The International Organization for Standardization (ISO) last fall published ISO 9001:2015, an updated quality management system standard used by an increasing number of manufacturers worldwide. The new standard is considered a major upgrade to ISO 9001:2008, its immediate predecessor, in that it focuses less on documentation and more on enterprise-wide management. Enterprise Minnesota has taken an aggressive approach to helping its manufacturing customers harness the significant power of the new ISO approach. Its four ISO experts—Tim Bjorgum, David Ahlquist, Kent Myhrman, and Greg Langfield—recently sat down for a roundtable discussion about the potential and challenges of the new standard. What follows is an abridged version of their conversation.
Are there misconceptions about the new ISO 9001:2015 standard?
Greg Langfield: I think ISO has suffered over the years with too narrow an image because the word quality was associated with it and because a lot of people assumed it was just about documenting their processes. That’s always been just one minor aspect of ISO and it is even less so in the new standard. So part of the challenge is to overcome that image.
David Ahlquist: The new ISO takes things to the next level in a very big way, and I don’t think the typical manufacturer understands that even the old ISO could become a business management system for their company.
Tim Bjorgum: Some companies are pushed by their customers to be ISO, so maybe they see it as a sales tool. It’s best to step back and realize that customers want them to improve their performance. They want on-time deliveries, high quality, and a reasonable price, and they also want their vendors to make money.
Kent Myhrman: One test that shows how deeply the ISO discipline is embedded within an organization is to ask if they want to do more ISO or less, in other words: is it adding value or cost? We have clients who truly see how ISO is fundamental to their business and how they approach managing and improving their business. But, if you’re not in that mode right now, the new ISO standard is going to look scary to you.
Someone described the difference between the ISO 2008 and 2015 as “an evolution from compliance to performance.” Is that apt?
Ahlquist: Enterprise Minnesota is absolutely focused on helping companies move from compliance to performance. I want that on our business cards; I want to have it accompanied with flags and music when we come into a company. It’s not about compliance, it’s about performance—and that is our calling card.
Bjorgum: We emphasize that it’s a business management system. It’s not an ISO thing, or a quality thing; it’s a business management system. The better the company performs, the better it’s going to meet its customers’ expectations of quality, of delivery, and price. And that will make the company stronger and more profitable.
Langfield: I don’t view the 2008 standard as being a negative. 2008 was a very powerful standard. Our customers experienced great rewards from 2008 when they viewed it as being integrative to their business. ISO 2015 is looking for a more mature approach to how you’re going to manage your business and how you’re going to evaluate the processes and risks associated with them.
Myhrman: It gets back to this: If your current attitude is to use ISO to maintain compliance, you’ll probably do as little as it takes to pass a compliance audit—and you can still do it that way. But you’re going to have trouble getting through the audit if you think that your goal is compliance.
Ahlquist: Another question to ask is, “If your designated management rep leaves the company, do you still have a quality system?” If they answer, “No. When they leave, our system leaves,” they are not using ISO for company performance.
Myhrman: We commonly get asked, “What do I have to do for ISO?” The more suitable question should be, “What do we have to do for our company?” The new standard enables us—almost insists—that we take that approach. What do we need to do for our company? How do I decide what that means? How do I communicate it? How do I structure my company so that I can both ask and answer that question?
Ahlquist: I want to twist that a little bit to say that our approach is a discussion with the client. It’s not, “you need to do this and you need to do that.” It’s really discussing what the standard is about. “Tell me how you do that in your business today? How well is it working? Can we improve upon that? And how do we document how to continue or improve procedures?”
Will some companies be intimidated that the new standard requires enterprise-wide participation? It no longer will be acceptable to throw the project at their quality guy and say, “That’s a wrap.”
Ahlquist: It depends on who you talk to. The quality guy is probably saying, “This is fantastic. It’s not all on my back now. Everybody’s going to be involved in this.”
Bjorgum: We’ve always said that we need management support to have a successful ISO implementation. ISO realized that and made a formal statement about what leadership is responsible for, not just the designated management representative, the old DMR.
Langfield: One way to think about it is, what owner or CEO would let their quality manager design and run their entire business? None. That’s why they added this leadership requirement to ISO 2015: the right people should be saying how this thing needs to work.
Ahlquist: Another thing is that this is best practices of world-class companies. When we’re working with small to mid-size manufacturers, it’s kind of, for them to think about this and go, “Oh, okay. You know, this is not just the big companies that do this.”
This week, I’ve followed up with a couple companies that have achieved ISO. One has an ERP system with real-time information on their products and their inventory. Anybody in the company can access it. Sales people can look up an order on their iPad and tell their customer when it is going to ship and where it is in the system. That system equals anything the big companies have. It gives them real-time data to make good decisions and their “management review” reflects that—they can use real-time data to determine what’s going well and what they need to work on. To me, that’s world-class performance in a 15-person company.
Myhrman: Another thing for companies to think about is that it will be harder to upgrade to the 2015 standard by using the same compliance style techniques you used with the 2000 or 2008 systems. You need to step away from saying it’s required by ISO—you should never use that language again. ISO has set people free. We’ve all heard about offspring that you’d like to set free, but they won’t leave. Well, ISO has set companies free and we’ve got to make sure that they’re ready to take on a new approach to addressing the requirements.
How does the successful implementation of ISO 2015 reflect on the other enterprise-wide management practices that modern manufacturers must engage?
Ahlquist: We are focused on the fact that ISO is a business management system, and we are trying to identify the best way to support your business, not the best way to earn a certification. The 2015 standard emphasizes a range of things that we think are important for our customers. It talks about understanding processes and their relationships: Lean value stream mapping is a nice way to think about how you’re performing through the organization. It talks about what skills are needed, and how to transfer and document those skills: TWI does a wonderful job of leveraging that. It asks you to think more formally about the informal systems that companies operate on—organizational or “tribal” knowledge. It asks you to think about those softer skills, to be able to manage them, encourage them, capture them, and pass them on.
ISO 2015 talks a lot about leadership. The old standard had planning in place. It asked where do we need to go? What might change? And what changes in the marketplace might effect what we’re doing? 2015 emphasizes thinking about risks and opportunities, about the environment, about other stakeholders.
Bjorgum: Everything seems to tie in. ISO is about continuous improvement when it asks you to identify your strengths and weaknesses internally, and your opportunities and threats externally, or when it asks you to plan to mitigate risk, or capture opportunity. The answer might be that we need to lean out our system, we don’t have enough resources in the labor pool, or that we’ve got to do better training. We’ve got to improve the flow so that there’s less waste, so that we don’t have to rely so much on more labor to grow our business. Strategy management, training, problem-solving— they all fit together.
Langfield: ISO wants to know that you have a system that takes your business where you envision it to go. You need to look forward, and then ISO will help you get there. ISO expects that you have talented people who need to be developed, and so talent development speaks directly to that expectation. And ISO expects your business to be both effective and efficient, and that is the essence of productivity and operational excellence.
Enterprise Minnesota recently attained its own ISO certification. How has that process affected how you look at the process?
Ahlquist: One of the things I’ve seen doing internal audits is that employees get a chance to surface some issues. And the ISO process helps us address that. The staff has been happy to say, “CRM has been an issue for us. We need to do something about it.” And that has led to some corrective actions and Kaizen events. It has been fun to hear enthusiasm for the internal audits. When I do internal audits it is never adversarial. People are happy to find opportunities to do their part to make the process better.
Bjorgum: That’s a key point in the auditing process. You aren’t auditing the person, you are auditing the process. You really want to know how that process helps them do their job. When that audit works like that, the last question is usually, is there anything else we should know? How can we improve this? What can we do? The answer usually extends the interview for another half hour. That ties itself to improved performance for the company. They’re telling you about things that keep them from doing their job. Now we have some things we can work on. We can take that to management and show how we’re going to be a better performing company.
Myhrman: Enterprise Minnesota is a stronger company because of ISO. The best example is during the management review meetings. We’ve got two really difficult, challenging problems with our CRM system—one on the sales side and one on the consulting side. And to watch that team work together, to get frustrated, and to understand how important the answer is and not let it go, is really powerful. And it makes us a better company.