ISO Value

Maximizing ISO Continuous Improvement Value

Executive Summary

ISO 9001 and similar registration may be the last or first step in the continual improvement for a business. Companies use ISO for:

Compliance: ISO as policeman to policy. Often because they are mandated to use ISO by their customers.
Control: ISO as a means of reducing quality variation
Opportunity: Continuous Improvement (CI) is a requirement of ISO – the results depends on what companies actually do for continuous improvement
1. The majority focus CI only on the ISO requirement to continuously improve the Quality Management System (QMS)
2. In other cases the CI of the QMS includes non-quality related elements that overlap into business operations
3. Aggressive, strategically oriented companies incorporate CI as a core element of the entire enterprise including and beyond ISO

ISO is not cheap and it can be hard to point to a return on investment. It costs anywhere from tens of thousands of dollars to millions to become ISO Certified and a minimum of tens of thousands of dollars per year to, by some estimates, 2% of your gross sales to maintain certification.

Does ISO Registration pay?

ISO Registration is expensive to achieve and expensive to maintain

Answer = maybe. Only you can tell whether or not it has or will pay off as an investment for you. Extensive research with sample sizes of dozens to thousands of companies yield conflicting results on whether or not ISO registration pays.

Payoff ultimately depends on how you view ISO. If your objective is only compliance or control, the results tend to indicate that ISO may not pay for itself. If you use ISO as part of a Continuous Improvement program, ISO may very well be an integral part of your financial success.

How to make ISO Registration pay:

Successful companies use ISO as a springboard for quality and financial success but it is not a cookbook approach.

According to Jeff Pallister an ISO consultant for over 20 years, “ISO is quite intentional about not mandating how to do anything. It just says you have to have a way of doing things that gets these results. It is not prescriptive that way and one reason companies like it. So, the approach I suggest is that there are ways of meeting the requirement of CI that make a lot of good business sense. And focus on best practices in implementing this, that is, the "how to". In summary, it isn't the ISO standard that is a problem; it is the implementation, what companies do with it. Integrating a continuous improvement model such as the Profit Improvement Process is a way for you to maximize your ISO implementation. It is for busy people who want the results of CI now.”

Whatever CI model you use, the best approach is one that incorporates a company-wide continuous improvement process. The best programs include the means of directly measuring financial results to help management continue their support for the program.

Discussion of continuous improvement

The process of continual improvement is central to the long term business viability and success. ISO 9001 offers a starting point but does not mandate the “how” of continuous improvement. This can lead to a significant opportunity gap for ISO registered companies.

The International Organization for Standardization tells us in Principle 6: Continual Improvement: “Continual improvement of the organization's overall performance should be a permanent objective of the organization.”

“Key benefits:

	Performance advantage through improved organizational capabilities.
	Alignment of improvement activities at all levels to an organization's strategic intent.
	Flexibility to react quickly to opportunities.

“Applying the principle of continual improvement typically leads to:

	Employing a consistent organization-wide approach to continual improvement of the organization's performance.
	Providing people with training in the methods and tools of continual improvement.
	Making continual improvement of products, processes and systems an objective for every individual in the organization.
	Establishing goals to guide, and measures to track, continual improvement.
	Recognizing and acknowledging improvements.”

ISO Profit Improvement Opportunity Analysis

The following tables examine the key elements of an ISO-based continuous or continual improvement program and compares them to those of the Profit Improvement Process (PIP). The comments reflect how a PIP closes the gaps in the typical ISO-based continuous improvement (CI) program.

ISO Quality Management System Continuous Improvement	Enterprise-wide Continuous Improvement Profit Improvement Process (PIP) Inside ISO

This table details the key elements of ISO and the Continuous Improvement model.

Element	ISO	Profit Improvement Process (PIP)	Comment
Continuous Improvement goals	QMS only Quality Management System	Entire Enterprise	Quality and quality management are primary goals of PIP
Continuous Improvement governance	Narrow	Thorough	ISO provides the “what” but not the “how” PIP provides the how and the governance
Tie to profits	No	Yes	ISO says that quality should result in better costs. PIP ties all projects directly to the P&L
Key criteria for improvement project selection	No	Yes	Criteria are essential to good decisions
Training
Principles of CI	basic	broad	The principles are fundamental to PIP
Governance	No	Yes	*
CI idea generation	No	Yes	*
CI idea evaluation	No	Yes	*
CI idea selection	No	Yes	*
CI project refinement	No	Yes	*
CI project acceptance finding	No	Yes	*
CI project planning	No	Yes	*
Consensus building	No	Yes	*
Prioritization	No	Yes	*
Reporting structure	No	Yes	*
Project tools selection	No	Yes	*
CI project tie to profit (P&L)	No	Yes	*

*All of these training elements are fundamental to Profit Improvement Process training as they deliver what is absolutely necessary for the successful operation of a profit-directed continual improvement program.

Conclusion

Whatever model you use, the best approach is one that incorporates a company-wide continuous improvement process. The best programs include the means of directly measuring financial results to help management continue their support for the program.

A Profit Improvement Process (PIP) is highly adaptable and readily adoptable for any ISO 9001 registered company. PIP is designed as a process model that adjusts to the company rather than forcing the company to fit the model.

Implementation training ranges from a week or so for the steering committee to one or two days for most participants. Because all training is hands-on with the real challenges and opportunities for the client company the training more than pays for itself very rapidly.

One and two-day Power Idea Sessions are the building blocks of PIP implementation training. Power Idea Sessions are enhanced facilitation working sessions that deliver measurable results that can be tied directly to increased profitability. They pay for themselves.

PIP implementation training is designed for:

	Ease of deliverability
	Efficiency of client resource utilization (e.g. people and time)
	Flexibility to fit essentially any size and type of business
	Flexibility to meet client interests and needs
	Delivery of immediately quantifiable results to the client
	Development of potential follow-on work in project implementation support
	A high return on investment for the client – Training pays for itself with results
	A complementary/synergistic fit within existing initiatives, processes and tools

This is results-oriented.

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