Data, Definitions and Discipline

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All business leaders want to maximize resources and return on investment.

October 01, 2002

 

All business leaders want to maximize resources and return on investment. Most small and midsize enterprises, in fact, are quite adept at making the most of their resources. After all, we all want to manage our businesses as well as we can. Decision-makers on the leading edge, however, strive to build a "world-class" management system.

Being "world-class" means something different for each size of entity. No matter what size your company is, ISO - a quality management system developed by the International Organization for Standardization based in Geneva, Switzerland - is the first step on the long journey to becoming world-class.

ISO is designed to help you continually improve your system, products and services. It tells the world - and your customers - that your business has a management system that ensures that its products or services are consistently of the highest quality. It starts with your business's working approaches and attitudes combined with your expertise. The standard does not tell you how to run your business.

Going through the process helps your company improve the way it does business. It shows where your operations are redundant, how to save time and effort, and how to document what you do, and often it forces you to answer the question, "Why are we doing it this way?"

ISO focuses primarily on customer satisfaction and continuous improvement. Applicable to service and manufacturing industries, ISO outlines the fundamentals and vocabulary of quality management as well as guidelines for improving performance and developing quality manuals.

Whether or not you wish to achieve ISO certification, the theories are valid for any business. Per ISO, a quality management system must:

  • have management be actively involved from the beginning to ensure that the system functions effectively.
  • clearly define and communicate quality management system requirements.
  • provide adequate staff training.
  • define and control the process of producing your product and/or services.
  • have an internal auditing system.
  • monitor your quality management system through internal auditing.
  • have corrective and preventive action processes - not just plans - in place to make needed improvements.
  • maintain records and keep objective evidence that demonstrates compliance with all the stated requirements.

ISO does not:

  • establish performance criteria.
  • define quality levels.
  • tell you to exceed your competition's quality performance levels.
  • guarantee that you will have a superior product.
  • dictate how to manage your business.

ISO principles

ISO is based on eight management principles that are very similar to the criteria used in the Malcolm Baldrige Award and the National Housing Quality Award.

  1. Customer focus: Because organizations depend on their customers for growth, they should understand the customers' current and future needs, meet customer requirements and strive to exceed customer expectations.
  2. Leadership: Leaders are responsible for establishing the purpose and direction of their organizations. They should create and maintain the internal environment in which employees can become fully involved in achieving the organization's objectives.
  3. People: People at all levels of the organization are the essence of the organization, and their full involvement enables their abilities to be used for the organization's benefit.
  4. Process approach: The desired results are achieved more efficiently when activities and related resources are managed as processes.
  5. System approach to management: Identifying, understanding and managing interrelated processes as a system contributes to the organization's effectiveness and efficiency in achieving its goals and objectives.
  6. Continual improvement: Continual improvement of the company's overall performance should be a permanent objective.
  7. Factual approach to making decisions: Effective decisions are based on the analysis of data and information, not on hunches.
  8. Mutually beneficial supplier relationships: An organization and its suppliers are interdependent, and a mutually beneficial relationship enhances the ability of both to create value.

Unlike Baldrige and NHQ, ISO principles do not address business results.

Once a company implements the appropriate policies and procedures, it is ready for a third-party audit. This simply means that an unbiased entity reviews your management system to ensure that all 14 requirements of the guidelines are being met. Some good third-party registrars provide you with ideas of what to address in order to improve.

A management system based on ISO 9000 guidelines can facilitate implementation of an exit plan, ensure sustainability and relieve dependency on one or two people in the organization.

Serge Ogranovitch served as one of the 2003 NHQ Award judges and is president of The Potomack Group, a Vienna, Va.-based management consulting and auditing firm. He has incorporated ISO, Six Sigma, Malcolm Baldrige and other quality tools into client management systems.

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