Summary of research first published in 1993

BS5750 / ISO 9000 Implementation and Value Added

The growth in registrations to ISO 9000 has been paralleled by growth in the level of debate about the Standard’s fitness for purpose. The Director General of the BSI made claims for the benefits of registration, but there had been little research into the impact of ISO 9000 on business performance.

This research gathered perceptions on ISO 9000 implementation from 647 registered organisations.

The results can be summarised as follows:

  • Only 15% of the organisations surveyed believed they achieved all of the benefits claimed by the Director General of BSI;
  • 69% reported an improvement in procedural efficiency;
  • the results for improvements in measurable aspects of efficiency (costs, waste etc) were only half as good, suggesting that the perceived improvements of procedural efficiency do not necessarily translate into real improvements;
  • 33% of respondents reported an increase in the number of new customers as a result of registration;
  • 27% of the organisations sampled reported the Standard to have added significant value to their business;
  • Of particular interest, is the finding that only 25% attributed an improvement in overall costs;
  • 15% of the organisations perceived costs to have worsened.

The results raise questions as to whether the problems lie with the Standard, the implementors (managers) or both.

General perceptions of the Standard were that it is, on the whole, a good thing, but it suffers from problems of flexibility and interpretation.

Governmental customers are more inclined to insist on supplier registration to the Standard than private sector organisations and the results show that standards are set more from an internal perspective than being driven by customer requirements. People report that a change in culture is required to achieve success with ISO 9000 but there is a diversity of views as to whether the Standard encourages the practice of listening to customers and whether it is important to introduce the concept of continuous improvement prior to implementation.

People felt that the Standard has spawned many rogue consultants and many also felt that British management does not really understand it.

The problems of understanding, interpretation, flexibility and so on suggest educational needs amongst British management.

Comparisons of organisations on the dimensions of value added and impact on costs showed that those who felt they had succeeded with the Standard undertook it for broader purposes than those who undertook it for reasons of obligation and opportunism.

Smaller organisations had more concerns about costs and have greater expectations of improved market share as a result of registration. They also had more doubts about the Standards relevance to their business.

The results show that the Standard is achieving less than it should. One reason is the way it has been tackled. Organisations reporting positive results took a different perspective from those which achieved less. But the results also suggest problems with the Standard. Aside from issues of comprehension and flexibility, the focus of the instrument can be argued to be more internal than external.

By emphasising control of procedures, people are likely to lose focus on the purposes of their work (to serve customers by the most efficient means). The purpose of inspection against the Standard is to police deviation from procedures. Whereas, its proper function should surely be to assess whether procedures are in control and generating improvement.

The research conclusions offered suggestions for simplifying and improving our approach to quality standards.

Research conclusions

The results suggest significant room for improvement not only in the Standard but also in organisations approaches to implementation.

With respect to implementation, the results suggest that many British managers don’t know enough about quality management systems and consequently don’t approach implementation in a manner that will ensure good results. While this view may be read as an indictment of British management, one would have to accept in mitigation that the promotion of the Standard has centred on obligation more than education. Control or coercion is never a good way to encourage learning and a sense of opportunity.

The Standard itself is not easy to understand, which no doubt contributes to the problems. The results lead one to question whether it is fit for purpose.

ISO 9000 requires clear documentation and control of procedures. The purpose of surveillance is to inspect for any deviations from the procedures as documented. This raises two issues:

· Are the procedures written from the customers point of view?

· Do deviations matter in terms of service to customers and efficiency of operations?

Many people report considerable irritation with being policed for minor non conformances which have little bearing on service or efficiency and may even be reflective of peoples needs to ignore or circumvent procedures in order to solve customers problems. The purist would argue that such flexibility could and should be written into procedures. This argument misses the point.

Central to an understanding of quality systems is the concept of control. Should a quality management system control procedures or performance? In other words, should it control behaviour or accomplishment? If we seek to control procedures (ie behaviour) we could, in a worst case, ensure that wasteful practices which are not in the best interests of the customer are locked into our way of working. On the other hand, control of performance could, ideally, lead to flexibility in procedures as dictated by need (to improve service or efficiency).

Control cannot be achieved without measurement. The Standard encourages measurement by exception – looking for deviation from procedures (and perhaps regardless of whether such deviation matters). Section 20 of the Standard, however, places emphasis on statistical methods for process control and improvement. This contrasts with policing procedures for non-conformance. The basis of statistical process control is the measurement of variation within and between processes. The tone and positioning of section 20 suggests measurement of variation to be almost an afterthought rather than a principal component of a quality system.

Given the problems of understanding, it would be more relevant to establish a more straightforward approach which would deal with the things that matter, and be usable by all managers.

A straightforward approach:

Customers

An organisation should be able to show that it has found out what matters to its customers, established measures of capability on those things and then has taken steps to improve performance (against those measures).

Efficiency

An organisation should be able to show that it has established the capability of its main processes and is working (with measures) to improve their efficiency.

Any organisation that can demonstrate that it has the right focus and a method (or system) in place for improvement of service to customers and efficiency should be worthy of recognition. By comparison some organisations currently registered to ISO 9000 have no idea what matters to customers and show no evidence of improvement.

While such an approach is straightforward it is by no means simplistic. There is much work involved in putting such a system in place, but this is more than justified because its implementors would be developing their approach from the right (external) perspective.*

To go further, one could ask why it is that we don’t insist that organisations report customer satisfaction of their goods and services in their annual reports. It would provide a clear focus for the organisation and be of benefit to the consumer.

For the last 15 years we have pursued a quality management standard that seems to have neither captured the imagination of our organisations nor produced resounding results. Only 27% of the organisations sampled report the Standard to have added significant value to their business, and only 15% believe they have achieved the benefits claimed by the Director General of BSI. The time has come to go back to basics and adopt a more straightforward and relevant position from which to build our understanding of quality and our competence to achieve it.

Joshua Hammond, (President, American Quality Foundation), discussing the Baldrige Award in a letter to The Harvard Business Review (Jan-Feb 1992) wrote:

… apologists for the status quo are reminiscent of the ‘we designed it right the first time mentality’ that gets America into trouble and the government’s attitude of ‘we know best’ that keeps America in trouble.

He could have been describing ISO 9000. Both Baldrige (much the younger and more comprehensive) and ISO 9000 have been reviewed and modified since their original promulgation. It could be argued that such reviews reflect a desire to continually improve these standards. Yet it is a fundamental tenet of quality to ensure things are fit for purpose before they are promoted or sold. BSI is responding to criticism of the Standard, but will the result be received as another version of the same thing or a fresh, more relevant and more convincing approach?

Just as the US government has supported and promoted the Baldrige Award, our government stands firm in a commitment to promote quality standards (more are coming for specific sectors). To return to Joshua Hammond:

Using Baldrige… may get a company to Washington but not to world-class quality.

The same can be said of ISO 9000 – it may enable companies to sport a certificate but it should not, as yet, be taken as a marque of quality.