Innovation in EFQM Model of Excellence

There are many different pressures on enterprises to improve their operations, to be able succeed on the marketplace, and be competitive. They have to focus their attention towards the achievement of excellence in their performance. One of the ways to do so is innovation.

Therefore, the role of innovations for achieving excellence is critical. When talking about innovations, we are not talking about only innovation of products, but also innovations of processes, marketing innovations, organizational innovation, innovations in the field of human resources management and so on.

There is no single definition of innovation in an organization. However, the uniting feature of innovations is the implementation of something new to life. Thus, innovations can be characterized as one or more of the following:

  • the renewal and expansion of the range of products and services and the associated markets;
  • the establishment of new methods of production, supply and distribution;
  • the introduction of changes in management, work organization, and the working conditions and skills of the workforce.

Innovation may include the technical, design, manufacturing, management and commercial activities involved in the marketing of a new (or improved) product or the first commercial use of a new (or improved) process.

Customers increasingly prefer novelty in the products or services they consume. Therefore, the role of innovations lies in the ability of the organizations to comply with growing requirements of customers for something new – product functions, acceptable price, variability and quality, reliability, useful life, design, and user-friendly nature.

What does innovation mean from the EFQM perspective?

The EFQM model states that Innovation has never been more important for organizational success. Properly understood and applied it can help any organization grow faster, be more agile and unlock new forms of value. However, creating a self-sustaining culture of innovation can be hugely challenging.

There are some essential ingredients for setting up a successful innovation program within an organization. It may include:

  • Setting up values that nurture and enable innovation;
  • Having a desire to use innovation to meet or exceed customer expectations, driven by a deep understanding of what they want;
  • Having the humility to readily collaborate with Key Stakeholders, both internal and external;
  • Having the ambition and willingness to identify and implement innovative new ways of working, including the appetite to take measured risks and the patience required to innovate successfully
  • Embedding innovation processes into the operations in a manner that support sustainability; and
  • Clearly defining measures of innovation and setting aside both time and budget to innovate.

EFQM Model includes a special tool, Lens Series, that uses the guiding principles and seven criteria of the EFQM Model as the basis for focusing on a specific topic, such as Innovation. Organizations find it important to integrate and embed specific management topics or to ensure sector good practices within its Purpose, Ecosystem, Leadership, Culture, Operations, and Results.

The Innovation Lens allows an organization to assess its level of innovation maturity, i.e. how successful its innovation program is, against a comprehensive suite of indicators as follows:

  • Improved economic performance
  • Improved customer satisfaction and loyalty
  • Opportunity for deeper employee engagement and motivation;
  • Development of processes that will enable sustainable innovation;
  • Potential for an organization to achieve competitive differentiation and market space;
  • Opportunity for external recognition that allows an organization to publicly celebrate its success;
  • Opportunity for an organization to become part of a cross-sector EFQM Innovation Community that is focused on wealth creation and improving standards.

What does innovation mean from the organization’s perspective?

It means setting up the activities, processes and culture that combine to stimulate innovation and encourage it to flourish within their organization.

This can be expressed in two equally important ways. The organization actively develops new products (including services) or innovates work processes. New products need to satisfy customers’ requirements. In the case of work process innovation, it must contribute greatly to the efficiency of business management. One of the key points is that every organization should have at least one so-called unique activity.

Depending on the organization’s environment, improvement (of its current products, processes, etc.) and innovation (to develop new products, processes, etc.) could be necessary for sustained success.

Learning provides the basis for effective and efficient improvement and innovation. Improvement, innovation and learning can be applied to products, processes and their interfaces, organizational structures, management systems, human aspects and culture, infrastructure, work environment and technology, relations with relevant interested parties.

Fundamental to effective and efficient improvement, innovation and learning is the ability and enablement of the people in the organization to make informed judgments on the basis of data analyses and the incorporation of lessons learned.

Changes in the organization’s environment could require innovation in order to meet the needs and expectations of interested parties. The organization should identify the need for innovation, establish and maintain an effective and efficient innovation process and provide the related resources.

Innovation can be applied to issues at all levels, through changes in technology or product, processes, the organization, the organization’s management system.

The organization should use a process that is in alignment with its strategy to plan and prioritize innovations. The organization should support the innovation initiatives with the resources needed.

The organization should assess the risks related to planned innovation activities, including giving consideration to the potential impact on the organization of changes, and prepare preventive actions to mitigate those risks.

Increasingly, organizations recognize that innovation is more than the development of new products, services or solutions. It is about creating a constant flow of new ideas, responding to new trends or changing market conditions, as well as improving the existing products, services and solutions.