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Article

Strategic Transformation and Sustainability: Unveiling the EFQM Model 2025

by
Joanna Martusewicz
1,*,
Arkadiusz Wierzbic
1 and
Marcin Łukaszewicz
2,*
1
Faculty of Management, Wroclaw University of Economics and Business, ul. Komandorska 118/120, 53-345 Wroclaw, Poland
2
Faculty of Biotechnology, University of Wroclaw, ul. F. Joliot-Curie 14a, 50-383 Wroclaw, Poland
*
Authors to whom correspondence should be addressed.
Sustainability 2024, 16(20), 9106; https://doi.org/10.3390/su16209106
Submission received: 26 September 2024 / Revised: 15 October 2024 / Accepted: 19 October 2024 / Published: 21 October 2024
Browse Figure
Versions Notes

Abstract

:
The EFQM Model (European Foundation for Quality Management), established in 1991, serves as a framework for organizational excellence, helping achieve sustainable success through an integrated management system. The Model’s evolution is driven by the need to adapt to global trends, threats, and technological innovations such as digital transformation, employee engagement and well-being, remote work, agile performance management, diversity, equity and inclusion (DEI), sustainability, AI (Artificial Intelligence), and big data. The new EFQM Model 2025, presented in Istanbul in June 2024, introduces significant changes, emphasizing sustainability, innovation, and technology. These changes are analyzed based on the logic of three questions: Why, How, and What. Why: There is a necessity for better alignment of organizations with contemporary challenges through flexibility, risk resilience, and innovation capabilities in a dynamic business environment, including alignment with the Unated Nations Sustainable Development Goals (SDGs). How: The Model introduces an integrated approach to performance management and transformation, incorporating advanced technologies such as AI and data analytics. What: Implementing the EFQM Model 2025 enhances organizational adaptability, innovation, and flexibility, improving financial, operational, and strategic outcomes. Better alignment with sustainability goals leads to long-term value and social responsibility. Improved stakeholder engagement methods enhance understanding and satisfaction. The use of advanced technologies supports innovation and operational efficiency, while better strategic and operational performance and risk management ensure greater stability and the ability to anticipate future challenges.

1. Introduction

Quality management models were created in the mid-20th century to systematically improve organizational performance, ensure consistency, and meet customer expectations [1,2,3,4].
In the pursuit of organizational excellence, the EFQM Model (European Fundation for Quality Management), established in 1991, has been a cornerstone framework, aiding organizations in achieving sustainable success through an integrated management system. Over the decades, the Model has evolved to meet the changing demands of the global business environment [5,6]. The EFQM Model 2025, presented at the EFQM Forum in Istanbul in June 2024, represents the latest iteration of this evolution, incorporating substantial updates to address contemporary challenges and opportunities.
The impetus for the latest changes in the EFQM Model is rooted in the necessity to adapt to profound shifts in the global landscape [7,8]. The dynamic nature of modern business, marked by rapid digital transformation, necessitates robust Performance Management Systems (PMS) that leverage advanced technologies such as Artificial Intelligence (AI) and Big Data Analytics Robotization. These technologies are pivotal in driving efficiency and innovation, enabling organizations to stay competitive [9,10,11,12,13,14].
Employee engagement and well-being have become paramount in the wake of increased remote work and the need for Agile Performance Management practices [15]. The Model should emphasize Diversity, Equity, and Inclusion (DEI), ensuring that organizations foster inclusive cultures that support all employees [16,17]. This focus on DEI aligns with broader societal expectations and Corporate Social Responsibility (CSR) initiatives, reinforcing the importance of ethical business practices [18].
Sustainability is another critical focus of the EFQM Model [19], reflecting the growing importance of aligning business strategies with the UN Sustainable Development Goals (SDGs) [20,21]. Organizations are increasingly expected to demonstrate their commitment to sustainability through responsible environmental practices and long-term value creation. This alignment potentially may enhance both corporate reputation and operational resilience.
On the other hand, the analysis of the literature indicates the need for further improvement of the Model resulting from general and holistic assumptions [22,23,24,25,26]. Criticism focuses on the key element of the Model’s complexity and sophistication. Research indicates that complexity hinders user involvement due to a lack of necessary expertise, especially in small and medium-sized companies. Implementing the Model requires significant resources in terms of time, people and money [24,26,27,28]. Fonseca [6] notes the bureaucratic approach to the Model application that is occurring.
Studies have shown that while the EFQM Model integrates sustainability principles, their application often lacks strategic thinking and consistency, emphasizing economic performance rather than sustainability [21]. De Menezes [21] suggests that many organizations adopting the EFQM Model do not fully integrate sustainability guidelines into daily practices, highlighting the need to build clearer, more workable sustainability directions into the Model [21,29,30,31].
Critics have stated that the area of leadership is crucial to achieving effective results [32,33]. Weaknesses in the Model have also been found in areas such as organizational culture and stakeholder perceptions, particularly regarding employees and partners. This includes issues of culture management, motivational processes, human resource planning and performance management [34]. Critiques of the Model have also pointed to weak links between the Model’s direction, organizational culture, leadership criteria, and performance and transformation, which can affect its overall consistency and usefulness in strategic and technological transformations [26,35].
It is important to note that the number of available studies, particularly those related to the EFQM Model 2020, remains limited, as highlighted by Mitsiou and Zafiropoulos in their work [36]. Many recent publications are based on earlier versions of the EFQM Model, which may not fully reflect the application and impact of the current Model. We have made every effort to incorporate all relevant and available sources to support our analysis.
The Model provides a structured approach to performance measurement and strategic alignment of actions at the operational level. This tool could enable organizations to effectively track progress, ensuring appropriate responses to emerging trends and threats in line with their goals and strategies, leading to questions:
  • Why is there a necessity for better alignment of organizations with contemporary challenges, and how does this alignment impact long-term strategic resilience and competitiveness?
  • How could the integration of advanced technologies such as AI and data analytics in the EFQM Model 2025 facilitate innovative performance management and drive transformational changes within organizations?
  • What are the potential specific impacts of the EFQM Model 2025 on organizational adaptability, stakeholder satisfaction, and sustainable performance, and how do these impacts compare with previous models?
This manuscript explores the strategic transformation and sustainability that could be facilitated by the EFQM Model 2025 [37], which is structured around the fundamental questions of why, how, and what. By addressing these questions, we delve into the rationale behind the Model’s evolution, the methodologies it employs, and the tangible benefits it delivers. Through this analysis, we provide a comprehensive understanding of how the new EFQM Model 2025 can drive organizational excellence in a rapidly changing world.
The new EFQM Model 2025 introduces substantial updates to address the dynamic challenges of the contemporary business environment, emphasizing sustainability, innovation, and advanced technologies, which all should lead to sustainable performance. It highlights an integrated approach to performance management and strategic alignment, using AI and data analytics to enhance organizational adaptability and resilience. These advancements are poised to drive significant improvements in financial, operational, and strategic outcomes, aligning organizational practices with the UN Sustainable Development Goals (SDGs) and fostering long-term value creation and social responsibility.
The latest version of the EFQM Model 2025 is new, and there is limited knowledge related to its use. Empirical data on the use of the new Model will only be available two years from now. Therefore, the findings of this paper are based on predictions driven by the knowledge and involvement of Assessors who have only just finished implementing the 2020 Model Update; thus, their evidence is the most reliable we have.
This paper is the first attempt to compare the two most recent versions of the EFQM Model. This paper is valid for future planning based on lessons learnt in the recent past. The results could be valuable for planning empirical research and predictions about the effectiveness of the new Model. By illustrating the new key features introduced in the Model, this paper can provide a basis for further research into the benefits gained by using these features. We also indicate potential future improvements to the Model.

2. Materials and Methods

This study had a qualitative character. The study took an exploratory approach, using a combination of literature review and qualitative analysis to compare the EFQM 2025 Model [36] and the EFQM (2020) Model [19], as well as to examine their alignment with major megatrends affecting today’s business environments [38].
Adopting such a research process required the construction of research questions. As indicated in the introduction of the article, the authors defined three research questions:
  • Why is there a need to better align organizations with contemporary challenges, and how does this alignment affect long-term strategic resilience and competitiveness?
  • How can the integration of advanced technologies such as artificial intelligence and data analytics in the EFQM 2025 Model facilitate innovative performance management and drive transformational changes in organizations?
  • What are the potential specific impacts of the EFQM 2025 Model on organizational adaptability, stakeholder satisfaction and sustainable performance, and how do these impacts compare to previous models?
Given the nature of the research questions, the study used a qualitative analysis method. This approach was supported by a thorough content analysis of both EFQM 2020 and 2025 models. The EFQM Model is not only designed to be universal but is continually refined and developed through contributions from diverse cultures and regions, including Europe, Asia, Arab countries, and South America. This global development process ensures that the Model remains relevant across different cultural contexts, which is why cultural differences are not expected to influence the assessment of the Model’s effectiveness. To empirically verify the theoretical results, the authors conducted research in a business setting. The research techniques used were interviews with managers of organizations that have defined sustainability goals in their strategies, with managers of organizations where the EFQM Model has already been implemented, as well as with managers of organizations that have decided to implement it but have not yet completed this. During the in-person meetings, participants completed the questionnaire and were given opportunities to comment on the questions directly. This approach allowed for immediate clarifications, enabling participants to elaborate on their responses and address any ambiguities in real time. This interactive process helped the researchers capture both the initial responses and the participants’ reflections on the discussed topics. After the survey, participants were provided with a summary of the results, and all feedback was incorporated into the final analysis to enhance the accuracy and depth of the findings. Although all participants in our study shared the same cultural background, they worked for international corporations that operate within diverse cultural environments. As such, their responses were informed by their experiences in multicultural settings, but cultural differences did not directly influence the interpretation of the data. Each expert was treated with full respect, and their opinions and input were crucial to the findings of the study.
The study used the following steps [39,40,41]:
  • Expert interviews: eight EFQM assessors and seven industry experts were interviewed to gather insights and confirm findings. The study utilized a qualitative interview approach with 15 respondents who had either implemented the EFQM 2020 Model in their organizations or were in the process of doing so. The primary selection criterion for all participants was their familiarity with the previous versions of the EFQM Model 2020, ensuring they had sufficient knowledge to provide informed insights into the new Model. For the assessors, we specifically chose individuals with extensive experience in evaluating organizations globally, including their involvement in the Global Award assessments. This ensured that the assessors had a broad and diverse understanding of organizational excellence across different sectors and regions. In the case of managers, we selected individuals who had actively implemented the EFQM Model 2020 and were managing large organizations. These organizations included both EU companies and factories that are part of American and Asian multinational corporations, ensuring that the managers brought diverse perspectives from different cultural and operational backgrounds. By selecting participants based on their extensive experience with the EFQM Model and ensuring representation from different types of organizations and global regions, we aimed to reduce potential biases and provide a balanced and comprehensive understanding of the Model’s implementation. The interviews were conducted in June and July 2024. All interview responses were transcribed and categorized into two groups. Responses were grouped based on these coded themes to allow for a comprehensive analysis. The frequency of responses under each category was calculated for both groups, enabling a comparison of viewpoints. These quantitative data were then combined with qualitative insights to develop a comprehensive narrative and compare obtained results with published data (triangulation). This method provided a holistic understanding of the diverse perspectives of assessors and managers regarding the new EFQM Model.
  • Literature Review: A review of current literature was conducted to identify key megatrends, relevant expert opinions and recent research. This included an analysis of recent publications and reports on organizational excellence and sustainability.
  • Content analysis: A systematic and objective content study of both the EFQM 2020 Model and the New EFQM 2025 Model was conducted. The analysis was structured around three main areas: Direction, Execution and Results, and their criteria and sub-criteria.
  • Comparative analysis: materials were analyzed to identify key differences and their relationship to megatrends. This step highlighted key themes in the new Model.
  • Expert Discussions: Discussions were held with EFQM assessors to verify the results of the analysis and gather additional insights.
The draft version of the questionnaire was reviewed by subject matter experts (SMEs) in the field of organizational excellence and EFQM implementation. This review ensured that the questions were relevant, clear, and covered all necessary aspects of the research topic. Content validity was also assessed by cross-referencing the questionnaire items with established literature to ensure comprehensive coverage of the key variables.
The data analysis incorporated a critical approach by considering alternative explanations and exploring different perspectives from both assessors and managers. The analysis was deepened by comparing the responses across these two groups and reflecting on potential biases. For instance, differences in responses between managers and assessors were examined in the context of their differing roles within organizations. Limitations such as sample size, the potential for self-reporting bias, and the specificity of the context (EFQM 2025 implementation) were also acknowledged to provide a balanced interpretation of the data.

3. Results

The EFQM Model, also known as the European Foundation for Quality Management Excellence Model, is a holistic management framework designed to help organizations achieve sustainable performance by focusing on continuous improvement, stakeholder satisfaction, and balanced results. Unlike other management tools that may focus on specific areas such as quality (ISO 9001), process improvement (Six Sigma), or optimizing efficiency by minimizing waste and maximizing value (Lean), the EFQM Model integrates these elements into a cohesive approach that addresses all aspects of organizational performance. It provides a structured methodology for self-assessment and improvement, making it a versatile and comprehensive tool for achieving long-term success.
This holistic approach ensures that no element of the organization is overlooked. The focus is on delivering value and satisfaction to all key stakeholders. The EFQM Model assumes that employees and other stakeholder groups are a key element of the organization’s success. Thanks to their involvement, one can create a more productive and satisfying organizational environment, which translates into higher motivation and better results.
Organizations are prompted to improve continuously by regularly assessing their performance and identifying areas for improvement. The EFQM Model promotes an innovative approach to solving problems and taking advantage of new market opportunities, which will allow organizations to maintain a competitive advantage [42]. It provides a robust self-assessment tool that they can use to evaluate their maturity level and identify strengths and improvement areas.
The Model is compatible with other management standards, such as ISO, TQM or Six Sigma, allowing organizations to integrate the EFQM Model with other quality and management initiatives seamlessly. During its evolution, the EFQM Model increased its focus on achieving sustainable development goals through responsible management of resources and care for the natural environment [43].
The EFQM Model is built to combine a strategic nature, operational focus and results orientation. This approach makes it clear that no organization operates in a vacuum and that it is part of a complex ecosystem that can help or hinder its development. On the other hand, it understands that it will have to cope with the increasing pace and scale of change by taking management actions in the present while at the same time being ready for the challenges of the future.
The construction of the EFQM Model is based on the simple logic of asking three questions:
“Why” does the organization exist? What purpose does it fulfill? Why did it choose this strategy?
“How” does the organization intend to achieve its purpose and strategy?
“What” has the organization achieved so far? “What” does it intend to achieve in the future?
The key to the EFQM Model is the relationship between the organization’s purpose and strategy and the way it creates lasting value for its most important stakeholders and achieves outstanding results.
The structure of the EFQM Model (see Figure 1) is based on three main areas (Direction, Execution, and Results), seven criteria (Purpose, Vision and Strategy; Organizational Culture and Leadership; Engaging Stakeholders Creating Sustainable Value; Driving Performance and Transformation; Stakeholder Perceptions; Strategic and Operational Performances), and each Criterium has criterion-parts (in total 32 criterion-parts). Each criterion-part contains several detailed guidance points that are worth paying attention to when managing an organization.
Implementing the EFQM Model is a strategic decision that will not only improve daily operations but also strengthen the organization’s position on the market as a leader in operational excellence, innovation and sustainable development.
Recent global events have significantly disrupted organizational operations. The COVID-19 pandemic, followed by the war in Ukraine, led to supply chain interruptions and continuity issues. During this period, new tools, methods, and reorganization of supply chains emerged [44,45]. Digital transformation, machine learning, AI, big data, etc., must be embraced by companies that wish to remain competitive. A critical focus has become new work practices and environments that meet the adaptive expectations of today and future employees [46]. There is now a focus on DEI (diversity, equity and inclusion). The pace of change and clients’ expectations are constantly increasing. Emphasis should be placed on the development of remote, hybrid, and augmented reality work environments. Another vital area for organizations is building processes that enhance supply chain resilience, continuity of operations, and future forecasting programs as key management practices [5,14]. The UN SDGs aim to achieve a better future by 2030, and the EU has introduced new regulations for reporting on ESG (environmental, social and governance) criteria that are already compulsory for large companies [47]. Accordingly, the revised EFQM emphasizes all aspects related to sustainability.
Based on a comparison of the EFQM Model 2020 and the EFQM Model 2025, here is a Table 1. that highlights the key features and changes between the two versions:
New, more detailed guidelines have been introduced for every criterion. Even when the content has not been changed, the ordering and prioritization of points have been changed. This fact makes comparing the two documents more challenging.
Direction:
  • Purpose, Vision and Strategy: The importance of analyzing and understanding one’s ecosystem, its impact on the current and future market and the identification, prioritization and segmentation of key stakeholders has been developed. Another important aspect is the reinforcement of the need to adapt strategy to a dynamic market and to build strategic risk management and adequate resource allocation. New guidelines for oversight and strategy implementation have been introduced, reflecting the speed of change and the need for continuous and flexible strategy adaptation associated with dynamic change. The need to align the organization’s purpose with global requirements for environmental and social management initiatives in the context of sustainability and best practices in this area was emphasized. The necessity of a company “understanding sustainability principles and requirements and integrating them into performance management and governance systems” was emphasized.
  • Organizational Culture and Leadership: the role of leadership was reinforced, emphasizing the importance of developing and modelling desirable organizational values and culture. The importance of change and agility regarding the approach to the environment to contribute to creativity and innovation, inclusion and diversity is highlighted. Embedding sustainability in the vision and culture of the organization is important.
Execution:
3.
Engaging Stakeholders: the basic approach has remained unchanged, but advanced data analysis and AI have been introduced to better understand and anticipate stakeholder needs. Guidelines were expanded, especially for social stakeholders, partners and suppliers, highlighting mutual benefits, ethical aspects and the importance of two-way communication. The need to involve stakeholders in supporting transformation and sustainability activities was emphasized. Attention was paid to building collaborative channels based on trust. In the “People” criterion-part, the use of the concept of “Empowerment” was abandoned.
4.
Creating Sustainable Value: The Model elaborates on the issue of sustainable value creation and focuses attention on customers in this criterion. It emphasizes the possibility of using AI technologies already at the design stage of products and services, considers environmental and social sustainability, and emphasizes the principles of a circular economy. It introduces detailed methods such as building a marketing and communication strategy or using employees as ambassadors for the company. The description of the importance of flexibility in responding to changing market demands and circumstances without compromising the entire organization has been expanded. There is a focus on new technologies and effective supply chain management. An important element is the emphasis on minimizing negative social and economic impacts on the environment and leaving a carbon footprint.
5.
Driving Performance and Transformation: Emphasizes digital transformation and its impact on the organization. Integrates advanced data collection, analysis and processing methods using modern digital technologies such as AI, Big Data, etc. Emphasizes the importance of organizational resilience to a dynamically changing ecosystem. Considers sustainability indicators. Introduces new approaches to working, including remote working, hybrid working, AR, agile and lean principles. Describes the importance of a systemic approach to organizational change and the need to convince and engage its stakeholders. Another important area is the allocation of resources to support research, experimentation and the generation of knowledge for its activities. The term ‘risk management’ has been removed from the headline of one criterion-part and is now “Drives Performance,” but it remains part of the content.
Results:
6.
Stakeholder Perceptions: The EFQM Model 2025 expands the measurement of stakeholder perceptions by integrating more comprehensive indicators and feedback mechanisms. Unlike the previous Model, which primarily relied on quantitative measures, the 2025 Model incorporates both quantitative and qualitative data. Techniques such as sentiment analysis and machine learning are employed to gain deeper insights into stakeholder perceptions. These methods allow organizations to identify not only strengths but also areas needing improvement, leading to more targeted and effective strategies for stakeholder engagement and satisfaction.
7.
Strategic and Operational Performances: The key changes are described in the Positioning Statement. It has been emphasized that results are to be achieved in a sustainable manner. Predictive measures should be used to forecast and plan for the future. The EFQM Model 2025 clearly differentiates between strategic and operational performances, unlike its predecessor. Strategic performance is directly linked to the organization’s purpose, vision, and strategy, ensuring that long-term goals align with sustainable success and growth. Operational performance, on the other hand, focuses on the effectiveness of day-to-day activities. The Model introduces five categories: Fulfilment of Stakeholder Expectations and their Contribution, Economics and Financials, Sustainability, Performance and Transformation, and Predictive Measures for the Future. This comprehensive approach ensures that all aspects of performance are systematically evaluated and improved.
This comparison provides a structured overview of the key updates and enhancements in the EFQM Model 2025 compared to the 2020 version. These changes reflect an increased focus on sustainability, stakeholder engagement, and the use of advanced technologies to support sustainable performance.
The qualitative interview study included 15 respondents: eight EFQM assessors with extensive knowledge of the new Model and seven managers who had implemented the EFQM 2020 Model in their organizations, including managers from organizations that had decided to implement it but had not yet completed the process. This diverse selection ensured that all participants had significant experience with the EFQM 2020 Model, providing a well-rounded perspective on its application and impact. The interviews were conducted in June and July 2024.
The interview data, summarized in Table 2, reveals differing priorities between assessors and managers regarding the significance of various aspects of the EFQM Model 2025.
A significant 87.5% of assessors considered sustainable development important, while only 29% of managers shared this view. Notably, 43% of managers rated it as not important, indicating a substantial difference in how the two groups prioritize sustainability, with assessors placing a much stronger emphasis on its importance.
Leadership was seen as important by 75% of assessors compared to only 29% of managers, with 57% of managers remaining neutral. This suggests that while assessors view leadership as a critical factor for implementing the EFQM Model, managers are more reserved in their assessment, potentially focusing on other priorities.
Both groups showed a significant divergence in their perceptions. While 75% of assessors rated stakeholder engagement as important, only 14% of managers agreed. Most managers (71%) remained neutral, indicating a potential lack of emphasis on stakeholder engagement from a managerial perspective.
There is a consensus on the importance of new advanced technologies, with 100% of assessors and 71% of managers considering them crucial. However, there is agreement on its significance; the full support from the assessors contrasts with a more cautious approach from the managers, where 29% remained neutral.
The area of Agility and Risk Management was seen as important by 63% of assessors and 71% of managers, suggesting a general agreement on its importance. However, 13% of assessors considered it not important, which could indicate differing views on its implementation challenges or relevance to their roles.

4. Discussion (What Do the Changes Potentially Bring?)

4.1. Sustainability as a Core Element

Sustainability has emerged as a critical focus for organizations worldwide, and its integration into the EFQM Model 2025 underscores its importance in achieving organizational and sustainable performance. The EFQM Model 2025 positions sustainability as a fundamental component of organizational performance by broadening its scope beyond traditional performance metrics. Performance is redefined to include the ability to sustain high effectiveness over the long term while generating positive social and environmental outcomes. This integration is reflected in all of the Model’s criteria, which encourages organizations to adopt sustainable practices that contribute to economic, social, and environmental well-being. Each criterion’s description starts with “In practice, we find that an organization that demonstrates sustainable performance:” Thus, sustainability is not treated as an isolated aspect but is woven throughout the Model, emphasizing its relevance in every facet of organizational operations and strategy.
A key aspect of the EFQM Model 2025 is its alignment with the UN SDGs. The SDGs provide a comprehensive framework for addressing global challenges, including poverty, inequality, climate change, environmental degradation, peace, and justice. By aligning with the SDGs, the EFQM Model 2025 ensures that organizations are not only focused on internal excellence but also contribute positively to broader societal and environmental goals. The Model provides guidance on how organizations can integrate these goals into their strategies and operations, making sustainability a core part of their purpose and vision.
The EFQM Model 2025 promotes a holistic approach, recognizing that sustainable performance requires balancing economic performance with social responsibility and environmental stewardship. This approach ensures that organizations consider the full spectrum of sustainability impacts in their decision-making processes.
Economic sustainability focuses on long-term financial performance, innovation, and value creation. Social sustainability emphasizes the importance of employee well-being, community engagement, and ethical practices. Environmental sustainability involves minimizing ecological footprints through efficient resource use, waste reduction, and proactive environmental management. By addressing three dimensions of sustainability (economic, social, and environmental), the EFQM Model 2025 encourages organizations to develop integrated strategies that drive sustainable growth and resilience.

4.2. Leadership and Culture as Core Elements

The EFQM Model 2025 emphasizes leadership and culture as foundational elements of organizational excellence [48]. This focus represents a shift from the 2020 Model, highlighting the evolving role of leaders and the importance of a strong, adaptable organizational culture in navigating complex, dynamic environments.
In the 2013 Model, leadership was well described and was a highlighted area to pay attention to. The 2020 Model talks about leadership, but in general, it was difficult to find references to it in the criteria. The 2025 Model improved this element and again drew attention to leadership, which has been proven in empirical studies to significantly affect sustainable organizational performance [32].
The 2025 Model reinforces the role of leaders in integrating key strategic initiatives across all organizational levels. This shift ensures that leaders are not only visionaries but also active drivers of strategy, embedding core elements into daily operations and long-term planning.
There is a statistically significant relationship between leadership and organizational culture [49]. Therefore, it is justified that Model 2020 combined organizational culture and leadership into a single criterion. Model 2025 maintained this criterion but strengthened the role of leadership, which shapes and strongly influences organizational values and culture.
Inclusive stakeholder engagement enriches the decision-making process by incorporating diverse perspectives. This inclusivity leads to more informed and sustainable decisions, fostering long-term success. Broader engagement fosters a culture of collaboration, where diverse perspectives are valued and integrated into organizational practices, driving innovation and resilience.
The new Model places a greater emphasis on the role of leaders in fostering a culture of innovation. Leaders are encouraged to create environments where experimentation and creative problem-solving are valued and supported. By fostering innovation and agility, the EFQM Model 2025 helps organizations maintain a competitive edge. In fast-paced environments, the ability to innovate and adapt quickly is critical for survival and growth.
In response to the increasingly dynamic business environment, the Model underscores the need for agility in leadership. Leaders must be able to adapt quickly to changing circumstances, demonstrating flexibility and responsiveness [50]. Effective leadership now involves a more strategic allocation of resources, ensuring that initiatives critical to organizational goals are adequately supported.
The EFQM Model 2025’s focus on leadership and culture as core elements marks a significant evolution from the 2020 Model. By emphasizing strategic integration, inclusive engagement, transparency, innovation, and empowerment, the Model aligns with modern organizational theories that prioritize agility, resilience, and stakeholder value. These changes underscore the essential role of leaders and culture in driving organizational excellence in a complex, dynamic environment.

4.3. Empowerment vs. Engagement

The resignation from mentioning empowerment in the EFQM Model 2025, within the People criterion-part, raises concerns. The term “empowerment” is pivotal for fully leveraging employee potential. Empowerment is a process that involves entrusting and believing in subordinates, enabling them to make decisions and take responsibility for those decisions, thereby utilizing their knowledge, experience, and motivation.
Empowerment in organizational contexts is defined as the practice of sharing power with employees, providing them with autonomy, and fostering their self-efficacy [51]. It is not merely about engaging employees but about transforming them into proactive agents who feel a sense of ownership and responsibility towards organizational goals [52]. Empowerment should originate from leadership and be grounded in values, promoting trust and confidence in employees’ capabilities [53].
In contrast, engagement focuses on emotional and cognitive states related to work but may lack the emphasis on granting decision-making power, which is central to empowerment [53]. While empowered employees are more likely to take the initiative and innovate because they feel trusted and valued, engagement alone may not sufficiently foster this proactive behavior. Empowerment requires leaders to create a culture of trust and support, which is critical for sustainable performance improvements. The shift to engagement might reduce the emphasis on these crucial leadership behaviors.
The term “empowerment” encapsulates a more comprehensive approach to employee involvement, emphasizing autonomy, trust, and the full utilization of employee potential. While “engagement” is important, it may not fully capture the depth and breadth of employee empowerment. Therefore, maintaining the concept of empowerment within organizational frameworks would be crucial for fostering a culture of trust, innovation, and shared responsibility.

4.4. Leveraging New Digital Technology to EFQM Activity

The EFQM Model has always emphasized three key elements:
  • Learning—the process of continuous improvement through the acquisition of new knowledge and skills.
  • Benchmarking—the comparison of performance and practices with other industry best performers to identify areas for improvement.
  • Best practices—the implementation of proven methods and techniques that lead to better results.
The inclusion of qualitative measures alongside quantitative data in the EFQM Model 2025 represents a significant advancement in understanding stakeholder perceptions. By utilizing sentiment analysis and machine learning, organizations can obtain nuanced insights into stakeholder attitudes and expectations. This depth of understanding enables more responsive and adaptive strategies, enhancing overall stakeholder satisfaction and fostering stronger relationships. These advanced analytical tools also allow for real-time feedback, enabling organizations to make timely adjustments and improvements.
Emphasizing the importance of digital transformation, Big Data, and AI in the new version, the question arises as to what extent the EFQM Model could integrate these modern technologies to improve its existing digital tools such as RADAR, Assessbase, and others. Today, describing the state of an organization is a lengthy task, requiring significant resources and time, and is difficult due to the complexity of the organization and the variety of processes that make detailed analyses challenging. It is worth noting that EFQM team members are usually people who are actively working on current initiatives or projects and are involved in organizational processes, which puts additional strain on their daily work.
The creation of an organizational improvement system based on the experience, knowledge and good practices of other organizations would support the organization’s activities by facilitating the implementation and monitoring of improvement processes, and there would be a possibility of flexible adaptation to the specific needs and conditions of the organization concerned. The EFQM has a powerful database of information and experience that can be used to create advanced tools to support organizational improvement. This may be one of the key areas that require further improvement within the EFQM activity in order to support organizations even more effectively in their quest for excellence.

4.5. Clarity vs. Flexibility

The evolution of the EFQM Model from 2020 to 2025 is balancing between clarity and flexibility. The increased detail and clarifications in the 2025 Model aim to provide organizations with a more precise framework for assessing and improving their performance. This can lead to a better understanding and implementation of the Model, enhancing its overall effectiveness.
On the one hand, more detailed criteria and explanations help organizations understand what is expected. This can reduce ambiguity and ensure more consistent application across different organizations. Clearer guidelines facilitate more accurate self-assessment and external evaluation, leading to more reliable benchmarking. Organizations new to the EFQM Model may find it easier to adopt and implement with added clarity, as the detailed instructions can serve as a comprehensive guide.
On the other hand, with more prescriptive criteria, organizations might be constrained in their approach to innovation and unique problem-solving. The rigid structure could limit their ability to adapt the Model to their specific context. Detailed frameworks can sometimes lead to a box-ticking mentality, where the focus shifts to meeting specific criteria rather than pursuing genuine, holistic improvement. The more specific a model becomes, the harder it may be to apply universally across diverse sectors and cultural contexts. What works well in one environment might not be as effective in another.
While the EFQM Model 2025 is longer and has increased clarity and detail, thus providing substantial benefits in terms of guidance and consistency, these changes also come with potential drawbacks in terms of flexibility and universal applicability. Organizations must navigate these changes thoughtfully, balancing the structured guidance of the Model with their unique needs and contexts to maintain creativity and innovation in their continuous improvement efforts.
The EFQM Model 2025 marks a significant evolution in the quest for organizational excellence by integrating contemporary challenges such as sustainability, digital transformation, and inclusivity. This Model emphasizes a holistic approach to performance management, leveraging advanced technologies and aligning with global frameworks like the UN Sustainable Development Goals (SDGs). The changes introduced, including a stronger focus on leadership, stakeholder engagement, and agile performance management, provide organizations with a robust framework to navigate the complexities of the modern business environment. By fostering innovation, adaptability, and resilience, the EFQM Model 2025 ensures that organizations are not only equipped to meet current demands but are also prepared for future challenges in an increasingly dynamic world.

4.6. Increased Focus on Performance Outcomes

In the new EFQM Model 2025, there is a stronger emphasis on results and their measurement, which is a critical element in responding to changing market conditions and increasing operational risks. The Model now includes more detailed performance indicators, covering both financial and non-financial aspects, such as stakeholder expectations and contributions, economic and financial performance, sustainability, efficiency and transformation, and predictive measures for the future. In a dynamic business environment, continuous monitoring of results and the ability to quickly adjust strategies are essential for effective management and decision-making [54].
Experts and managers involved in the implementation of the new Model confirm that this approach is a step in the right direction. Organizations are placing greater emphasis on investment efficiency, considering return on investment (ROI) metrics, especially in the context of environmental protection and social responsibility. Investments in sustainable development are evaluated for their economic viability, with preference given to those that offer the fastest return on investment, often within a period of less than three years. This approach enables organizations to simultaneously achieve business and environmental goals [55].
The focus on measurable outcomes in the EFQM Model 2025 aligns with the broader trend of integrating sustainability and financial performance into a single framework, reflecting a holistic view of organizational excellence. The Model’s emphasis on using both leading and lagging indicators allows organizations to not only assess past performance but also to predict future trends, which is crucial for maintaining competitiveness and resilience in a volatile market [56].
The EFQM Model 2025 places a stronger emphasis on measuring performance outcomes, which is crucial for adapting to changing market conditions and managing operational risks. The implementation outcomes of the previous EFQM Model versions were evaluated using a comprehensive set of metrics that encompass both financial and non-financial aspects Table 3. Financial performance indicators, such as profitability, revenue growth, and cost reduction, are essential for assessing the economic success of the organization, while operational efficiency metrics focus on process optimization, quality improvements, and waste reduction. Customer satisfaction was gauged through feedback, loyalty indices, and retention rates, reflecting the organization’s ability to meet and exceed customer expectations. Employee engagement and satisfaction were measured using surveys and participation scores, highlighting the Model’s emphasis on creating a positive work environment. Innovation capability, evaluated through the number of new products and services, R&D investments, and idea generation rates, underscores the importance of fostering a culture of continuous innovation. Sustainability and social responsibility were assessed through environmental performance, social impact, and alignment with sustainability goals, ensuring that organizations were contributing positively to society and the environment. Future evaluations of the implementation of the EFQM Model 2025 using these criteria should bring empirical knowledge about its efficiency.

5. Conclusions

The EFQM Model 2025 presents a transformative framework that adeptly responds to the demands of today’s rapidly changing business landscape. By integrating sustainability, advanced technological practices, leadership, and a renewed focus on stakeholder engagement, the Model provides a comprehensive blueprint for achieving sustainable performance. This research has demonstrated several key findings in response to research questions:
  • Alignment with Contemporary Challenges:
The necessity for better alignment with contemporary challenges, including sustainability and digital transformation, is critical for organizations. This alignment enhances long-term strategic resilience and competitiveness, as organizations that adapt to modern demands can better manage risks and innovate effectively.
2.
Integration of Advanced Technologies:
The EFQM Model 2025’s incorporation of AI and data analytics could facilitate innovative performance management and drive transformational change. These technologies might enable organizations to streamline operations, enhance decision-making, and maintain a competitive edge in a dynamic business environment.
3.
Impacts on Organizational Outcomes:
The new Model 2025 may enhance organizational adaptability, stakeholder engagement, and sustainable performance metrics compared to previous models. By focusing on both strategic and operational performances, the EFQM Model 2025 ensures a balanced approach to achieving long-term success and immediate efficiency.
Practical Implications:
Organizations adopting the EFQM Model 2025 might leverage the described benefits. Key steps should include embedding sustainability into strategic planning and aligning with the UN SDGs to ensure long-term value creation and social responsibility. Next, organizations should use AI and data analytics for performance management to drive innovation and efficiency. Finally, organizations should foster an inclusive culture through and for enhanced stakeholder engagement, ensuring diverse perspectives are integrated into decision-making processes.
Our general conclusions and guidelines come from our empirical 2-year study, which finished this year and led to the implementation of the EFQM Model 2020 within two global company organizations.
Future Research Directions:
The Model has been reworded to include modern terminology, e.g., agile, for better understanding. It has also been made more precise, which has its advantages and disadvantages. Thus, future research should explore the Model’s practical implementation across various sectors and its impact on achieving sustainable development goals. Additionally, investigating the integration of emerging technologies, such as blockchain, IoT (The Internet of Things), and machine learning, could provide further insights into enhancing the Model’s effectiveness. Using these modern tools can also improve the EFQM Model 2025 itself, making it easier and faster to implement. Specifically:
AI and Machine Learning:
Leveraging AI for faster assessment and continuous monitoring can reduce the time and resources required for implementation. AI could also provide predictive analytics to foresee challenges and opportunities, thereby refining the Model further.
Big Data Analytics:
Utilizing Big Data Analytics can help gather comprehensive insights from various organizational processes. These data could be used to customize the EFQM Model to better fit the unique needs of different organizations, ensuring a more tailored approach.
Digital Transformation Tools:
Digital platforms and tools could facilitate easier implementation of the Model by providing integrated solutions for performance tracking, stakeholder engagement, and reporting. These tools can offer real-time updates and feedback, streamlining the entire process.
Blockchain Technology:
Implementing blockchain for secure and transparent data management could enhance trust and accountability within the EFQM framework. This could be particularly useful for tracking compliance with SDGs, ESG, and other performance metrics.
The EFQM Model is a widely recognized framework that guides organizations toward sustainable excellence. As the business landscape evolves with rapid digital transformation and an increased focus on sustainability, there is a growing need to enhance the Model’s usability and implementation. Feedback from practitioners and assessors indicates that while the EFQM has developed digital resources such as the EFQM Assessment Tools and the EFQM Knowledge Base to support organizations, these tools could be more user-friendly and agile.
One significant area for improvement is the enhancement of digital interfaces. The current tools could benefit from adopting advanced, conversational interfaces like AI-driven platforms like ChatGPT. Such interfaces would provide interactive guidance, real-time feedback, and personalized support, making the Model more accessible and engaging for users. This approach could reduce the learning curve associated with the Model and facilitate a smoother implementation process.
Increasing the agility of updates to the Model and its resources is also crucial. The rapidly changing business environment necessitates that the EFQM Model be updated more frequently to incorporate the latest best practices, technological advancements, and emerging sustainability considerations. Implementing agile methodologies in the development and dissemination of the Model’s resources could enable quicker updates and more responsive support for organizations. This would ensure that users always have access to the most current information and guidelines.
Improving the accessibility and format of the Model is another important consideration. Currently, the Model is often distributed as a static text file (PDF), which can be less user-friendly and harder to navigate. Transforming the Model into a dynamic format, such as a relational database or an interactive HTML platform, would enhance usability. An interactive online version would allow users to navigate through the Model’s criteria more intuitively, access linked resources, and customize their learning experience. This could also facilitate better integration with other digital tools and platforms that organizations use.
The integration of AI and interactive platforms into organizational frameworks has been shown to improve user engagement and facilitate better understanding and application of complex models [66]. Furthermore, adopting agile practices for updates ensures that frameworks remain relevant and effective amidst rapid technological and environmental changes.
By incorporating these technological enhancements into the EFQM Model, the organization can address existing challenges related to user-friendliness and implementation efficiency. Adopting AI-driven interfaces would provide a more personalized and engaging experience for users. Agile updating processes would ensure that the Model reflects the latest developments in organizational excellence. Transforming the Model into an interactive online format would make it more accessible and easier to navigate, thus facilitating better understanding and application by organizations.
Validating new EFQM Models is extremely challenging, as validation results from previous versions often come too late; therefore, our attempt at prospective validation is a novel approach, and we hope this research will pave a new standard in the field.

Author Contributions

Conceptualization, J.M. and M.Ł. methodology, J.M.; validation, A.W. and J.M.; formal analysis, J.M. and A.W.; investigation, J.M. and M.Ł.; resources, J.M. and A.W.; data curation, J.M. and A.W.; writing—original draft preparation, J.M. and M.Ł.; writing—review and editing, J.M., A.W. and M.Ł.; visualization, J.M. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding. The Open Access publication of this article was partially funded by the Institutional Open Access Program (IOAP).

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Informed consent was obtained from all subjects involved in the study.

Data Availability Statement

All data are included.

Conflicts of Interest

The authors declare no conflicts of interest.

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Sustainability 16 09106 g001
Figure 1. EFQM Model Structure [19]. The structure of the EFQM Model is based on three main areas (Direction, Execution, and Results), seven criteria (Purpose, Vision and Strategy; Organizational Culture and Leadership; Engaging Stakeholders; Creating Sustainable Value; Driving Performance and Transformation; Stakeholder Perceptions; Strategic and Operational Performances), and each criterion has criterion-parts (in total 32). Copyright © 2024 EFQM. Reproduced with permission from EFQM.
Figure 1. EFQM Model Structure [19]. The structure of the EFQM Model is based on three main areas (Direction, Execution, and Results), seven criteria (Purpose, Vision and Strategy; Organizational Culture and Leadership; Engaging Stakeholders; Creating Sustainable Value; Driving Performance and Transformation; Stakeholder Perceptions; Strategic and Operational Performances), and each criterion has criterion-parts (in total 32). Copyright © 2024 EFQM. Reproduced with permission from EFQM.
Sustainability 16 09106 g001
Table 1. The comparison of the EFQM Model 2020 and the EFQM Model 2025.
Table 1. The comparison of the EFQM Model 2020 and the EFQM Model 2025.
Based on a Comparison of the EFQM Model 2020 and the EFQM Model 2025
FeatureModel 2020Model 2025
Direction
Purpose, Vision and StrategyFocused on defining purpose, vision, and strategy, aligning them with stakeholder needs and the ecosystem.Enhanced focus on sustainability, alignment with UN SDGs, strategy adjustment and implementation, strategic risk management, and a stronger emphasis on resource allocation and performance management systems.
Organizational Culture and LeadershipEmphasis on leadership behaviors, role modeling, and fostering a supportive culture for innovation and change.Reinforced leadership aspects, including commitments to purpose, role modeling, and removing barriers to change. New guidance on fostering creativity and innovation. Emphasizes the importance of stakeholders in shaping the strategy.
Execution
Engaging StakeholdersFocused on engaging stakeholders and understanding their needs and expectations.Continued focus on stakeholder engagement with enhanced use of data analytics and AI to predict and understand stakeholder needs. New guidance points were introduced for society, partners, and suppliers.
Creating Sustainable ValueEmphasis on designing and delivering value aligned with the organization’s purpose and strategy.Shift towards creating sustainable value, acknowledging changing customer needs, and incorporating circular economy principles. Emphasis on using advanced technologies for value creation.
Driving Performance and TransformationFocused on managing performance and transformation, with elements of risk management included.Additional focus on managing disruptions and ensuring business continuity. New emphasis on leveraging data-driven insights, sustainability, and new technologies like AI and data analytics. Emphasize the importance of R&D.
Results
Stakeholder PerceptionsMeasurement of stakeholder perceptions, primarily quantitative.Inclusion of qualitative measures for stakeholder perceptions. Use of sentiment analysis and machine learning for deeper insights. Emphasis on using insights to drive improvements and transformations.
Strategic and Operational PerformanceCombined focus on strategic and operational results without clear segmentation.Clear differentiation between strategic and operational performances. Strategic performance is linked directly to purpose, vision, and strategy, while operational performance focuses on day-to-day activities. Introduction of five categories for performance measurement: Fulfilment of Stakeholder Expectations and their Contribution, Economics and Financials, Sustainability, Performance and Transformation, and Predictive Measures for the Future.
Table 2. Significance of Changes in the EFQM Model 2025: Results in % from Interviews.
Table 2. Significance of Changes in the EFQM Model 2025: Results in % from Interviews.
ASSESSORMANAGER
Not ImportantNeutralImportantNot ImportantNeutralImportant
Sustainable development012.587.5432929
Leadership02575145729
Stakeholders’ engagement02575147114
New advanced technologies0010002971
Agility and risk management13256302971
Focus on results0010001486
Table 3. Criteria for Evaluating the Efficiency and Implementation of the EFQM Model.
Table 3. Criteria for Evaluating the Efficiency and Implementation of the EFQM Model.
lpCriteria for Evaluating Efficiency and Implementation
1Financial Performanceprofitability, revenue growth, cost reduction, innovation[22,23,57]
2Operational Efficiencyprocess efficiency, quality improvements, and waste reduction[22]
3Customer Satisfaction:customer feedback, loyalty indices, and retention rates[58,59,60]
4Employee Engagement and SatisfactionEmployee satisfaction surveys, turnover rates, and engagement scores to determine the Model’s effectiveness in enhancing the workplace environment.[61,62]
5Innovation Capabilitythe number of new products/services, R&D investments, and the rate of idea generation and implementation[63,64]
6Sustainability and Social ResponsibilityEnvironmental performance, social impact, and alignment with sustainability goals[21,32,65]
7Stakeholder SatisfactionBroader stakeholder perceptions, including those of suppliers and partners[23]
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Martusewicz, J.; Wierzbic, A.; Łukaszewicz, M. Strategic Transformation and Sustainability: Unveiling the EFQM Model 2025. Sustainability 2024, 16, 9106. https://doi.org/10.3390/su16209106

AMA Style

Martusewicz J, Wierzbic A, Łukaszewicz M. Strategic Transformation and Sustainability: Unveiling the EFQM Model 2025. Sustainability. 2024; 16(20):9106. https://doi.org/10.3390/su16209106

Chicago/Turabian Style

Martusewicz, Joanna, Arkadiusz Wierzbic, and Marcin Łukaszewicz. 2024. "Strategic Transformation and Sustainability: Unveiling the EFQM Model 2025" Sustainability 16, no. 20: 9106. https://doi.org/10.3390/su16209106

APA Style

Martusewicz, J., Wierzbic, A., & Łukaszewicz, M. (2024). Strategic Transformation and Sustainability: Unveiling the EFQM Model 2025. Sustainability, 16(20), 9106. https://doi.org/10.3390/su16209106

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