A Standard’s Evolution
How ISO 9004:2018 came to be
by Isaac Sheps and Pierre L’Espérance
There is no doubt that the primary focus of an organization should be to achieve higher customer satisfaction. This is often done by implementing rigorous processes to continuously improve the quality of its products and services. In the current competitive environment, however, that’s not enough to sustain success.
Organizations must move beyond product quality to the next level of organizational quality by implementing an effective and efficient management system. It must be led by top management and focused on the organization’s ability to meet the needs and expectations of its customers and other relevant interested parties to sustain organizational success.
That’s where ISO 9004:2018 comes in. While ISO 9001:2015 focuses on providing confidence in an organization’s products and services, ISO 9004:2018 focuses on providing confidence in the organization’s ability to sustain success.
A look at past versions
During the past 30 years, ISO 9004 has gone through a significant evolution—referred to by some people as a revolution. ISO 9004:1987—the first version of the standard—was developed during the total quality management (TQM) era. The intent was for an organization to first implement ISO 9004:1987, followed by ISO 9001:1987 for certification purposes.
However, the market reacted differently. The concept of TQM was unclear to many organizations. The perception was that TQM and ISO 9004:1987 demanded too many resources for hard-to-define goals and benefits, so organizations used ISO 9001:1987 directly and uniquely for certification purposes and as the foundation of their quality management systems (QMS).
ISO 9001:1994 was published with minimal changes, and ISO 9004:1994 was perceived to be guidelines for implementing ISO 9001:1994 requirements.
When ISO 9001:2000 was published, organizations realized the benefits of the process and the plan-do-check-act approach. ISO 9004:2000 was published with the intention of being a consistent pair with ISO 9001:2000—it was all about going beyond ISO 9001:2000 as a guide to improving an organization’s QMS.
ISO 9001:2008 was published with minor revisions, but ISO 9004:2009 contained important changes. It focused on providing guidelines and tools for using quality management principles to achieve and maintain organizational success. For the first time, it acknowledged that a QMS alone wasn’t enough—organizations must apply other management systems to achieve sustained success. They must meet the needs and expectations of their customers and other interested parties.
ISO 9001:2008 and ISO 9004:2009 were no longer a consistent pair. On one hand, ISO 9001:2008 provided requirements for certification. On the other hand, excellence models provided a scoring grid for organizations to measure their overall performance. But excellence models only provide information about how to score organizations—not how organizations can improve their overall scores. ISO 9004:2009 was developed as a bridge between quality management requirements and excellence models, and to provide guidance to sustain success.
The changes implemented in ISO 9004:2018 severed its remaining ties with ISO 9001 and made it a standalone standard focused on how organizations can sustain success by implementing all management systems that can support their ability to meet the needs and expectations of all interested parties.
More than that, the current version implies that all these management systems can be integrated into one system that aims to achieve quality at the organizational level, which differs from quality at the production or product level. Product and service quality, which is the focus of ISO 9001:2015, is about meeting the needs and expectations of customers. Quality of an organization is about meeting needs and expectations of all relevant interested parties, including customers.
This evolution is illustrated in Table 1, which compares the titles and scopes of the last three versions of ISO 9004.
The structure of ISO 9004:2018
Despite dealing with a management system, ISO 9004:2018 doesn’t fully follow the Annex SL structure like ISO 9001:2015 does because it’s a guideline document, not a requirement standard. Its structure follows the logic and sequence of an organization management system with the objective of achieving sustained success. The structure presented in Figure 1 shows a process with customer and other interested parties’ needs and expectations as an input, and confidence in an organization’s ability to meet those needs and expectations as an output.
There is an important note in the standard about interested parties: When it refers to interested parties, the standard always refers to all relevant interested parties and their needs and expectations. Which interested party and which of its needs and expectations are relevant to the organization must be identified by the organization.
Main terms. There are three main terms used in ISO 9004:2018 that must be understood before the standard can be implemented:
- “Quality of an organization.” “The ‘quality of an organization’ is the degree to which the inherent characteristics of the organization fulfill the needs and expectations of its customers and other interested parties, in order to achieve sustained success. It is up to the organization to determine what is relevant to achieve sustained success.”1
As stated earlier, quality at the organizational level differs from production, product and service quality. Production quality focuses on making products with consistent characteristics—ensuring that there is no variance in the production process. Product and service quality focuses on meeting needs and expectations of customers. Meanwhile, organizational quality is about meeting needs and expectations of all interested parties. The difference is in whose needs and expectations should be met.
- “Interested parties.” As defined in ISO 9000:2015, an interested party is a “person or organization that can affect, be affected by, or perceive itself to be affected by a decision or activity”2 of the organization (a stakeholder). Figure 2 depicts examples of interested parties and their needs and expectations according to ISO 9004:2018.
- “Sustained success.” In ISO 9000:2015, success is defined as achievement of an objective.3 Sustained success is defined as the result of the ability of an organization to achieve and maintain its objectives long term.4 The main concept on which ISO 9004 is based is that “to achieve sustained success, the organization should go beyond the quality of its products and services and focus on anticipating and meeting the needs and expectations of its interested parties, and not just those of its customers alone, with the intent of enhancing their satisfaction and overall experience.”5
Clauses 8-11 of ISO 9004:2018 are similar to ISO 9001:2015 and other management systems, but clauses 5-7 are unique and therefore require additional discussion.
Clause 5—Context of the organization. Understanding the context in which the organization operates is the basis for what the organization must do to achieve sustained success. As stated in the standard: “Understanding the context of the organization is a process that determines factors which influence the organization’s ability to achieve sustained success.”6
The standard also emphasizes that the context of the organization consists of three main domains: interested parties, external issues and internal issues. Without properly identifying relevant interested parties and their relevant needs and expectations, the external and internal issues the organization is facing currently and in the future, and next processes, the management system will not provide sustained success. External and internal issues can affect the organization’s ability to achieve sustained success. Examples of external and internal issues as detailed in the standard are shown in Table 2.
Clause 6—Identity of an organization. Defining and maintaining the identity of the organization is the first step in building a management system that will support its sustained success and is one of the main responsibilities of top management. The standard states: “An organization is defined by its identity and context. The identity of an organization is determined by its characteristics, based on its mission, vision, values and culture.”7
These four elements—mission, vision, values and culture—are the building blocks of the foundation upon which the organization’s activities are built. Because these terms often have different meanings, the standard defines them as follows:
- Mission: The “organization’s purpose for existing.”8
- Vision: “Aspiration of what an organization would like to become.”9
- Values: “Principles and/or thinking patterns intended to play a role in shaping the organization’s culture and to determine what is important to the organization, in support of the mission and vision.”10
- Culture: “Beliefs, history, ethics, observed behaviors and attitudes that are interrelated with the identity of the organization.”11
Of course, these four elements of the organization’s identity are interrelated and top management should ensure that they are aligned.
Clause 7—Leadership. This clause is focused on the involvement, commitment and responsibility of the organization’s top management. After defining and maintaining the identity of the organization, based on its context, top management should define, maintain and deploy the organization’s policy, strategy and objectives. Doing so allows top management to establish the three fundamentals of leadership:
- Creating a unity of purpose by promoting the adoption of the mission, vision, values and culture.
- Defining the organization’s intentions and direction in the form of the organization’s policy, strategy and objectives.
- Conveying a consistent message to the organization. According to the standard: “The effective communication of policies and strategy, with relevant objectives, is essential to support the sustained success of the organization.”12
When formulating the strategy, top management must consider the competitive factors in different aspects, as detailed in ISO 9004:2018, clause 7.2.
The scope of ISO 9004:2018 says: “This document provides a self-assessment tool to review the extent to which the organization has adopted the concepts in this document.”13
The self-assessment tool, found in Annex A, is based on the guidance detailed in the standard, which provides a framework for improvement. It can be used as-is or customized to suit the organization. The self-assessment tool uses five maturity levels. It was formatted so there is a separate table for each subclause of the standard, and there is a special column for results and comments of the self-assessment performed.
Facing the continuously and rapidly changing context of the organization, organizations that aim to sustain success must move to a more holistic view of their QMS—from focusing only on product and service quality to the quality of the organization.
ISO 9004:2018 provides step-by-step guidance for an organization to sustain success. The first step is to determine and understand the context of the organization, which consists of three main factors:
- Relevant interested parties (including customers) and their relevant needs and expectations.
- External issues.
- Internal issues.
Based on this data, the organization’s top management must determine and enhance the organization’s mission, vision, values and culture.
The next step is to determine and deploy the organization’s strategy, policies and objectives. To achieve the determined strategic intentions and objectives, top management must ensure that the right processes are in place, properly interrelated with all resources allocated and aligned to the intentions and objectives of the strategy. Of course, the organization’s systems and activities must continuously improve and, therefore, processes for performance measurement and improvement must be established.
- International Organization for Standardization (ISO), ISO 9004:2018—Managing for the sustained success of an organization—A quality management approach.
- ISO, ISO 9000:2015—Quality management systems—Fundamentals and vocabulary, subclause 3.2.3.
- Ibid, subclause 3.7.3.
- Ibid, subclause 3.7.4.
- ISO, ISO 9004:2018, see reference 1.
- ISO, ISO 9000:2015, subclause 3.5.11.
- Ibid, subclause 3.5.10.
- ISO, ISO 9004 :2018, clause 6.2.
- ISO, ISO 9004:2018, clause 7.4.
- ISO, ISO 9004:2018, see reference 1.
“Gallup’s Perspective on Organizational Identity,” Gallup, Inc., 2014.
Japanese Industrial Standard (JIS), JIS Q 9005:2005—Quality management systems—Guidelines for sustainable growth.
L’Espérance, Pierre, and M. Duclos, “ISO 9001:2015,” Quebec Movement of Quality, December 2015.
L’Espérance, Pierre, “ISO 26000: A Standard on the Social Responsibility of Organizations,” Quebec Movement of Quality, September 2009.
L’Espérance, Pierre, “Management System Standards Published by ISO,” Quebec Movement of Quality, February 2011.
L’Espérance, Pierre, “The Latest News in System Management and ISO Standardization,” Quebec Movement of Quality, October 2010.
Proceedings of the 15th Industrial Engineering and Management Conference, Tel Aviv, Israel, March 2008.
Sheps, Isaac, “From Product Quality to Organization Quality,” proceedings of the 22nd Annual ASQ Quality Management Conference, New Orleans, March 2010.
Sheps, Isaac, “Is There a Need to Change the 8 Quality Management Principles?” proceedings of the International Quality Conference, Jerusalem, November 2011.
Sheps, Isaac, “Moving From Product Quality to Organization Quality to Achieve Sustained Success of an Organization,” Asigurarea Calitatii—Quality Assurance, Vol. 23, No. 87, 2016.
Sheps, Isaac, “Quality Management and Organization Success,” proceedings of the EOQ Congress Bled, Slovenia, 2017.
Sheps, Isaac, “QMS in Future—ISO TC 176 Perspective,” proceedings from the Fourth International Working Conference TQM—Advanced and Intelligent Approaches, Belgrade, Serbia, May 2007.
Sheps, Isaac, “The Future of ISO 9001 Quality Systems Management—Requirements,” proceedings of the International Convention on Quality JUSK—2010, Belgrade, Serbia, May–June 2010.
Sheps, Isaac, and Avigdor Zonneshain, “Design for Sustainability—The Challenge for Systems Engineering,” proceedings of the 18th Annual INCOSE International Symposium, Utrecht, The Netherlands, June 2008.
Weiler, Greg, “What Do CEOs Think About Quality?” Quality Progress, May 2004, pp. 52-56.
Isaac Sheps is chair of the Israeli Standard Institute Central Committee for MS Standards. He is the convener of the International Organization for Standardization (ISO) technical committee (TC) 176 working group (WG) 25, the subcommittee responsible for revising ISO 9004. He earned his doctorate in economics from the Bucharest University of Economic Studies in Romania.
Pierre L’Espérance is a co-founder and principal partner of the consulting firm Le Groupe Qualiso in Quebec. He is a member of the Canadian technical committees on quality management, and occupational health and safety at work. He also was the Canadian expert delegate to ISO’s TC 176 SC2 WG24, the subcommittee responsible for revising ISO 9001:2015 and is co-convener of WG 25. L’Espérance earned his MBA from Laval University in Quebec City.