2019

STANDARDS OUTLOOK

What’s Really Important

By John E. “Jack” West

It’s not the revision but how you implement ISO 9001

By the end of this year, the International Organization for Standardization (ISO) is expected to issue a new version of ISO 9001. The revision process has been referred to as an amendment, to emphasize that it is intended for clarification, not to change requirements. In a feature article in this issue of Quality Progress, Lorri Hunt explains the changes.

ISO 9001:2008 will offer an opportunity to revisit the basics of management systems, refresh ISO 9001-related training and, perhaps, return to some of the basics. Over the past eight years since ISO 9001:2000 was issued, we seem to have lost some of the emphasis on the simple concepts that are so important for implementers of formal management systems using standards, such as ISO 9001.

Some of the basic ideas that provide an important framework for the ISO 9001-based quality management system (QMS) are:

  • Develop your organization’s own principles.
  • Align your quality policy and the organization’s mission, vision and key strategies.
  • Focus your QMS on meeting organizational goals.
  • Measure the right things.

Develop

It is common for organizations to focus on quality tools to achieve improvements. Tools are important, but it probably is more important to understand the underlying principles for achieving quality excellence.

In an article in the Harvard Business Review, Steven J. Spear points out that one key to the long-term success of Toyota is its adherence to its basic principles.1

“The insight that Toyota applies underlying principles rather than specific tools and processes explains why the company continues to outperform its competitors,” Spear says. “Many companies have tried to imitate Toyota’s tools as opposed to its principles; as a result, many have ended up with rigid, inflexible production systems that worked well in the short term but didn’t stand the test of time.”

Now, this is not a Toyota advertisement. The point has nothing to do with Toyota but has to do with using tools such as ISO 9001 without clearly understanding the context needed to make the tools’ use successful.

When it comes to ISO 9001, that context is expressed in the eight quality management principles that are given in clause 0.2 of ISO 9000:2005:

  1. Customer focus.
  2. Leadership.
  3. Involvement of people.
  4. Process approach.
  5. System approach to management.
  6. Continual improvement.
  7. Factual approach to decision making.
  8. Mutually beneficial supplier relationships.

These eight principles were introduced in ISO 9000:2000 and were not changed in the 2005 edition.

Understanding the principles is important because they provide a framework in which the requirements of ISO 9001 were developed. But they are important for another far more profound reason: They provide organizations with a starting point for developing their own principles or values.

Organizations need to have ownership of their principles. Developing them is more important than developing the management system or the tools used in that system.

It isn’t sufficient to develop the management system using the specific guides of ISO 9001 or the Malcolm Baldrige National Quality Award criteria. In effect, doing so is to treat the principles as just another tool.

When you base actions on a standard or model, you must trust that the principles of that model fit your situation. While it is tempting to adopt the principles from a standard or a quality award’s criteria, or to use those of another organization, this is certain to be inadequate because each organization is unique. No single model is likely to be focused on the things most important to achieving excellence in your organization.

On the other hand, the system should evolve on a foundation that is based on the principles you develop. It is on these principles that you can expect all actions in your organization to be taken.

Align

Success requires integration of quality management with the organization’s overall mission and future vision. In many—perhaps most—organizations, however, quality’s role has not been considered in strategic thinking and planning.

CEOs, CFOs and marketing and manufacturing executives sit around long, polished wooden tables to plot the future of their organizations during the next two to five years. Typically, the quality role is ignored when issues such as market share, margin, market expansion and cash flow are addressed. Consequently, product or service quality is not integral to the activities of the organization.

The quality activities are thus not part of the basic decision-making processes of the organization. The organization’s decision makers do not view them as an integral element of the management of the organization. Quality in this example is, at best, a tactic for preventing nonconforming products or services from reaching an end-use customer.

An organization’s mission is a statement of its reason to exist. It describes in high-level terms what the organization is. Clearly understanding what business the organization is in and how it succeeds in that business is crucial.

Mission statements might reflect the way in which the organization behaves, how it pursues business opportunities, how it treats its people or other information that is important to the understanding of the organization. Because mission statements express what the organization is, they seldom need to be modified.

An organization’s vision describes a picture of the organization in the future. Understanding where the organization is going or needs to go is often as critical as understanding the current mission. Unlike the organization’s mission, vision might need to change over time.

Vision is developed by first getting a clear picture of the organization’s current situation (sometimes called the current reality) and then picturing what the organization needs to look like in the future.

The process starts with top managers, who work out their picture of the organization’s future and share it with the employees. Their objective should be to get employees to see how their own vision relates to top management’s vision.

An organization’s vision of the future might be quite different from its current situation or from what is described in its current mission statement. For example, the organization could have the vision of abandoning its current lines of business in favor of growth in other areas.

In some cases, mission, vision and key values can be developed independently. Often, they are interrelated. They should be the foundation for all that happens in the organization and reflected in strategies and in all of the organization’s policies, including quality.

A clear understanding of the organization’s mission, vision and key values should precede the development of a strategic plan. Likewise, a clear understanding of those things, along with current strategies, is a prerequisite for drafting a quality policy.

The quality policy should always display good alignment with an organization’s mission, vision, key values and strategies. It is common to see completely different and conflicting sets of overall business and quality objectives, particularly in organizations that are under extreme pressure to reduce costs but have objectives for world-class quality.

Focus

It is necessary to focus a QMS on meeting organizational goals and to align the organization’s quality and overall business objectives to achieve high levels of performance. This concept is shown in Figure 1.

Figure 1

Establishing overall business objectives is a natural function of top management. While ISO 9001 requires that top management establish the quality objectives, it is common practice for the quality policy and objectives to be drafted by a quality manager and approved by a top manager without much consideration of whether there is good alignment with business objectives.

If the links shown in Figure 1 do not exist, there is little chance of aligning business objectives with quality objectives. Displaying this alignment in the words of mission and vision statements and policies is a noble goal, but the words need to represent real intentions of top managers.

The question, “What are quality objectives?” should not be asked in isolation. Rather, the questions should be, “What are the things related to quality that support our organizational objectives, and what is our policy related to those things?”

It is first necessary to align the quality policy with the organization’s mission, strategic plans, business plans and overall business objectives. Some of the considerations in developing objectives and quality policy include:

  • Needs of customers in various market sectors.
  • Need for the organization to grow (or shrink) to suit market needs.
  • Market opportunities for current, new and improved products.
  • Opportunities and needs for better technologies.
  • Needs of the organization’s members for education, training, skills and experience.
  • Capital needs for growth, new and improved products and new processes.
  • Cash-flow needs to sustain operations.
  • Means to obtain required financing.

Once business objectives and quality policy are aligned, it is appropriate to develop the quality objectives. If the business objectives and quality policy are appropriate, it should be quite easy to develop aligned quality objectives to support them. This stage might also introduce needs that were not considered in earlier planning.

For example, organizations that have a tradition of inward focus might not have even considered the needs of customers in developing their business objectives. This means that once the quality objectives have been developed, they need to be checked against the business objectives and quality policy to test alignment.

Objectives are needed to address mission and vision because we need to measure against short and long-term targets. Establishing this type of alignment might appear to be difficult. It isn’t.

For example, an organization needs to increase its margins on sales. There could be a business objective to increase margins by 10% over a one-year period.

Several quality objectives might relate to this business objective. Two of them could be increasing customer satisfaction by 35% as measured by surveys to build customer loyalty while reducing quality failures by $50 million over the same year.

Similar logic is used for objectives related to the vision.

Measure

It is important to understand that you want to measure independent variables, not just response variables. The most important independent variables are the key drivers of performance. A simple example is shown in Figure 2.

Figure 2

Think about candy. If you want to control the sweetness, you have two options for measurement: You can measure the taste itself or the amount of sugar you put into each batch. The amount of sugar is an independent variable, while the sweetness is a response variable. The response variable gets sweeter as you add more sugar.

Likewise, a business objective such as “improve customer satisfaction by 33% over two years as measured by surveys” is a response variable. To drive the 33% improvement, you need to measure the independent variables that will cause customer perception to improve.

Measuring progress toward meeting the overall objectives is often not good enough because overall objectives tend to be response variables. It is often necessary to develop a small family of key measures that will drive performance.

Targets should be set for each measure so that reaching the targets will result in meeting the organization’s objectives. Selection of these key drivers is not a trivial task, and in most organizations the correct measures are not obvious. Their determination often has required several rounds of trial and error.

Guessing at what to measure can lead to measures in which data collection is easiest or a tendency to measure everything. Some analysis should be done to determine the key drivers. To select the correct things to measure, you need to know what is important to customers and how those things relate to their perception of satisfaction.

Simple tools, such as cause-and-effect diagrams, sometimes are useful in defining these relationships. Consider gathering past data as a baseline and verifying that when the selected key driver changes, the response variable also changes as predicted.

It is common for a single key driver (independent variable) to affect several of the objectives. When this happens, it is very good news because it can reduce the number of key drivers that need to be measured.

Not mandatory, but opportunity

Many organizations have found their objectives depend on removing wastes that are included in the cost of quality. For them, measuring cost of quality has become an important part of the key driver concept.

Nothing can absolutely guarantee success to those who implement management systems. But focusing on these issues can go a long way toward preventing failure.

The new version of ISO 9001 might not bring mandatory changes, but it does provide an opportunity to rethink the basics of management systems.


Note

This column was adapted from parts of Unlocking the Power of Your QMS by Charles A. Cianfrani and John E. “Jack” West (ASQ Quality Press, 2005).


Reference

1. Steven J. Spear, “Learning to Lead at Toyota,” Harvard Business Review, Vol. 82, No. 5, May 2004, pp. 78-86.


John E. “Jack” West is a management consultant and business advisor. He served on the board of examiners for the Malcolm Baldrige National Quality Award from 1990 to 1993 and is past chair of the U.S. technical advisory group to ISO technical committee 176 and lead delegate to the committee responsible for the ISO 9000 family of quality management standards. West is an ASQ fellow and co-author of several ASQ Quality Press books.


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