EFQM Excellence Model: TNT Express

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Table of Contents

Background Information
Situation Analysis
Recommendations
Conclusion

Background Information

TNT Express is an international company specializing in the express delivery of parcels. It operates in more than 200 countries with a strong position in Europe. TNT Express was purchased by FedEx in 2016 for $4.4 billion in hopes of fuelling growth to the company in Europe. Before the acquisition, TNT Express was a company with more than 56,000 employees and annual revenues of nearly €7 billion. It delivered more than 4 million parcels, documents, and pieces of freight every week to corporate and private customers. The vision of the company was to be the most admired delivery company, while its mission was to connect businesses, markets, and people in a sustainable way.

The company received increased recognition due to winning the EFQM European Quality Award in 1998. The company experienced rapid growth in the 1990s; however, acquisitions led to the appearance of numerous legacy systems and processes that needed to be refined to ensure efficient operations and management. Even though TNT marketed itself as a global company, its services varied depending on the location, which caused dissatisfaction among central customers of the company. Therefore, the company launched a Business Process Model (BPM) based on EFQM and put delighted customers as the primary concern of the company. The model was associated with significant success despite facing considerable resistance from frontline employees and middle management.

Situation Analysis

EFQM Model

To assess the case of the company, it is beneficial to identify the framework for the situational analysis. Since TNT Express utilized the EFQM model, it is natural to identify issues in the business model of the company using the same perspective. The European Foundation for Quality Management was formed in 1988 when 14 executives of leading European companies united in enhancing the competitive position of European companies in the world market.

The model was last updated in 2020 to include three major categories that measure business excellence, which is direction, execution, and results. To evaluate these categories, it is necessary to analyze purpose and vision strategy, organizational culture and leadership, engagement with stakeholders, creation of sustainable value, driving performance and transformation, stakeholder perception, and strategic and operational performance. Careful examination of the seven matters helps to identify problems and form recommendations for the company to achieve greater excellence.

Purpose and Vision

TNT Express had a clear purpose stated in the BPM, which turned the company into a customer-centric organization. According to the model, the central goal of the company was to delight the customers with exceptional customer service. The model includes many aspects based on the reciprocal dependency of processes on customer experience and feedback. BPM is an excellent reference for middle management since it provides a clear decision-making pattern. Even though the model may be challenging to grasp, it does not need to be understood entirely by the frontline personnel. The employees only need to be aware of the company’s vision, which is to become the most admired delivery company. In short, this aspect of the EFQM model does not require any improvements.

Organisation Culture and Leadership

The leadership of the company supported the idea to strive for excellence as it initiated a restructuring process to improve the performance of the company. The leadership of the company realized the necessity to integrate innovation on every level of the organization’s culture. However, the leaders were repeatedly unable to convince the middle management that the culture of constant improvement was central. The changes occurred only as reactions to two adverse events: the financial crisis and a threat to lose one of the largest customers. At the same time, it should be noticed that these events only created an initial push and TNT’s leaders were able to sustain it and transform it into long-term strategic improvements.

As a result, of implementing the EFQM model, TNT was able to achieve considerable improvement in organizational culture. Before the initialized change, the organizational culture was rudimentary, which implied that the style and process standards had begun but when the going got tough these standards were forgotten. After a series of implemented changes, the organization’s culture was managed and sustainable, which meant that processes were followed and improved upon, while innovation was closely linked to customer needs. However, innovation still was not a part of the process because of employee middle management resistance.

Engagement with Stakeholders

TNT Express demonstrated outstanding results in terms of engagement with stakeholders. The company build sustainable relationships with its customers, attracted, engaged, developed, and retained employees, contributed to the development and well-being of the society, and secured ongoing support of business and governing stakeholders. While TNT Express tried to hire new talents, it focused on developing the abilities of current frontline personnel and middle management instead of looking for new employees.

The company continuously collected feedback from stakeholders, which resulted in adaptations to the evolving needs of customers during crisis moments. Finally, in the 2010s, the company reported its achievements in environmental sustainability, which was of extreme importance to many customers. Therefore, this aspect of the EFQM model does not seem to need improvements.

Creating Sustainable Value

According to EFQM, an outstanding organization recognizes that Creating Sustainable Value is vital for its long-term success and financial strength. This usually implies that the company segments customers and identifies key stakeholders at appraise information about their needs. Such needs assessment is vital for securing long-term relationships since it helps to understand what is valuable for them. TNT adhered to the principle by creating a methodology for getting to know the stakeholders’ wants and needs, which resulted in the creation of the life cycle of a customer doing business with TNT. The model was used to make the voice of the customer count when defining and delivering value.

Driving Performance and Transformation

A successful company needs to find a perfect balance between driving performance, or management of current events, and driving transformation, or the encouragement of change. Driving for transformation is usually measured in the implementation of new technologies to accumulate and utilize up-to-date knowledge and data. TNT’s initial intention was to unify all the technological bases and deal with legacy systems left after acquisitions.

At the same time, the company put increased emphasis on the excellence of day-to-day operations. The company placed a particular emphasis on Delivering on Time in Perfect Condition (DoTPC) principle. However, the company was able to achieve a balance between driving performance and transformation only on paper because the innovation was employed only when at critical moments instead of being continuous.

Stakeholder Perceptions

The engagement with stakeholders seems adequate; however, some areas may need improvement. On the one hand, the central stakeholders acknowledge the success of the company and understand that it can fulfill its strategic plans and objectives. For instance, during one of the crises moment, the company was able to get the highest supplier rating due to the power of structured process improvement. The representatives of these customers spoke enthusiastically about the utilized methods and achieved results. Moreover, it even granted a significant part of the new business to TNT admiring the way the company was managed. Gathering information about the perception of the customers is the central concept in the model adopted by the company, which implies that feedback from key stakeholders is repeatedly collected and processed to use the findings in transforming the business strategy.

On the other hand, some of the internal stakeholders, such as middle managers and frontline employees, did not have an adequate perception of the company. People often wanted the improvement teams to leave because these teams took employees out of their comfort zone. Even though the company leaders were aware of this tendency, no interventions were followed to address the attitude and improve the understanding of the company’s purpose among these stakeholders.

Strategic and Operational Performance

In terms of operational performance, the company was able to fulfill its primary goal by successfully applying the DoTPC principle. In some places, the improvements were so successful that even the most active protesters against improvement became the most prominent advocates for the implemented methods. The strategic performance was also adequate since the company improved from rudimentary to managed and sustainable business culture, which was part of the strategic development plan. Before the acquisition, TNT had a stable performance in terms of financial growth (3% annual growth in revenues). However, TNT Express failed to achieve the fifth level of organizational culture according to BPM.

Problem Identification

Considering the analysis given in the previous section, there several problems that may be identified.

The engagement with middle management was not optimal, which led to the inability to understand how processes interacted across different parts of the business. TNT upper management was often unable to take middle managers and frontline employees out of their comfort zone and break the old type of mentality. The matter led to variations in outputs and customer experiences.
The company had insufficient control over inputs because of inadequate process management. The improvement teams had tremendous short-term success; however, in the long run, TNT could not sustain the positive change due to the lack of control over processes at the lowest level.
The company does not have a culture of regularly measuring the performance, analyzing the results, and executing corrective actions to address the identified problems. Continuous improvement is possible only when the DMAIC (Define, Measure, Analyse, Improve, Control) methodology is implemented consistently at all levels.
The improvement strategy in the company was reactive rather than proactive. While innovation is part of the business process, they are closely connected to the customers’ needs. While this seems to be an adequate measure, the company implements changes only when the customers already have experience a certain need. Hence, there is a felt delay between experiencing a need and its fulfillment. Measures are needed to forecast the growing needs of customers and offer new decisions to the customers immediately.

Recommendations

The identified problems can be addressed using the following recommendations:

Together with the concept of EFQM, the company should consider using the Total Quality Management (TQM) model, which has essential modifications to the EFQM approach. TQM consists of eight essential elements, including customer-centricity, total employee involvement, process-centered method, integrated system, strategic and systematic approach, continual improvement, fact-based decision-making, and communications. While most of the principles are present in the EFQM model, there is no emphasis on effective communications. Effective communication has a significant role in maintaining morale and in motivating employees at all levels. Moreover, TQM insists on fact-based decision-making, which is also vital for effective operations.
RADAR (Results, Approaches, Deploy, Assess, and Refine) logic should be integrated to replace DMAIC. While the employed DMAIC system is an adequate measure, it presupposes that all the changes are final, since control is the final stage. In a sense, RADAR does not have a final step, as, after assessment and refinement, a new cycle may begin. The approach will help to focus on continuous improvement.
TNT needs to monitor the services of competitors to offer analogous products. The company should acknowledge its competitors as key stakeholders and engage with them, which is vital according to the EFQM model.
The company needs to invest in research and development (R&Q) and implement the latest technologically advanced practices. According to EFQM, technology is a major element in enabling performance and transformation. Moreover, it will help to forereach the customers’ needs and support continuous change.
An aggressive ideological campaign is to be employed to reach the stakeholders around the edges of the model. This implies that TNT needs to pay closer attention to its frontline employees and their understanding of the company’s vision and mission. At the same time, the workers should know how to implement the principles integrated into the company’s purpose in practice.
The company should put a greater emphasis on social responsibility. TNT operates in the delivery business, which is associated with significant environmental hazards from trucks and aviation. Being concerned about ecological issues is the key to positive relationships with customers.

Conclusion

TNT Express is a company with a high level of corporate culture, which promotes innovation based on engagement with key stakeholders. It managed to achieve considerable success in quality, value, and organizational excellence by employing the EFQM model. Even though the company experienced a significant performance improvement, the analysis revealed four problems that needed immediate attention. These issues can be addressed by following six recommendations mentioned in the analysis.

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