The EFQM model is a management framework helping organizations manage change and improve performance. The EFQM model was launched by the European Foundation for Quality Management in 1992 to increase the competitiveness of European companies.
Understanding the EFQM model
The EFQM model was launched by the European Foundation for Quality Management in 1992 to increase the competitiveness of European companies.
To facilitate this, the model incorporates a self-assessment framework measuring the strengths and weaknesses of an organization across all its operations.
The EFQM model is non-prescriptive and does not advocate strict adherence to rules or procedures.
Instead, it provides a broad overview of what is required to achieve organizational excellence.
Since its release, however, the model has evolved to reflect an increasingly dynamic global marketplace.
The latest version has seen the framework transition from a simple assessment tool to one that offers a basic methodology for managing change and its associated impacts.
Let’s take a look at the key components of the revised model in the following sections.
The three questions of the EFQM model
The model is now based on the answering of three questions:
Direction
Why does the organization exist? What purpose does it fulfill? Why was one strategy chosen over another?
Execution
How does the organization intend to deliver on its purpose or strategy?
Results
What has the organization achieved? What does it want to accomplish in the future?
Direction, execution, and results then drive the rest of the framework, with each question supported by a few key criteria in the form of guiding principles.
The seven criteria of the EFQM model
With the above said, we will now take a look at the seven main criteria and how they are distributed across the three questions.
Direction
Criterion 1: Purpose, vision, and strategy
Organizational excellence is underpinned by an inspiring purpose, an aspirational vision, and a strategy that delivers.
Criterion 2: Organizational culture and leadership
Culture refers to the values exhibited by employees that influence behavior over time.
Leadership in the EFQM model means the organization is recognized as a role model by its peers.
Execution
Criterion 3: Engaging stakeholders
The organization must also identify its key stakeholders, or those most likely to play a role in organizational success.
Stakeholder relationships are built on transparency, accountability, and trust.
They are also involved in deploying strategy and are recognized for the contributions they make.
Criterion 4: Creating sustainable value
Long-term success and financial viability are enriched by purpose, strategy, and customer segmentation.
Sustainable value also means the organization acknowledges that stakeholder needs may change over time.
That is, products, services, and solutions may need to be adapted.
Criterion 5: Driving performance and transformation
Requiring the organization to successfully deliver business operations while reacting to internal and external change.
This allows it to deliver for today while preparing for tomorrow.
Results
Criterion 6: Stakeholder perceptions
What are the personal experiences of stakeholders after dealing with the organization?
These perceptions can be obtained from surveys, focus groups, media reports, customer feedback, or external recognition.
Successful organizations continually meet the needs of stakeholders and can analyze past and current performance to measure progress.
Criterion 7: Strategic and operational performance
Lastly, how effectively does the organization fulfill its purpose, achieve its strategy, or create and deliver value?
Does it understand the cause and effect relationships that impact performance?
Current performance, measured by financial and non-financial models, should give clues to future performance with a relatively high degree of certainty.
Key takeaways
The EFQM model is a management framework helping organizations manage change and improve performance. It was created to help European businesses become more competitive and has since been tweaked and adapted.
The EFQM model encourages businesses to answer three questions around direction, execution, and results. These questions form the structural component of the framework.
The EFQM model also features seven key criteria distributed across the three structural components. These include purpose and strategy, culture and leadership, stakeholder engagement, sustainable value creation, performance and transformation, stakeholder perception, and strategic and operational performance.
What are the key questions the EFQM model asks?
The three questions the EFQM model asks revolves around the following:
The EFQM model is used by many organizations, including businesses, government agencies, and non-profit organizations. It is prevalent in Europe, where it was developed, but it is also used by organizations worldwide. The EFQM model is a widely recognized and respected framework for assessing and improving organizational performance. Many organizations use it to help them achieve excellence and become more successful. It is often used with frameworks and models, such as the Balanced Scorecard and the Six Sigma methodology.
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
