The ISO 9001.2015 standard is out. Two important questions are: How did we get here? What happens now? Greg Hutchins, a Risk and Quality Expert, in his book “ISO: Risk Based Thinking 2015 Edition”, says we have gotten here through an evolutionary process, which, because of VUCA (Volatility, Uncertainty, Complexity and Ambiguity), requires a greater assessment of the external environment than is the case with just a quality focus.
QUALITY IN THE BOARDROOM
A recent interview segment on ASQ TV indicates that the change will result in quality moving to the board room. Is ISO 9001.2015 an evolution or a continuation? A brief historical and literature review and some recent analysis from my dissertation provide some insights.
In the nineteen eighties, the Japanese industrial complex was on top of its game. As a result, interest in their management and production techniques increased as did the visibility of such quality luminaries as Edwards Deming, Joseph Juran and Philip Crosby. Quality Awards were also adopted around the world.
The nineteen nineties saw a decline in the Japanese industrial threat, but an increase in globalization. Authors such as Thomas Friedman in his book “The World Is Flat” and Suzanne Berger in her book “How We Compete” documented the increasing interconnectedness and competitiveness of the global economy. Concurrent with this increase in globalization was an increase in outsourcing of production processes. Both of these trends increased the complexity of business operations.
TODAY’S KNOWLEDGE ECONOMY
In this new Century there is a growing emphasis on the Knowledge Economy. The Knowledge Economy is a concept which focuses on the increase in the embedded knowledge occurring in the products and processes associated with the biochemical, computer and electronics industry. Hanushek and Woessmann in their book “The Knowledge Capital of Nations” find that global economic growth is closely associated with education level, while Xie and Killenwald in their book “Is American Science in Decline?” indicate that other countries recognize education and strength in science and technology fields are key to globally competitiveness. As a result countries such as China, Singapore, Korea and Taiwan are investing heavily in science education.
The emphasis on science and technology increases the level of sophistication and complexity in product development. If there is any doubt, one only has to listen to the list of potential side effects listed in drug ads, or look at depth to which oil rigs are drilling in the oceans. An increase in sophistication, however, adds complexity. This in turn increases risks.
This general trend was found in an examination of 3092 academics from twenty-four U.S. universities and the criteria which assisted them in obtaining National Institute of Health (NIH) funds in 2008. The study found that if one is in a basic science field (biology, chemistry, and physics) fewer dollars are allocated. While fields like Neuroscience and Genetics are more heavily funded. Another positive contributor was having a combined PhD and MD degree. The findings indicates that NIH sees the future of development and innovation in biotechnology is in more complex fields, which benefit from the combination of the sophisticated research methodology associated with a PhD and the practice of Medicine.
QUALITY AND RISK CONNECTION
Jerald Hage in his book “Restoring the Innovation Edge: Driving the Evolution of Science and Technology” links quality and risk. He notes that at the operating level, companies need to have a strong quality orientation. This allows them to reduce defects in the production of the product, lower repair costs, and extend product life. At a corporate level, however, companies need to assess the cost and risk of actions, develop radical solutions for radical product innovations and eliminate multiple kinds of risks to the individual and environment.
The above may seem like a pedantic recitation. The point is that scholars and reporters in various fields recognize what Greg Hutchins has emphasized. The economic environment is more competitive, interconnected and volatile. Unanticipated events can have a significant negative impact on a vast number of people and businesses. Consequently, for their own good, the good of the environment and the world, companies should, and if they want ISO certification must, incorporate risk assessment into their strategic plans.
As for the idea that quality is now in the board room, that is true. However, quality while an important component of any corporate strategy is a tag along. ISO 9001.2015 has placed Risk Assessment front and center in the board room.
As to where one goes from here, corporations wanting an ISO 9001.2015 certification have three years to comply. At this juncture, the best advice is to go slow. Do not throw out your quality processes, as a quality product and service is still a key to economic success in this highly competitive global environment. But, risk assessment is here to stay and like quality will become part of the corporate landscape.
Bio:
James Kline PhD(abd) is an ASQ certified Six Sigma Green Belt and Manager of Quality/Organizational Excellence. He has consulted on quality and workforce development issues for the State of Oregon and the League of Oregon Cities and conducted a number of economic studies for local governments. He has authored numerous articles on quality and workforce development.