TQM - ISO 9001 - Six Sigma: Do Process Management Programs Discourage Innovation?

A Knowledge@Wharton article based on joint research with the Harvard Business School says now may be the time to re-evaluate the corporate efficacy of process management and tailor them to the right applications. Studies show that misapplied process management can hinder companies and dull innovation. "In the appropriate setting, process management activities can help companies improve efficiency, but the risk is that you misapply these programs, in particular in areas where people are supposed to be innovative," notes Mary Benner–management professor at Wharton.

Process management methodologies focused on continuous improvement such as TQM (the work of Dr. Deming), surfaced in the 1980s in the US after the Japanese adopted it successfully. In 1960 the Emperor of Japan awarded Dr. Deming the Second Order Medal of the Sacred Treasure for his help in transforming Japanese industry. Six Sigma started at Motorola and became popular in the mid-1990s due to GE’s visible efforts. The basic premise is to improve quality to only three defects per million through systematic in processes improvement, and careful statistical measurement of outcomes.

The ISO 9001:2000 international standard specifies requirements for a Quality Management System overseeing the production of a product or service. It is not a standard for ensuring a product or service is of quality; rather, it attests to how well processes work, and how they will be managed and reviewed. Earlier incarnations of the standard were heavily criticized for the internal focus on extensive documentation, but like all things worth doing the standard evolved to the current 2000 much improved version. Continual improvement, leadership involvement, and customer satisfaction are pivotal components of the standard.

Six Sigma is similar to TQM in its focus on techniques for solving problems and using statistical methods to improve processes. But whereas TQM emphasizes employee involvement organization-wide, the Six Sigma approach is to train experts (known as green belts and black belts) who work on solving important problems while they teach others in the company. The publicized success of GE after Jack Welch adopted Six Sigma (to which he devotes a chapter of his book "Winning"), more than a quarter of the FORTUNE 200 followed suit. Yet not all firms were able to find the same magic.

In fact, of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since, according to an analysis by Charles Holland of consulting firm Qualpro http://www.qualproinc.com/ . Critics say that one of the chief problems of Six Sigma is that it is narrowly designed to fix an existing process, allowing little room for new ideas or an entirely different approach. All that talent–all those best and brightest–were devoted to, say, driving defects down to 3.4 per million and not on coming up with new products or disruptive technologies.

An inward-looking culture can leave firms vulnerable in a business world that is changing at a breakneck pace–whether it's Craigslist stealing classified ads from local newspapers or VoIP threatening to make phone calls virtually free. Innovation is "a meta-stable entity," says Vishva Dixit, Vice President for research of Genentech, who oversees 800 scientists at a company that has created some of the most revolutionary anticancer drugs on the market. "Nothing will kill it faster than trying to manage it, predict it, and put it on a timeline."

No business can afford to focus its energies on its own navel in that environment. "Getting outside is everything," says GE's Immelt (who still deploys Six Sigma). From the day he took over as CEO, he says, he knew the company would need to be "much more forward-facing in the future than we ever were in the past." He explains: "It's not about change. It's about sudden, abrupt, and uncontrollable change. If you're not externally focused in this world, you can really lose your edge."

Professional experience traverses key business disciplines including entrepreneurship, leadership, and strategic management. From a 15 year stint with a start-up developer of software and equipment for the automation and controls industry, which led to several promotions including VP of Sales; to the acquisition of this firm by a Blue Chip company; to managing businesses with P&L accountability for Fortune 100 firms, I have enjoyed a productive career accented by sales/marketing, management, and team bulding talents. Recent educational achievements include an MBA from the University of Miami, Six Sigma Green Belt Certification, and ISO 9001 QMS Certification.

ISO 9000 – Management Systems for Business Success

ISO 9000 is a management system produced by the International Organization for Standardization (ISO). The purpose of the ISO 9000 is the improvement of the efficiency and productivity of organizations. Businesses use ISO 9000 to make sure they consistently satisfy customers, and comply with their industry’s regulations.

Systems are often the last things on the minds of small business owners. Instead of organized processes, most small businesses rely on the expertise of staff and owners and their ability to communicate that expertise to each other. Unfortunately, individual skills and relationships don’t scale – as businesses grow, those that don’t have a management system become inconsistent, chaotic and inefficient.

Developing management systems is something all successful businesses have to do. Unfortunately, most organizations come up with systems in isolation from everybody else. Not only is this “re-inventing the wheel” but it also means that they can’t take advantage of management best practices.

ISO 9000 is an international, generic management system that can be applied to service and product oriented businesses, as well as public administrations and government departments. It allows organizations to take advantage of the latest models for setting up and running a management system.

ISO 9000 improves:

Customer Satisfaction – by focusing on improving what the organization does to provide value for customers, ISO 9000 promotes consistent high-level quality.

Efficiency – by concentrating on how processes provide quality to customers instead of simply the final product, ISO 9000 improves organizations’ efficiency.

Marketing – because ISO 9000 is an internationally recognized standard, using it communicates quality and reliability to customers and partners.

Employee Motivation – by establishing a consistent, comprehensive set of rules and procedures, ISO 9000 ensures that employees know exactly what their responsibilities are and how to fulfill them.

International Trade – because ISO 9000 is an internationally developed management system, adopting it significantly simplifies their relationship with organizations in other countries.

The ISO itself does not provide ISO 9000 certification. Instead, organizations can obtain certification from third party auditors. Certification is not required, and even businesses that choose not to go to the expense of having a formal audit can benefit significantly from implementing ISO 9000.

For more information see the International Organization for Standardization website or the Industry Canada ISO 9000 checklist.

Nigel Fogden is an English teacher and writer with 24 by 5 Tech Comm, a technical writing company that specializes in fast, high-quality writing and editing. For more articles on writing, technology and business, sign up for the 24 by 5 Tech Comm Newsletter at http://www.24by5.com and stop by our blog at http://www.24by5.com/wordpress/

 

Is ISO 9001 Registration For My Organization?

Firstly you should decide your own reasoning behind considering ISO 9001 2000 registration for your organization.

Is the number of registrations in your market sector increasing?

Are your competitors seeking registration?

Are your customers asking about registration?

Are registrations increasing in your industry?

Are your customers asking you to become registered?

Have your group HQ asked you to gain registration?

Do you want to reap the financial benefits of registration?

Have the number of customer or consumer complaints increased?

Do preventable errors keep occur again and again in your business?

It is not possible to state exactly what benefits will your organization will gain by having a formal quality system, primarily because each organization is different. However, I think it is fair to say that most organisations will benefit from having a formalized Quality Management system where:

Work proceeds in an orderly and predictable way.

The same old preventable errors stop occurring.

Customer and consumer complaints fall dramatically.

Your Management System improves.

Internal communication within your organization improves.

Returned product from customers reduces week on week.

The quality of your product and or service improves.

The level of customer and employee satisfaction improves.

Your organization produces quality data to improve your business.

By now you should have a reasonable idea of whether or not ISO 9001 2000 registration is right for your organization and whether or not you will gain financially from adopting the ISO 9001 2000 standard as a method of running your business effectively and efficiently.

If you are now seriously considering seeking registration to the ISO 9001 2000 standard you must begin to understand what the standard requires of an organization. There are many books and resources available which discuss implementing the ISO 9001 2000 Quality Management Standard into an organization, including the documentation and resources to be found on this web site.

You may like to begin your ISO 9001 2000 education by reading the various articles and resources to be found on this web site. I would thoroughly recommend reading the Questions and Answers (Q&A) section of this web site as it will answer many of the initial questions that you might have about the ISO 9001 2000 registration process.

To begin to understand the requirements of the ISO 9001 2000 standard we recommend that you read Preparing For ISO 9001 2000 Registration. Alternatively you could take a training course which will teach you about the ISO 9001 2000 Quality Management Standard and the registration process.

To determine the amount of input required by your organization to comply with the requirements of the ISO 9001 2000 standard will require that you assess your existing management system. You could to fetch in a consultant at this stage because a consultant will be able to identify exactly what your organization needs to do in order to achieve the requirements of the ISO 9001 2000 Quality Management Standard.

Many organizations opt to carry out a gap analysis audit by themselves. However, this is such an important part of the ISO 9001 2000 registration process it is worth seeking professional help from a consultant. Many organizations who opt to jump straight into the gap analysis audit process themselves can often waste time, money and resources by not fully understanding the intent of the ISO 9001 2000 standard. Whereas seeking professional advice from a consultant will set your organization on the right path with clear instructions on who, what, where, why, when and how things should be done.

If on the other hand your organization already has a very good understanding of the ISO 9001 2000 Quality Management Standard and you have:

A documented Quality policy.

Been setting and using documented Quality objectives.

Documented Top management reviews of your Quality Management System.

Documented top level Quality Management System Manual.

Documented effective and efficient process procedures and or work instructions.

Documented employee skills and training records which are regularly reviewed.

Documented ISO 9001 2000 compliant Quality Management System Audits.

Documented an effective and compliant Customer complaint process.

Documented an effective corrective & preventive action process.

If you are doing all the above then you may be well on your way toward gaining ISO 9001 2000 registration. However, if your Quality Management System is incomplete or immature it will require much more effort to become compliant. You can continue to adjust your system, carry out internal quality audits to check for compliance, train employees etc. Until you reach a position where you feel you have done as much as you are able to do yourself. Once you have reached this stage you may be concerned that you have missed something important. It seems rather silly to embark on a full registration audit at great cost to your organization when you can hire a consultant to carry out a gap analysis audit for a relatively small sum of money to ensure that your quality management system is compliant with the requirements of ISO 9001 2000. If you fail the certification body initial assessment audit the cost of a full re-audit by a registration body can be prohibitively expensive.

A pre-assessment or gap analysis audit is survey carried out by a professional who compares what processes your organization has in place compared to those required by the ISO 9001 2000 Quality Management Standard. The consultant will report any deficiencies in your organizations processes, it is then up to you to decide if you want to tackle these deficiencies by yourself or to engage the professional services of consultant.

Driso provide ISO 9001 2000 consultancy, auditing, software, and training Services. They also supply Easy ISO 9001 2000® software for initially setting up an ISO 9001 2000 compliant Quality Management System or improving upon an existing one. To contact Driso Consultancy Services visit the web site below and see what they can do for you and your business.http://www.driso.co.uk