Paul Grizzell alerted me to a study by the European Foundation for Quality Management (EFQM) and the British Quality Foundation of the impact of implementing the EFQM Excellence Model on bottom-line business results. The EFQM started four years after the Baldrige program and uses a similar model and assessment process. The following graph shows the percent that award-winning companies outperformed comparison companies five years after receiving their first awards.

The study used public financial information to track the performance of 120 EFQM, Baldrige, and other similar award-winning companies, including 24 U.S. companies, over an 11-year period. It also tracked the performance of a comparison company for each award-winning company that was in the same country, used the same accounting data, and was close in size as measured by total assets. The 11-year period started five years before a company received its first award and ended five years after it received its first award.

The award winners also outperformed the comparison companies in the first year after they received their awards: 3% better in market share, 8% in sales, 12% in assets, and -1.5% in total cost over sales. And they outperformed the comparison companies three years out: 36% in market share, 17% in sales, 20% in assets, and -1.4% in total cost over sales.

The study was patterned after a similar study done in the mid-1990s by Dr. Vinod Singhal and Dr. Kevin Hendricks of U.S. quality award winners, with similar results: 73% increase in operating income, 33% increase in sales, and a 49% increase in assets. You can read a summary of the report here.

According to the EFQM report published by the Centre of Quality Excellence, University of Leicester, which is available in the Box on Paul Grizzell’s LinkedIn profile page here:

“The overall evidence indicates that, when the principles of the EFQM Excellence Model have been implemented effectively, performance improves in both short and long periods of time. This should prove to be reassuring for those companies that have made an investment and long-term commitment to the principles of the EFQM Excellence Model, and it provides evidence to support the continued commitment to the principles of the EFQM Excellence Model for those companies that might be thinking of replacing their excellence strategy with something else.”

For evidence of this outstanding performance in companies that have won the Baldrige Award, check out Baldrige Gets Results.

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