EFQM FRAMEWORK FOR THE HOSPITALITY AND TOURISM INDUSTRY

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1 EFQM FRAMEWORK FOR THE HOSPITALITY AND TOURISM INDUSTRY

2 EFQM Shares What Works We are committed to helping organisations drive improvement through the EFQM Excellence Model, a comprehensive management framework used by over 30,000 organisations in Europe. To help you implement our Model, we provide training and assessment tools as well as recognition for high performing organisations. But our real talent comes from gathering good practice and sharing them through our network. We at EFQM, a not-for-profit membership Foundation founded in 1989, aim to share what works, through case studies, online seminars, working groups, conferences and thematic events. Sharing our members enthusiasm, their motivation and the results they achieve; that is what we work for. EFQM 2016 No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means (be this electronically, mechanically, through photocopy or recording, or otherwise) without either the prior written permission of, or a license permitting restricted copying and use for a third party, from the publisher.

3 Content 1. EFQM Excellence Model Integral Components Fundamental Concepts of Excellence The Criteria The Enabler Criteria Leadership Strategy People Partnerships & Resources Processes, Products & Services The Results Criteria Customer Results People Results Society Results Business Results RADAR Logic EFQM Framework for Hospitality & Tourism 1

4 This Guide is designed to help Hospitality and Tourism Organisations to interpret and implement the EFQM Excellence Model EFQM Excellence Model 2013 The Basis for the Model The EFQM Excellence Model is based on a set of European values, first expressed in the European Convention on Human Rights (1953) and the European Social Charter (revised in 1996). This treaty is ratified by the 47 member states of the Council of Europe and the principles are incorporated into national legislation. The Fundamental Concepts of Excellence build on the foundation of these basic human rights, assuming they are universally applied. Recognising the role business can play in supporting the broader goals of the United Nations, the UN Global Compact (2000) was established. The initiative encourages organisations to actively apply these values, set out as 10 Principles for sustainable and socially responsible business, across their global operations. Whilst a number of these principles are explicitly covered in the EFQM Excellence Model, a number are implicit, including those relating to human rights, corruption, bribery and forced labour, as these are already a legal requirement within Europe. Whilst there are numerous management tools and techniques commonly used, the EFQM Excellence Model provides an holistic view of the organisation and it can be used to determine how these different methods fit together and complement each other. The Model can therefore be used in conjunction with any number of these tools, based on the needs and function of the organisation, as an overarching framework for developing sustainable excellence. Excellent organisations achieve and sustain outstanding levels of performance that meet or exceed the expectations of all their stakeholders. All organisations strive to be successful, some fail, some achieve periods of success but ultimately fade from view, and a few achieve sustainable success, gaining deserved respect and admiration. The EFQM Excellence Model assumes that an excellent organisation will respect and comply with the 10 principles of the UN Global Compact, regardless of whether legally obliged to do so. The need for a Model Regardless of sector, size, structure or maturity, organisations need to establish an appropriate management framework to be successful. The EFQM Excellence Model is a practical, non-prescriptive framework that enables organisations to: Assess where they are on the path to excellence; helping them to understand their key strengths and potential gaps in relation to their stated Vision and Mission. Provide a common vocabulary and way of thinking about the organisation that facilitates the effective communication of ideas, both within and outside the organisation. Integrate existing and planned initiatives, removing duplication and identifying gaps. Provide a basic structure for the organisation s management system. 2 EFQM Framework for Hospitality & Tourism

5 4. The Criteria Enablers Results Leadership People Processes, Products & Services People Results Business Results Strategy Customer Results Partnerships & Resources Society Results EFQM 2012 Learning, Creativity and Innovation The EFQM Excellence Model represented in the diagram above is a non-prescriptive framework based on nine criteria. Five of these are Enablers and four are Results. The Enabler criteria cover what an organisation does and how it does it. The Results criteria cover what an organisation achieves. Results are caused by Enablers and Enablers are improved using feedback from Results. The arrows emphasise the dynamic nature of the Model, showing learning, creativity and innovation helping to improve the Enablers that in turn lead to improved Results. To develop the high level meaning further each criterion is supported by a number of criterion parts. Criterion parts are statements that describe in further examples of what, typically, can be seen in excellent organisations and should be considered in the course of an assessment. Finally, below each criterion part are guidance points. Many of these guidance points are directly linked to the Fundamental Concepts mentioned earlier. Use of these guidance points is not mandatory. They are intended to give examples to aid interpretation of the criterion part. Each of the nine criteria has a definition, which explains the high level meaning of that criterion. EFQM Framework for Hospitality & Tourism 9

6 5. The Enabler Criteria 1. Leadership EFQM Criterion Definition Excellent organisations have leaders who shape the future and make it happen, acting as role models for its values and ethics, and inspiring trust at all times. They are flexible, enabling the organisation to anticipate and react in a timely manner to ensure the on-going success of the organisation. 1a. Leaders develop the Mission, Vision, Values and ethics and act as role models 1b. Leaders define, monitor, review and drive the improvement of the organisation s management system and performance 1c. Leaders engage with external stakeholders 1d. Leaders reinforce a culture of excellence with the organisation s people 1e. Leaders ensure that the organisation is flexible and manages change effectively 1a Leaders develop the Mission, Vision, Values and ethics and act as role models For example, leaders in excellent organisations: Champion the organisation s values and are role models for integrity, social responsibility and ethical behaviour, both internally and externally, to develop and enhance the organisation s reputation Develop and support a shared leadership culture for the organisation, and review and improve the effectiveness of personal leadership behaviours Secure their future by defining and communicating a core purpose that provides the basis for their overall Vision, Mission, values, ethics and corporate behaviour Set and communicate a clear direction and strategic focus: They unite their people to share and achieve the organisation s Mission, Vision and strategic goals Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion Jack Welch What this means This sub-criterion is about creating the right leadership culture and ensuring that your leaders and managers support this by what they do. Cultivate passion in your leaders. Creating a shared leadership culture for your tourism business is about cultivating a passion in your leaders and your team for the services you provide and the customers that you serve. Culture defines an organisation and gives it a distinct purpose, values and beliefs. It may even influence the services provided and the rates, prices or entrance fee charged. What do we mean by culture? A common definition is that culture is a set of shared beliefs and values that lead to norms and expectations for members of that culture. It is the glue that holds an organisation together through shared assumptions, beliefs, and processes. In short, it defines for your business how things are done around here. 10 EFQM Framework for Hospitality & Tourism

7 Culture creates an impression on others of what our organisation is like. Think of Apple, Disney or McDonalds and particular words and images of a type of organisation culture will come to mind. So, why do we need a shared leadership culture? A shared leadership culture will ensure that everyone on the team is working together towards a common set of goals. It provides meaning and passion for the day-today activities, and a sense of shared and unified purpose. Customers will very quickly pick up on this. It enhances their experience of your organisation, which translates into positive feedback, testimonials and repeat business all good for business. Key things you should be doing Your tourism business should have a clear Vision, Mission and Values. Everyone in the team should know what the business is about and where it is headed. Get your team involved by asking for their views, and where they see the business going. Ensure the values you decide on reflect ethical and socially responsible behaviour. Keep them simple and communicate them widely on your website, at team meetings, in your brochures, marketing material, publications, etc. You will find more information on creating a Vision, Mission and Values in the Strategy Criterion, under 2c. Monitor how your leaders live the values. Monitor how well your leaders support the Vision, Mission and Values, by their behaviour. Use performance appraisal to monitor this. Ask for feedback from employees and peers, for example, through peer reviews or climate surveys. If you find that there are skills gaps and behaviour issues in your leadership team, set clear goals with the individual concerned to address these, and follow up closely. You will find more information on climate surveys and performance appraisal in the People Criterion, under 3a and 3b. Continue to develop your leadership team. A Leadership Development Programme can be a terrific way to support leaders in building a shared leadership culture. It helps to develop competencies needed through shared experience and learning. It also encourages each leader to review the effectiveness of their own leadership style and how well it fits with the organisation, and with their peers. There are some tourism businesses, for example, which have developed their own leadership programme and use it to attract and retain high calibre individuals. Select leaders with the right competencies and behaviours. Leaders create culture so it s important to select leaders with the right skills set and behaviours. Decide on the leadership competencies and behaviours you need. Include them in job and role descriptions for your leaders, and in your recruitment and selection process. A word of caution - it is hard to change someone s values once they are recruited. If you make a mistake, correct it quickly. The wrong leader can undermine your culture and upset the balance in your leadership team. EFQM Framework for Hospitality & Tourism 11

8 1b Leaders define, monitor, review and drive the improvement of the organisations management system and performance For example, leaders in excellent organisations: Define and use a balanced set of results to review progress, provide a view of long and short-term priorities and manage the expectations of the key stakeholders Understand and develop the underlying capabilities of the organisation Evaluate the set of results achieved to improve future performance and provide sustainable benefits to all their stakeholders Base decisions on factually reliable information and use all available information to interpret current and predicted performance of relevant processes Deliver high levels of stakeholder confidence by adopting effective mechanisms to understand future scenarios and effectively manage strategic, operational and financial risks What this means This sub-criterion encourages leaders to think more strategically about how they manage and measure performance. Measuring the right things Tourism businesses are traditionally good at measuring financial and operational performance. Budgets, revenues generated, capacity and some areas of HR may be measured and reported on as a matter of routine. Excellence directs leaders to take a more strategic and long-term view. This means identifying a balanced set of performance measures that will tell us how far along the track we are in terms of achieving all of our goals. What does balanced set of performance measures mean? Your business goals will include financial targets and projections. They may also reflect other strategies in areas such as people performance, environment, market development and customer satisfaction. The measures you use (your Key Performance Indicators, KPI s) should monitor progress on all your goals, so that you get a balanced perspective on the performance of the business. They also need to be able to signpost your progress in relation to plans you have for the future. Why is this important? If you only measure product sales, costs and profits you may miss important signposts of problems in other areas, such as market changes, how customers perceive you and what employee think about working in your business. It is harder, then, to predict the sustainability of the business, and even harder to convince banks, shareholders and other funders of its long-term viability. Key things you should be doing Choose metrics that matter. Measure what is important, not what is easy. Your Key Performance Indicators should tell you how your business is performing in relation to your business goals. Start with the end point what results do you want? Is it more sales, more profit, satisfied customers, better quality service, less risky business? Look at how you are tracking these results and if you aren t get a measure in place that will. Keep it simple - remember measures are usually about one of three things time, money or quality. You ll find more information on measures and results, with examples for tourism businesses in the Results section of this Guide. Establish a good system for reporting business performance. Establish a routine (e.g., daily/weekly/ monthly) for reporting on each area in your business and on your KPIs. Develop a good report template to standardise the information so that reports are clear and easy to read. Check with the managers/teams using the reports to make sure the reports have the right information in them. Have a clear meeting structure. To help communication and information flow have a simple but effective meeting structure, e.g., daily shift handovers, weekly team update meetings, monthly management and board meetings. Not all your meetings need to be formal but they do need to be effective. Challenge your current meetings do you meet often enough? Do the meetings run well? Is everyone who needs to be there? Are they action oriented and do they help the decision making process (see Figure 2)? It can be worthwhile to set formal agendas and use a common action template to record actions agreed. 12 EFQM Framework for Hospitality & Tourism

9 Assess the situa>on and capability to respond Monitor and review based on situa>on changes Decision- making process Choose your response and alterna>ves Authoritarian decision- making (Tyranny) Balanced decision- making (Civilised!) Implement your response Group decision- making (Mob rule) Individual decision- making (Anarchy) Figure 2 The Decision-Making Process Figure 3 Decision-Making Behaviours Be consistent and supportive in decision-making. Leaders must ensure that responsibility for decisionmaking authority is known and understood, is applied consistently, is based on reliable data, and that decisions are communicated effectively. Figure 3, below, provides an interesting perspective on how organisations can behave when making decisions and the consequences of that behaviour! Don t undermine people by changing decisions they have made without consulting them, or by making decisions without including them. Managing risks to your business. In a tourism business, protecting the business against legal action should be a key part of your measurement system and controls. Invest in good insurance cover and effective internal risk management structures. Develop a list of all your business risks and the controls you have to manage them. Review this regularly following any incidents, and to keep it updated as you change what you do, introduce new services, or change how customers and employee engage with you. EFQM Framework for Hospitality & Tourism 13

10 6. Customer Results EFQM Criterion definition Excellent organisations achieve and sustain outstanding results that meet or exceed the needs and expectations of their customers. 6a Perceptions These are the customers perceptions of the organisation. These may be obtained from a number of sources, including surveys, focus groups, ratings, compliments and complaints. These perceptions should give a clear understanding of the effectiveness, from the customers perspective of the deployment and outcomes of the organisation s customer strategy, supporting policies and processes. Measures could include perceptions of: Reputation and image Product and service value Product and service delivery Customer service, relationship and support Customer loyalty and engagement Typical perception measures in the Hospitality & Tourism industry: Perception measures are those used to obtain direct comment or feedback from customers about how they perceive your business and how satisfied they were with the experience. These can include, for example: Results from customer comment cards Results from customer surveys Results from customer focus groups and customer evenings Event feedback Number and type of complaints Number of compliments and positive feedback (e.g., Tripadvisor reviews) Number of positive customer references and testimonials Your most unhappy customers are your greatest source of learning Bill Gates EFQM Framework for Hospitality & Tourism 45

11 7. RADAR Required RESULTS ASSESS AND REFINE Approaches and Deployment Plan and develop APPROACHES EFQM 2012 DEPLOY Approaches The RADAR logic is a dynamic assessment framework and powerful management tool that provides a structured approach to questioning the performance of an organisation. At the highest level, RADAR logic states that an organisation needs to: Determine the Results it is aiming to achieve as part of its strategy. Plan and develop an integrated set of sound Approaches to deliver the required results both now and in the future. Deploy the approaches in a structured way to ensure implementation. Assess and refine the deployed approaches based on monitoring and analysis of the results achieved and ongoing learning activities. EFQM Framework for Hospitality & Tourism 53

12 EFQM 2016 No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means (be this electronically, mechanically, through photocopy or recording, or otherwise) without either the prior written permission of, or a license permitting restricted copying and use for a third party, from the publisher. ISBN: EFQM Avenue des Olympiades Brussels, Belgium Tel +32 (2) Fax +32 (2)

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