The Future of Quality Management Is Business Success, Part 1
(July 20, 2020)
All articles in this series:
In 1989, I was handed a copy of ISO 9001:1987 by my employer with the direction to find out what it was all about. Our company was headquartered in Europe, and we would be compelled to implement the standard straightaway.
My first reaction was that I wished it had been published 20 years earlier when I was operating under the burdensome military specification MIL-Q-9858A. ISO 9001 was very straightforward and written so that virtually any organization could use is as the foundation for an effective quality management system.
The local ASQ section was abuzz about the new standard and eager to “interpret” the requirements. Those who were in quality management were excited to present the standard to senior management as the new solution for lowering defects and scrap rates.
Early adopters were classically trained quality professionals. ISO 9001:1987 was titled “Quality systems—Model for quality assurance in design/development, production, installation, and servicing.” This standard had the potential, we hoped, to inculcate the tenets of quality management into an entire organization. And the quality managers saw it was good.
Unfortunately, the early adopters became enamored with the words “quality assurance” in the title, and it was forever to be owned by the quality department. Thirty years later, it is called a quality management system standard, and it still is the catechism for quality professionals, not the bible for an entire company.
Many of the early implementations were done to comply with a customer or industry requirement. The implementation was conducted to the exact wording of each element and to the guidance provided by the handful of certified registrars. The implementation was always costly, time-consuming, and burdensome, and there was no return on investment factored into the quest to become certified.
Quickly, leaders in industries such as petrochemicals adopted the standard as a mandatory prerequisite for suppliers. Then it became a marketing tool, and massive ISO 9001 banners were displayed on manufacturing facilities.
During the last three decades, implementing the standard has typically been a significant overhead expense, a never-ending chore to remain compliant, and an added work burden to the staff of most organizations.
We’ve developed tools for continual improvement and metrics to demonstrate how well they work, but they are seldom integrated into overall business performance indicators.
What we nearly universally overlooked is that the mission of most organizations is to maximize market share and profit, and to provide a return on investment to the principals and shareholders. Those concepts are not in our training curricula.
During the last decade, business leaders have questioned the value of ISO 9001 certification as a necessary business cost. The patina has faded as it has become a marketing tool. Some evidence of this is shown by the roughly 20-percent drop in worldwide ISO 9001 registrations from 2017 to 2018 (comparing ISO’s “The ISO Survey” for both 2017 and 2018).
Quality management and liability
With ISO 9001’s 2015 revision, Technical Committee (TC) 176 essentially threw a hand grenade over the transom to the quality community. The committee replaced the soothing and nurturing requirement for preventive action with a new term, “risk-based thinking.” Not only do we not connect quality metrics to business success, there is nothing in classic quality management that has a direct correlation to risk abatement. The term is so alien, that there is a LinkedIn group that deals with nothing but interpreting what risk-based thinking means and how are we going to “comply with the requirement.”
The ISO/TC 176/SC2/N1284 guidance document for ISO 9001:2015 suggests that risk-based thinking is intended to establish a systematic approach to considering risk, rather than treating “prevention” as a separate component of a quality management system. It goes on to state that risk-based thinking is something we all do automatically in everyday life. Really?
In my experience, the guidance document does more to obfuscate risk-based thinking than help with implementation direction. The fact that there are several schools of risk management based on insurance requirements and safety regulations further complicates what risk means to each organization.
The most consequential definition of risk is liability. No matter how much you think about risk and implement your flavor of risk management into a quality management system, being sued is the ultimate downside to poor quality. We’ve made the transition from quality control inspection to error-proofing processes. We must now change our paradigms from risk management to risk avoidance.
Evolving the body of knowledge
I spent the first 14 years of my career as a quality control engineer at NASA’s Mission Control Center in Houston. I was part of an incredible team that won the space race. I matriculated into the real world by becoming the manufacturing and quality manager of three different companies.
My plan was to synthesize the culture that we created at NASA for businesses that were manufacturing products. I was also determined to endow the personal and team accountability we modeled while sending men to the moon.
I learned two fundamental business lessons from those experiences. Senior management did not share their vision, mission, and values with everyone who worked for them, and their only objective was to maximize profit. Ergo, continual organizational dysfunction. The only way to achieve maximum profit, according to senior management, is to lower cost and gain market share. Quality babble did not interest them.
In all three assignments, I did institute a system of risk and rewards leading to team accountability. I made quality the responsibility of everyone. I also became aware that any endeavor to improve quality had to have a return on investment and contribute directly to the key business indicators.
Since 1991, I have been helping organizations implement “ISO 9001 as a Profit Center.” The number of quality professionals who understood the concept was and is woefully small.
The second experiential contribution to this body of knowledge evolved when I became an expert witness in products liability and organizational negligence. I discovered early on that proving acceptable or negligent standard of care was no more complicated than conducting compliance audits on defendant companies. After nearly two decades, I have achieved a 96-percent success rate.
The future of quality management is business success
The series of articles that will follow this one are intended to share with my colleagues a set of tools to evolve quality management into business management. They include:
• Evolving the requirements of Section 4 of the standard from merely defining the context of the organization to working with senior management to create, implement, and make shared vision, mission, and values a cultural imperative
Business success integrated into ISO 9001:2015
During the next seven installments, I will provide experiential data that make compelling cases for quality as a profit center and risk avoidance. I will also provide specific suggestions for incorporating both into each clause of the standard. The theme and objective will be to sunset the limited effectiveness of traditional quality management and create an enterprisewide business management system that drives organizational excellence and shields companies from liability.
The decline in ISO 9001 certificates is symptomatic of the evolving business environment. Management is focused on prevailing over intense domestic and foreign competition and meeting artificially set price points, especially in consumer products. The overhead expense of the quality department is becoming too high in comparison to return on investment. I have been told by millennial business leaders that I am irrelevant to their worlds.
Similarly, Six Sigma is seeing a decline in popularity for similar reasons, cost vs. benefit. Oliver Stately has written a very timely article that makes an in-depth case for how a Motorola statistical tool became a cultural imperative for all organizations.
During my tenure as chair of the Quality Management Systems Committee for ASQ, I watched Six Sigma become an entire industry unto itself. Part of me was jealous at the financial successes of the training organizations and how much they were making to matriculate Six Sigma Black Belts.
In conversations with my Six Sigma colleagues at ASQ, we developed a rift in our relationships because I pointed out several fatal flaws of Six Sigma. One was that the success model of Jack Welch at GE was not scalable to smaller organizations. Jack had large financial reserves to fund his experiment.
Next, Six Sigma became a religion instead of a business excellence model. Those who weren’t anointed with a “belt” were of lesser value and status.
Finally, and my most emphatic disagreement, is that if your goal is less than 100-percent defect-free, outgoing quality, you will certainly achieve it. That truism keeps me busy as an expert witness.
I encourage us all to continue to use the tools of lean when they are applicable but not in the context of a panacea for all business ills.
Call to action
If we, as quality professionals, are to become indispensable assets to our organizations, we must examine our paradigms and add value to the entire enterprise. In my experience, that requires including all aspects of business operations in our experiential knowledge base and becoming champions of the key success indicators of our organizations.
Also, we must learn how to incorporate risk avoidance in every process in our organizations. The results can lead to zero outgoing defects and creating customers who are referrals instead of warranty nuisances. By adding the tenets of foreseeable risk into your skill set, you may find that you become a virtual expert in products liability and organizational negligence. That will make you a more valuable asset to your organization. You may find it may also become a lucrative vocation, as I have.
Author: Tom Taormina is a subject matter expert in the ISO 9000 series of standards.
Credit: This article has been written for and published in Quality Digest, 22 Jan ,2020