ISO 9001 is much more than a standard, it should be part of a business’ strategic plan and not simply thought of as a quality management standard for product or service conformance or as a standard to achieve ISO 9001 certification.  Many organizations simply look at the ISO 9001 standard as a way to manage the quality of their products or services or as a standard for certification, but I’m here to tell you that it’s so much more than that!  I personally have always been of the opinion that business is quality and quality is good business.  The quality principles that are included in ISO 9001 are just good business practices.

Throughout my 18 year business career in quality, I have often been amazed by executives, business owners, managers and supervisors that desire to increase efficiency, customer satisfaction and profitability, but have rarely tapped into the pragmatic real power of the ISO 9001 standard.  They often think of ISO 9001 as something the Quality Department should be focused on or in many cases it’s an after-thought; rather than a strategic and integral part of their overall business plan.  Some organizations only think about it when one of their primary customers ask them are they ISO 9001 certified or they encounter it on a bid questionnaire for a project.  These are not strategic decisions.  The real value of ISO 9001 has been debated for as long as I can remember, but those organizations that continue to debate rather than take action are resigned to the prospect of poor business, poor business growth and being overtaken by organizations that have moved beyond debating the topic.

Mr. David Levine and Michael Toffel of the Harvard Business School published a paper on January 18, 2010 that summarizes an empirical study performed that researched the benefits realized by 916 companies that adapted the ISO 9001 standard compared to 17,849 non-adapters.2  Some of the benefits noted in the study included:  higher rates of survival of organizations, higher rates of sales, higher rates of employment growth and increased wages.  In addition to these benefits, others included: reduction in waste generation, enhanced worker productivity, worker improved attention to detail and improvement in health and safety performance.  These benefits sound like business benefits, rather than quality benefits.  ISO 9001 should be thought of as a business management tool for your organization to drive real value and results.

A Business Management Tool

A business model describes the rationale of how an organization creates, delivers and captures value for anyone or anything that is impacted by the organization.  This may be shareholders, employees and customers, including the community and the local and global economy.  The business model itself should outline the mission, strategies, infrastructure, organizational structure, operational processes and procedures that will be utilized to execute the business model.  Based upon survey responses of managers, a business model is the design of organizational structures to enact a commercial opportunity. 1  A business must deliver value to its customers, convince customers to pay for that value, and once they pay, the organization must operate in a manner that will result in profitability.

The business model should address what customers need and how the organization can meet those needs.  The more I think about this, it sounds a lot like what the ISO 9001 standard is all about.  Too often organizations do not include quality as part of their business model or plan and they continue to struggle in successfully executing their mission, consistently meeting the needs of their customers and delivering value to their internal and external customers.  The ISO 9001 standard states that the adoption of ISO 9001 should be a strategic decision by the organization and its design and implementation is influenced by varying needs, objectives, products provided and processes employed.3  If the organization has failed to implement ISO 9001 as part of its strategic business model and plan, the organization may begrudgingly realize some positive benefits, but will not achieve the real value behind the standard.  One of the most powerful benefits of the standard is the principle of employing the process approach to managing your business.

Process Approach

I’m often amazed when I ask the question to the employees of my clients’ organizations about their knowledge of their organization’s core processes.  I may ask an employee can you explain to me the basic work flow of your organization and I often receive a blank stare.  I challenge you today to ask 3 people within your organization to explain your core processes and see how many of them can articulate how work flows.  If ISO 9001 is meant to be used as a business management tool, every employee in the organization should have a basic understanding of how the organization generates revenues, the flow of organizational processes and their order and understand their role as part of the overall collection of processes within the organization.

The process approach used as a business management tool, is basically understanding your organization’s processes, their inputs, their outputs and how the processes interact with each other.  Without understanding your organization’s processes, it’s difficult to diagnose problems, get to the real cause(s) of those problems and implement real preventive or corrective actions.  The process approach is based upon (4) basic principles:  1. Understanding and meeting requirements, 2.  The need to consider processes in terms of added value, 3.  Obtaining results of process performance and effectiveness and 4. continual improvement of processes based on objective measurement. 3

Understanding and Meeting Requirements

Most problems in organizations and in life in general are associated with not understanding and meeting requirements.  Just think about it, many marriages fail because the couple did not understand or did not meet the requirements of the other spouse.  Employees often under perform due to not having a clear understanding of the requirements of their job; therefore, they are not either equipped or not able to meet job requirements.  Customers are often dissatisfied due to the customer’s requirements not being understood and met.  In all of these scenarios, the meeting of the requirement is directly correlated to the initial understanding of those requirements.

When requirements are understood up front, it greatly increases the chances of successfully meeting requirements.  Understanding requirements is the responsibility of both parties involved.  In the marriage, it’s important for both parties to clearly articulate and explain their requirements, so that the other understands the expectations.  When I met my wife, she had a “long” list of criteria for her husband before she met me and of course I had a “short” list.  When we started dating, we both made our requirements (casually of course) understood and we’ve been working to meet them for the past thirteen years.

For employees to be successful, it’s important for the organization to first identify the requirements for the position, find a candidate that is qualified to meet those requirements and then clearly explain the job requirements to the employee.  How often have we seen new employees just plopped down at a desk and asked to execute?  When the employee doesn’t work out, the organization looks to the employee failure; rather the organization’s failure to ensure job requirements were understood by the employee, so that the employee could have a chance of successfully meeting job requirements.

When engaging customers, the customer may understand what they want or need, but may not understand the requirements involved in meeting their needs or wants.  This is why its important for the organization to educate the customer on what requirements are involved in meeting the customer’s needs.  This step increases the chances of customer satisfaction for the organization upon delivery.  This principle is also true as departments work with each other internally on a daily basis.  Many mistakes, waste and rework can be directly associated with the lack of initial understanding of requirements of the other department.  Once requirements are understood, the chances of those requirements being satisfactorily achieved are greatly increased and the process can add value to the organization.

Consider Processes in Terms of Added Value

Your organizational processes should add value internally and externally all along the way, from capturing customer requirements to final delivery.  This is when your ISO 9001 QMS really becomes a business management tool and not just a quality manual, procedures and forms.  Processes transform inputs (understanding requirements) into desired outputs (meeting requirements).  Without controlling inputs to each process, the organization will fail to add value when the output of the process is delivered, either internally or externally.  What is added value?  Value is based upon the perspective of the process recipient.  Value internally may mean that an employee is meeting requirements of a job description or that the payroll process is achieving the desired result of employees getting paid on pay day.  Value externally may mean that the customer’s requirements are being met, on time and on budget.

There is nothing worse for an organization than having processes that do not add value or that are not effective.  This is so frustrating to employees and customers.  I have been on the receiving end of some organizations’ non value added processes.  A perfect example is when you call customer service and they ask you a laundry list of information to verify your identify.  Once they figure out they can’t help you, they transfer you to another person who asks you the same laundry list of questions.  Now they’ve spent 15 minutes verifying your identity and they haven’t spent any time addressing your real problem.  Having to repeat that process adds no value to the customer nor the organization to have to repeat it.  Again, the value is determined at the “output point” of each process, which it will be very difficult to achieve value if the “inputs” to the process are not understood up front.  It’s the principle of garbage in – garbage out.

Obtaining Results of Process Performance and Effectiveness

Once an organization understands it processes, it’s important to monitor their performance to assess their effectiveness.  As I stated earlier, having an ISO 9001 QMS is a strategic part of the overall business plan, so it’s imperative to determine if the processes are assisting the organization in meeting overall goals and objectives of why the process was initially created .  The perfect measure is at the “output point” of each process.  The output point is where requirements are met and is where the organization can determine if the process is effective.  For example, the purpose of a final inspection process is to ensure that nonconforming product is not delivered to customers.  To achieve the final inspection, criteria (inputs) must be defined, so that the inspector can determine if the product meets requirements (output).

The organization recognizes that every process has some variation, so it won’t prevent nonconforming product 100% of the time. The organization may establish an objective to have a 2% nonconforming product rate for each product line shipped. To measure this on an ongoing basis, the organization would have to record each time a product is returned to be able to measure the performance and effectiveness of the final inspection process. A nonconforming product rate of 1% may alert the organization to analyze the cause(s) and take preventive actions to keep the number below what the organization has deemed to be acceptable. If the process is not monitored and the nonconforming product rate goes beyond 2%, the organization would have to analyze the cause(s) and implement corrective action to get the final inspection process back in tolerance, but by this time the issue may be bigger, than if addressed at 1% and would have resulted in increased customer dissatisfaction.

This concept doesn’t only apply to manufacturing companies, it also applies to service companies. For example, if a drilling contractor’s rig move process is designed to achieve on-time rig moves 95% of the time and they are only achieving a rate of 80% on-time delivery, the rig move process may not be effective and should possibly be changed or other factors that would prevent on-time rig moves discussed with the customer up-front. This is how ISO 9001 is meant to be used as a business management tool for the organization to drive continual improvement.

Driving Continual Improvement based upon Objective Measurement

All organizations must continually improve to sustain their place in the market and to survive. ISO 9001 has some great tools within it to assist your organization improve its operation and to even reduce risk. To improve, the organization must understand and meet requirements, consider processes in terms of adding value and measure those processes to determine if processes are performing and that they are effective.

The reason why many organizations do not reach their full potential or remain stagnant is that they don’t have a mechanism to drive continual improvement. They simply run around everyday putting out fires, tackling surface issues and responding to the “problems of the day”, rather than addressing process performance issues based upon objective measures. This is one of the reasons that small to medium sized companies remain small and never reach their full potential and big companies don’t achieve maximized profitability. They are too caught up in the forest and can’t see the trees. Using objective measurements allows the company to determine what trees in the forest to trim or even cut down to lead to a clear path of continual improvement.

The ISO 9001 standard offers several objective measurements that can assist your organization in driving continual improvement. Some examples include: customer’s perception of satisfaction, internal audits, monitoring and measurement of processes, measuring products and services, control of nonconformities, supplier performance, corrective and preventive actions.

Conclusion

In conclusion, I hope I have provided some insight on how ISO 9001 can be used as a real business management tool and how it’s so much more than just a quality management system standard. If your organization is only interested in ISO 9001 in hopes to achieve certification, I’m here to let you know that that is the wrong purpose. Organizations should know that they can implement ISO 9001 and gain all the benefits of it, without incurring the additional costs of pursuing ISO 9001 certification. Operating in accordance to ISO 9001 and ISO 9001 certification are two different things. Many organizations will do business with ISO 9001 compliant companies that are not ISO 9001 certified.

Once ISO 9001 is implemented as a strategic decision of the organization and is part of the overall business plan, certification may be pursued if the company thinks it will add market value. Focusing on implementing a process approach will lead to a systematic method of identifying and controlling processes to ensure requirements are understood and met in an effort to add real value to the organization and other parties. Once the processes are monitored through objective measurements, the organization can systematically drive continual improvement and growth by focusing on the right cause(s) of process performance issues, which will lead to business success and the ISO 9001 standard being used as the business management tool, as it is intended for. Remember business is quality and quality is business