ISO 9001:2015 – Newsletter – Issue 39



Issue 39 – Clause 4.1:  Understanding the organization and its context


ISO 9001:2015…

Clause 4.1:  Understanding the organization and its context


What’s the intent of Clause 4.1?… In our last Newsletter (ISO 9001:2015 Newsletter Issue 38) we discussed the topic of “continual improvement”, and now here in Clause 4.1 we start our Newsletter cycle over again, going back to the very first Clause where we address the new term called “context”.
Note A:  This Clause DOES NOT include requirements for “documented information”.
Note B:  The content for these Newsletters comes from working in the field with my Clients, and with their ISO Certification Bodies. I gain a lot of hands-on experience from conducting training workshops and gap audits, where the requirements of the Standard have to be interpreted and applied to each unique situation.  Combining an on-site Gap Audit with ISO 9001:2015 Essentials Training, has become our most popular request for proposal from our Newsletter readers, because the first step in making the transition is to understand how big of a gap needs to be closed.  Another popular training request is our on-site Internal Process Auditor Training for ISO 9001:2015 since you will need to do a complete round of internal audits to the new Standard prior to your external upgrade audit (see below).  On that note, some organizations are opting to outsource their internal audits in order to meet deadlines (…more details on this service, as well as the training sessions we offer, can be found below).
Note C:  As I said in my last Newsletter, this current issue goes back to the beginning of the ISO 9001:2015 Standard where we will be discussing each Clause in its entirety (not just what’s new, but everything inside of it)… including a complete list of auditor checklist questions.  My hope is that you will continue to find these Newsletters useful, and if so, that you will share them with others.


The new numbering format… 

Element 4 – Context of the organization
Element 5 – Leadership
Element 6 – Planning
Element 7 – Support
Element 8 – Operation
Element 9 – Performance evaluation
Element 10 – Improvement


Clause 4.1  Understanding the organization and its context consists of zero (0) Sub-Clauses…

The primary intent of this Clause is to begin setting the stage for how your Quality Management System (QMS) will be structured.  How will your QMS support achieving the business strategies?  In other words, if after assessing its external opportunities and threats, as well as its internal strengths and weaknesses, your company establishes a strategy of growing sales significantly by expanding into new geographies, then the QMS will need to be ready to supply products and services that meet the specific requirements found in those new markets.  Until we know the purpose and strategic direction of an organization, we don’t know what the QMS tool should look like.  A company operating in a stable, mature industry with a limited number of large, localized players will have much different demands placed upon its QMS then a company facing extreme profit margin pressures from offshore competitors.

The authors of ISO 9001:2015 have caused some confusion regarding Clause 4.1… During many presentations and seminars the question inevitably comes up “What do they mean by Context?”.  People ask this question because the document authors used this word in the title of the very first Element (4.0) and in the title of the very first Clause (4.1), yet nowhere in the Standard do they ask you to state what the “context” is of your organization.  Not in Clause 4.1… not anywhere.    Normally you’d expect a sentence something like “The organization shall determine its context, etc, etc”.  Instead of asking you to state what your “context” is, it asks you to determine what internal and external issues impact your organization… which is normally handled as part of annual business planning activities in many organizations.

Business or Strategic Planning always had a home in “Management Responsibility” of the old version of the Standard, specifically within the Quality Objectives section.  In this newly revised ISO 9001:2015, business or strategic planning (which typically includes some form of a SWOT Analysis – Strength, Weaknesses, Opportunities, Threats) covers the majority of what Clause 4.1 is asking for, and handles Element 6.0 (Planning) as well.  I am a big believer in Strategic Planning (or Business Road-Mapping) because I have seen first-hand how companies were able to successfully navigate and grow, in a field full of competitors, by getting their Team to all row in the same direction (i.e. getting alignment and clarity on the targets/goals for the business)… pretty powerful tool from the results I’ve seen.  If you want more information on this topic, see my previous Newsletter from last year (ISO 9001:2015 Newsletter Issue 4).

What if your organization doesn’t do formal business or strategic planning?… Then speak with members of your top management and find out how they set direction each year, along with how they establish targets and goals they want to achieve.  If this is currently an informal, undocumented activity, then consider writing a paragraph into your Quality Manual that basically describes this informal process (or the formal one if it exists), and have top management sign-off on it.  Here is another important fact, the phrase “documented information” does not exist within Clause 4.1, so you are free during audit interviews to simply verbally describe how your Business Planning or Strategic Planning process (or SWOT activity) functions.  Even if some companies keep a record of these activities they can state that this information is considered proprietary and confidential.  If the Auditor sees this verbal-only discussion as a “documented information” gap and wishes to pursue this further, they will be faced with demonstrating that a lack of “documented information” in this area somehow makes this particular QMS business planning process ineffective (see Clause 4.4.2)… and that will mean challenging top management’s ability to run their company due to a lack of business planning documentation.

The last sentence in Clause 4.1 asks you to review your internal and external issues… again this is typically handled by looking at information from the previous years’ business planning activities, and then asking “so what’s new or changed this year?”… and then starting the business planning cycle over again, in the same time-frame, year after year, after year.


Be sure to watch for our next Newsletter issue where we will cover another section of ISO 9001:2015…


PS: Don’t forget to look at the Q&A section below for some final thoughts…


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Need Help?

ISO 9001:2015 Internal Audit Outsourcing (we do it for you)

For cost effectiveness, the Internal Audit function can be outsourced to an external experienced auditor on a periodic basis. This will provide an independent and objective assessment to management, of where process issues may exist, along with identifying opportunities for improvement. It will also provide the evidence needed to satisfy Internal Audit requirements within the ISO Standards.


Documentation Development Training Workshop for ISO 9001:2015

This Documentation Development Training Workshop for ISO 9001:2015 Session is intended to be a very interactive, hands-on session (hence the name Workshop) where your QMS documentation will be created/revised, with guidance from an experienced facilitator.  This type of session can help launch your transition efforts by getting a lot accomplished within a compressed time-frame.  If your organization has already begun the re-write then this session can be used to validate what you’ve accomplished so far, or if you haven’t yet begun, it can be the catalyst to get things started (…which is usually the hardest part).  Deciding how to move from your current QMS structure into a new one can be a daunting task and this session can help you navigate through it.  A copy of a sample Quality Manual (re-iterating the “shall” requirements found within the ISO 9001:2015 Standard) will be provided to each participant.  As always, our focus will be on how to develop a simplified and streamlined quality management system, that helps to drive improvement in your business.


Internal Process Auditor Training for ISO 9001:2015

The two (2) day Internal Process Auditing for ISO 9001:2015 Training Session is focused on a process approach to auditing with the objective being not only to assess conformance of the quality management system, but also to uncover process improvements during an audit. This goes hand in hand with the process auditing requirements found within ISO 19011 and the process approach covered in ISO 9001:2015, which promotes continual process improvement throughout this Standard. An enhanced checklist is developed, and there will be workshops throughout, to reinforce learning, as well as a live, practice audit. If you are looking to meet the ISO 9001:2015 internal audit requirements and to “raise the bar” for your internal audit program then this is the course you should consider.


ISO 9001:2015 Essentials + Gap Audit

This combines the ISO 9001:2015 Essentials Session with a Gap Audit – This approach is used to assist organizations in launching their transition efforts for this new ISO Standard. This event accomplishes two things: a) it provides education on the new ISO 9001:2015 Standard for your key personnel (i.e. internal auditors; etc.), by highlighting the differences from the 2008 version; and b) assesses the gap from where you are today to where you need to be to achieve compliance to this new ISO Standard. Training certificates covering education on the new ISO 9001:2015 Standard, as well as issuing of a Gap Audit Report for distribution to your Top Management, are the two deliverables from this event. On a final note, a closing meeting can be arranged with key individuals so they can hear first hand the results of the Gap Audit that was performed.  PS: We’ve also done this session with just the QMS Management Rep attending, which allowed them to quickly get up to speed on this new Standard, as well as to see how much of an effort the transition will be… and of course they receive their own Training Certificate as part of this event.  This also allowed them to avoid traveling offsite to get the training they needed anyways, as evidence for their Certification Bodies.



Q:  How do you perform an audit for Clause 4.1 of ISO 9001:2015?

A:  For Clause 4.1, an Audit Checklist should cover these areas:

–  Does the company perform a business planning activity during each fiscal year?  If yes, when does it take place?  Who attends?  Any evidence to demonstrate it took place for the current fiscal year?  For the last fiscal year?
–  What typically comes out from an annual business planning activity (outputs)?  What goes into the process (inputs)?  What key steps take place?  How long does the whole process take to complete?
–  Are business targets or goals set each year?  How is that done?
–  What are the external factors/issues affecting the business?  What are the internal factors/issues affecting the business?  Do they ever change?  Are they monitored/reviewed/updated?
–  What is the Purpose of the organization?  Is that described/stated anywhere?
–  What is the Strategic Direction of the organization?  Is that described/stated anywhere?

(Make sure to interview more than one person and obtain examples for the items listed above)


Until next time…

Tim Renaud

Helping Business Professionals Reduce Risk and Remove Waste!