ISO 9001:2015 – Newsletter – Issue 73

Issue 73 – Element 4: Context of the Organization – Anything useful for Management?

ISO 9001:2015…

Element 4: Context of the Organization – Anything useful for Management?

I appreciate receiving emails with questions and/or comments from readers of this Newsletter… please continue to do so since it provides me with direction on where to aim the content of these publications.  One of the most often heard comments I receive is about how management (top; middle; front-line) don’t always see the benefits of ISO 9001 with how they run the business.  So with that in mind, this month will be a start of a series of Newsletters looking at each of the ISO 9001 Elements (4, 5, 6, 7, 8, 9 & 10), looking at what’s inside each one to see what can be useful for management, that they just don’t realize.  Passing these Newsletters along to management to read, or reviewing them during a management meeting, may also help to break any ice they’ve felt about ISO 9001 (not to mention that it would represent some evidence of “training” for management personnel).  I hope the time spent building this next series of Newsletters will help you begin to break down any barriers you may be up against inside your organization.

In my last Newsletter (ISO 9001:2015 Newsletter Issue 72) we discussed the topic of  “Part 2: ISO Registration, is it worth it?”, and now in this Newsletter we will discuss “Element 4: Context of the Organization – Anything useful for Top Management?“.

The ISO 9001 Element numbering…

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

Element 4 – Context of the Organization consists of four (4) Clauses as listed below:

4.1  Understanding the Organization and its Context

4.2  Understanding the Needs and Expectations of Interested Parties

4.3  Determining the Scope of the Quality Management System (QMS)

4.4  Quality Management System and its Processes

Let’s talk about Element 4… As you might notice from the above listing of Clauses (4.1 to 4.4), this first Element was placed there for management to decide how they want “Quality” to be handled in their organization.  Each of these Clauses contain requirements that spell out what your Customers expect from you.  Yes, that’s right, your Customers… because they are the ones who wrote the ISO 9001 Standard, and they did it with their needs in mind.

So that’s the first message, if you think Customers are important for your business then you should want to understand what it is they expect regarding the “Quality” of the products and services you sell to them.  Even if you don’t think your Customers care about ISO 9001, they do care about the level “Quality” you are selling to them.

Can you meet your Customers quality requirements without using the ISO 9001 template?  Absolutely… To do so you’ll need to implement a number of processes (actually a system of connected processes) that you will use to manage “Quality” from the time the Customer tells you what they want until you give them what they asked for… The challenge will be to identify all of the processes you’ll need.

I’ve actually done this as a brainstorming session with a management team who were unsure what value ISO 9001 provided them… So after an hour of building a list of processes (that they would need to manage Quality), I then showed them that it covered 90% of what was already in ISO 9001… which caused some of them to realize that maybe ISO 9001 just might actually be useful.

The point is, if you want to take care of your Customers so they’ll keep buying from you year after year then why re-invent the wheel… If ISO 9001 has already done all the hard work, then why not use its framework for your business and for your Customers?

Clause 4.1 – Understanding the Organization and its Context

Let’s now move on and discuss Clause 4.1 and what’s inside of it for management.  Business or strategic planning (which typically includes a SWOT Analysis – Strength, Weaknesses, Opportunities, Threats) covers the majority of the internal/external issues that Clause 4.1 is looking for, and handles a lot of Element 6.0 (Planning) as well.  If your company already does this type of annual planning then what benefit does ISO 9001 bring?  Well for starters, it will help you do this important activity in a more systematic and methodical way, each and every year.  Secondly, it will also help the whole management team remain accountable for executing those parts of the plan they own, because this process will be assessed.

This is exactly why I was brought in by one Client because it wasn’t clear if his team was properly executing on the plans that were developed (executing the Strategies along with their supporting Tactical plans) and he needed an objective set of eyes to assess it.  Based on what I’ve seen, ISO 9001 can tighten up the whole strategic planning process… which can be a useful thing, especially since sometimes these planning sessions can wander away from their stated agenda.

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 aggressive competitors, by getting their Team to all head in the same direction (i.e. getting alignment and clarity on goals for the business)… this is a very powerful tool from the results I’ve experienced.

Clause 4.2 – Understanding the Needs and Expectations of Interested Parties

Once you’ve addressed the “issues” facing you then you can identify those “interested parties” that are relevant to your business and connected to those “issues”, as well as what their requirements are.  Ask yourself, who is most interested in the “quality” of your products and services?  Your Customers should be the first thing you thought of… now who else?  Your owners/shareholders are also very interested in the level of quality you deliver because it will ensure a steady stream of profits.  Luckily you get to decide how long or how short your list will be of interested parties.  Once your list is built then beside each name on the list you will identify what their requirements are for “Quality” that you will have to meet (if you want them to stay interested).

Why is this Clause useful to management?  Well it brings into sharp focus “who” you should pay attention to, and “what” you should pay attention to, when you run the business day-to-day.  If you want to operate a sustainable business then you will want to make sure you take Clause 4.2 seriously because typically these interested parties will eventually shut down your business if you don’t meet their requirements.

Having processes in place to stay on top of these interested parties (and assessing them at least once a year – see Clause 9.2) is the only way to make sure that you won’t get tangled up in a business issue that will distract you.  An example of this situation came up a few years ago with a Client of mine who had lost track of the many details they had signed off within a Customer contract (everyone assumed someone else was taking care of these details).  A number of small but critical contract obligations were not being fulfilled and luckily these were discovered internally just prior to the three year renewal date, where these issues would have surfaced when the Customer performed their contract renewal audit.

Clause 4.3 – Determining the Scope of the QMS  AND  Clause 4.4 – QMS and its Processes

I will deal with these last two Clauses (4.3 and 4.4) together at one time to keep this Newsletter brief and to the point.  As a Manager of one area of the business, the benefit of defining Scope (Clause 4.3) and establishing “Quality” processes (Clause 4.4) would be to ensure that your area of responsibility is properly covered to your advantage in running/managing it.

When I say to your “advantage” what I mean is… don’t let others address these two Clauses without your direct involvement.  Take the time to accurately define (eg. flowchart; document; etc.) those processes that you personally are responsible for, and will be assessed against, during performance review time.  Leveraging Clauses 4.3 and 4.4 will provide you with some basic tools for communicating with your team on how you expect the work to be done, but more importantly to uncover ways to improve your part of the business.  A great statement from a Fortune 500 CEO goes like this: “Everyday you come to work, you have only two jobs to do… the first is the one you were given and the second is finding ways to improve it”.

Let’s also not forget the benefit that you will get, at least once a year, from an objective set of eyes assessing your processes (this will be covered in Clause 9.2) to make sure those processes are being executed the way you had planned them to be.  Documenting your processes (Clause 4.4) that are included within the Scope (Clause 4.3), can be an eye opening (and fun) exercise.  This is a great way to engage your team in taking more ownership and accountability for their processes.

Be sure to watch for our next Newsletter issue where I will be answering some of the questions that I get from Readers of my Newsletters about how to implement the requirements of ISO 9001:2015 in a specific and practical way, that will also help improve business performance…