The importance of the EFQM Excellence Model in a sustainable society

Last week I mentioned that it is time for Third Generation Quality Management (3GQM). It is time for a method that makes a significant contribution to a more sustainable society. It is time for EFQM - The Next Level.

Buzzword

'Sustainability' is a buzzword that everyone has an opinion about. But what is sustainability anyway? Anyone who consults the Glossary of the EFQM Model 2013 brochure will be disappointed: sustainability is not even in there...

But is it really a problem if sustainability plays a limited role? That depends on your ambition. The vision of EFQM - 'A world striving for sustainable excellence' - indicates a clear desire to be recognized as a Global Role Model. This is supported by one of the core values: ‘We develop partnerships that generate mutual benefits for the community.’

Focus and vision

Sustainable excellence goes beyond the pursuit of business excellence. This requires more than an 'inside-out' perspective on the quality of the internal organization. Our global economy calls for a broad view on the world and to have a clear idea of the organization, however small, how to fulfil its role in it. In this context it is important for the EFQM Model 2016 that we have a discussion about:

• What is the role of the EFQM Excellence Model in a sustainable society?

• What is the ambition of the EFQM community? 

• What definitions will we use in this context?

Clear compass

Clear principles make the targets transparent. The four sustainability principles of The Natural Step Framework are useful guidelines towards a more sustainable way of thinking and doing, and thus towards a sustainable society. These scientifically based sustainability principles provide a compass which inspires more and more organizations.

Combining principles & criteria

The sustainability principles are easy to combine with the EFQM Excellence Model criteria. In first instance, of course, with the criterion Leadership and the Vision of the organization. The strength of the EFQM Excellence Model to help organizations achieve their strategy in combination with a vision in which the organization defines her role in a sustainable society brings Third Generation Quality Management very close to home! 

New website

Like the EFQM Model Improve4all continues to develop. Next week the new website will go live - including this blog. It is time for change. It's time for Improve4all - The Next Level. You have been warned!

EFQM: The Next Level

Next to customer results and employee results society results are an equally important factor in the EFQM Excellence Model. However looking at the average scores EFQM Excellence Award (EEA) applicants have received for society results the past years this is not evident. What does this mean? And how can we change that?

Looking out for society
In the EFQM Model 2013 the Fundamental Concept Creating a Sustainable Future (CSF) is defined as: ‘Excellent organizations have a positive impact on the world around them by enhancing their performance whilst simultaneously advancing the economic, environmental and social conditions within the communities they touch.'
How does this wonderful definition connect to reality? Do excellent organizations really have a positive impact on the world around them?

Relative versus reality
To answer these questions the feedback reports of 19 EFQM Excellence Award assessments (from 2010 to 2012) were reviewed. These reports were selected because of their 'high scores’ on society results (EFQM criteria 8). ‘High’ defined as scoring at least 60 points (of 100). Relatively speaking this is a lot as over the years society results on average have scored 'low' with only 45 points, where all the other criteria averaged scores between 58 and 62 points!

Role models
From the analysis of these 19 feedback reports only three really good examples regarding ‘society results’ could be identified: Red Eléctrica de España (Spain), Coca-Cola Ýçecek (Turkey) and Umicore Precious Metals Refining (Belgium). These role model organizations all have certified ISO9001, ISO14001 en OHSAS18001 management systems in place, but more importantly they survey the perceptions of society, have integrated sustainability into their strategy and publish a sustainability report.
But this also means that scoring relatively high on society results does not yet tell us much about how 'focused' the organization towards ‘society’ really is.

Attention
The purpose of implementing the EFQM Model is to achieve balanced results, because we believe that this the basis for continued organizational success. Although societal / sustainability issues are in the news every day these days, even the EEA-applicants to date do not seems to be able to attain the same level of results for society as for the other results criteria. A point of attention!

EFQM: The Next Level
This year the EFQM Model celebrates its 25th anniversary. Through the years the EFQM Model has been updated. Valuable and necessary updates have been done, but no structural changes were made. Maybe it is time for EFQM – The Next Level. Curious about that? More next week!

Why we need enlightened leaders

It is a known fact: at some point the oil will run out. To continue to provide food and shelter to the growing population in the world, we produce continuously. And with that, we consume more and more energy and that inevitably will lead to problems. Fortunately, there are solutions.

Self-sufficiency
The first steps towards to provide sustainable energy have been taken, but this is not enough. At the current pace it will take a long time for sun, water and wind to become our main sources of energy. The speed must increase, and that is precisely the purpose of the Vision 2050: a roadmap towards a self-sustaining planet.

Illustration: Ivo va Leeuwen.

Changing the rules of the game
Businesses should also contribute to this, but that requires some ‘enlightened leadership’. According to Peter Bakker - President of the World Business Council for Sustainable Development (WBCSD) - there are (far) too few business leaders with a sustainability vision. So, the rules of the game must change. Together with the International Integrated Reporting Council (IIRC), the WBCSD drafted a framework for Integrated Reporting: a new way of reporting where not only financial data, but also the way value is created is playing a part. The main question: what are the social consequences - for humans, for animals and the environment - of the business activities?

Good example
It may sound complicated 'Integrated Reporting', but it is not too bad. The SAP Integrated Report 2012 is a good example of a report in which the non-financial results are clearly presented. Their rationale: ‘When products touch millions of people, safety and innovation go hand in hand.’

Leadership
Integrated Reporting is the result of ‘integrated’ management, which is the result of the 'integrated' strategy. At the core lies the 'integrated' vision. And who defines the vision of the organisation? Precisely: the leaders! As the EFQM Excellence Model 2013 under the criterion Leadership proclaims: ‘Leaders develop the mission, vision, values and ethics and act as role models’.

Sustainable future
For all organisations who do not know where to start: use the EFQM Excellence Model! Developed already 25 years ago, but still effective in providing organisations with a clear roadmap towards a sustainable - financial and non-financial - future.

New winners, new books, new challenges

Nothing lasts forever. Projects are started and completed. New insights lead to new publications and new role models. And be warned, because the EFQM Excellence Award assessment teams are on the move again…

Who will be the 2013 EFQM Excellence Award Winner?
As every year in January and February EFQM put the EEA-assessment teams together. After an individual preparation period, in March all teams met up in Brussels for the 'briefing event’. During a relaxing and inspiring get-together the groundwork for the EFQM Excellence Award assessments in May / June was completed. The big question is always which organizations will receive the honours this year. In October at the EFQM Forum in beautiful Vienna the EEA 2013 winners will be announced!

Briefing event EFQM assessment teams.

Book Launch
The role and responsibilities of companies are under discussion. The central question is: how can organizations simultaneously serve multiple stakeholders, both inside and outside the organization? The goal: a balanced use of the four forms of capital, being social, human, environmental and financial.
The new Dutch book Derde Generatie Kwaliteitsmanagement (third generation quality management) describes the search for existing and new insights in the field of quality management. As Improve4all I contributed to this book with a chapter on the role and importance of social results in the EFQM Excellence Model.
The book will be presented on 30th of May, during the 17th National Quality Congress in the Netherlands. As Improve4all I will provide a workshop on the EFQM-chapter in the book.

Sustainability Report 2012 for ASML 
Sustainability is not a one trick pony, but a continuous process. Similarly, neither was the creation of the 2012 Sustainability Report for the Dutch chip machine manufacturer ASML. The report was completed over a period of six months, a time in which many aha-moments were experienced providing a nice base to build upon.

Every beginning has an ending...
After more than two years the challenging interim management assignment at ASML as come to an end. As Corporate Sustainability Manager I have enjoyed the pleasant cooperation with people on all levels in the organisation. ASML is a vibrant company with innovation at the core of its being.
I will continue as sustainability professional looking for new challenges in the context of creating a more sustainable world. And for me too innovation, in the way we think and act, is at the top of my priority list!

Change is coming!

The world is changing at a fast pace. The population is growing explosively and consumption is growing with it. We cannot remain bystanders while we eat the planet. These words come from Paul Polman, CEO of Unilever, one of the world’s largest producers of nutrition, hygiene and personal care. Companies play a role in the world of tomorrow, but how?

Abiding the law
National and international laws are often the decisive factor for the behaviour of companies: as long as the laws are respected, it is good. But is that enough for a sustainable future? Polman does not think so: 'CEOs need to understand that they cannot be bystanders anymore. They need to move from a license to operate to a license to lead and take on an active role.'

Ambition
At Unilever they put their money where their mouth is: in the Sustainable Living Plan Unilever expresses their ambition: by 2020 halve the impact while doubling turnover. Unilever does not yet know how to achieve this, because this requires many innovations throughout the supply chain. However this does not result in Unilever playing the waiting game. On the contrary: they publicly announced this ambition making clear it is optional any longer. Moreover they are completely transparent about where they are now.  By publishing a 'wish list' with innovation areas they invite stakeholders throughout the value chain to support them in finding better solutions. This creates a proactive focus on society making it a fixed part of the strategy of the business.

Collaboration
Of course there are risks: there is relatively little attention for the real problems in the world, globally confidence is low and the powerful internet can make or break a company. At company level there are problems with managing the value chain: we know little about where our raw materials and semi-finished products come from and under which conditions these have been created. So we need transparency and cooperation: we really cannot do it alone.

Paul Polman, CEO Unilever: 'Shape, share and stimulate.'

Exemplary Role
The powerful product brands are perfectly capable to fulfil an exemplary role. Think of the soap brand Dove where Unilever in their campaigns emphasized the importance of washing your hands, or using a food brand to support educational programs around eating healthy. The possibilities are endless and are sometimes simply obvious. Mostly it is a matter of wanting to do it and then making it happen. Or, as Polman puts it: shape, share and stimulate.

How happiness can make any company stronger

Today - Wednesday, 20 March 2013 - is a special day. It is the first International Day of Happiness, proclaimed by the General Assembly of the United Nations, because the pursuit of happiness is a fundamental human need. But what is happiness anyway? And what does this mean to companies?

Putting people first

The status of a country is usually deduced from their Gross National Product: the total value of all goods and services produced in a given period. Not in Bhutan, where King Wangchuk in 1972 developed a new measure: Gross National Happiness. On the basis of 33 indicators the 'turnover' of the country is measured, including health, psychological well-being, education, culture, governance, community, ecology, living standards and the use of time. In Bhutan they look further than their pay check, people come first. Notwithstanding these noble initiatives, there are also critics: many measures are subjective and negative developments (such as crime) are not deducted. But still, we can learn much from Bhutan.

Mental health

Over the years Bhutan has become an inspiration. In 2012 the Earth Institute published - commissioned by the United Nations - the World Happiness Report. Some notable conclusions in it:
- 'Rich' countries are happier than 'poor' countries. This does not mean more money, because the strength of the social safety net, the degree of personal freedom and the absence of corruption have a bigger impact on happiness;
- Job security and good working relationships are more important than salary and working hours;
- In each country, the most important factor is: the mental health of its population.
How entrepreneurs can use this knowledge?

Illustration: Ivo van Leeuwen.

True faith

Ricardo Semler is the CEO of a Brazilian company called SEMCO. He is a man devoid of authoritarian structures. This is proved by the fact that on his first day as CEO he fired as much as 60% of his executive team. Multiple times Semler was proclaimed 'Brazilian businessman of the year’ because of his unorthodox management style. SEMCO is characterized by an open culture with lots of room for personal initiatives: there are no fixed working hours, no dress code and a minimal number of procedures. The company consists of independent cells where every employee has access to and participates in de business, even on financial level. The employees have real freedom, there is a genuine trust. And it pays off, because annually SEMCO grows 25% on average!

Fun

Actually, the message is simple: the happier employees are, the better they perform. Ensure that people are genuinely involved in the organization and enjoy their work, that's the point. Or as Semler himself puts it: "If we do not let people do things the way they do, we will never know what they are really capable of and they will just follow our boarding school rules."

Practicing sustainability difficult? Of course not!

Often there is a world of difference between theory and practice. How to make the transition from model to reality? How to implement a sustainability strategy? When using the EFQM Excellence Model that is not so difficult.

Sustainability
From the very beginning the EFQM network felt ‘society’ needed to be one of stakeholders in the EFQM Excellence Model. And as a result the interests of the public at large have always been part of the values underpinning the criteria of the model. These values, there are eight, are called the Fundamental Concepts of Excellence. In the 2013 revision of the model the ‘society concept’ is titled: "Creating a Sustainable Future".

Good management
The EFQM network always considered the EFQM Excellence Model to be a 'sustainable model'. Implicitly, but also explicitly, society is part of the EFQM model criteria and sub-criteria. And during more recent evaluations of the EFQM Excellence Model 'having a positive impact on society’ has become even more apparent as one of the principles of ‘good management’ according to the EFQM.

Illustration: Ivo van Leeuwen.

 Supply chain
To create a sustainable balance between the interests of companies, people and the environment (people, planet, profit) strategic focus should be directed towards international socially responsible supply chain management. This supply chain approach is also the point of attention in the debate on transitioning from a linear economy to a circular economy, going from ‘take-make-waste' to 'borrow-use-return'. All this goes far and beyond the realized positive or negative impact of the company itself.

Golden combination
Using The Natural Step Framework an organization develops a sustainability strategy with the planet as one of the stakeholders. With the EFQM Excellence Model, consisting of the Fundamental Concepts, the nine criteria of the EFQM Model and RADAR, this sustainability strategy can be implemented. Using the EFQM Excellence Model an organization can develop a culture of excellence, bring consistency in the management style, compare themselves to the good examples of others and encourage innovation to improve results. The Natural Step and the EFQM Excellence Model are therefore sustainability’s golden combination.