The Standards Answer

Show me the money!

Published: Tuesday, September 7, 2004 - 22:00

Perhaps the single most pervasive reason top management resists the implementation of a quality management system relates to our failure, as quality professionals, to demonstrate the return on investment. We do a less-than-stellar job of demonstrating to executives the financial value implicit in ISO 9001:2000 or any of the other excellent QMS models.

Our linguistic inflection stresses the “quality” and downplays the “management.” Inadvertently, we end up de-emphasizing the role managers play in the strategic implementation of a QMS.

A good QMS helps an organization reach its goals. Those goals universally relate to satisfying customer requirements to make money. For nonprofits, the net gain produced by satisfying customer requirements might be reflected in such monetary benefits as reduced tax burden due to decreased dependencies on community resources.

The challenge for quality professionals is to sell top management on the financial benefits of ISO 9001—or whatever model is appropriate to that industry. We need to be able to say, with conviction, “If we implement this system, we will help our bottom line.” We need to show them the money.

It would be naive to ignore that most companies seek registration to a recognized QMS because one or more of their customers requires it. However, it’s possible, even desirable, to approach this mandate as a golden opportunity. Rather than implementing their QMS with (what one of my colleagues refers to as) “malicious compliance,” managers should seize the occasion to take a customer requirement and incorporate it into a winning strategy. Top management can’t do that unless we provide them with the justification and the tools.

Working Group 11 of ISO /TC 176 is currently working on a document relating to the financial and economic benefits of a quality management system. One of our guiding stars is the famous Jerry Maguire quote: “Show me the money.”

ISO 9004:2000, the guidance document that’s paired with ISO 9001, promulgates eight quality management principles. We’re using those principles as the foundation for the document. The principles relate to customer focus, leadership, involvement of people, process approach, systems approach to management, factual approach to decision making and mutually beneficial supplier relationships. For each of the principles, we define the achievable benefits and tools that would be most helpful.

It’s easy for us to say, “Do this, and the money will follow.” It’s a different matter to specifically target a tool or an activity for the fulfillment of a monetary objective. But that’s precisely what we must do. If we can’t verbalize the relationship, how can we expect management to understand it?

One of the quality management principles, factual approach to decision making, reinforces our need to have a reason for anything we do. Operating in any other way—initiating programs and spend money willy-nilly—is the antithesis of good management. Activities must originate from a need grounded in verifiable data, which may relate to actual facts or projections based upon precedent. Hence, executive management’s manifestation of this principle might be evidenced by the provision of resources for reliable information gathering and analytical tools, like SPC.

Similarly, providing top management with information about the money saved from decreased downtime realized from a more aggressive preventive maintenance equipment maintenance program gives them the objective justification they need to put the money for the program into next year’s budget. Processes associated with these two elements are reflective of specific clauses found in ISO 9001:2000—8.4 Analysis of Data and 6.3 Infrastructure.

It’s possible to put a monetary spin on each requirement of the quality management system model. For example, if you do a better job of controlling your design process, you’ll decrease the risk of costly manufacturing error. If you conduct internal audits, you have a “heads-up” on a potential problem before it affects your delivery to a customer, and you have the added benefit of benchmarking great practices that may improve productivity in another part of the organization.

If we want top management to embrace the QMS, we need to connect the dots between requirements, resources and rewards. Quality professionals must understand the relationship between QMS requirements and the budget process, as well as the constraints of the organization. They need to give top management the facts they need to make decisions about the resources required to reach organizational objectives. Anything less digresses into petulant whining, and “ISO says so” is a lousy reason to do anything.

About The Author

Denise Robitaille

Denise Robitaille is the author of thirteen books, including: ISO 9001:2015 Handbook for Small and Medium-Sized Businesses.

She is chair of PC302, the project committee responsible for the revision to ISO 19011, an active member of USTAG to ISO/TC 176 and technical expert on the working group that developed the current version of ISO 9004:2018. She has participated internationally in standards development for over 15 years. She is a globally recognized speaker and trainer. Denise is a Fellow of the American Society for Quality and an Exemplar Global certified lead assessor and an ASQ certified quality auditor.

As principal of Robitaille Associates, she has helped many companies achieve ISO 9001 registration and to improve their quality management systems. She has conducted training courses for thousands of individuals on such topics as auditing, corrective action, document control, root cause analysis, and implementing ISO 9001. Among Denise’s books are: 9 Keys to Successful Audits, The (Almost) Painless ISO 9001:2015 Transition and The Corrective Action Handbook. She is a frequent contributor to several quality periodicals.