2 Introducing Excellence

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The European Foundation for Quality Management (EFQM®) is a membershipbased not for profit organisation, created in 1988 by fourteen leading Europeanbusinesses, with a Mission to be the driving force for sustainable excellence inEurope and a Vision of a world in which European organisations excel.

EFQM has promoted the concept of partnership with similar National organisationsin Europe to help promote sustainable excellence in European organisations. All of these National organisations have worked with EFQM to develop theFundamental Concepts of Excellence and to promote the EFQM Excellence Model.Contact details for our partners can be found at http://www.efqm.org/partnership_distribution/npo_details.htm

By January 2003, EFQM membership had grown to around 800 organisationsfrom most European countries and most sectors of activity. Together with theNational organisations the membership network runs to thousands of organisationswith several million individuals employed in those organisations.

In addition to being the owner of the EFQM Excellence Model and managing The European Quality Award, EFQM also provides a portfolio of services for itsmembers.

© 1999 - 2003 EFQMNo part of this publication may be reproduced, stored ina retrieval system,or transmitted in any form or by any means(be this electronically, mechanically, through photocopyor recording, or otherwise) without either the priorwritten permission of, or a licence permitting restrictedcopying and use for a third party, from the publisher.V2.1/En

The European Foundation for Quality Management

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1. Introducing excellence: using the EFQM Excellence Model to improve performance 4

2. The EFQM Excellence Model 5

3. The Fundamental Concepts of Excellence 6

4. Self-Assessment and performance improvement 9

5. The EFQM Levels of Excellence Scheme 10

6. Further Help 11

Appendix 1 12

Contents

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Introduction

This brochure provides a brief description of the EFQM Excellence Model and the Fundamental Concepts upon which theModel is based; it also outlines how organisations can use the Model and theprocess of Self-Assessment to improve

performance, and how they can benefitfrom making applications for The EuropeanQuality Award.

The EFQM Excellence Model is flexibleand can be applied to organisations largeand small, in the public as well as the private sector.

1. Introducing Excellence: using the EFQMExcellence Model to improve performance

52. The EFQM Excellence Model

The EFQM Excellence Model, a non-prescriptive framework based on nine criteria,can be used to assess an organisation’s progresstowards excellence*. The Model recognisesthere are many approaches to achieving sustainable excellence in all aspects of performance. It is based on the premise that:

*Excellent results with respect to Performance,Customers, People and Society are achievedthrough Leadership driving Policy andStrategy, that is delivered through People,Partnerships and Resources and Processes.

The arrows emphasise the dynamic natureof the Model. They show innovation andlearning help to improve enablers which inturn lead to improved results.

Definitions of the nine criteria and the criterion parts are given in Appendix 1.Forconvenience, we use the terms “Enablers”and “Results” to designate two categories ofcriteria. Enabler criteria are concerned withhow the organisation undertakes key activities;Results criteria are concerned with whatresults are being achieved.

At the heart of the Model lies the RADARlogic. The elements of RADAR are Results,Approach, Deployment, Assessment andReview. The elements of Approach,Deployment, Assessment and Review areused when assessing “Enabler” criteria andthe Results element is used when assessing“Results” criteria.

Within this non-prescriptive framework,certain Fundamental Concepts underpin theModel. Behaviours, activities or initiativesbased on these concepts are often referred toas Total Quality Management. This is whatwe mean when we use the words “TotalQuality Management” in this brochure.

The concepts are not listed in any particularorder and the list is not meant to be exhaustive.They will change as excellent organisationsdevelop and improve.

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Leadership

People

ENAB L ER S

I NNOVAT I ON AND L E ARN ING

RE SU LT S

Partnerships& Resources

Policy &Strategy Processes

KeyPerformance

Results

People Results

Society Results

CustomerResults

© 1999 - 2003 EFQM

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Results Orientation

The ConceptExcellence is achieving results that delightall the organisation’s stakeholders.

How the Concept is put into practiceIn the fast changing environment that istoday’s world, Excellent organisations are agile,flexible and responsive as stakeholder needsand expectations change, often frequentlyand quickly. Excellent organisations measureand anticipate the needs and expectations oftheir stakeholders, monitor their experiencesand perceptions, and monitor and reviewthe performance of other organisations.Information is gathered from both currentand future stakeholders. This information isused in order to set, implement and reviewtheir policies, strategies, objectives, targets,measures and plans, for the short, mediumand longer term. The information gatheredalso helps the organisation to develop andachieve a balanced set of stakeholder results.

Customer Focus

The ConceptExcellence is creating sustainable customervalue.

How the Concept is put into practiceExcellent organisations know and intimatelyunderstand their customers. They understandthat customers are the final arbiters of productand service quality. They also understandthat customer loyalty, retention and marketshare gain is maximised through a clearfocus on the needs and expectations of bothexisting and potential customers. They areresponsive to those customers’ present needsand expectations. Where appropriate theysegment their customers to improve theeffectiveness of their response. They monitorcompetitor activity and understand theircompetitive advantage. They effectivelyanticipate what customers’ future needs andexpectations will be and act now in order tomeet and where possible exceed them. Theymonitor and review the experiences and per-ceptions of their customers and wherethings go wrong they respond quickly andeffectively. They build and maintain excellentrelationships with all their customers.

Leadership and Constancy of Purpose

The ConceptExcellence is visionary and inspirational leadership, coupled with constancy of purpose.

How the Concept is put into practiceExcellent organisations have leaders who set and communicate a clear direction fortheir organisation. In doing so they uniteand motivate other leaders to inspire their people. They establish values, ethics,culture and a governance structure for theorganisation that provides a unique identityand attractiveness to stakeholders. Leadersat all levels within these organisationsconstantly drive and inspire others towardsexcellence and in so doing display both role model behaviour and performance.They lead by example, recognising their stakeholders and working with them on joint improvement activity. During times of turbulence they display a constancy of purposeand steadiness that inspires the confidenceand commitment of their stakeholders. At the same time they demonstrate thecapability to adapt and realign the directionof their organisation in the light of a fastmoving and constantly changing externalenvironment, and in so doing carry theirpeople with them.

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Management by Processes and Facts

The ConceptExcellence is managing the organisation througha set of interdependent and interrelated systems,processes and facts.

How the Concept is put into practiceExcellent organisations have an effectivemanagement system based upon, and designedto deliver, the needs and expectations of allstakeholders. The systematic implementationof the policies, strategies, objectives andplans of the organisation are enabled andassured through a clear and integrated set of processes. These processes are effectivelydeployed, managed and improved on a day-to-day basis. Decisions are based on factually reliable information relating tocurrent and projected performance, processand systems capability, stakeholder needs,expectations and experiences, and the performance of other organisations, including,where appropriate, that of competitors.Risks are identified based on sound performance measures and effectively managed. The organisation is governed in ahighly professional manner, meeting andexceeding all corporate external requirements.Appropriate prevention measures are identifiedand implemented inspiring and maintaininghigh levels of confidence with stakeholders.

People Development and Involvement

The ConceptExcellence is maximising the contributionof employees through their developmentand involvement.

How the Concept is put into practiceExcellent organisations identify and understandthe competencies needed, both now and in the future, in order to implement theorganisation’s policies, strategies, objectivesand plans. They recruit and develop theirpeople to match these competencies andactively and positively support them throughout. Personal development is promoted and supported allowing people to realise and unlock their full potential.They prepare people to meet and adapt to thechanges required of them both in terms ofoperational changes and personal capabilities.

They recognise the increasing importance ofthe intellectual capital of their people anduse their knowledge for the benefit of theorganisation. They seek to care, reward andrecognise their people in a way that buildstheir commitment and encourages theirloyalty to the organisation. They maximisethe potential and the active involvement of their people through shared values and aculture of trust, openness and empowerment.They utilise that involvement to generateand implement ideas for improvement.

Continuous Learning, Innovationand Improvement

The ConceptExcellence is challenging the status quo and effecting change by utilising learning to create innovation and improvementopportunities.

How the Concept is put into practiceExcellent organisations continuously learn,both from their own activities and perfor-mance and from that of others. They rigorously benchmark, both internally andexternally. They capture and share theknowledge of their people in order to maximise learning across and within theorganisation. There is an openness to acceptand use ideas from all stakeholders. Peopleare encouraged to look beyond today andtoday’s capabilities. They are careful to guardtheir intellectual property and to exploit itfor commercial gain, where appropriate.Their people constantly challenge the statusquo and seek opportunities for continuousinnovation and improvement that add value.

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Partnership Development

The ConceptExcellence is developing and maintainingvalue adding partnerships.

How the Concept is put into practiceExcellent organisations recognise that in the constantly changing and increasinglydemanding world of today success maydepend on the partnerships they develop.They seek out, and develop, partnershipswith other organisations. These partnershipsenable them to deliver enhanced value totheir stakeholders through optimising corecompetencies. These partnerships may bewith customers, society, suppliers or evencompetitors and are based on clearly identifiedmutual benefit. Partners’ work together toachieve shared goals, supporting one anotherwith expertise, resources and knowledge and build a sustainable relationship basedon mutual trust, respect and openness.

Corporate Social Responsibility

The ConceptExcellence is exceeding the minimum regu-latory framework in which the organisationoperates and to strive to understand andrespond to the expectations of their stake-holders in society.

How the Concept is put into practiceExcellent organisations adopt a highly ethical approach by being transparent andaccountable to their stakeholders for theirperformance as a responsible organisation.They give consideration to, and activelypromote, social responsibility and ecologicalsustainability both now and for the future. The organisation’s Corporate SocialResponsibility is expressed in the values andintegrated within the organisation. Throughopen and inclusive stakeholder engagement,they meet and exceed the expectations and regulations of the local and, whereappropriate, the global community. As wellas managing risk, they seek out and promoteopportunities to work on mutually beneficialprojects with society inspiring and maintaininghigh levels of confidence with stakeholders.They are aware of the organisation’s impacton both the current and future communitytaking care to minimise any adverse impact.

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Adoption of the process of Self-Assessmentis EFQM’s recommended strategy forimproving performance. EFQM is convin-ced that, applied rigorously, Self-Assessmentwill help organisations, large and small, inthe private and public sectors, work moreeffectively.

Self-Assessment is a comprehensive, systematicand regular review of an organisation’s activities and results referenced against theEFQM Excellence Model.

The Self-Assessment process allows theorganisation to discern clearly its strengthsand areas in which improvement can bemade. Following this process of evaluation,improvement plans are launched, which aremonitored for progress. Organisations carryout this cycle of evaluating and takingaction repeatedly so that they can achievegenuine and sustained improvement.

Organisations using the EFQM ExcellenceModel for Self-Assessment have found theexercise results in a wide range of benefits,notably:

Provides a highly structured, fact basedapproach to identifying and assessing anorganisation’s strengths and areas forimprovement and measuring progressperiodically;Educates people on the FundamentalConcepts and framework for managingand improving the organisation and howit relates to their responsibilities;Integrates the various improvement initiativesinto normal operations;Facilitates comparisons with other organi-sations, of a similar or diverse nature,using a set of criteria that is widely acceptedacross Europe as well as identifying andallowing for the sharing of “good practice”within an organisation.

To summarise, the Self-Assessment processoffers organisations an opportunity to learn:to learn about the organisation’s strengthsand weaknesses, about what “excellence”means to the organisation, about the organisation’s progress on the journey toexcellence, how far it still has to go and how it compares with other organisations.

The process of Self-Assessment is explainedin greater detail in EFQM’s brochureAssessing for Excellence.

4. Self-Assessment and performance improvement

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The EFQM Levels of Excellence Scheme wascreated to provide consistent European-wide recognition to organisations at eachstep of their journey to Excellence. Somewere asking for simple, practical ways tobegin their journey whilst mature organisationswanted more sophisticated products andservices to enhance their efforts to achieveever-higher levels of excellence. Organisationsapply to whichever level they think is mostappropriate for their level of maturity. Thescheme is run by both EFQM and itsNational Partners, making it possible fororganisations to apply in their native language.All Levels involve assessment against theEFQM Excellence Model.

The main objectives of the scheme are to:Extend recognition to organisations atevery level of achievement;Maximise the number of organisationswho are able to apply the principles of theEFQM Excellence Model for organisationalimprovement;Provide independent feedback from practisingmanagers to support organisations in theirquest to improve;Provide practical products and servicesthat help organisations achieve improvedlevels of excellence.

The EFQM Levels of ExcellenceScheme has three strands

I.European Quality Award (EQA) The European Quality Award is Europe’smost prestigious Award for organisationalexcellence and is the top Level of the EFQMLevels of Excellence. It has been run annuallysince 1992. Recognition by means of a pres-tigious award remains a key stimulator ofexcellence. Organisations who are achievingworld class quality standards remain the targetgroup and are the potential applicants forthe European Quality Award (EQA).Nevertheless, it remains open to members andnon-members regardless of their size and sector.Separate categories exist for large organisations,operational units, the public sector andsmall and medium enterprises (SMEs).

II. Recognised for Excellence This Level is also available to both EFQMmembers and non-members. It is based onthe full EFQM Excellence Model, and offersapplicants the benefits of a structured approachto identify organisational strengths and areasfor improvement, and recognises successfulefforts to implement excellence and goodpractice. It requires a shorter applicationdocument and a modified assessment processwhen compared to the EQA. The programmewill recognise organisations whose score isconfirmed at 400 or more points. Applicantswho achieve this level can be considered wellmanaged organisations and they will be ableto use the recognition in their commercialand promotional efforts.

III. Committed to ExcellenceCommitted to Excellence is designed fororganisations at the beginning of their journeyto excellence. The emphasis will be on helpingorganisations understand their current levelof performance and to establish improvementpriorities. This Level is based on a two-stageprocess. The first stage involves applicantsgoing through a Self-Assessment at a highlevel, using the 9 criteria of the EFQMExcellence Model. This will provide a broadoverview of performance against an establishedframework used by role model organisations.The output of this assessment will result inthe applicant identifying a limited numberof improvement areas relevant to their orga-nisation. The second stage calls for organisationsto demonstrate that improvement actions havebeen deployed. Organisations that demonstratethey are Committed to Excellence will beable to use the recognition in their commercialand promotional efforts.

Who is the scheme aimed at?All organisations (for EQA this is limited toEuropean organisations) - large businesses,public sector organisations, small andmedium-sized enterprises and operationalunits - can participate. The scheme providesuser friendly, practical ways to begin anorganisation’s journey towards excellenceand is therefore primarily designed for thoseorganisations that:

Want to find out more about how theymanage their business or an operationalunit within their business and wouldvalue independent feedback from practi-sing managers; Are looking for a holistic approach toimproving their business;Want a simple and practical approach tofind out more about how leading edgeorganisations manage and improve theirbusinesses;Would value some form of recognition fortheir initial efforts in seeking to becomean excellent company.

If you want to know moreIf you would like to know more aboutEFQM Levels of Excellence please visit ourhome page at www.efqm.org where you willfind details about the scheme and applicationforms. In addition, our web-site holds a rollof honour of organisations who have beenrecognised through both the EuropeanQuality Awards and the other Levels ofExcellence.

5. The EFQM Levels of Excellence Scheme

116. Further Help

EFQM works in partnership with many national organisations in Europe and licenses a number of organisations to deliver training coursesrelated to the EFQM Excellence Model. We also organise a number of events throughout Europe related to the Excellence Model. Furtherinformation on these organisations and events are available via our website (www. efqm.org)

ASSOCIATED PRODUCTS

TITLE

Introducing Excellence

Fundamental Concepts of Excellence

The EFQM Excellence Model

The EFQM Excellence Model Public Sector Version

The EFQM Excellence Model Small and Medium Enterprise Version

Assessing for Excellence - A Practical Guide for Self-Assessment

Pack of Advice

CD-ROM Self-Assessment Workbook

Excellence One Tool Box and CD-ROM

PURPOSE

Overview of the Model, the Concepts, the Levels ofExcellence Recognition Scheme and Self-Assessment.

To provide detailed information on the FundamentalConcepts. To persuade senior executives that the Modelhas value, and is based on sound business sense.

To provide details on the EFQM Excellence Model,including the linkages with the FundamentalConcepts, criteria and criterion parts.

As above with Public Sector differences.

As above with SME differences.

To provide a summary of what Self-Assessment is, thevalue of it, the different approaches to Self-Assessmentand their respective risks and benefits.

Providing general advice on the implementation ofExcellence into an organisation using the EFQMExcellence Model.

A structured set of 90 questions based on the EFQMExcellence Model.

A comprehensive, interactive, online learning platformfor Performance Excellence.

AUDIENCE

Anyone with a general enquiry or interest onEFQM, the EFQM Excellence Model and Modelrelated activities.

Those with an interest in the concepts underpinningthe Model.Senior Executives and people who need to persuadeSenior Executives.

Award Applicants (2004 awards onwards).Self-Assessment practitioners including internal andaward assessors.Quality professionals and others with a wish tounderstand the Model in more detail. Also supporting Material for the EFQM AssessorTraining Course & Self-Assessment Training Courses.

As above but also for those with a specific interest inusing the Model within Public Sector organisations.

As above but also for those with a specific interest inusing the Model within SMEs.

People either charged with, or involved in, developingSelf-Assessment strategies in their organisation.People who wish to benchmark their current Self-Assessment approach.Also supporting material for the EFQM Self-Assessment Training Course.

Those wishing for easy description and liveexamples of the implementation of the Model.

Organisations wishing to undertake an easy questionnaire approach to Self-Assessment.

Any organisation or individual wishing to haveaccess to regular news updates, latest managementpractices and tools and discussion forums onPerformance Excellence topics.

12 Appendix 1

The EFQM Excellence Model

Leadership10%

People9%

ENABL ER S

I NNOVAT I ON AND L E ARN ING

RE SU LT S

Partnerships& Resources

9%

Policy &Strategy

8%

Processes14%

KeyPerformance

Results15%

People Results9%

Society Results6%

CustomerResults 20%

The percentages shown are those used forassessing applications for The EuropeanQuality Award.

Organisations practising Self-Assessment mayuse the percentages shown but they may also,of course, select percentages more appropriate

to the particular features of their own orga-nisation. Furthermore, some organisations prefernot to “score” their internal Self-Assessmentbut to concentrate on the “strengths” and“improvements” that are highlighted. (SeeEFQM brochure: Assessing for Excellence: a practical guide to Self-Assessment.)

Definitions of the criteria and criterion partsin the EFQM Model are given below - a furthermore detailed description of the Model interms of “guidance points” for each sub-cri-terion is given in “The EFQM ExcellenceModel” also available from EFQM.

© 1999 - 2003 EFQM

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3. PEOPLE1. LEADERSHIP

Excellent Leaders develop and facilitate theachievement of the mission and vision. Theydevelop organisational values and systemsrequired for sustainable success and implementthese via their actions and behaviours.During periods of change they retain a constancyof purpose. Where required, such leaders areable to change the direction of the organisationand inspire others to follow.

1a. Leaders develop the mission, vision,values and ethics and are role models ofa culture of Excellence

1b. Leaders are personally involved inensuring the organisation’s managementsystem is developed, implemented andcontinuously improved

1c. Leaders interact with customers,partners and representatives of society

1d. Leaders reinforce a culture ofExcellence with the organisation’s people

1e. Leaders identify and championorganisational change

Excellent Organisations implement theirmission and vision by developing a stakeholderfocused strategy that takes account of themarket and sector in which it operates.Policies, plans, objectives, and processes aredeveloped and deployed to deliver the strategy.

2a. Policy and Strategy are based onthe present and future needs andexpectations of stakeholders

2b. Policy and Strategy are based oninformation from performance measu-rement, research, learning and externalrelated activities

2c. Policy and Strategy are developed,reviewed and updated

2d. Policy and Strategy are communi-cated and deployed through a frameworkof key processes

Excellent organisations manage, developand release the full potential of their people at an individual, team-based andorganisational level. They promote fairnessand equality and involve and empower theirpeople. They care for, communicate, rewardand recognise, in a way that motivates staffand builds commitment to using their skills and knowledge for the benefit of theorganisation.

3a. People resources are planned, managedand improved

3b. People’s knowledge and competenciesare identified, developed and sustained

3c. People are involved and empowered

3d. People and the organisation have adialogue

3e. People are rewarded, recognised andcared for

2. POLICY AND STRATEGY

Model Criteria

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Excellent organisations plan and manageexternal partnerships, suppliers and internalresources in order to support policy andstrategy and the effective operation of processes. During planning and whilstmanaging partnerships and resources theybalance the current and future needs of the organisation, the community and theenvironment.

4a. External partnerships are managed

4b. Finances are managed

4c. Buildings, equipment and materialsare managed

4d. Technology is managed

4e. Information and knowledge aremanaged

Excellent organisations design, manage andimprove processes in order to fully satisfy,and generate increasing value for, customersand other stakeholders.

5a. Processes are systematically designedand managed

5b. Processes are improved, as needed,using innovation in order to fully satisfy and generate increasing valuefor customers and other stakeholders

5c. Products and Services are designedand developed based on customerneeds and expectations

5d. Products and Services are produced,delivered and serviced

5e. Customer relationships are managedand enhanced

Excellent organisations comprehensivelymeasure and achieve outstanding resultswith respect to their customers.

6a. Perception Measures

6b. Performance Indicators

4. PARTNERSHIPS AND RESOURCES 5. PROCESSES 6. CUSTOMER RESULTS

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Excellent organisations comprehensivelymeasure and achieve outstanding results withrespect to their people.

7a. Perception Measures

7b. Performance Indicators

Excellent organisations comprehensivelymeasure and achieve outstanding results withrespect to society.

8a. Perception Measures

8b. Performance Indicators

Excellent organisations comprehensivelymeasure and achieve outstanding resultswith respect to the key elements of theirpolicy and strategy.

9a. Key Performance Outcomes

9b. Key Performance Indicators

7. PEOPLE RESULTS 8. SOCIETY RESULTS 9. KEY PERFORMANCE RESULTS

1ISBN 90-5236-072-3

Brussels Representative OfficeAvenue des Pléiades, 151200 Brussels, BelgiumTel: + 32 2 775 35 11Fax: + 32 2 775 35 35http://www.efqm.orge-mail: info@efqm.org

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