OKR vs. EFQM

This is the first of a five-part series examining how OKR compares with other management frameworks. In this post, we look at how OKR compares to EFQM.

1. OKR vs EFQM
2. OKRs vs. SMART Goals
3. OKR vs 4DX
4. OKR vs Balanced Scorecard
5. OKR vs KPIs

Before we dive into the detail, let's look at the history of the EFQM (European Foundation for Quality Management) and why the EFQM Excellence Model became the framework it is today.

What is EFQM?

EFQM was founded back in 1989, shortly before the fall of the Berlin Wall, by a consortium of European business leaders. The goal of EFQM was to establish a formalized management framework designed to help organizations become more effective, thereby increasing the overall competitiveness of the European economy.

As a management framework the EFQM Excellence Model aims to help, organizations understand where they are on a "path to excellence" and then provides the tools and techniques to measure improvement over time. A key focus is the measurement of the relationship between cause and effect, enabling organizations to measure what they do, against the results they get.

Cause and effect in the Excellence Model, or "enablers" and "results," are broken down into different areas, which can be looked at as inputs on one side and outputs on the other.

Enablers

• Leadership
• People
• Strategy
• Partnerships and Resources
• Processes, Products, and Services

By changing what any one of these enablers do, any of the following results are affected:

Results

• People Results
• Customer Results
• Society Results
• Business Results

Finally, the change advocated by the model is a continual focus on achieving "Excellence" in each of the "enabler" areas. Excellence is defined by some core principles.

Principles

• Adding value for customers
• Creating a sustainable future
• Developing Organisation Capability
• Harnessing Creativity and Innovation
• Leading to Vision Inspiration & Integrity
• Managing with Agility
• Succeeding through the talent of People
• Sustaining Outstanding Results

Finally, the Excellence Model employs a tool for managing performance, which is where the framework steps closer to what OKR is capable of, although the Excellence Model tool is very different.

RADAR logic is the concept that describes how to manage performance, and it provides a way for organizations to question how well they are executing on the strategy created using the Excellence Model.

RADAR starts by determining results to be achieved or expected outputs from the strategy generated by the Excellence Model. Starting with results is similar to how OKR starts with Objectives but on a high level. RADAR logic makes no distinction between an Objective (outcome) and a Key Result (measure), or who in the organization hierarchy owns the result.

Once "Results" are defined, RADAR next requires the planning and development of "Approaches" which describe how "Results" are achieved; these are very similar to the way Perdoo includes Initiatives in our model of OKR. The next step, "Deploy," attempts to determine how, where, and when approaches are implemented. Finally "Asses & Refine" ensures results are continuously measured, learnings captured, and consensus achieved on whether "Approaches" to achieving "Results" are working.

Comparing OKR with EFQM

When looking at both frameworks side by side, it is clear that EFQM has a much broader scope than OKR. This is both a benefit and a disadvantage. EFQM presents some key conceptual tools used to understand and manage the complexity of organizations, the management of key stakeholders, and their relationship with the outside world, all within the context of implementing a model of excellence.

The complexity of the framework can make it inaccessible to the majority of employees, due to the time and energy to required to learn it. Its complexity also affects its relevance to employees lower than senior management level, and the connection to the framework has a potential impact on the transparency of, and engagement with, company strategy. As an employee tasked with implementing company strategy, understanding how to contribute requires that you invest the time and effort in understanding the complexities of the EFQM framework. This is a core problem OKR seeks to solve, by remaining simple.

Another difference between OKR and EFQM is the latter's focus on cause and effect, or input/output modeling. OKR, in contrast, is more concerned with outcomes and how they can be prioritized, measured, and achieved. This future-looking, goal-oriented approach is a crucial difference to the RADAR logic of EFQM. With OKR once a goal is reached, a new one is created, rather than continuously improved upon until excellence is achieved.

Ultimately EFQM and OKR are two very different frameworks, with very different purposes, which can and do fit together. While EFQM is broad in scope and covers in intricacies of organizational management strategy, its complexity and input/output focus could make it inaccessible to many employees and therefore impact the execution of the management strategy it seeks to create.

OKR, on the other hand, is simple, focused, and concerned only with turning strategy into clear business goals and measuring results. This lightweight structure makes OKR simple for everyone in an organization to understand, and it consists of only four central concepts: Objectives, Key Results, Initiatives, and Cadences. The downside of OKR is that it provides no tools or framework for creating business strategy, only the means to execute on it. This makes it great for communicating what needs to be achieved but not at actually creating the strategy behind it.