlinecommunity of your peers, we will provide you with the tools and resources to help youperform more effective and efficiently, while enhancing the quality operations within your
  5. 5. organization. As our industry becomes more and more dependent on the Web forinformation, has been developed to provide Six Sigma professionalswith instant access to information. Leveraging our strength and foundation in education,IQPC and the Process Excellence Network are uniquely positioned to provide acomprehensive library of webcasts gathered from our events, as well as exclusivecontent from leaders in the industry.