Sabado, Nobyembre 26, 2011

ISO 9001 Standard and Corporate Performance


Despite the fact that more than one million organizations worlwide have a certified ISO 9001 management system, such a system is still viewed by many as focused on product quality. Any internet search will find a host of companies claiming the physical properties of their products are excellent because they are ISO 9001 certified.

When I was in China recently, my question as to why an organization should be ISO 9001 certified was repeatedly answered in terms of assured product quality. Certainly, in China at least, the role of a quality manager is seen as ensuring a component is within tolerance rather than ensuring a company is achieving its strategic objectives.

But ISO 9001 certification, as many purchasers have discovered, does not always ensure good product quality. A number of organizations remain certified because they fear the loss of a marketing tool, but few can demonstrate tangible benefits to justify paying certification bodies for the privilege.

Despite the common perception of ISO 9001 as solely focused on product quality, the standard, if properly aplied, can and should concern itself with the quality of the business management system. Rather than looking at compliance with a written procedure, or whether a gauge is calibrated, the standard should be used to assess the effectiveness of processess.

Recent global economic turbulence has focused attention on improving the quality of business performance and the need to make decisions quickly based on reliable information. As a result, there appears to be a growing interest  in corporate  performance management using key performance indicators to monitor corporate  performance . KPIs are an ideal method not only to monitor corporate performance but also to review the effectiveness of processes and have been used by a range of organizations for many years.

Traditionally users of ISO 9001 have focused more on operational rather than financial results, limiting the influence of the standard at boardroom level and reducing management reviews to little more than an annual summary of inspection results. This losses sight of that close link between the management system system and organizational strategy. A set of KPIs covering both operations and financial results can and should be used as the basis for an ISO 9001 management system and corporate performance management.

Another way to refocus attention on the link between ISO 9001 and startegy is via the requirement set out in the standard that the quality representative is a member of the senior management team. Many senior managers are not well versed in quality management, but if initiatives can be linked to results, particularly financial results, then management reviews are more likely to become decision making forums and the linkages between processes are likely to become more apparent.

Many of my colleagues consider my ongoing attempts to replace our word quality manual with simple hyperlinked pictograms to be of little value and even fewer are willing to try to map out their own processes. However, the acceptance of key performance indicators as a basis for setting priorities for improvement and monitoring progress has been much more readily accepted and is a good foundation on which to build the profile of quality with the senior team.

There are, of course, other quality models that could be used for corporate performance management such as business excellence models. Its influence to date has been much less than ISO 9001, but its philosophy has a much wider acceptance than the corporations that actively promote their use of its frameork. ISO 9001's model is much more sure it is being used in the right way.

The more fundamental issue, however, is that ISO 9001 in its current form ensures neither good product quality nor effective management as it does not easily show how these two aims might be achieved. The 2008 revision was little more than improvements to terminology and grammar, but change is certainly needed. The market for certification is saturated , even in the growth economies, with the standard sold almost as a commodity, devaluing certification to it. It would appear that it is in no-one's interest to maintain the status quo.

If ISO 9001 is to survive and certification bodies are to stay in business, then a much greater emphasis on business performance is needed. Hopefully some of the concepts of business intellgence are adopted in quality management so that it becomes something that contributes more to intelligent business.


Huwebes, Nobyembre 17, 2011

Understand your company's chance of success.. Porter's Five Forces



To help the understanding of how company and its products may fare in a marketplace, Michael Porter provided a simple five element model to indicate areas to investigate, opportunities and threats. A quality lens in each of these areas can help business managers to further identify potential strategies.

Rivalry
The most common source of threat and the most common place where threats are assessed is with existing competitors, where pricing and product/service quality are a typical source of advantage. In assessing this, you can analyze their products and test their services to understand something of their methods. When you have many powerful competitors with great products, the competition is likely to be hot and dangerous. If you want to stay in such markets, you need excellent quality and smart innovation to stay ahead.

Purchasing power of the customers
When you have big customers and price competition, your customers are likely to demand deep discounts. Just as you have professional salespeople, they have professional buyers who know how to negotiate. Big customers may also demand product customization. When you have serious price competition, quality improvement must focus on strategies such as cutting costs, for example with parts production, and process simplification while sustaining overall product quality.

Bargaining power of suppliers
Supplier can also have power over you, particularly when the balance supply and demand is tipping in their favor. If they are the only suppplier of a critical part, then they can hold up your whole process. You also need to manage supplier quality, of course, because it is possible they may let quality slip while boosting their profits, possibly at a long term cost to everyone.

Threat of new entrants
To enter a new market can be quite expensive , but new entrants often appear with special invenvestment and the latest equipment, making them a serious problem even when you have a good market share. The best approach here is often to keep the barriers high , making it ruinously expensive to join the game, for example by constantly competing with yourself even when you are a market leader, driving quality up and costs down on a constant basis. You can also tie up suppliers and channels to the market, making it difficult for new people to get to these critical resources.

Threat of substitutes
The classic substitute competitor is margarine for butter, a curve ball that farmers probably did not see coming. A good way of looking for substitutes is to consider "share of wallet" as a critical measure.

If you sell coffee, your competitors are all beverage sellers. If a person is looking for a drink, then beer, cola, tea and water may all be competitors, with new drinks such as health drinks as relatively recent substitutes. The quality approach in understanding substitutes is to "chunk up" to the higher purpose. For example, a car hire company might consider transport as the real benefit  and so consider the threat of bicycles to their business.

A sixth force that often considered is governments, which can have a significant effect on companies and their competitiveness , through legislation and taxation. In international competition , one should expect support from one's own government and obstacles from local government. Having international standards established within the firm can be very helpful for this.



JOP with Philip Kotler-Marketing guru and author of best selling books worldwide.


Lunes, Nobyembre 7, 2011

Your career questions answered:A letter from my former management student at De La Salle University-Dasmarinas


I would like to thank  Michael for  subscribing my book -The Human Resources Management in Action at IPad..

The problem: How can I help HR to recruit people who will support our quality culture?

The Answer:
There are four key steps in recruitment and therefore, four opportunities to identify those who could contribute most to quality culture: the job description, candidates' application, the interview and the probation period.

Every job description should incorporate the expectation that the candidate will be committed to the company's quality culture. The information pack must include the organization's quality policy and other background information such as the customer charter and details of improvement initiatives.

Suitable candidates will indicate in their application how they will fulfill the quality requirements and those with some training or experience of quality may have an advantage here.

At the interview, ask questions that probe a candidate's understanding and commitment to quality. Incorporate these questions into interviews for every post. Describe scenarios that involve a demanding client, for example. Should the candidate stick to a contract or seek a resolution that ensures the relationship is maintained? This will also help the candidate identify whether this employer believes in assigning authority as well as responsibility.

The successful candidate may have a period of probation, during which personal objectives will be set. You should ensure an objective relating to quality or process improvement is incorporated and given a high priority.

The key message to HR is never assume that people understand the concept of quality. Keep checking.

Available in Samsung Galaxy tablet reader, Sharp Galapagos e-reader, IPad, Amazon's Kindle e-reader and Toshiba Libretto.

Linggo, Nobyembre 6, 2011

Why you should protect your project and organization.......Reputation in Project Management


Project managers and quality professionals should consider reputation in four areas:
- Impact from the project on the reputation of the organization involved
- The reputation of the project.
- Impact and completeness of project communications.
- The reputation of the project management profession.
It is good for a project to be focused on its objective, but the team can lose sight of the organization's broader needs. The quality professional's independence and consideration of the organization as a whole is a useful perspective for a project manager. In reviewing the plan, considering what the project will do for the organization's reputation may change some of the options available for the solution, challenge assumptions or identify risks. These should be managed in the project but may also be included in the wider organization's risk or issue management.

The project
Projects can be the mechanism to execute strategy for organizational change or to develop new products, services or capabilities. In these cases, the project plans should consider the project's impact on the organization's brand and reputation. How will the changes the projects makes be a reflection of the corporate brand? How will the project's way of working or dealing with stakeholder's enhance the organization's reputation? The project's communication plan should ensure that influencing the influencers is part of the project.

Additionally. all projects should look to their own reputation within the organization. A good reputation can help to improve stakeholder participation in project meetings and provide valuable support for the resources the project needs. This can be especially true for projects based in one part of an organization that directly causes changes to occur in another part of the organization. Distance , language and culture can change reputations and support. Careful communication planning can help to avoid problems.

The project manager
Project managers are often measured against a scope, schedule and budget, which are all fixed at the beginning of the project. The reputation of the project manager to deliver is dependent on estimates that are often based on best-case scenarios with little in depth analysis or risk assessment. Sometimes the full impact and associated costs for the organization cannot be fully estimated at that time. The business needs and the market in which the project works will change and therefore the scope, resources, schedule or budget may need to change dramatically.

While these initial estimates of cost are necessary for business planning, it is only when the project is fully defined, planned and costed that the budget and schedule can be properly known. In innovative projects or those with significant risks, this may be in the much later stages of the project. Recognizing this dilemma between the need to plan and understanding the potential inaccuracy of estimates, a quality manager can serve the organization and avoid the project's reputation becoming a scapegoat if things go wrong.

Project management
The reputation of project management is, of course, dependent on perceived success of projects. If a project runs smoothly, it is often assumed that the project was easily managed. If the project is seen as more difficult but produces results, project managers are lauded. This fact of human nature may not be a true reflection of the reality of the project: a complex project that run smoothly is actually down to the skill of the project management team and should be celebrated.

As each project can add to or detract from the project management profession's reputation, the quality professionals can also help the organization to form  an objective opinion on the value of the project management profession, the project managers it recruits , and style and methods used by the more successful projects