Business Improvement

The European Foundation for Quality Management (EFQM) was created in the 1980s by leading European businesses in order to increase the acceptance of quality as a strategy for developing global competitive advantage and to encourage quality improvement initiatives.

Every aspect of business performance is considered varying from management style, resource management and strategic planning through to customer satisfaction, impact on the community and the ever important business results. This global approach ensures that the assessment and consequent improvement plans cover essential areas of the business, leaving no gaps.

Rather than recommending a single method for business improvement, the EFQM developed a model based on the experience of a number of major European companies. There are nine areas of the business environment considered in the model (shown in the diagram below) and these areas are used as the headings of a matrix of business improvement.

The EFOM Model

It has been demonstrated that these represent the critical areas which determine the level of success of a company. To promote the use of this model, the EFQM developed the European Quality Award (EQA) based on a scoring mechanism using the model.

Enablers

The five Enablers establish the business environment to permit a quality culture to evolve.

1. Leadership

How the executive team and all managers behave to inspire and drive the culture change towards a quality organisation.

2. Policy and Strategy

How the Company's policy and strategy reflect the commitment and drive towards continuous improvement in the business.

3. People Management

How the Company manages its resources and releases the full potential of its people.

4. Resources

How the key financial, information, application of technology and material resources are effectively managed and utilised to support the organisation's policy and strategy.

5. Processes

How the key processes of the business unit are identified, reviewed and revised to create an environment of continuous improvement within the organisation.

Results

The four key Results areas are concerned with how the unit measures its performance. The. occur as a result of the development of the change in business philosophy.

6. Customer Satisfaction

What is the perception of the unit's customers regarding the provision of products and services?

7. People Satisfaction

What the employees of the unit feel about the organisation.

8. Impact on Society

What is the perception of the Company amongst society at large in terms of quality of life, the environment, preservation of resources, and involvement in the community?

9. Business Results

What the unit is achieving relative to its planned business performance.

Winners of the EQA can be expected to score about 800 points. However, these are normally several years along the quality route. Effective companies who have a few years experience tend to score around 500 points.

The Business Improvement Matrix

The Business Improvement Matrix is based on the business model developed by the EFQM and will provide your business with an external benchmark of how your company is performing relative to other European companies.

This matrix offers every management team a tool which can be used to assess progress towards business improvement in a quick and simple way. Yet because it is linked to the EFQM criteria, it is possible to use the resulting scores to compare performance against other units and businesses.

What are the aims of the business improvement matrix?

In developing the Business Improvement Matrix the use made of the results of the assessment was deemed to be the most important aspect of the process.

The aims of the matrix were therefore agreed as:

To provide a simple measurement tool which would provide a regular snap-shot of performance concerning continuous improvement within a business unit.

To develop a system which allows a comparison based on nationally recognised criteria which could be used to provide a less introverted view of performance.

To offer a simple, yet complete, step by step framework to guide managers in the formulation of a plan for the implementation of continuous improvement within each business unit.

To highlight any 'gaps' identified in the planning or implementation process.

To encourage any 'gaps' to be analysed, understood and the planning of improvement to be modified to ensure a convergent approach towards business improvement.

Note: The matrix is intended for use throughout any business. The term 'unit' has been used throughout the matrix and this workbook. Therefore for 'unit' read the region, department, function or district being evaluated.

Since the matrix is designed to provide a route map for progress as well as enabling the Company to rate its performance against other European businesses, the Business Improvement Matrix describes a level comparable to that of a 500 point company. Therefore a management unit reaching level 10 in every category would be equivalent to a 500 point EFQM company.

Team Approach to Self Assessment

The following four step method is recommended for team analysis.

1. Briefing

Identify who should be on the assessment team. This will usually be the unit manager and his or her management team, but it may be a diagonal slice of the units staff. These people attend a briefing on the matrix and how to use it. At this meeting, each team member is given a copy of this workbook.

2. Individual Rating

Each team member should rate the unit on the matrix using documentary rather than anecdotal evidence. Pages 13-31 provide an expansion of the requirements of each of the steps on the matrix to help with this process.

3. Consensus Meeting

The self assessment team then meets to discuss their ratings and produce a consensus score. This will provide a more objective view of the unit.

4. Planning for Improvement

The information resulting from the Consensus Meeting should form the basis of further discussions which will be used to produce an action plan for the unit.

Guide for Completion of the Matrix

The Business Improvement Matrix consists of the nine categories identified by the EFQM. Under each heading, ten steps are listed in a logical sequence leading from first beginnings (step 1) to a good U.K/European standard of operation (step 10).

Within each of the nine categories, the stages reflect progress in terms of:

the approach adopted

levels of deployment of the approach

the results achieved using these methods.

Therefore, this tool can be used to give a snapshot of where a business unit is and identify ways in which the planning process can be amended to provide a path towards continuous business improvement.

To Rate the Unit

Using the matrix, start at level one for each category (moving left to right across the columns).

Leaving a step blank

If no action has been taken to develop or implement a plan of action for a particular step, then the box should be left blank.

To colour a step yellow

Enabler boxes should be coloured yellow if an approach to the task has been developed and/or partially implemented. The approach should be documented and evidence for any implementation should be obtainable (as opposed to being purely anecdotal).

Results boxes may be coloured yellow if there is some evidence that the approach used is having the desired effect.

To colour a step green

Enabler boxes should be over-coloured with a green pen, if there is evidence that the approach is fully deployed throughout the unit.

Results boxes can be coloured green if the approach implemented is completely successful. Having coloured all of the relevant boxes for a particular category, the next category should be completed in the same way. Once all of the categories have been rated, a score can be calculated (see Scoring Section).
The matrix has been designed so that every function should be able to use it to measure their progress. There are no not applicable boxes