Context of the Organization – External Issues

external influencesContext of the Organization – External Issues

External Issues Relationship to the Company Scope

The scope of the company explains what the company does and doesn’t do. If it is a steel stamping shop it is unlikely the company also makes cotton candy. If you manufacture parts for a specific industry, your company may not do any design and development. Scope talks about what products and services the company provides. Internal issues are within the company’s control. External issues are usually outside the company’s control. With external issues all the company can do is monitor and react, it cannot control the issues.

External Issues Models

Models used in strategic planning or market research are useful in identifying external issues. There are a large number of models available. One that is effective is PESTEL but any model that allows the company to identify external issues and define how to monitor and react to them can be used.

External Issues Using PESTEL

PESTEL stands for

  • Political – taxes, tariffs, labor laws, trade restriction
  • Economic – economic growth, interest rates, exchange rates, inflation
  • Social – population growth, age distribution, attitudes toward careers and minorities, safety concerns
  • Technological – R&D activity, automation, rate of change, production efficiency
  • Environmental – weather, climate
  • Legal – discrimination, consumer, employment, health and safety, consumer law

Risks and Opportunities with External Issues

The following table shows some examples of an issue, a single concern, the potential risks and opportunities and a method of monitoring them. Most companies will have multiple concerns for each issue.

Issue Concern Risk Opportunity Monitor
Political Tariffs Reduces ability to export Reduces external competition Monitor USITC
Economic Interest rates Limit capital availability Increase capital availability Meet with bank quarterly
Social Aging population Smaller workforce Increased demand for certain products Strategic planning and Annual Management review
Technological Changing markets No demand for current products Large demand for innovation Industry specific information sources
Environmental New laws Require investment Provide new markets Monitor EPA regulations quarterly
Legal Consumer laws Increased cost to manufacture Limits new competition Set google alerts
Style Communication Poor Excellent In-process errors

 

Conclusion – External Issues

The risks and opportunities of external issues can be handled in a very similar manner to internal issues. A key difference between the two is how much control the company has. With internal issues the company management should be able to evaluate and adjust to influence or change the outcome. With external issues the company can only react to the issues.

By looking at the Interested Parties, Internal Issues and External Issues a company can have a better understanding of the business risks and opportunities. With this information they can select a strategic plan which best directs the company to obtain a long-term goal of profitability and longevity.

 

Interested Parties

Management requires everyone to work together for quality

Management requires everyone to work together for quality

Context of the Organization – Interested Parties

This is one way of looking at Interested Parties. Other consultants look at it differently. You need to decide what works best in your company.

Scope, requirement hasn’t changed, Assume you reviewed it and it accurately represents your organization

Who are the interested parties?

This changes from company to company only you can determine who the interested parties are. In previous revisions of ISO we were mostly concerned with  the customer with some interest in our suppliers and our employees. But nothing was formalized and there wasn’t a direct consideration of risk/opportunity.

¡  People who have a stake in what and how your organization performs in producing products or services which meet the customers’ requirements

¡  Are relevant to the QMS

While section 4.2 of the ISO 9001:2015 standard does not require you to identify the risks and opportunities, they should be included in section 6.1. So we’ll go over that now and save repetition later.

Risk negative or positive, ISO 31000, 14001 opportunity, Interested Parties can be both

Here is a side point in ISO 9001 risk is considered to be either negative or positive. In ISO 31000 and ISO 14001 they consider risk as negative and opportunity as positive. Keep that point in the back of your mind in-case an auditor challenges the term “opportunity” and be prepared to say in your company opportunity means positive risk. You can use whatever name you want. I have a client who names quality objectives as “rocks”. It is a term everyone there knows and understands and it meets the standards requirements for quality objectives so the auditors don’t challenge the name.

Interested Parties effect the QMS

Interested parties effect the QMS. This is important because this may or may not include the customer, the end users and your competitors.

One way to look for Interested Parties is to consider the  following areas. Again you may not have all of these and you may think of some not included in this presentation. It is up to you to identify the interested parties for your company.

  • Suppliers – Providers of raw material, components, sub-assemblies, finished product and services
  • Internal groups – Employees, unions, stock holders, management
  • Intermediaries – The most common is a distributor but there are also aftermarket service groups
  • Alliances – A bank may recommend a consultant they think will increase the company’s profitability, while the consultant may recommend a bank to clients who are having banking issues
  • Influencers – Think of peer groups, councils, chambers of commerce

Organizing Interested Parties

There is more to be done than just list the interested parties. Some of the interested parties can provide both a risk and an opportunity. For example a supplier performance issue presents a risk to you meeting your customers’ requirements. However, if they are a leader in their industry they could provide you with a competitive advantage with a new product none of your competitors has access to use.

Slide 10 – Risks and opportunities

So let’s start the table.

Interested Party Concern Risk Opportunity
Suppliers Their reputation and quality/delivery/price influences yours Nonconformance Superior performance
Employees Is it stable? Do they have pride of workmanship? Controls product quality Source of innovation
Shareholders Source of investments, company direction Looking for short term ROI Supports re-investing
Community Impact on your reputation, and ability to produce Demands which reduce profits Promotes development
Intermediaries Increased sales, impacts your reputation Damage to product More contacts/sales
Alliances Increased opportunities, concerns for reputation Your reputation is tied to theirs Increased sales
Interested party Concern Risk Opportunity
Influencers Is their advice of value Different frame of reference Wide range of experience
Regulators Compliance Not managing changes Good rating
Certifying bodies  Do they understand the organization and the standard(s) Dependent on auditor training Global view of QMS

 

You get the idea.

Controlling Risk from Interested Parties

Now that you have a list of your interested parties and the concern or impact they have on your company with the inherent risks or opportunities, you need to monitor and control your risk and capitalize on your opportunities. So let’s add a column.

Interested Party Risk Opportunity Monitor
Suppliers Nonconformance Superior performance Annual performance review/ random inspection
Employees Controls product quality Source of innovation Annual performance review
Shareholders Looking for short term ROI Supports re-investing Review BOD reports
Community Demands which reduce profits Promotes development Community newsletters, membership in community organizations
Intermediaries Damage to product More contacts/sales Reports of NC and Sales
Alliances Your reputation is tied to theirs Increased sales Monitor press releases Qtrly Sales
Influencers Different frame of reference Wide range of experience Monthly meetings
Regulators Not managing changes Good rating Regulator updates/ ratings
Certifying bodies Dependent on auditor training Global view of QMS Annual surveillance audit

 

 

Of course these controls are typical examples and you should define what works for your company. The point is you should have a way to monitor and address risk and capitalize on opportunities.

Documenting Interested Parties

When the auditor arrives they are going to ask, “Who are your interested parties?” There is no requirement in the standard that you list interested parties.

You must communicate to your organization who are the interested parties and how they will be monitored.

So when identifying Interested Parties think about who affects or has the potential to affect your QMS

Let your common sense guide you on identifying the Interested Parties, Don’t worry, you can do this. If you need help, e-mail me at technacon1986@sbcglobal.net or call (708) 814-3685.

The next presentations will be on internal and external influences.

Documented Information

Can we throw out our procedures or are we still locked in?

Can we throw out our procedures or are we still locked in?

ISO 9001:2015 and Documented Information

The first thing we heard about ISO 9001:2015 version was no more need for procedures, quality manuals or records. Hurray, hold a bonfire in the parking lot!

Hold the matches. We now have documented information in place of procedures, manuals and records. So is this an “I gotcha” on the part of ISO?

Not necessarily. Jump into the standard at section 7.4 Communication which says “The organization [your company] shall determine the internal and external communications relevant to the quality management system, including:

  1. a) on what it will communicate;
  2. b) when to communicate;
  3. c) with whom to communicate;
  4. d) how to communicate;
  5. e) who communicates.

This gives the company the leeway to communicate in manners other than written procedures. For example instead of having a Work Instruction on how to assemble a product or complete a form, the company could have a video employees could reference instead.

Where is Documented Information required?

In the ISO 9001:2008 there are 6 documented procedures. That is all you needed. So what about the 2015 revision?

Thumbing through the standard I found a requirement for documented information as follows:

  • 4.3 Determining the scope of the quality management system – “The scope of the organization’s quality management system shall be available and be maintained as documented information”
  • 4.4.2 To the extent necessary, the organization shall:

o   maintain documented information to support the operation of its process

o   retain documented information to have confidence that the processes are being carried out as planned

  • 5.2.2 Communicating the quality policy – “The quality policy shall be available and maintained as documented information
  • 6.2.1 Quality objectives and planning to achieve them – The organization shall maintain documented information on the quality objectives.
  • 7.1.5.1 General [Monitoring and measuring resources] -The organization shall retain appropriate documented information as evidence of fitness for purpose of the monitoring and measurement resources.
  • 7.2 Competence d) Retain appropriate documented information as evidence of competence
  • 7.5.1 General [Documented Information] –The organization’s quality management system shall include documented information required by this International Standard and documented information determined by the organization as being necessary for the effectiveness of the quality management system
  • 7.5.3.1 [Control of documented information]Documented information required by the quality management system and by this International Standard shall be controlled…..
  • 7.5.3.2 [Control of documented information]Documented information of external origin determined by the organization to be necessary for the planning and operation of the quality management system shall be identified as appropriate, and be controlled.
  • 8.1 Operational planning and control e)1) and 2) -The organization shall plan, implement and control the processes needed to meet the requirements for the provision of products and services, and to implement the actions determined in Clause 6 by: determining, maintaining and retaining documented information to the extent necessary to have confidence the processes have been carried out as planned and to demonstrate the conformity of products and services to their requirements
  • 8.2.3.2 [Review of the requirements for products and services] – The organization shall retain documented information as applicable on the results of the review and on any new requirements for the products and services.
  • 8.3.2 Design and development planning j) – the documented information needed to demonstrate that the design and development requirements have been met.
  • 8.3.3 Design and development inputs – The organization shall retain documented information on design and development inputs
  • 8.3.4 Design and development controls f) – The organization shall apply controls to the design and development process to ensure that documented information of these activities [a-e] is retained
  • 8.3.5 Design and development outputs – The organization shall retain documented information on design and development outputs
  • 8.3.6 Design and development changes – The organization shall retain documented information on design and development changes and the results of reviews and the authorization of the changes and the actions taken to prevent adverse impacts
  • 8.4.1 General [Control of externally provided processes, products and services] – The organization shall determine and apply criteria for the evaluation, selection, monitoring of performance and re-evaluation of external providers based on their ability to provide processes or products and services in accordance with the requirement. The organization shall retain documented information of these activities and any necessary actions arising from their evaluations.
  • 8.5.1 Control of production and service provision a) – Controlled conditions shall include, as applicable the availability of documented information that defines the characteristics of the products to be produced, the services to be provided, or the activities to be performed and the results to be achieved;
  • 8.5.2 Identification and traceability – The organization shall control the unique identification of the outputs when traceability is a requirement, and shall retain the documented information necessary to enable traceability.
  • 8.5.3 Property belonging to customers or external providers – When the property of a customer or external provider is lost, damaged, or otherwise found to be unsuitable for use, the organization shall report this to the customer or external provider and retain documented information on what has occurred.
  • 8.5.6 Control of changes – The organization shall retain documented information describing the  results of the review of changes, the person(s) authorizing the change, and any necessary actions arising from the review.
  • 8.6 Release of products and services -The organization shall retain documented information on the release of products and services. The documented information shall include evidence of conformity with the acceptance criteria and traceability to the person (s) authorizing the release.
  • 8.7.2 [Control of non-conforming outputs] – The organization shall retain documented information that describes the nonconformity, describes the actions taken, describes and concessions obtained, and identifies the authority deciding the action in respect of the non-conformity.
  • 9.1.1 General [Monitoring, measurement, analysis and evaluation] – The organization shall retain appropriate documented information as evidence of the results.
  • 9.2.2 [Internal audits] – The organization shall retain documented information as evidence for the implementation of the audit program and the audit results.
  • 9.3.3 Management review outputs – The organization shall retain documented information as evidence of the results of management reviews.
  • 10.2.2 [Nonconformity and corrective action] – The organization shall retain documented information as evidence of the nature of the nonconformities and any subsequent actions taken and the results of corrective action.

              Whew! That was a lot of documented information, about 30 by my count. So what does this mean, do we need 30 procedures now instead of six or zero as some consultants are claiming?

The Clues as to What to do for Documented Information

Retain Documented Information

First look for the word “retain” before documented information. In most cases this was a “record” in the 2008 version and about 2/3 of the referenced documented information requires information be retained.

If you have an ERP system or a design program or a project program or a database program which automatically retains information such as product test results and release authority there is no need for a procedure or manual directing you to save the data, your system does this for you. If there is not an automated system than there must be some way to communicate, “save this stuff this way”. Does it need to be a procedure? No, but a procedure may be the simplest and easiest method of communication.

The Other 1/3

So let’s look at the other 10 or so requirements of documented information.

  • Scope of the quality management system (QMS). Hopefully your QMS is part of the company’s strategic planning, if not there are some more basic issues going on which need to be addressed first. So the scope could be part of the strategic plan. It could also be addressed in a risk/opportunity matrix. Or it could simply be part of the company quality manual. Many companies will need to continue to provide a quality manual because it is a customer requirement. Do they need to regurgitate the standard? No. Put in them the information the standard and your customers require. Organize it to make sense to you, your customers, employees, regulators and any other interested party your company has identified.
  • The quality policy is documented information. It can be posted throughout the company via electronic message boards or bulletin boards. Ta da! You’ve got it. Of course the company will want to note which bulletin boards have it in case of an update, not all companies have electronic message boards.
  • Quality objectives and planning to achieve them should already be in place. An easy way to maintain them is with a project program like Basecamp. However, such a program isn’t necessary. It can simply be part of the management review minutes.
  • Information required by the standard and the organization must be controlled. This includes documents of external origin. So if there is data or communications which is vital to your QMS or that the standard tells the company it must have, it needs to exist and be protected against unauthorized changes. What this information is and how it is to be handled must be communicated. So if a video works, great. If a procedure is the answer, great. If the information is a regulation or a statute  than a link to the source of the information may be effective.
  • Documented information that the design requirements have been met will include specifications and drawings and records of design reviews. Again, this may be done with a specific program or communicated with a procedure.
  • Control of externally supplied products and services requires retained documented information about how suppliers are managed, evaluated and controlled. It is important to suppliers to have this information as well as retaining documented information so a system must be in place to control suppliers. A video might do a good job of explaining this or an e-mail or a procedure.

Summary

While procedures are no longer required, they may be the easiest and clearest form of communication for the who, what, where, when, why, and how of an activity. It is acceptable to have new and innovative ideas to communicate and retain documented information. So let’s hear your input. If you didn’t have to have a procedure how would you handle documented information?

14 Steps to Establish Process Improvement

This article is presented as part of an overview of the quality guru’s of the 1980’s. The 14 steps were develop by Mr. Philip Crosby and presented by Philip Crosby Associates. Reading “Quality Is Free”, “Quality Without Tears”, and “Quality Without Pain” are helpful in understanding how Mr. Crosby developed his philosophy and encouraged others to use it. For more information about Philip Crosby Associates, go to http://www.philipcrosby.com/pca/index.html.

Quality Councils guide the quality Improvement Process

Step 1 of the 14 Steps – Management Commitment for Process Improvement

Management must make clear where it stands on quality. Without top management commitment the process is doomed to failure (see “Four Ways a Quality Improvement Process Can Fail” and “Five Ways to Assure the Success of a Quality Improvement Process”).Top management must communicate it has a zero defect strategy if it wants a quality improvment process. The primary action to accomplish this is to write and communicate a Quality Policy. In ISO 9001 all documentation comes from the philosophy in the quality policy. This is the reason why that is so important.

Step 2 of the 14 Steps – Quality Improvement Team to Create Process Improvement

A framework is needed to coordinate the quality improvement process which is driven by the quality improvement team. This is the vehicle to remove roadblocks to progress and provides a formal communications medium to ensure the quality improvement efforts are coordinated throughout the company. Each department should have a representative on the team and a charter is needed. The team members take responsibility for one or more of the 14 steps. This team is not the problem solving team but manages the various activities associated with quality improvement throughout the company.

Step 3 of the 14 Steps – Measurement of Process Improvement

One definition of insanity is doing the same thing repeatedly and expecting a different result. Measurement is the determination of the result. Teams measure the difference their changes have made. Measurement is done in simple terms of things (part XYZ) or events (shutdowns or recalls) and compared to past performance to see if it is a process improvement, no change or a deterioration.

Step 4 of the 14 Steps – Cost of Quality and Process Improvement

The Cost of Quality takes “things” and “events” and converts them to a common language – money. The group charged with making the change does not monetize their efforts this is done at a central level providing for consistency of costing. (see “The Cost of Quality”) Speaking in terms of money allows managment to justify the costs to create process improvement.

Step 5 of the 14 Steps – Quality Awareness as it Relates to Process Improvement

The purpose of Quality Awareness is to raise the personal concern felt by all employees toward the conformance of the product or service and the quality reputation of the company.[1] As Dr. Deming also said in his 14 points, we are all dependent on each other. Process improvment can not occur unless the entire team agrees it is needed.

Step 6 of the 14 Steps – Corrective Action for Process Improvement

Corrective Action Systems respond to 3 sets of rules – Input rules, Administrative rules, and output rules. Corrective action looks for systematic rather than anecdotal solutions. The process should have steps and be formalized throughout a company. They should be designed to eliminate compromising on conformance to requirements. Implement “Do It Right the First Time” to create process improvement.

Step 7 and 9 of 14 Steps – Zero Defects Planning and Zero Defects Day impact on Process Improvement

Zero Defects day is designed to be an event to create a personal experience for all employees so they know a permanent change, a process improvement, has been made. Management is committed and this is a process not a project. It will not go away.

Step 8 of 14 Steps – Employee Education Creates Process Improvement

All employees must understand the Absolutes of Quality so they can competently carry out their role in the quality improvement process. This means an education plan as well as reference documentation such as procedures and work instructions. Treat Suppliers as if they were employees when it comes to education.

Step 10 of 14 Steps – Goal Setting for Process Improvement

Total quality is achieved incrementally over time but in order to keep focused on process improvement it is important to establish realistic goals. Employees must participate in the goal setting and have a say in what can be accomplished in a defined timeframe.

Step 11 of 14 Steps – Error Cause Removal in Process Improvement

Employees have to be able to communicate roadblocks to accomplishing quality improvement process. Communication must flow in both directions; management must make expectations clear and employees must define issues and concerns that they believe will prevent them from being successful. The process to do so should be simple and formal with procedures  and assigned responsibilities to address employee concerns.

Step 12 of 14 Steps – Recognition of Process Improvement Efforts

Everyone needs to know their hard work was recognized. A quality improvement process must include a formal program to recognize both individuals and groups for their actions which create quality improvement.

Step 13 of 14 Steps – Quality Councils for Process Improvement

The purpose of this step is to bring together the appropriate people to share information that may benefit other areas of the company. In a large company with multiple divisions it could be a periodic meeting of the quality managers. They must also audit the quality improvement process for effectiveness and be will to go to management if the system is not functioning as planned.

Step 14 of 14 Steps – Do It All Over Again for Continuous Process Improvement

A quality improvement process never ends. It must be a permanent management responsibility. The focus must be to always satisfy the customer. At this time the Quality Improvement team changes although at least one member of the old team must stay on to provide information and continuity in the quality improvment process.

 

 



[1] “Quality Improvement Process Management College Manual” @1987 pg 4-6-1 “Purpose”

Four Ways a Quality Improvement Process Can Fail

 

Is your Quality Improvement Process destined for success or failure?

While reading through the binder I received in 1987 from the Philip Crosby Quality College in Winter Park, FL I came across a section titled ‘Four Ways a Quality Improvement Process Can Fail’. I was expecting something that quality professionals had created fail-safes to prevent. What I found instead was four conditions  that are just as valid today as they were in 1987.

Failure #1 – Lack of Management Attention to the Quality Improvement Process

That’s it. Either management is on-board with a Quality Improvement Process or they are not. It is the reason the Management Review is so critical to the success of ISO 9001 companies. If management is involved in providing resources and determining which projects have what priority than the company is on the right road for a successful Quality Improvement Process.

Failure #2 –  Allowing the Quality Improvement Process to Become a Motivational Program

When the Quality Improvement Process goes from creating real and lasting preventive measures and becomes a method to “get the employees involve” or create “caring” in the employees it will fail. Employees will see through the rhetoric and realize management is not serious or interested. The expectation is the employees will change in some way rather than the system.

Failure #3 -Focusing the Quality Improvement Process Only on Operations

Operations makes the widgets that get sold but the cause of non-conformances can occur in order entry, purchasing, engineering, logistics – any area of the company. That is why ISO 9001 is a quality management system. The whole system must be controlled to be effective. The entire process must be looked at, not just the area where they manufacture a saleable product.

Failure #4 – Allowing the Quality Improvement Process to Become A Problem-Solving Committee

There is a saying, “When you are up to your ears in alligators, it is difficult to remember your original objective was to drain the swamp.” Solving problems is critically important but the problems won’t go away until a systematic review of the entire process occurs. Corrective measures are different from preventive measures.

Thank you to Mr. Crosby for this tool to analyze the Quality Improvement Process. It is just as valid in 2012 as it was 1987.

The Absolutes of Quality

Mr. Philip Crosby created a chart titled “The Absolutes of Quality”.

1980’s Conventional Wisdom

 

Reality

Goodness 

Definition of quality

Conformance to requirements
Appraisal 

System to create quality

Prevention

Quality levels 

Performance Standard

Zero defects

Indexes or process levels 

Measurement

Price of Non-conformance

 

Definition of Quality

In the 1980’s “quality” was more of a feeling then a measureable element. Quality was a superior product as far as features. It might be a nicer finish to a piece of furniture or an accessory on a car. The idea that quality was conformance to requirements was a radical change. With the advent of ISO 9001, meeting the customer requirements became a “given” as the definition for quality.

Sorting bad product from good

System to Create Quality

Prevention is the current system prosperous companies use to produce a product the conforms to customer requirements. The majority of executives and managers understand the concept that the system must create 100% conforming product. Not that long ago, the method of producing a quality product was t o make a bunch of widgets and sort out the defective parts. Yes there was an army of inspectors at every plant. There was even a television ad for a brand of underwear that told people it wasn’t a quality product until inspector 12 said it was.

Quality Performance Standard

Of course 100% inspection was cost prohibitive so companies used inspection tables. The most well known was MIL-STD 105. First the manufacturer and the customer agreed as to the acceptable percentage of defects in the shipment. They would use the MIL STD 105 to determine a samples size and how many defects they could find and still ship the product. Now if current companies found a single defect in a sample, the product would be quarantined, a root cause analysis started, and a corrective and preventive action implemented.

Measurement of Quality

Measuring the Cost of Quality was unheard of in the 1980’s. Inspection and scrap were a cost of doing business and were built into the price of the product. Today, most companies track both the cost of conformance and the cost of non-conformance. If they are following ISO 9001 they also have a system to generation projects to reduce the total cost of quality.

Quality Today

So here is a question: Does your company track the cost of quality?

What Does ISO Stand For?

ISO means working together for standardization

Where Did the Name ISO Come From?

ISO is the anachronism for “International Organization for Standardization”. It is not the” International Standards Organization”. The anachronism would have been different in each country – IOS in English, OIN in French. To avoid any problems this would create the founders gave it a short, all-purpose name. They chose “ISO” from the Greek isos meaning “equal”. So whatever the country or language, the short form is always ISO.

What does the ISO do?

The International Organization for Standardization is the world’s largest developer and publisher of international standards. Did you ever wonder who came up the with standard size of a sea-tainer or a tablet of paper? It was the International Organization for Standardization. Most of the time we don’t think about standards, we just expect things to fit and to work well and safely. Standards are hidden given only noticed when absent. The International Organization for Standardization has more than 19,000 international standards. The International Standards provide a common technological language facilitating trade and the transfer of technology.

How Did ISO Get Started?

In 1946 delegates from 25 countries met and decided to create a new international organization with the objective “to facilitate the international coordination and unification of industrial standards”. It officially began operations February 23, 1947. It is not a governmental organization but a network of 163 countries, one member per country, with the central secretary in Geneva, Switzerland that coordinates the system.  Some the members are part of their government structure, others are from the private sector, usually from a national partnership of industry associations. Each member has one vote and all members are on equal footing. Standards are based on consensus among experts in the field and are periodically reviewed, usually every five years to see if they should be maintained, updated, or withdrawn. The standards are voluntary and market driven. There is no legal authority to enforce the implementation of the standards.

How Are ISO 9001, ISO 14001, ISO 27001, ISO 26001 Different?

The majority of the standards are specific to a particular product, material or process. However ISO 9001 (Quality), ISO 14001 (Environmental management), ISO 27001 (information security) and ISO 26001 (social responsibility)are generic management system that can be implemented in any organization, no matter the size, product or sector.

If you would like to learn about how International Organization for Standardization is financed and new standards are selected for development go to http://www.iso.org/iso/about.htm

 

Point 14 – Top Management Commitment to Action

Clearly define top management’s permanent commitment to ever improving quality and
productivity, and their obligation to implement all of these principles. Indeed, it is not enough that top management commit themselves for life to quality and productivity. They must know what it is that they are committed to—that is, what they must do. Create a structure in top management that will push every day on the preceding 13 Points, and take action in order to accomplish the transformation. Support is not enough: action is required!

Dr. W. Edwards Deming

What is Management’s Job – Commitment to Action

One of my father’s favorite sayings was, “lead, follow or get out of the way”. Management’s job is to lead. There must be a commitment to constant and on-going improvement. Each and every morning, management must look at their operation and decide what needs improvement and make a commitment to take action.

The Price of Failed Commitment to Action

If management does not make a commitment to constant and on-going improvement, it
will not happen. Management does not have to implement  the change but they must lead the change or their employees will end up building internal empires or chasing projects with
a lower value to the company.

Part of creating this commitment is developing a structure that guides the employees to
an on-going commitment of improvements in quality and productivity. Management must establish a system, indicate its’ importance to the company and demonstrate their own commitment to constantly and forever improving. It does not have to be fancy, but management must believe and support it.

The Call for Commitment to Action

There is a childhood chant, “Sticks and stones may break my bones but words will
never hurt me.” I wish it were true. How many suicides were prompted by cruel words? Words have power, the power to build up or the power to tear down.When management stands up and says “this is who we are and this is what we stand for” it can change the world.

My first job was with an ethical pharmaceutical company. We had a simple rule,
“Would you want your child to take this medicine?” If the answer was no, we threw it away. Every person on the line had the ability to call the supervisor and point out a problem. Each and every person on that line knew the importance of what they did and that attitude came from the top down. The VP of manufacturing walked through the plant several times a day and any operator
could stop him with a question or a concern. We had power and pride.

So what are you going to do, lead, follow or get out of the way?

Creating and Maintaining a Corporate Culture Using ISO 9001

 

How do we maintain and communicate corporate culture using ISO 9001?

                I have a Saturday morning secret weapon, to improve my business. I attend the Levy Entrepreneurial Group meeting. Thank you Joe for creating it, Jack and Terry for leading it, and Don for introducing me to it. I love talking to the attendees, they have so much experience and they are happy to share.  Subjects range beyond my imagination, no small feat when you realize I write fiction as a hobby. On the drive home, this week’s meeting  on corporate culture, had my mind running like a squirrel that got into chocolate covered coffee beans. Good thing traffic was light, I was definitely a distracted driver.

                Let’s start by defining corporate culture. It is the psychology, attitudes and experiences of the society formed in a company. It is a blend of values, beliefs, rituals and myths, developed over time. To sum up, corporate culture is the perception of a company by its’ employees, vendors, and clients.

                So how do we create and keep a positive corporate culture? Implementing ISO 9001 correctly.

Communicating Corporate Culture using ISO 9001

It starts with the Quality Policy. It is a simple, straight forward statement of how we treat the customer, our employees and our suppliers. It must be something more than a framed plaque on the break room wall. Company leaders, and that is anyone who supervises, trains, or assists other employees, must live and refer to the values stated in the policy when it comes to decision-making. Thus a requirement of ISO 9001 is communicating the corporate culture.

                Job descriptions also communicate the corporate culture in more subtle ways and are required by ISO 9001. The job descriptions guide the employee to work within specific constraints and include a responsibility to evaluate and improve how the company does business. This should also be reflected in the employee review process and the development of objectives. All of these are requirements of ISO 9001. All of these communicate the corporate culture.

                Using the standard organizes communications to the employees. Clearly defining the corporate culture using ISO 9001 provides consistent values as different people generate job descriptions, reviews and other employee documents since everyone is guided by the quality policy.

                Small companies often do a good job of “presenting the vision” when they start. Growth can change all of that. Training is necessary. Not just job training but also training on the corporate culture. Much of Saturday’s meeting included examples of when this was done well and when this was done poorly. The standard requires the training on the quality policy which defines the corporate culture. Using ISO 9001 requires the communication of the corporate values.

Keeping the Corporate Culture Using ISO 9001

                Documentation  

                When developing your documentation systems it is critical to realize everything is linked and the quality policy it the keystone holding the over arching philosophy together. Using the standard as a guide helps control the dispersal through the documentation process, making it easier to communicate the corporate culture using ISO 9001.

Section 4.2 of the ISO 9001 standard lists the documents a company needs to use for training to keep the corporate culture in place:

  • A quality policy and objectives
  • A quality manual
  • Procedures
  • And documents for planning, operation and control of the processes

All of these must reflect the corporate culture, particularly when it comes to guidance on decision making.

                Management

                According to section 5.1 of the standard, management must accept the responsibility to keep the values important to the corporate culture in place. A key element to keeping corporate culture is stated in clause 5.5.1 of the ISO 9001 standard, “Top management shall ensure responsibilities and authorities are defined and communicated within the organization.” That isn’t just guidelines on who does what and with what and to whom, but also the values guiding each and every interaction, decision and activity in the workplace.

Viewing Employees as a Resource Stabilizes the Corporate Culture using ISO 9001

                ISO 9001  has a whole section on employees. How does management make sure they are competent, aware of the corporate culture, and trained? Does the corporation provide the infrastructure and work environment to make the employees successful at living the corporate culture? Most importantly, the standard recognizes employees are a valuable resource. Section 6 of the standard is a guide to empowering employees. It becomes a simple task to stabilize the corporate culture using ISO 9001.

Outside perceptions of the Corporate Culture using ISO 9001

                The Care and Feeding of Clients

                ISO 9001 requires interaction with the client and a development of a feedback mechanism, not only for errors but in ways to provide better service. The corporate culture has to be built around serving the customer or the company doesn’t stay in business. Thus the clients perception  is improved and the corporate culture using ISO 9001 is propagated.

                Controlling vendors

                Most companies focus on communicating and living their corporate culture  when it comes to their clients and their employees. A much smaller number take the same care to communicate the corporate culture to their suppliers. Implementing ISO 9001 addresses that shortfall. The supplier must have a good perception of how the company expects them to perform and clear communication as to whether these requirements have been met. This goes beyond, meeting performance requirements, on-time delivery, and reasonable price. Consistency is created through the entire process stream and clear perceptions created of the corporate culture using ISO 9001 to deal with suppliers.

                How the standard is viewed and implemented can take many forms. However, creating and maintaining the corporate culture using ISO 9001 is one of the strengths of doing the job right, staying in business and providing jobs.

ISO 9001 Management Review – Going in Circles

Are We Going in Circles ?ISO 9001 Management Review

Implementing ISO 9001 can sometimes feel like you are a dog chasing its’ tail; you can’t just walk down through the standard completing  a section at a time. Instead you have to jump from quality policy to documentation to customer requirements to design and hey isn’t this all about process control? Talk about making us linear, engineering-types crazy with frustration.

ISO 9001 Management Review is really a two-way Street

ISO 90010 management review is a key element in making implementation of the standard a viable continuous improvement effort. Support for change comes from the top down and is communicated in the ISO 9001 management review. Management is responsible for making sure the resources are available to create change. Management is responsible for setting priorities for change. ISO 9001 management review is the place where employees demonstrate what is and isn’t working and conveys to management what they need to accomplish positive change. ISO 9001 management review is the place to communicate and set the goals for the next business cycle, so while it may feel like you are going in circles it is really a two-way street for communication.

Typically, the management representative pulls all the information together for the ISO 9001 management review and generates the agenda for the business cycle. Note, it should be for the business cycle. In most companies the business cycle is annually so a single ISO 9001 management review per year suffices. However, I have seen companies where the business actually cycles multiple times a year. In this case, for the ISO 9001 management review to be an effective tool, and not just “the ISO 9001 standard requires it so we have to sit through it” meeting, it should be performed multiple times per year.

The management representative is responsible for keeping the presentation on track, but that does not mean doing the entire ISO 9001 management review, single-handedly. Each area should report and take full responsibility for the presentation of the data and answer questions related to that data.

Organizing the ISO 9001 Management Review

The data being presented at the ISO 9001 management review should not come as a surprise to management. They should have been receiving, and reading, regular updates. This meeting is to present trends from the data to be used to guide future actions and goals and most importantly, determine if the system is working or needs serious revision.

Each activity in standard implementation should link back to and communicate to management through the ISO 9001 management review. The ultimate responsibility of management is to allocate resources, develop a plan to be competitive, to stay in business and to provide jobs. For this reason, during implementation of the ISO 9001 standard it sometimes feels like the efforts take the employees in circles, always returning to the ISO 9001 management review. Continuous improvement is a cycle and a never ending quest following the Plan Do Check Act model. ISO 9001 is a tool for continuous improvement and therefore is cyclical in nature. ISO 9001 management review is the two-way street for communication to create constancy of purpose for continual improvement of products and service to society, allocating resources to provide for long range needs rather than only short term profitability, with a plan to become competitive, to stay in business, and to provide jobs[1].


[1] Dr. W. Edward Deming, 14 Points, “Constancy of purpose”