In October 2019, after about seven years, the new EFQM Model 2020 was published. It was preceded by long, intensive preparatory work to produce a completely new version of the model, based on the conception of the 2013 model, which takes current trends into account and gives companies and organizations impetus to meet the challenges of the present. So what specifically changes with the new 2020 version?

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This is what an Excellence Model can do

If you as a company have numerous certificates for quality, environment, occupational health and safety, information security, energy management and almost any number of other topics, the question is justified as to what is missing. Is it necessary to go beyond management system standards and deal with an excellence model such as the EFQM Model 2020?

Absolutely, because one must be aware that with the various approaches from management systems, one only designs partial management systems of a company.

But when it comes to promoting corporate success and competitiveness, standards such as ISO 9001 for quality management are not the sole means. Because what every company does cannot be differentiating. Corporate success is therefore also the result of a long-term learning process that comes about when companies become aware of their weak points and begin to actively work on them.

 

Happy in the valley of the clueless - unconscious incompetence

Most companies do not use the Model for Excellence because they do not see the point in applying it. Often, companies are filled with great confidence and self-assurance. People look back on decades of success stories - like Kodak....

One finding of users of the EFQM model is that companies are most at risk when they feel totally unthreatened. The "Sitting Duck" principle leads to these companies slipping so helplessly to their doom in a changing competitive environment, without realizing it in time. 

In the EFQM Model 2020, one starts with the analysis of the company by looking at one's own procedures and strategies in the context of the thematic areas of the model - it speaks of main and sub-criteria. As a rule, this learning process takes place with external support in the form of training, among other things. This is because it is doubly difficult to bring about a cultural change by adopting a self-critical attitude and at the same time thinking as neutrally as possible about the potential for improvement when considering the company's ability to be successful in the context of its own business model / market.

EFQM 2020: Change in the model as well

According to EFQM 2013, the new EFQM Model 2020 focuses more on the change of organizational structures. While the last version of the model still looked considerably at the achievements of the last four years, the focus of the new model is directed towards the future - keyword "Future Focus". But, "What specifically changes with the new 2020 version?"

More agility, collaboration and leadership at all levels

The EFQM Model 2020 focuses less on preserving structures; the normative sets of rules already do that. The new model asks strategically for the challenges and demands to open up the own "ecosystem" and to strengthen the collaboration with the stakeholders. It sees the success of the organization's leadership when it is successfully implemented at all levels.

The next two years will show which companies have spent the good years developing their structures!

The term "ecosystem" has a key meaning in the EFQM Model 2020. Many managers consider their systems in themselves. In an internal audit, the focus is usually on the customer, and in the best case, one looks at the chain of the end-to-end process. However, a comprehensive view of the company as an open system is often not taken.

Agility and flexibility versus arbitrariness

EFQM 2020 assumes that a defined degree of freedom in the implementation of strategically relevant activities makes a company more successful. This does not mean aiming for improvisational theater. Controlling the degrees of freedom is an important leadership task not only for top management, and it must be mastered.

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EFQM – Business Excellence

Your company handles modern management methods with aplomb. But you want more: to achieve top performance, to gain more corporate quality, to create more competitiveness. With EFQM you can turn wishes into reality.

EFQM 2020: Leadership as a success factor

The leadership of a company is often associated with the management team. Yet studies show that it is precisely the lowest management level that exerts a massive influence on the company's success. For this reason, the Excellence approach focuses on an integrated leadership concept, which conciliates the cascaded management of the company across all levels and, in particular, scrutinizes leadership performance at team level.

All people in the company work together more or less effectively. The difference in the effectiveness of collaboration - even beyond the boundaries of the company - determines the competitiveness of the organization. Normative approaches typically do not provide this view. Performance indicators alone do not fully reveal cause-and-effect relationships; they also include specific perceptions of the individuals involved.

 

Individual perceptions as indicators of performance

Particularly in B2B business, the fatigue of answering questionnaires is widespread. Often, the results of such surveys are also of limited validity. That's why the new model for excellence no longer looks only for statistical results, but also for individual feedback from key stakeholders. This means that the findings from the field of perceptions can gain considerable significance.

 

The analysis of the results runs along the structures of the organizations

So far, EFQM 2013 has given four perspectives on results. This has changed with EFQM 2020. We primarily distinguish between perceptions and performance measures. The latter define the organization's capabilities in competition.

Work is done according to the logic of the company and no longer according to the predefined logic of the model. As a result, work in the results area has become much more flexible. In the end, it is about analyzing how far the company is able to reach its goals.

 

Cat or mouse?

In a market, I am so driver or driven, cat or mouse. Most managers enjoy working with the cat more than the mouse. Entrepreneurs report that being a market leader is a much more gratifying job than being 2nd, 3rd or even 4th in the market.

However, this exposed position is usually not easy to gain and is quickly lost. In real life, a company can be cat and mouse at the same time. Once you understand in which arena you are the cat and in which you are the mouse, you can live with it just fine.

 

The golden circle: Three crucial questions

The EFQM Model 2020 has a tripartite structure that distinguishes between aspects of "alignment", "realization" and "results". The structure is based on the thought of Simon Sineck, who under the term "Golden Circle" has placed these three aspects as the basis of his considerations.

"WHY" is the first of all questions

Why should we do this? This ensures that one only takes measures that also offer a specific added value for the company. This is exactly the opposite of standard requirements, which are the same for everyone and thus immediately fall through the cracks in this consideration. EFQM 2020 thinks entrepreneurially: it looks for ways to success (See also Moll/Kaerkes "Wege zum Erfolg", ISBN: 978-3446409668).

 

The second question revolves around the "HOW".

This question addresses the design of procedures capable of solving the problem identified as relevant in the "Why" question.

 

Question no. three: "WHAT?"

Finally, the Excellence Model only selects those companies that can ultimately demonstrate their success through results. A distinction must be made between luck and ability. The model asks about the drivers of success. The "What" in the Golden Circle means which characteristics lead the company to success.

 

Drastic change without connectivity

The new model is more significantly changed than was the case in the last five changes. The familiar nine-boxes look has given way to modern round symbolism. Yet, in the deep soul of the model, the logic is still to be thought of as linear. 

What should the existing users of the EFQM 2013 model do?

There are quite a number of companies that have used the logic of the model as the basis of their management considerations. At BMW, for example, you will find the model logic deeply embedded in the management structure. The good news is that the old structure is not wrong and there is certainly no harm in continuing to work with it for now. Assessments can still be carried out according to the new model. There are already several examples of this. 

How does the model help me to develop my company?

We are heading into a challenging phase of economic development. It is to be expected that disruptive changes will occur, for which your company is either prepared or not. The Corona crisis is the prime example of this. The next two years will show which companies have spent the good years developing their structures! According to statistical research, EFQM users are clearly less likely to fail in competition because they have prepared themselves for possible stress scenarios.

Author
André Minor

Dr. André Moll is an executive board member of the German Initiative Ludwig-Erhard-Preis e.V. (ILEP e.V.). Dr. Moll, who holds a doctorate in chemistry, took over the management of the Initiative Ludwig-Erhard-Preis in 2005. As a member of the EFQM Core Team, he continuously supports the further development of the model. In addition to contributing to the design of the EFQM Model 2020, he coordinated the project team for its translation into German. With the new edition of the Excellence Handbook, he has also introduced the model's innovations into the literature on the excellence approach.

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<p>EFQM Expert and Executive Member of the Board ILEP e.V.</p>