Records, Retained Documented Information, and ISO 9001:2015

ISO 9001:2015 does a lot of things right, but using clear language is not one of them. One of the most glaring examples is the transformation of the word “records” into “retained documented information.” That’s right, they took one word and turned it into three. And the three words are not nearly as intuitive as the one word they replaced. Regardless of what you call them, records are the proof of something happening. They are historical, referring to past events. As such, they are not revised. Records might be “corrected” in some cases, but they are never revised. Only documents are revised. (We’ll address documents and their status in ISO 9001:2015 in a future article.) The primary control of records is that of housekeeping: knowing where they are stored, who is responsible, how long they’re kept, etc.

Here is a summary of records requirements in ISO 9001:2015:  

·         24 records are required in ISO 9001:2015. This is compared to 21 records required in ISO 9001:2008. Some of the 24 records required by ISO 9001:2015 are actually repeat requirements.

·         20% of all the record requirements come from section 8.3, Design and development of products and services. That amounts to 5 records, which is the same number required by ISO 9001:2008.

·         A completely new record that is required in 9001:2015 is retained information on changes: review of changes, persons authorizing the change, and necessary actions arising from change (section 8.5.6)

·         ISO 9001 continues its redundant ways. ISO 9001:2015 requires records of evidence of processes being carried out effectively TWICE, once in section 4.4.2 and again in section 8.1.e.1.

·         More redundancy: ISO 9001:2015 requires records that demonstrate conformity of products & services processes TWICE, once in section 8.1.e.2 and again in section 8.6.

·         5 of the records in ISO 9001:2015 have qualifiers. They are “to the extent necessary” and “as applicable.”

·         One item listed as “retained documented information” (i.e., record) is actually a document. That is design outputs. Design outputs are living information such as specifications, engineering drawings, recipes, formulas, and bills of material. Since they are living, they are subject to revision, meaning they are documents.

·         A handful of requirements would be virtually impossible to have evidence of without records, and yet records are not required by ISO 9001:2015. These include context of the organization (4.1), interested parties (4.2), planning of changes (6.3), and customer feedback (9.1.2).

·         One of the strangest record issues of all is the omission of calibration records in ISO 9001:2015. This has been replaced by the requirement to ‘retain information on fitness of purpose for measuring instruments,’ which would include calibration. I expect many people implementing ISO 9001:2015 will get a bit confused by this. 

Do not let anyone tell you that the “correct” terminology is retained documented information. If you like that term, then by all means use it. If you prefer the term ‘records,’ you can use that in its place. Always remember that documents are records are two different things. That one fact alone will make any QMS easier to use and understand. 

Nobody believes in communication more than Darryl Keeler. As President of Tech Systems Inc., communication is possibly the single biggest part of his job. After all, Tech Systems Inc. (www.techsystemsinc.com/) is security systems integrator with employees in over 32 states, Canada, and Puerto Rico. Being a medium-sized company with business across such a wide geographic has its challenges. Darryl Keeler long ago decided that robust and continuous communication needed to be a guiding principle. “Communication is the key factor in maintaining a high level of employee satisfaction,” Darryl assured me. “And satisfied well-informed employees ensure that we have highly satisfied clients.” Darryl personally writes the Friday Finale, a company newsletter summary that ends each week and which goes out to every employee. It maintains a warm touch, covering birthdays, work anniversaries, and anything personal of importance that is happening with teammates. It also addresses business updates from the previous week. TSI Family Emails (TSI stands for Tech Systems Inc) is their way of communicating items that are of high importance to the entire company, sort of “red alert” emails. These include process changes, policy changes, and major customer developments. The TSI Family Emails are one step beyond the Friday Finale’s in terms of business importance. The Tour De Focus is one of the company’s most impressive communication processes. This is where Darryl Keeler travels around the country and meets with every company employee. He simply sits down and asks for comments or opportunities for the company to improve based on individual opinions.  These are all captured and recorded, and the leadership team works through all of them and gets back with the folks who suggested the improvements.  This entire list is posted on SharePoint for everyone to review, and the ideas always number in the hundreds. The employee portal is the live repository of information that team members use for their jobs. Only the most current versions of documents are available, and it also includes phone lists, updates, tutorials, and training materials. Finally, the leadership team of Tech Systems meets every Monday to go over financials, hot company topics, and opportunities for improvement. The Monday meeting also serves as the primary feeder of information into their monthly management review. Communication is clearly the oil that flows through the engine of Tech Systems Inc. And the president of the company, Darryl Keeler, is head mechanic and communicator. 

Goodbye, Quality Manual

Who loves their quality manual? Please give me a show of hands. Hmm, not much enthusiasm. That’s because the quality manual for most companies serves no other purpose than something to give to customers or auditors. Most employees have never seen or heard of their company’s quality manual. And yet it has been a required document of ISO 9001 since the standard was first published. That has changed in ISO 9001:2015. There is no mention of the words “quality manual,” and the only true leftover requirement is that you have to document your quality management system (QMS) scope. I expect that many companies are going to drop their quality manual altogether now that it’s no longer mandated. But wait! Let’s re-imagine the quality manual as a document that actually helps the organization. First of all, let’s get rid of the rehash of ISO 9001 requirements. Most quality manuals feature this, and the rehash constitutes 95% of the words included. If you want to see what ISO 9001 says, get a copy ISO 9001. The quality manual should be completely focused on the company, period. Secondly, let’s think of the quality manual as a sort of “User Guide for the company’s QMS.” What would an employee or interested party need in a user guide? Well, let’s provide the following:

• Structure and contents of the management system 
• Road map to lower-level documents within the system 
• Company history and background 
• Overall process flow of the organization 
• Company’s products and services described in a clear, practical manner 
• Organization’s strength and capabilities 
• What to expect during an audit and how to prepare for one 
• Responsibilities and authorities of key personnel 
• The scope of the QMS 

Some of these items have always been included in quality manuals, and others are new additions. The point is to assemble all the high-level content that people need to know into one consolidated location. This could be accomplished in 3-4 pages at the most. Since it’s so lean and streamlined, employees might actually see value in using it. The quality manual could truly become the gateway to your company’s management and business systems. Now we’ve got something useful. But let’s drop the name “quality manual.” Any thoughts for what this information should be called?

ISO 9001:2015 has been approved

The ISO 9001:2015 ballot has been approved. There were 75 approvals, 0 disapprovals and 5 abstentions (Canada, Honduras, Kazakhstan, Luxembourg, and Qatar). It is planned at this time that the standard will show a September 15, 2015, publication date and it is scheduled for release on September 23, 2015. (On schedule)

Problem causes versus problem symptoms

This segment addresses the differences between problem causes and problem symptoms, their relationship, and the nature of actions taken to address both.

What is problem solving?

This segment is entitled "What is problem solving?" and it provides a basic overview of problem solving, including the nature of causes, the fallacy of a single root cause, and the need to match corrective actions to the most significant causes.

Santa’s Customer Survey

What an exciting time of year! Yes, it’s exciting because it’s Christmastime and all, but it’s also because we’re doing something we’ve never done before. You’re probably asking, “What could a worldly and sophisticated fellow like Santa Claus never have done before?” Why, implement a customer survey, that’s what.

I admit it sounds a little odd. Santa brings joy and happiness, right? Right! That’s the way it’s been for hundreds of years. I had a 110% customer satisfaction rating. Not that I actually asked anyone, it was just one of those things I knew. Everybody knew. Santa Claus topped the JD Power list before J.D. Power was even born.

Lately things have changed, though. People are so demanding. Gimme, gimme, gimme! I blame it on video games and a lack of exercise. We’ve even started getting complaints. That’s right, complaints. Who on Earth would file a complaint against Santa Claus? Crazy, right? Well, it has happened more times than I would like to admit. I’ve heard it all: “I didn’t get what I wanted,” “The toys seemed cheap,” “It didn’t come with batteries,” “I wanted money,” “Jewelry is what really grates my cheese.” I even got a complaint from a guy who said I didn’t leave a present for his girlfriend, and he was married to someone else! I’m telling you, people have gone nuts. Nuts or not, they’re my customers. That’s the bottom line.

So, complaints were becoming an ugly fact of life at the North Pole. My head elf, Horatio, and I were sorting through complaints one night when he said something that really grabbed my attention.

“Handling complaints is a mug’s game, old man,” Horatio said. “We need to get ahead of the curve.”

I set down my mug of eggnog and squinted at the little devil. “What are you talking about?” I growled.

That’s when Horatio gave me one of my most important lessons of my long life. He said we’d never succeed just by trying to deal with complaints. We needed to be proactive. When I heard that, I felt like busting him into Saint Patty’s Day. After all, I’m the King of Proactive. How could I possibly pull off Christmas Eve without being proactive? Gimme a break. But I had to admit that I wasn’t proactive when it came to customer feedback. I assumed that everyone who didn’t complain was satisfied. Horatio said that for every complaint we received, there were probably hundreds of other people who had a complaint, but didn’t bother to tell us about it. He said that we needed to reach out to our customers and find out what they thought, and take action on their perceptions before they ever had a chance to complain. At first, all this MBA mumbo-jumbo just made me mad.

“I’m Santa Claus!” I bellowed. “Isn’t that good enough?”

Horatio looked me dead in the eye and said, “The Easter Bunny is kicking our butts. Heck, even the Tooth Fairy is gaining ground on us.”

It turns out that these jokers already had customer surveys and focus groups. And their objective was overtaking us in customer loyalty and brand recognition! We had targets on our backs and I didn’t even know it.

We had to act fast. Horatio and I made plans to begin working on a survey the very next morning. We convened my Executive Elf Council at 8 o’clock sharp. The first thing we did was brainstorm service attributes that our customers cared about most. Horatio cautioned us that we couldn’t ask about every possible service attribute. If we did, we would end up with a 100 question survey that nobody would bother to complete. We had to focus our survey questions on the few important drivers of customer satisfaction. The trick would be identifying these few important drivers.
The elves brainstormed dozens of issues related to customer satisfaction. The issues ran the gamut from my rosy cheeks to where the reindeer relieved themselves. I counted up the ideas and was dismayed to find that we had brainstormed over 60 issues. Clearly, not all of these were created equal; we would need to prioritize. Horatio led us through a voting exercise whereby each elf had three votes to assign to what they believe were the three most important issues. And guess what? Nobody could agree on what were the most important! The votes were all over the map and we hadn’t succeeded in prioritizing anything. What did you expect from a pack of elves? We were at a standstill.

"Let’s take a break,” Horatio said. “Everybody get up and stretch your legs. We’ll reconvene in ten minutes.”

The break was a good idea, as it relieved a lot of tension. Have you ever seen a North Pole elf get tense and frustrated? It’s an ugly thing, I promise you. I spend at least half my time dealing with elf problems. After everyone had cleared out of the conference room, Horatio called me over.

“It’s time to use some data,” he said. “Do you still have all the letters sent to you from children?”

“Of course,” I said. “They’re in the big file cabinet in my office.”

“Great. Give me a hand,” Horatio said.

We carried 2 years worth of letters to Santa into the conference room. When all the elves had returned from the break, Horatio divided us into 5 groups. Each group was given a stack of letters. The task was to scan through each letter and see if it included any feedback. Most of the letters just asked for things, of course, but a few included some ideas for improvement. We tallied up the feedback and consolidated them into categories. Once we did this, the most important drivers of customer satisfaction became clear:
• Jolliness
• Generosity
• Communication
• Santa’s lap

That last one seemed a little strange, but it came directly from our customers. I guess that’s the value of using real data to develop your survey, instead of just guessing at what your customers care about. Horatio said we could easily create a survey based on these satisfaction drivers. He suggested a simple question followed by a four-point scale. The scale would represent the best and worst possible responses on each end, with two additional points at equal intervals in between the extremes.

“Santa, would you care to use your poetic wit to create some survey questions for us?” Horatio asked.

“It would be my pleasure,” I said.

Within a few minutes I had dashed off four concise questions:
• How would you rate Santa’s overall mood?
• Did Santa give you everything you wanted?
• How easy was it for you to communicate with Santa?
• Did you sit on Santa’s lap this year? If yes, how would you describe the experience?

All the elves agreed that the questions accurately represented the four main issues. The elves, led by Horatio, developed a customized scale for each question. We all smiled with a sense of accomplishment. I was just about to suggest a big bowl of eggnog, when Horatio said, “We’re not quite finished.”

You should have heard the chorus of boos and catcalls that rose up from that motley gang of elves. I thought I was going to have to spray them down with a garden hose, when Horatio soothed everyone with a wave of his hand.

“Calm down,” he said. “It’s no big deal. We just need a couple of open-ended questions to put at the end of the survey.”

Horatio explained that no matter how good a job we did at identifying the key drivers of customer satisfaction, we didn’t address everything. There were bound to be some issues that customers cared dearly about and which weren’t even on our radar screen. A couple of open-ended questions would enable customers to add anything that they thought was important to them. Horatio suggested two simple questions along the lines of “What did you like most” and “What did you like least.” They sounded fine to me. My cyber elf typed up the whole survey, which stretched to a whopped three quarters of a page long. Nice and tight, as I like to say.

I told Horatio that we would mail it out right after the first of the year, using the addresses in my Rolodex. Horatio just laughed. He said we needed to use technology: our website, email, virtual focus groups. It would be cheaper, easier, and faster. Horatio said we didn’t have the luxury of time, and from what I saw from these complaints I believed him. We needed to make improvements now.

The first of our electronic surveys have gone out and we’re already getting some great feedback. Review of customer feedback is one of the key agenda items during our weekly North Pole staff meeting. We go over each survey, discussing what people like and don’t like. At first I wanted to take action on every single comment. That’s when Horatio pulled back the reins.

“Whoa there, big boy,” he said. “Let’s focus on the important few, not the trivial many.”

Turns out that Horatio had been reading a W. Edwards Deming book. Now I’m reading it. If you want to know anything about the Pareto principle, you just talk to your ol’ friend Santa Claus. I’ll get you squared away.

Anyway, we prioritize our feedback and select at least one issue to take action on at every staff meeting. A team is assembled to come up with an improvement plan. We track process improvements through our corrective and preventive action system. That’s another new thing we developed. It’s just a simple database that applies project management to problem solving and process improvement. We enter the issue into our system, assign a champion, appoint team members, agree on a due date, and track the action all the way to completion. At the beginning of each staff meeting, we review open corrective and preventive actions. When elves and reindeer know that I’m going to hold them accountable, our improvements never slip through the cracks. A good dose of follow-up always ensures success.

Of course, anything that looks or smells like a complaint jumps to the front of the line. We handle complaints immediately like we always have. The difference now is that complaints aren’t the only tool we use for feedback. We’re addressing perceptions long before they have a chance to turn into complaints. Complaints are an important feedback tool for our customers, but the proactive feedback we’re capturing on our survey is even more important. It’s the engine that drives our improvement machine.

You’re probably wondering about the improvements we’ve made, and I don’t blame you. Here are just a few:
• I now attend jolliness refresher training, just to sharpen my game. I don’t want anybody to say I wasn’t jolly, dammit.
• I’ve established a toll free phone number that is staffed with elves 24/7. This should make it easier for kids to get in touch with me.
• We repainted my Santa Throne a nice white color, like vanilla ice cream. I learned that the fire engine red throne was intimidating to some children.

I can’t tell you how much we’ve learned from our survey. One of the many valuable lessons is that customer sometimes have unreasonable expectations of what Santa can and will do. We’ve begun a PR campaign to calibrate expectations. When our customers know up-front what to expect, they tend to be much happier in the long run. For example, we’ve had to educate people that Santa does not bring money, drugs, alcohol, tobacco, guns, or items of a sexual nature. This is a kid’s program, for goodness sake! You would think that people would have a little common sense, but you know how that goes. We explicitly state our limitations right on the website for all the world to see. Just click on the tab that says, “Stuff that Santa Doesn’t Bring.”

Another thing Santa doesn’t do is bring presents to naughty people. Trust me, I know who’s been naughty. We have some state-of-the-art technology that can detect naughtiness from half way around the world. Horatio pointed out that the term “naughty” was a bit vague. Now we clearly define the actions that could lead to a judgment of naughty. There are no surprises, but here are just a few to give you a flavor for what Santa doesn’t appreciate:
• Cruelty to animals or children
• Lying
• Cheating
• Stealing
• Relying on others to do what you should do yourself
• Voting Democratic

Ho, ho, ho! That last one was a joke. Don’t anybody get bent out of shape; Santa has a right to be funny every now and then. The lowdown is we have a list, so if you want a present from Santa don’t be naughty. And don’t send me an email asking for sex toys or a big fat spliff. Even asking for these things can get you bumped into the category of naughty.

We have even more plans for next year. My idea is to leave a little comment card in every stocking. The card will ask everyone to go to my website (with parental supervision, of course) and leave feedback online. Before Christmas Day is even half-over, we’ll have thousands of feedback entries. Horatio is going to write a computer program that slice and dice the feedback in every imaginable way. He has all kinds of wild ideas for statistical analysis, but I told him, “Santa wants it simple. Give it to me in pictures, little fellow.” So Horatio also plans on boiling the trends into some simple charts and graphs that even an old fat man in a red suit can understand.

So, would you like to see our customer survey? I would value your comments on it. We’re constantly trying to fine-tune our feedback tool so we get the right information. We could ask 100 questions, but the key to success is keeping it short and sweet. Let us know what you think, and of course feel free to provide some feedback on my performance in general. Like our Quality Policy says, we’re dedicated to providing a profound, positive, and memorable Christmas experience, while continually improving our performance. Those aren’t just words on the North Pole conference room, they’re the beliefs we live by. Oh, and if you leave cookies for me this year, please note that I’m especially partial to Do-Si-Dos from the Girl Scouts. Leave out a plate of those babies and I might just overlook some naughtiness!

Product Certification: Developing Meaningful Programs

Product certifications have exploded in recent years. Products ranging from pine lumber to children’s toys carry some sort of certification, and the organizations issuing certifications are as diverse as the products themselves. What are the practical values of these certifications? What are the pitfalls and limitations? In this article I will explore these issues and propose some recommendations for a product certification program that is meaningful and helpful to consumers and producers alike.

The changing marketplace

The variety and sophistication of products that are available to the general public has exploded in the last half century. Products that would have been considered extravagant or even unimaginable are now commonplace, available day or night at the local big-box retailer, or delivered by a brown UPS truck. Automation of manufacturing methods and the reduction of variability have driven down product costs, and improvements in logistics have moved products to consumers in every corner of the world. The range of manufactured goods has never been broader or more impressive.

With the increase of product variety and sophistication, consumers have more exposure to information about product attributes, performance properties, and potential dangers. The growth of information technology and the increased velocity of the news media has helped educate consumers, establishing an awareness of what products can and should do under conditions of actual use.

Risks that were once unknown or well-concealed are now widely communicated. The communication of risks runs the gamut from scientifically verifiable to the blatantly fabricated. Most consumers don’t possess the technical background to discriminate between the real and the imagined; they only know that a product is reported to have risks and this perception affects purchasing behavior.

Another factor that influences consumer behavior is the litigious nature of society in the United States. If a product doesn't perform as expected or causes injurious results, civil action may be brought to redress losses. Lawsuits may be filed against the designer, manufacturer, distributor, or seller of the product, often with the only consideration being who has the deepest pockets. Information about products risks or dangers, even if inaccurate, can form the basis for legal action. Lawsuit judgments frequently run in the millions of dollars and outcomes of this sort can easily destroy a company.

Consumer behavior aside, some products carry with them inherent and irrefutable risks. Aircraft components and parts must be certified to ensure their reliable performance over defined time frames. Any product failure while in flight can have disastrous consequences, so the product’s performance must be known with a high degree of certainty. Other products have similar safety risks. Notable examples include electrical appliances, children’s toys, pharmaceuticals, and medical devices. Many of the programs associated with known safety risks are administered by government agencies on behalf of the public.

Safety is not the only concern of consumers. Other concerns span the range of human emotions and interests, and they vary greatly from person to person and from region to region. These include the following, to name just a few:

• Environmental impact
• Exploitation of workers and social responsibility
• Exploitation of animals and animal testing
• Energy efficiency
• Use of renewable energy
• Material reutilization and use of recycled components
• Antimicrobial effectiveness
• Recyclability at end of product life
• Ergonomic performance
• Sustainable production processes

In the past, a product simply had to do what it was supposed to do. Expectations of products are much more demanding and complex now. Consumers come to the marketplace armed with a baffling array of concerns and agendas, and producers are left with the challenge of choosing the battles that will lead to reduced risk and long term success.

Product certification with credibility

In response to consumer concerns, producers have embraced the use of product certification systems. These systems provide assurance that a product possesses certain qualities about which consumers and stakeholders feel strongly. There are literally thousands of different product certifications representing almost every imaginable product attribute. The challenge for the consumer is know what makes a credible certification. After all, consumers make important product choices that affect their family’s health and welfare, so they need to be informed about certification claims. One certification seal looks just as official as any other; the magic is knowing what lies behind the seal.

There are five main elements that comprise a credible product certification program:

• Openness
• Objectivity
• Quality management system
• Competent personnel
• Accreditation

Let’s examine each one of these and discuss what they mean in practical terms.

Openness

This is exactly what it sounds like: equal and open access to the product certification. A reputable certification scheme must be available to all organizations that produce the applicable products. The certification can’t be contingent on financial inducements, group memberships, or geographical location. The certification should be available to all products that meet the certification criteria, and any organization can apply. This can be contrasted with the following examples:

Join our club. “Sure, you can apply for product certification, but you have to become one of us first. Join our club, pay the dues, support our causes, and we’ll certify your product.” A scheme of this sort has nothing to do with the product attributes and everything to do with building a membership base in an organization.

Pay to play. It is entirely reasonable for a certification body to charge application fees and recover its product testing costs. Nothing in the world is free, and even nonprofit organizations need to develop a revenue stream. What is not reasonable is to require payoffs to obtain certification. Pay-to-play systems like this have no technical merit and exist only to line the pockets of the certifying body.

Only locals need apply. Some product certifications exist as a form of boosterism for a country’s products. Boosting a country’s products is a role of economic development agencies and public relations firms, not product certification. Product certifications that are contingent on geographical location are inherently closed to many products that might otherwise apply.

Objectivity

Objectivity is the cousin of openness. Objectivity means that all products are treated the same way with regard to certification. The same criteria are applied to everybody, and all products are evaluated in the same manner. One of the biggest things that compromises objectivity is money. When the product certification scheme exists solely as a way to make money for the certification body, then you can be sure that the scheme is not objective. Here are some common examples of nonobjective product certification systems:

In-house certification. Companies occasionally develop certification programs for their own products. No other products need apply. How could a scheme like this be considered objective? It isn’t. Nobody certifying its own products can maintain any level of objectivity or impartiality. It’s analogous to judging your own child in a talent contest.

Take my advice. “So, you’d like to obtain certification? Let us help you! We not only grant certification, we offer consulting and advice for companies working in that direction. If you sign up for our consulting program, we feel confident that your products will pass certification.” A product certification like this is nothing more than a back door to selling services. There’s no objectivity, because naturally the certification body is going to favor the products for which it has provided services. A reputable certification body never offers consulting or assistance to organizations seeking product certification.

Quality management system

A credible certification body will have a functioning and effective quality management system (QMS). This system will include written procedures that guide its operations, defined responsibilities and authorities for personnel, clear criteria for certification, and systematic improvement processes. The point is that the certification body should manage itself in a controlled and methodical manner. There’s little credibility in a certification granted by an organization that can’t get its own act together. A quality management system based on ISO 9001 or ISO Guide 65 is recommended, and the certification body should consider having its QMS certified by an independent third party. Some of the symptoms of a certification body that does not have an effective QMS include the following:

• Delays in testing and certification decision
• Lost records and applications
• Misplaced product samples
• Problems that don’t get corrected
• Internal confusion and repeat errors
• Unreceptive to customer feedback
• Inconsistent criteria for product certification

One of the most valuable questions that can be asked of a certification body is, “What is your own quality management system based upon?” If the response is one of confusion, then you can be sure that there is no quality management system in place and the certification scheme might be a sham.

Competent personnel

For a certification body to have any credibility, it must be staffed by personnel who are technically competent in the area of the certification. This type of competency can’t be farmed out to other organizations. Essential in-house competencies include an understanding of the following:

• The product and its features
• Customer requirements and expectations
• Possible product failures and shortcomings
• Legal and regulatory issues applicable to the product

In short, the certification body is staffed with experts in the product. It is possible for the certification body to subcontract the product testing, but it can’t subcontract the technical competence of its people.

The certification body should have established requirements for the competency of its personnel, training on a defined basis, evaluation of effectiveness, and records of training. Only through the training of its personnel and continually maintaining their competencies can a certification body reliably make decisions on product certification.

Accreditation

Finally, a certification body should accredit its product certification scheme. The most widely applied accreditation criteria is defined in the international standard ISO/IEC Guide 65—“General requirements for bodies operating product certification systems.” Accreditation to ISO/IEC Guide 65 is granted by independent third-party organizations who themselves have demonstrated the ability to evaluate other certification bodies in a consistent and fair manner.

Many of the attributes recommended by this article would be difficult for a consumer to verify at a certification body, but one question will generally captures the spirit of all of them: “Is your product certification system accredited to ISO Guide 65?” Failure to go the final step and accredit the product certification system means a cloud hangs over any products certified by that body.

Don't Fail Your Customers with the 5 Whys

So you have a customer complaint. It’s not just any complaint, but a huge one from your biggest customer. The problem affects millions of dollars in business and threatens the survival of your company. Are you going to take action? Of course! You put together a team of top players and attack it head-on.

Team members investigate the problem and perform a detailed 5-Why analysis. They start with the problem statement and ask, “Why did that happen?” repeatedly, drilling down deeper with each iteration:

Problem: There were seven data errors in reports issued to our largest customer in the last month

• Why? Because lab reports are getting in the wrong project folders.

• Why? Because the project numbers are written illegibly on the folders.

• Why? Because the customer service representatives are rushed when preparing folders.

• Why? Because there are only two representatives taking calls for all divisions.

• Why? Because business expanded rapidly in the past year and management neglected to re-examine the work load of the customer service representatives.

After 5 Whys, the team has found what it believes to be the root cause of the problem: customer service representatives who are overworked. The team takes action to remove the root cause, which is the addition of a third customer service representative. A person is quickly transferred and trained, and the action is deemed effective by objective observers. A pizza lunch follows, including a congratulatory address by the president of the company. A week later, three more reports have data errors in them. Your company is dropped by its largest customer. Everybody was certain the problem solving was effective, but it obviously wasn’t. What happened?

Why the 5 Whys alone don’t work

Asking why one time after another assumes that the problem is perfectly linear, with one cause directly related to another. If we keep asking “why?” we’ll eventually get back to the root cause. However, real problems are much more complex than this. One cause does not always lead directly to another cause. There are contributing factors and hidden variables that mess up our ingenious chain of causes. If we try to treat every problem as nothing more than the result of a single chain of causes, we’ll miss the complexity that exists in the process.

The other reason that the 5 Whys is ineffective is that it focuses only on today’s causes. People enter the problem-solving process by asking, “In this exact problem that occurred, what was the chain of causes that led to it?” The 5 Whys ignore the causes of tomorrow. For problem solving to be truly effective, we can’t only consider the causes we know about now. We’ve got to consider the potential causes of tomorrow. The 5 Whys will expose some of the current causes, but it will rarely reveal potential causes. We need to consider the entire universe of causes: actual and potential, present and future, large and small, obvious and elusive. The key to uncovering this is gaining an understanding of the process that produces the problem.

Understand the process first, and then ask why

To address customer complaints in a thoughtful way, we must achieve an intimate understanding of our process. I don’t mean what the process should be; I mean what the process actually is. Whatever process is involved in the complaint must be described, step by step, as it is actually happening now. Existing procedures may not be much help to us in this regard. Procedures often describe how a process is supposed to operate, without any obstacles, surprises, errors, or creativity on the part of employees, but the world deals up all of these things on a regular basis.

Put away your procedure when investigating a complaint. Instead, assemble a team of people intimately knowledgeable about the process. The people you want are the ones who actually do the work and get their hands dirty. Utilize people from different perspectives: production, quality, engineering, logistics, and purchasing. Managers should be represented also, but their perspective is often woefully uninformed about the tasks and activities taking place.

Explain to your team that you’re working to address a complaint and you need to understand the process that results in the complaint. The team will create a flowchart for the process as it actually exists. This will lead to an exploration of causes, but only after we’ve gained an understanding of the process from start to finish. Here are the supplies you’ll need to facilitate a session:

• Flip chart

• Markers

• Large sticky notes

Plan on keeping your flowchart exercise very simple. Fancy symbols won’t help you understand your process any better. In fact, the only “symbol” you’ll use will be large sticky notes. Also, avoid the temptation to use a laptop computer or other electronic device to help you construct the flowchart. Creating the flowchart on a flip chart will enable all team members to crowd around and personally contribute to the process. You don’t want to introduce any barriers to the creative process. Computers, by their nature, relegate the majority of team members to observers, which is the opposite of what you want.

If possible, tell team members a day or two in advance that they’ll be making a flowchart for the process. Ask them to think about the various tasks, activities, and decisions that are part of the process. This way they’ll be well-prepared when the session begins and the team will use its time more efficiently.

Here are the key steps to constructing a flowchart that we can use in problem solving:

• Determine boundaries. Decide on starting and stopping points for the flowchart, and keep in mind that many problems originate on the periphery of the process. Make your starting point far enough upstream in the process to capture the early planning and logistics steps. Likewise, make the stopping point far enough downstream that you capture inspection, storage, and follow-up steps.

• Identify each step in the process. Beginning at our assigned starting point, identify the first step (task and decision) of the process. Write this on a large sticky note, writing only as many words as will fit. Continue doing this sequentially for each step in the process. Decide if each is a task or a decision, and put a “T” or a “D” in the lower right-hand corner of the sticky note to indicate this. It’s also helpful to write the decision steps in the form of a question to fully differentiate them from the task steps. Encourage participation and dynamic discussion of the process as a team. Anybody who attempts to dominate the process should be gently reminded to allow everyone to take part.

• Arrange the steps in order. Determine the sequential order of the tasks and begin placing them on the flip chart. The first step will go at the top, with subsequent steps flowing downward. As the team begins assembling the flowchart with the sticky notes, forgotten tasks and decisions almost always spring to mind. That’s the point of using sticky notes--they can be easily moved. Add new tasks as necessary and rearrange existing tasks until everybody agrees that the flowchart accurately represents the process.

• Connect the steps with arrows. Connect the tasks and decisions with arrows, indicating the flow of the process. Each task has a single arrow exiting it. Each decision has two arrows exiting it, with each arrow representing a different decision outcome. Make sure to label the arrows that exit the decision boxes indicating which answer to the decision outcome that they represent. The most common labels for decision arrows are yes and no, although they can be labeled with anything that makes sense in reference to the decision required by the decision box.

• Check for accuracy. No matter what kinds of preparations are made or how smart the team members are, there are bound to be errors with a flowchart. When the team is finished constructing the flowchart, verify it by “walking the process.” Take your flowchart to where the work is actually being done and check that you haven’t forgotten any steps or made errors in sequencing. Make corrections as necessary.

Identify causes

The big benefit of starting with a flowchart is that it forces us to consider the entire process, not just the parts that we know best or are most likely to be involved. The team can now begin to identify the actual and potential causes that occur at each step of the process. Start at the top of the flow diagram and brainstorm what could possibly go wrong and lead to our customer complaint. Instruct the team members to think about the following possibilities at each step:

• Mistakes that can be made

• Confusing tasks

• Incomplete instructions

• Conflicting goals

• Communication barriers

• Anything else that can go wrong

Cast a wide net as you speculate on causes. Hunches are OK, and no proof is needed. The spirit of this is the same as brainstorming: All ideas are treated as potentially significant, without criticism. Write each of the potential causes on the flowchart next to the steps to which they apply.

Another way to think about causes is to call them failures. Ask the question, “What failures could lead to our customer complaint?” Whether they’re called causes or failures doesn’t really matter. The point is be to as inclusive as possible, taking a full inventory of what could go wrong at each step of the process as it actually exists. At the end of the exercise, your team will have identified dozens of potential causes. Now it’s time to narrow the field.

Narrow the causes to the most significant

It’s unlikely that you have the resources to act on all the actual and potential causes. That’s why you have to narrow your focus. One of the easiest ways to do this is through a multiple-voting process. Each person on the team is assigned four votes to use for what he or she believes to be the most significant causes. Team members can cast their votes anyway they wish: placing one vote on each of four separate causes, placing two votes on two causes, whatever they decide. Choose a colored marker that is different from the ones used for constructing the flowchart and writing the causes. The votes can be cast as check marks beside the causes to which they relate.

After all votes are cast, the facilitator will tally up the number of votes for each cause. You’re going to take action on not one root cause, but on a number of significant causes that contribute to the complaint in question. How many causes should the team act on? There’s no magic number, but taking action on five to seven causes for relatively obvious problems and 10 or more causes for complex problems seems to work well. List the top causes, as indicated by the number of votes they received, on a separate flip chart. It’s helpful at this point to allow a brief discussion on each of the top causes. The facilitator can begin this by saying, “Who would like to say a few words about this cause?” The point is to bring everyone up to speed on each of the top causes. This builds a richer understanding of the causes and creates a basis for taking action.

Plan and implement action

Now we come to the most important step of all--action. Each of our top causes must be matched with an action that will remove it or reduce it to an acceptable level. The team will consider each cause in turn and agree on an action for it. Here are the specific variables that should be identified:

• Action to be taken. Be as specific as possible in defining the action to be taken.

• Responsible party. Who will lead the implementation of the action? Preferably, each action should be assigned to someone who has participated in the problem-solving session. Team members are invested in the process, due to their involvement up to this point, and they have an understanding of the process variables.

• Required resources. List the money, people, supplies, time, and other resources that will be required to carry out each action.

• Expected completion date. State when the team believes that the action can be completed. Because you’re striving to assign actions to team members, you can get commitment from each responsible party on the completion date.

Agree on a date when the team will reconvene and review the progress on action items. Let it be known that top management will be present during the review meeting. This will highlight the importance of making progress on the assigned actions. Team members don’t want to appear remiss in front of their peers, but they’re mortified to appear remiss in front of top management. Visibility and accountability ensure that nobody drops the ball.

Keep your customer abreast of the progress you’re making on the complaint. Because the actions were triggered by customer feedback, it only makes sense to provide some feedback of your own. “Here’s what we’re doing to improve our service to you,” sends a powerful message. It also cements the organization’s commitment to follow-through on the actions being implemented. The ultimate result of the entire process I’ve described is to create customer loyalty. Focusing on the entire process when attacking customer complaints, instead of just asking 5 Whys, will achieve this.

Defining the Problem

A few years ago, we had a mysterious scratching sound in our attic. My 5-year-old daughter was terrified, and everybody’s sleep was being interrupted on a nightly basis.

“We need to do something about the noise in our attic,” I told my daughter.

“No!” she cried. “Don’t go into the attic. It’s too scary.”

I talked to my daughter, and it was obvious that the vagueness and seeming enormity of the problem terrified her. She didn’t understand the problem, thus it was overwhelming. In my daughter’s mind, the sound in the attic could be bats, snakes, ghosts, vampires, or big hairy monsters. I took my daughter’s hand and gave it a reassuring squeeze.

“I’m a little scared, too,” I told her. “But if we can learn more about the problem, I bet we can solve it.”

My daughter seemed dubious, but she agreed to help me investigate the situation. We went into the attic with a flashlight, stabbing the beam of light into the dark and dusky corners. It didn’t take long for us to figure out the nature of our problem. We saw tiny eyes and furry little faces staring at us.

“They’re just squirrels,” my daughter giggled. “They snuck into the attic.”

“I guess the scratching doesn’t scare you anymore,” I said.

“No,” she said, “it’s not scary. We know what the problem is. It’s not scratching sounds; it’s squirrels.”

My daughter had made a profound discovery about problem-solving. She knew how to define a problem. Armed with that knowledge, she was prepared to help solve it.
We have to define exactly what the problem is. Big hairy problems are scary and unsolvable. We also have to move beyond the immediate symptoms of the problem and explore the deeper details. It’s OK to start with a big hairy problem, but we have to quickly sharpen our focus. Only then can we really understand what we’re facing and begin solving it.

The diagram in figure 1 illustrates the process of defining a problem. We start with the vague and symptomatic and move toward the specific and factual.



Specific details instead of symptoms

Symptoms (such as the scratching sound in the attic) are the raw materials of a problem statement, but they’re only the start. It’s usually necessary to do some preliminary investigation to determine exactly what the problem is. Just as my daughter and I went into the attic with the flashlight, you may need to examine your process, inspect products, talk to customers, and analyze data.

There’s a fine line between defining the problem and determining causes. In the attic example, one could argue that by stating the problem as “squirrels in the attic,” I actually began root cause analysis. Should we have backed up a step and stated the problem as “scratching sounds in the attic?” The issue is one of perspectives and how far we should push beyond symptoms. During problem definition, you generally want to get one step beyond the symptoms. Any more than one step and you’ve probably ventured into determining causes. One step beyond the symptoms, and we’re simply nailing down specifics; we’ll be much better prepared to take effective action when the time comes. The action we take with symptoms can be much different than the action we take with a well-defined problem. Consider the example in figure 2.


In both cases, we’re basically dealing with the same problem; we’re just choosing a different starting point. In the first example, we’re starting with the symptom as our problem statement, and this leads to drastically different solutions. In the second example, the problem statement goes beyond the symptom and gets specific.

Crafting a problem statement is one of the most important steps in problem-solving. If it’s done carelessly, the resulting problem-solving is doomed. Spend the time and the effort to nail down the problem statement in specific, factual terms. The process of developing a problem statement is an evolution in many respects, as illustrated in the diagram in figure 3.



Writing problem statements that move beyond symptoms is relatively easy. Simply define the facts along these angles, and you’ll have a workable problem statement:

• How was the problem first reported? This is the unfiltered problem statement, exactly as it came to you. In many cases it will be one or more symptoms, and it may not even be accurate. Problems reported by customers are often so brief as to be unusable, such as “no good” and “doesn’t work.”

• Who experiences the problem? Few problems are universal. Most only affect certain people, depending on a variety of factors. It’s important to know who experiences the problem. The people identified are usually the ones we need to interview to gain a deeper understanding of the facts related to the problem.

• What exactly is the problem? Here is where some preliminary investigation comes in handy. Find out what is happening beyond the raw symptoms. Take nothing for granted and attempt to independently verify all facts. If the problem was reported as “doesn’t work,” you will want to find out exactly what that means.

• When does the problem occur? If we can pinpoint when the problem is happening, we are much closer to understanding its causes. Interviews and data analysis are often key to determining the timing of problems.

• Where does the problem occur? Most problems are localized to a specific place or set of places. What those places are will often indicate the causes and dictate how the problem must be solved. Keep in mind that “where” can refer to a location within a facility or a location on a product (such as with a product defect).

• How often does the problem occur? Frequency of occurrence helps clarify the scope and magnitude of a problem. Armed with information about frequency, we have a much better idea of the resources that will be needed to attack the problem.

• Why does it matter? Problems never exist in a vacuum. For a problem to exist, a standard, requirement, or expectation must be violated. It’s very helpful to know what standard that is. Sometimes that standard itself turns out to be false and the problem simply goes away.

Eliminate bias

If we try hard to stick to the facts, we’ll likely have a problem statement that is free of bias and prejudices. We may believe the problem is that, “The idiots in the stockroom can’t manage their inventory,” but such a biased problem statement will not lead to any meaningful problem-solving. Check your problem statement by asking the following questions:

• Could anyone perceive something as a personal attack?
• Are any personalities specifically mentioned?
• Does anything sound biased or prejudicial?

If the answer to any of these questions is yes, then the problem statement must be revised before proceeding. The best problem statements make no assumptions; they simply document the current state.

Keep suspected causes out of the problem statement

Smart people like to get ahead of the ballgame. After all, time and resources are in short supply, so it makes sense to combine steps and increase your mileage. This approach often backfires when it’s applied at the problem-definition stage. People are tempted to write the suspected root cause of the problem into the problem description. In other words, they jump ahead and short-circuit the entire problem-solving process. It’s all well intentioned, of course, but it needs to be avoided at all costs. Take a look at figure 4. Anytime you see these words in a problem statement, beware of assumptions being made.



Now is not the time for guessing at the cause of our problem. We will do that at a later stage. All we need now is to define the specifics of our problem as factually as possible.

Methods for defining the problem

There’s a certain amount of investigation that must occur to arrive at the problem statement. The challenge at this stage is to simply determine the facts. Find the facts and write them clearly. If you do a good job of defining the problem from all angles, the remaining steps of problem-solving are often easy. The methods we’ll discuss include:

• Observing the problem yourself
• Interviewing
• Analyzing data
• Photographing the problem

Observing the problem yourself

This is the single best way to understand a problem. Find out where the problem exists and go see it yourself. By seeing the problem first-hand, the facts of the situation are not filtered through someone else’s perceptions.
The act of observation can mean a couple of different things:

• Actually observe the problem occurring. An example is running a machine that always overheats. We can start the machine and watch as it becomes hot.
• Observe the effects of the problem . An example is examining the motor of the machine that overheated. It may be impossible to watch the machine overheat (as it may be completely broken), but we can certainly observe the results.

Depending on the nature of the problem, one of these conditions may be impossible to witness. That’s often the case with direct observation. In the case of a plane crash, for instance, the problem can only be observed once. If you weren’t lucky enough (or unlucky enough) to be on the scene, then you couldn’t have observed it. This is why interviewing becomes valuable. You may not be able to observe the problem, but there are people who did observe it, and they will probably be willing to talk to you.

Interviewing

Interviews build on the symptoms that have already been reported. The interviewer must guide the interviewee through all the questions necessary to move away from raw symptoms and factually describe the situation. One of the challenges of interviewing is soliciting specific details. People often speak in broad generalities, but this is no help in developing a problem statement. Anytime someone describes a problem in absolute terms, you need to drill deeper and arrive at specifics. Some of the words to watch out for include the following:
• “Always”
• “Everywhere”
• “Everybody”
• “Completely”

When faced with absolute terms such as these, gently challenge the thinking of the interviewee. If the interviewee says that the problem happens all the time, ask him if the problem happens at midnight. If the interviewee says that the problem happens everywhere, ask her if it happens in the front office. Narrow the focus to what the interviewee really knows to be true. Make sure that the interviewee understands that you’re interested in hearing about his or her personal experiences, not a restatement of what he or she heard from other people.

You may encounter people with strong opinions about the problem. In particular, you are likely to hear speculation about the potential causes of problems. It’s nice that people want to be helpful, but what are needed are facts about the problem, period. Thank people for their help and steer them back to the task at hand. You may want to make a list of people who seem to have deep insights about the problem; we may be able to use them later in the “determine causes” step of problem-solving.

Analyzing data

Data are recorded information, typically in the form of numbers or measurements. Paradoxically, some of the most closely held beliefs are the most flawed. The old quality control adage is useful to keep in mind as you define your problem: “In God we trust. All others must bring data.”

Data generally fall into two categories:
• Primary data. These are data that are collected for a specific purpose, such as problem-solving. These data didn’t exist until we began collecting them.
• Secondary data . These are data that already exist. They have been collected for some purpose unrelated to the problem that we’re facing, but we can still use them.

Whenever possible, you should make use of existing data (i.e., secondary data). It relieves you of the burden of collecting your own data and enables you to focus on the analysis, which will help shape your problem statement. Most organizations are not lacking in data; they just need to be located, organized, and analyzed.

Photographing the problem

A photograph can communicate complex information at a glance. It can also put you on the scene of the action, in cases where it would be very expensive or logistically impossible to see the problem yourself. Even if you are able to see a problem first-hand, a photograph can help you communicate it to others in a way that words can’t. The beauty of digital photos is that they can be shared instantly, considerably expanding the range of problem-solving.

When photographing a problem, keep the following points in mind:

• Get permission to take photographs. This is needed when you are on someone else’s property, such as that of a customer or supplier. Some organizations are very sensitive about the presence of cameras.

• Photograph from different angles and perspectives . Just as you want different viewpoints with your interviews, you want different viewpoints with your photographs. A photograph with an unusual perspective can often reveal a detail that gets missed by many astute inspectors.

• Indicate the scale. Depending on the context, it can be difficult to know the size of something in a photograph. This is especially true with close-up photography. If there could be any doubt about the size of something being photographed, include a reference item (such as a penny) or a scale (such as a ruler) within the photo frame.

• Use a tripod for close-up photography. Most cameras are prone to produce blurry close-ups unless they are held very still during exposure. An alternative can be using a flash, but this often causes reflections and overexposures with close-ups.

Use a variety of methods to define your problem. Mix and match them with the objective of writing a problem statement that truly defines the obstacle. The output of this step serves as the input of the next step, so do whatever is necessary to produce a good product. A poorly conceived problem statement results in an effective solution only by luck.

High Impact Auditing

Internal auditing, the process by which an organization examines its ability to meet internal and external requirements, can be one of the most effective tools for triggering continual improvement. It can also be an expensive waste of time and a source of endless frustration and conflict. Which it becomes for you depends on how your organization plans and manages its audit system.

Auditing is not only a balancing act--identifying positive and negative aspects of a company’s performance--but also a planned activity, with auditors and auditees agreeing on the audit’s time, place and scope. Surprise audits are neither necessary nor desired. Internal audits generally use an organization’s existing personnel for the task, although outsiders are occasionally called in.

Internal audits offer huge benefits, both to the organization’s top management and the auditors. Top managers can:
* Discover what’s really going on within the organization, which allows for more objective decision making
* Learn of potential problems before they explode into issues that pose significant risk to the organization
* Ascertain where failures occur, enabling the containment of these problems and initiation of corrective action
* Identify where resources should be directed
* Determine how effective their training efforts are
* Learn which processes and personnel are particularly effective, which can trigger recognition

For their part, internal auditors:
* Gain exposure to other parts of the organization, which broadens their experience
* Are exposed to best practices they can implement in their own departments
* Learn how they contribute to the organization’s success, which increases motivation and employee retention
* Expand the organization’s competency and knowledge base through their experience

An effective internal audit system must work in concert with other systems, especially corrective and preventive action. An internal audit takes a snapshot of the organization, identifying nonconformities, opportunities for improvement and positive practices. Auditors don’t propose specific actions, fixes, solutions or recommendations. They simply identify where failures and successes occur. By their nature, audits typically identify more failures than successes, and these failures are called audit nonconformities.

Requirements vs. opinions

To identify a nonconformity, a requirement is needed. You might have a concern, remark or opportunity, but it’s not a nonconformity unless it’s clearly tied to a requirement, a fact that’s often overlooked.

Any activity, process or outcome that doesn’t meet requirements is a nonconformity. A number of sources, such as ISO 9001, inspection checklists, purchase orders and product specifications, could introduce specific requirements the organization must implement. The auditor’s opinions, notions, philosophies and personal experiences, however, don’t constitute requirements. When people audit with an eye toward driving continual improvement, requirements are sometimes “invented,” albeit usually with good intentions. One of the best techniques for ensuring audit nonconformities are written correctly is insisting that they’re structured in two parts:

Requirement--Exactly what the organization has committed itself to do

Finding--Exactly what the organization has or hasn’t done that contradicts the requirement

Objective evidence

Objective evidence is a factual recounting of what was seen, heard or experienced during the audit. Gathering this evidence takes the most time and effort.
It is recorded in the “finding” portion of the requirement and describes exactly how the organization failed to fulfill the requirement.
Objective evidence meets a number of criteria. Among other things, it’s:
* Not subject to bias or prejudice. Auditors can’t allow their personal feelings to influence their interpretation of the evidence.
* Traceable. As many identifiers as possible should be recorded (e.g., date, time, function, department, machine, customer, order number and product code).
* Expressed as simply as possible. Sometimes auditors will provide a paragraph or more of detail, thinking that more data will provide more convincing evidence. However, the objective evidence is best streamlined and to the point.

Objective evidence is stated in such a way that the first half of the nonconformity directly contradicts the requirement. Enough detail is provided to facilitate traceability--but not so much that it overwhelms. Auditees expect concise and clearly written findings.

Consider the following correct audit write-up:

* Requirement: The general manager stated that all employees are expected to understand the facility’s key measures and how to contribute to them. (Note that the requirement comes from the general manager’s statements, which function as requirements when he’s talking about something under his control.)
* Finding: Three out of five employees sampled randomly in the shipping department didn’t understand the facility’s key measures or how to contribute to them. (Note that the finding’s language mirrors that of the requirement, stating exactly how the organization failed to meet its commitment. The sample size is defined, and the location is also identified. Employee names, however, are appropriately omitted.)

Now look at this incorrect write-up:
* Requirement: All employees should understand key measures. (Note that it isn’t clear whether this is an opinion or a requirement. Where did this “should” come from?)
* Finding: Employees were ignorant of the organization’s objectives and strategic direction, and they were obviously unprepared to assist in continual improvement. (Note that here, the finding’s tone is subjective and accusatory. Sample size and other identifiers are omitted, which provides insufficient traceability.)
It generally takes a number of audits before an inexperienced auditor can confidently draw conclusions from objective evidence and write nonconformities clearly and concisely. Practicing the audit process with an experienced auditor is time well spent.

The system, not the people

One of the best ways to understand the system and its effectiveness is through people: how they receive and interpret information, carry out instructions, produce goods and deliver services according to requirements, and satisfy customers. Nevertheless, an audit must always focus on the system itself.

Some auditees might suspect that an audit constitutes a personal attack on their jobs, and auditors must be prepared for that reaction. They should calmly explain that the audit process is all about the system, put the auditees at ease and depersonalize the process as much as possible. If people are uneasy about the audit process, they won’t provide objective evidence, and the audit, in turn, won’t trigger continual improvement.

Does this mean people never screw up? Of course not. But when failures are identified during an audit, they’re system failures. Very few nonconformities occur due to willful employee misconduct. If someone makes a mistake or fails to carry out a job step, it’s usually because the system is flawed and error-prone. Fix the system, and people will have less opportunity to screw up.

Auditing strategic processes

Not all organizational processes have the same strategic significance. An internal audit system that’s oriented toward continual improvement will focus on strategic issues. Most management system standards such as ISO 9001 require that organizations schedule audits based on status, importance and prior audit results. This means organizational processes with more strategic importance will be audited more often.
The following audit questions reflect on processes that typically have high strategic importance:
* Customer satisfaction. What methods does the organization use to capture customer perceptions? How are data on customer perceptions reported and analyzed? Has overall customer satisfaction improved?
* Corrective and preventive action. Is there proof that root causes or potential root causes are being identified? Are actions taken to eliminate root causes or potential root causes? Are data on corrective and preventive actions reported and analyzed?
* Leadership. Has the organization determined its mission and strategy? Are organizational performance and direction communicated throughout the organization? Has top management led the review and action on key measures and other important information that indicates organizational success?
* Internal auditing. Do auditing schedules clearly reflect the strategic importance of processes and the results of previous audits? Does the organization’s management take corrective action on nonconformities raised by audits? Are the corrective actions effective, based on the evidence?
* Design and development. Are design inputs and outputs recorded and approved? Is progress against the design plan periodically reviewed? Is the design process’s output validated under conditions of application or use?
* Transformation. How is work planned and scheduled? What information guides work performance in general? How do employees receive feedback on their work? Do employees understand how their efforts affect key measures?
These audit questions are examples and might not be applicable to all organizations. Other processes could have strategic significance, depending on the organization’s nature and competitive environment.

Training auditors

Many audits produce poor results because auditors haven’t received proper instruction or been given opportunities to practice what they’ve learned. The organization must invest the necessary time and effort in making its auditors competent and confident before they’re assigned an audit.

Auditors must be familiar with:
* Practical interpretations of the standard adopted by the organization
* The audit’s purpose and how it drives continual improvement (i.e., by providing a balanced picture of the organization and triggering corrective and/or preventive actions)
* Phases of the audit and various activities within each phase
* Sources of audit requirements (e.g., the standard, procedures or sales orders)
* Methods of gathering objective evidence and drawing valid conclusions
* Diplomacy skills and effective interpersonal communication
* Audit role-playing under controlled conditions
* Writing nonconformities in the prescribed format
* Actual auditing with an experienced auditor

Auditor training doesn’t necessarily need to be formal or even classroom-based. The style and format of training will differ significantly from one organization to the next. However, auditors must have a conceptual understanding of the process and a practical grasp of techniques, both backed up by sufficient practice. When auditors truly understand their roles and responsibilities, the process should result in strategic continual improvement.

A successful audit almost always results when an individual takes personal ownership of the process. He or she must be able to carry out the following five complex and linked activities, which create strategic continual improvement.

Audit scheduling

An audit schedule defines the auditing that will take place during an extended period of time, usually six months or a year. The purpose of the schedule is to communicate when and where the audit team’s services will be needed, when the organization can expect to be audited, and what requirements will be included in the audit.

Audits scheduled far in advance always produce better results. Note, too, that the processes considered more strategically important to the organization are scheduled for audits more often. Processes and functions that have performed poorly in previous audits are also scheduled for frequent audits. Regardless of other considerations, all processes, functions and departments within the scope of the management system must be audited at least once a year.

The schedule can be keyed to organizational processes, departments, functions, facilities, an ISO standard element or something else. However, it must clearly communicate which audits are coming up and when. Audit schedules should provide enough detail to guide the overall process and help with the next step, audit planning.

Audit planning

An audit plan is focused, detailing a single audit’s scope, objectives and agenda. The plan provides a chronology of the audit from start to finish: which processes will be audited, exactly when they’ll be audited, who will do it and which requirements will be audited in each segment. Even details such as meetings, breaks and lunches are shown on the plan in order to clear up any timing conflicts between auditees and auditors and keep the audit on track.

Typically, the audit plan is distributed several days prior to the audit. Auditees often request alterations to the plan based on logical concerns and existing commitments. By all means, modify the plan to accommodate them. The one variable that usually never changes, however, is the audit’s scope.

Audit supervision

The audit’s on-site phase consists primarily of gathering evidence. The lead auditor takes part in this and also manages the overall process. These duties typically include:
* Leading the opening meeting
* Managing and communicating changes to the audit plan
* Ensuring that the audit stays on track
* Insisting that auditors remain objective, consistently evaluating all evidence
* Encouraging auditors to write up their findings during the audit to avoid a time crunch directly before the closing meeting
* Reviewing all nonconformities to ensure that they’re logical, valid and clear
* Providing performance feedback to audit team members so individuals can target areas for their personal improvement
* Resolving all conflicts constructively
* Apprising the auditee of the audit’s progress
* Leading the closing meeting
* Ensuring that the entire audit is conducted professionally and positively

If these duties sound difficult, it’s because they are. Many organizations have ineffective audit processes because the so-called lead auditor doesn’t understand his or her responsibilities. An accredited lead auditor course is a very good investment for individuals who function as lead auditors for their organizations.

Audit reporting

The first formal reporting that takes place during an audit is the closing meeting. The lead auditor presents a verbal summary of the audit, including positives and negatives. Depending on the audit’s size and duration, the closing meeting might last from 15 minutes to more than an hour. The meeting allows for back-and-forth dialogue between auditors and auditees. During the closing meeting, auditee management is presented with the written audit observations and/or corrective action requests, and these form the basis for discussion of the audit results.

Subsequent to the closing meeting (and occasionally during the closing meeting), an audit report is presented to the auditee management. This summarizes the audit’s overall themes and trends. Usually it’s written by the lead auditor, based on evidence gathered by the entire audit team. The report doesn’t belabor every audit observation because these should have already been addressed during the closing meeting. Audit reports should be as concise and streamlined as possible. Graphics such as matrices and Pareto diagrams are helpful.

Verification and closure

The auditee management is usually asked to respond to audit nonconformities by an agreed date. The response should include investigation into the root cause, proposed corrective action and a date when the action should be completed.

The lead auditor reviews the responses to determine whether the investigation and proposed corrective actions are adequate. This is the first stage of verification.
One of the most important jobs the lead auditor and auditing team can perform is a careful scrutiny of auditee responses. Accepting weak investigations and/or corrective actions does nobody any favors and certainly doesn’t trigger continual improvement. If a response doesn’t identify a plausible root cause or propose a corrective action related to it, the lead auditor must diplomatically reject the response and explain to the auditee why it’s adequate. The auditee is the audit process’s customer and should be treated with the same respect that any other customer would receive.

The second stage of verification occurs when the auditee notifies the lead auditor that corrective action has been implemented. At this stage, the lead auditor or a team member will verify that the corrective action has been fully implemented and the root cause of the original nonconformity has been eliminated.
Verification is sometimes performed by reviewing records or documents submitted by the auditee; alternatively, an on-site visit is made to review evidence in person. The nonconformity’s nature and significance will determine whether on-site verification is necessary.

Once all audit nonconformities have been addressed with effective corrective action, the audit is considered closed. However, this doesn’t mean it’s forgotten. A high-level discussion of audit results is an important input to the business review process, and audit trends influence resource allocation and strategic decision making.

Improving the Quality of Leadership

Leadership is the genesis of everything that takes place within an organization. From idea to launch, growth to maturity, decline to demise, leadership affects everything that takes place within an organization. Nothing is more important to success, and yet many organizations suffer from poor leadership because nobody understands what it is and how to practice it.

How do we define leadership? It’s the process of influencing personnel, strategy, decisions and activities to fulfill an organization’s mission. To some, this definition implies that people in most organizations won’t have the opportunity to lead, but that’s a narrow interpretation. Everybody has an opportunity to influence business excellence at some level. The more people who practice leadership, the stronger an organization will become.

Leadership is composed of four basic elements:
* Clarity--possessing a clear vision for the future
* Communication--passing along that vision in an understandable way
* Credibility--being worthy of trust
* Character--demonstrating the inner qualities that facilitate true leadership

Let’s examine each of these components, see what they really mean on a practical level and figure out how to put them into practice.

Clarity

The world offers countless variables and uncertainties. A leader can sort through these complications and point out a clear path to a company’s goals. As a result, people become less anxious about the future and more confident about where the organization is heading. Leaders can’t necessarily reduce uncertainty, but they can help others understand its aspects, which in turn will strengthen the organization to meet future challenges.

A leader’s clarity can reveal the following to an organization:
* Unique ways of securing resources
* Opportunities for success
* Threats and associated risks
* Insight into competitors’ actions
* Internal strengths and the best ways to leverage them
* Constructive evaluation of internal weaknesses
* Helpful alliances
* How events affect employees
* Objective analysis of internal performance

Clarity is an analytical process. Leaders who possess clarity can see relationships and solutions where others see only confusion. Granted, leaders often receive expert advice on various topics, but ultimately they’re the people who draw diverse information into a coherent whole. A leader’s clarity successfully drives the organization’s strategy.

The analytical strength required for clarity can be developed in much the same way that athletes perfect a skill. The requirements are the same for both: practice, hard work and discipline. Like athletes, leaders’ training programs never end. As long as they’re focused on providing clarity to their organizations, leaders must continually sharpen their analytical skills.

As a leader, how can you do this? Here are some practical steps:
* Avoid passive activities such as sitting in front of the television. Passive activities slow down brain activity and encourage analytical laziness.
* Read a wide range of material and avoid falling into ideological ruts. Leaders seek out books that don’t necessarily mirror their own thinking.
* Question pronouncements of fact, especially when they’re asserted by authority figures. Leaders verify facts for themselves and draw their own conclusions. Skepticism and curiosity are useful tools.
* Strive for a constant state of learning. This doesn’t necessarily mean taking formal classes, but make a point of cultivating new ideas and deepening your knowledge of old ones. This keeps your mind limber and strong.
* Stay physically fit. Fitness reduces stress and improves clarity. Mental fitness and physical fitness are closely related for most living creatures.
* Become an active listener. Simply listening to what people say can provide a great deal of clarity in itself. People who want to impress others talk often; leaders talk less and listen more.
* Pursue creative outlets of expression. Whether you enjoy oil painting or hedge trimming, be creative in your recreational activities. Such creativity will enhance your clarity during normal working hours.
* Embrace unfamiliar or uncomfortable situations. Learn to conquer your fear of the unknown. Leaders are masters of dissecting the unknown and making sense of it--and they don’t scare easily.

Get into the habit of analyzing facts from a unique perspective, drawing conclusions and making decisions. Don’t allow fear about the risks and challenges facing your organization to paralyze you. If a decision you make leads the company in the wrong direction, reverse course. “It’s common sense to take a method and try it,” observed President Franklin Roosevelt. “If it fails, admit it frankly and try another. But above all, try something.” These are wise words for all prospective leaders. As long as you can learn from your mistakes, they have value.

Communication

The best leaders are often known as great communicators. Communication is the vehicle by which a leader’s clarity is shared with the rest of the organization.
A leader communicates most effectively in person. Others are less likely to doubt their leader’s beliefs and commitments when he or she has the courage to voice them. Written policies, declarations, memos and e-mails can be effective but are best used as backups to a leader’s spoken words.

As with other aspects of leadership, communication skills can be learned. A number of distinct attributes characterize effective communication:
* It’s smooth, but spontaneous. A rehearsed speech often comes across as stiff and bureaucratic. Does this mean public addresses shouldn’t be rehearsed? No. In fact, leaders should continually practice and sharpen their communication skills, emphasizing a natural, free-flowing style.
* It’s appealing to each person. Leaders recognize that an organization consists of individuals. Everyone hearing the communication will inevitably analyze it in terms of how it relates to him or her personally. Thus, a leader helps each person understand why a course of action or decision is important.
* It’s convincing. Leaders must really believe in what they say and provide specific examples. The message then becomes personal, delivered directly from the heart. Everyone listening to the leader will understand why the message is relevant.
* It’s free of errors. Nobody’s perfect, but leaders in particular must get their facts straight before they speak. The communication should be grammatically correct, coherent and factual. A wise leader enlists the help of competent proofreaders and fact-checkers before communicating.
* It’s concise. A smart leader keeps his message streamlined. It’s worth noting that Abraham Lincoln’s Gettysburg Address, considered one of the most significant speeches in U.S. history, is fewer than 300 words long. Now that’s concise.

Some people never develop clarity, but communication skills can be mastered with practice. Study communicators whom you particularly admire. Note the attributes that make them great speakers. Which of their traits can you cultivate in your own communications? Overcome your resistance and take every opportunity to practice in front of groups.

Credibility

Like beauty, credibility is in the eye of the beholder. One person might find a leader credible, while a different person won’t. Although neither determination is necessarily correct, both are legitimate because they’re perceived as such. Perceptions are facts--at least to the perceiver.

Leaders must acknowledge credibility’s capricious nature. Because no one is capable of universal approval, wise leaders will aim for a credible middle ground by appealing to a wide audience. Results and behavior both influence credibility.
Nothing builds credibility like positive results. Leaders who can demonstrate success inspire confidence and trust in others. Positive results particularly impress when they relate to an endeavor the organization is currently pursuing, but a leader can garner credibility from an almost limitless list: new products, gained market share, games won, goals scored, donations received, legislation passed, etc. In fact, successful leaders often move from one field to another--for example, a trusted business leader who wins an elected office. Even without political experience, business success lends credibility to the new endeavor.

Past results might get a leader in the door, but the ability to consistently achieve results sustains credibility. Leaders must take actions that produce positive results, and they must let everyone know about them. These announcements should be low-key, factual and generous in acknowledging others’ roles. The point is not to brag about achievements but to maintain credibility and prepare for continual positive results.

Leaders’ behavior is constantly scrutinized. Every action is analyzed for flaws and errors that cast doubt on their credibility. Although this isn’t particularly fair, it’s a fact leaders must understand and manage. They’re held to a higher standard than everybody else.

People have vastly different standards for what constitutes appropriate and inappropriate behavior. Behavior that can damage credibility includes the following:
* Illegal activity. Sometimes even an unsubstantiated charge is enough to damage credibility.
* Sexual indiscretion. This includes extramarital sex, aggressive flirting, suggestive remarks and blatant interest in pornography.
* Recreational drug use
* Excessive alcohol consumption. Depending on the environment, even moderate consumption can harm credibility.
* Offensive or insensitive language. This includes dirty jokes, profanity, derogatory statements, insults and racist remarks.
* Self-serving decisions and actions
* Lying and spreading misinformation
* Inconsistent or unfair treatment of subordinates
* Indecisiveness
* Irreverent or sacrilegious actions
* Tattoos, body piercing or unusual hairstyles
* Frequent emotional outbursts
* Unorthodox hobbies
* Unusual viewpoints
* Flamboyant dress

Obviously, not all of these are equal in import. Some are legal issues, others moral or ethical, and some simply matters of personal choice in a free society. However, they can compromise credibility, depending upon the observer. Leaders must decide whether their behavior will harm their credibility. Some of the items listed are private issues, but keep in mind that they, too, can affect credibility. And credibility affects that most elusive of leadership qualities: character.

Character

Character consists of those inner qualities that guide and motivate us. Strong character enables leaders to choose the right fights, make the right decisions and reach their goals. While credibility focuses outward on other people’s perceptions, character concerns internal qualities that only the leader and his or her closest confidants can really perceive.

Like other elements of leadership, character can be studied and improved. It’s the most difficult element to change, though, because much of it is hardwired into a person’s psyche. Many leaders act upon character qualities without realizing it. Character resides in the mind and heart, operating on both conscious and subconscious levels.

Character revolves around three basic components: leading for the right reasons, acceptance of responsibility and humility. Let’s look at each of these and explore how someone might use them to develop their own leadership abilities.
People have a wide range of reasons for wanting to lead, and not all them are good. The best leaders want to lead because they believe they can raise their companies to new levels of success and in doing so, benefit everyone in the organization.

Exceptional leadership focuses outward and concerns what the leader can do for the organization. Of course, leaders are often well-compensated for their efforts, but the compensation isn’t why they wish to lead. They’re dedicated to excellence and improving the lives of those around them. Does this sound contrary to the way many leaders behave? Unfortunately, it is.

Consider some of the right reasons for leading. These include:
* Carrying out a positive vision for the organization
* Reducing organizational risk
* Ensuring long-term survival
* Making improvements
* Outperforming competitors
* Removing obstacles
* Enhancing clarity and creativity
* Helping the organization’s mission evolve as the company grows
* Holding oneself to unimpeachable standards
* Challenging oneself to be the best
* Providing a positive future for one’s family
* Being a role model

Some of the wrong reasons to lead include:
* Stroking one’s ego
* Impressing people
* Getting rich
* Settling scores and acting on grudges
* Fulfilling a sense of entitlement
* Elevating one’s social status
* Enjoying special perks and privileges
* Benefiting a subset within the organization
* Helping friends at the organization’s expense
* Imposing extreme ideologies contrary to the organization’s mission
* Attracting members of the opposite sex

Only the leader truly knows the reasons for his or her desire to lead. Others can speculate, but all leaders must look within and honestly appraise their motivations. If they fall into the “wrong reasons” column, leaders must seriously evaluate their fitness to lead. When these negative motivations manifest themselves in a leader’s behavior, credibility is damaged.

Responsibility

No greater responsibility exists than leading others. Many people rely on leaders and their ability to assess situations fairly and accurately. Successful leaders understand and accept this responsibility. It might sometimes require them to make decisions that don’t necessarily benefit themselves but that will benefit the organization. True leaders are no strangers to self-sacrifice.

An eye-opening exercise for leaders is to list all the people who depend on them: employees and their families, suppliers, customers, stakeholders and others. Any leader who isn’t humbled by this exercise hasn’t fully grasped the depth of the responsibility involved.

Leaders are responsible not only for the people they lead but also for their own actions. Many leaders ignore this responsibility, however, and become detached from the ethics of their own actions. In their minds, they’re bigger than life. Their actions become less important than pursuing their objectives. Failing to act ethically eventually derails them. For this reason, humility is another attribute that leaders must cultivate.

Humility

Leaders are not perfect. Even the best have flaws like everybody else. This is a fact, though you wouldn’t know it from the way many leaders act. They’re showered with money, perks, privileges and praise, and they begin to think they must indeed be perfect to merit all those rewards. This means trouble.

All leaders must have a healthy confidence in their abilities, balanced by a sober understanding of their own failings. A leader’s strengths won’t shine every day of the week. Leaders are only humans, not deities; they’re stuck down here with the rest of us.

Leaders who lack humility will exhibit a number of dangerous traits, such as:
* Denying facts that run counter to their policies
* Reluctance to take advice
* Selective data interpretation
* Exhibiting anger toward views that challenge their own
* Unwillingness to change course, even when evidence suggests the need to do so
* Cultivating sycophants
* Discouraging risk-taking and the entrepreneurial spirit
* Willingness to lie and deceive in order to bolster their positions
* Inability to laugh at themselves
* Lack of accountability for their own behavior

Leaders who lack humility will eventually destroy their organizations. In the short term, they might propel their companies to outrageous heights, but inevitably hubris will plunge them, and those counting on them, into chaos. Mark Mendenhall of the University of Tennessee at Chattanooga refers to this phenomenon as the “Icarus paradox,” after the figure in Greek mythology whose wax wings melted when he flew too close to the sun. All leaders must fear the sun’s effects on their own wax wings.

Hubris is a poison that spreads from the leader and infects the entire organization. Smart, independent-thinking people defect, leaving only “true believers” or those too tired to fight. The healthy dynamic of dialogue and debate disappears, and the organization becomes stilted and inflexible.

Every leader must guard against this. How? Luckily, the same activities that breed clarity also tend to generate humility. True wisdom, which is the pinnacle of clarity, recognizes how little one really knows. When a leader begins to perceive this, humility follows naturally.

The leader’s journey

Leadership represents a lifelong journey. It must be pursued with discipline, persistence and great personal strength. Mastering clarity, communication, credibility and character are the necessary first steps. Integrate these qualities into the activities you face daily. If you consistently practice them, you’ll grow into a true leader, and your organization will achieve many of its goals as a result.