efqm-model

What Is The EFQM model? The EFQM Model In A Nutshell

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:

  1. Direction – why does the organization exist? What purpose does it fulfill? Why was one strategy chosen over another?
  2. Execution – how does the organization intend to deliver on its purpose or strategy?
  3. 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

  1. Criterion 1: Purpose, vision, and strategy – organizational excellence is underpinned by an inspiring purpose, an aspirational vision, and a strategy that delivers.
  2. 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

  1. 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.
  2. 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.
  3. 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

  1. 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.
  2. 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.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"