The EFQM Framework for Innovation

Measuring and Improving Your Ability to InnovateMeasuring and Improving Your Ability to Innovate

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3Contents

1. Introduction – Why Innovation Matters 4

2. Innovation 5 2.1 What is Innovation? 2.2 Who is Benefiting from Innovation? 7

2.3 The Challenges of Innovation 8

2.4 How to Get Started? 11

3. The EFQM Excellence Model 14 3.1 Introduction 14

3.2 The RADAR logic 15

4. The EFQM Framework for Innovation 16 5. The EFQM Framework for Innovation – Implementation 27 5.1 The Self-Assessment process 27

5.2 Choosing the ‘right’ Self-Assessment technique 30

Appendix 1: The link between the EFQM Model and the Fundamental Concepts 34

Appendix 2: The RADAR Pathfinder Card 35

Glossary of Terms 36

Further Help and Associated Products 38

Acknowledgements 39

This publication will give an introduction as to what makes an organisation innovative. It gives practical steps forward in measuring and improving your ability to innovate. It is particularly suitable for people who have forefront knowledge of EFQM but it is also useful to anyone looking for a structured approach.

According to recent research (Innovation to Cash, Boston Consulting Group, 2003), innovation is the top priority for global companies. The European Commission, as well as many national and regional institutions, is fostering and supporting innovation as the best way forward in a ‘knowledge economy’. Nevertheless, the cost of taking new products to market has doubled during the last decade and innovation failure rate is often quoted at 60% to 85%.

Innovation is not a temporary fad. It has been increasingly recognised as an important success factor by businesses over the past 30 years. There are no signs that this might be changing in the future. Innovation is here to stay!

Gone are the times of mass production when building up volume was the main driver of competitiveness. Economies of scale still matter but they need to be blended with the creative spirit of innovation. Different customers have different expectations and they need to be matched with economically viable offerings.

Gone are the times of friendly oligopolies: businesses now compete head to head by continuously improving what they have, by providing attractive new solutions to their customers or by buying their competitors. Advantages should not be considered as a given; moreover they never last long and tend to be copied quickly. In this new competition regime, innovation is key for the ones that want to succeed.

Peoples’ expectations and their level of information have also increased significantly over the past years. Innovation is not only an imperative for private companies: the public and not-for-profit sectors also need to develop a more innovative spirit.

More than ever, there seems to be no limit to human needs. At the same time, the sustainability imperative will constrain the way we work and consume, but we all know that ‘constraint is the mother of invention’. New technologies will continue to flourish. All the conditions are set for innovation to remain on the top of Executives’ ‘to do’ list.

Nevertheless, this introduction needs to finish with a word of caution. Pushing more ideas through the new product and service development pipeline will not be enough to secure success. Innovation only blossoms in organisations where this challenge is addressed seriously. Every act of management that contribute to improving the ability to innovate needs to be considered. The EFQM Framework for Innovation provides a rich picture of those acts of management that are often critical.

In EFQM we talk about sustainable innovation, innovation which brings lasting added value to the organisation, its shareholders and society as a whole. This Framework is here to help you define your innovation agenda, to measure your innovation performance and improve your competitiveness.

4 1. Introduction − Why Innovation Matters