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.