Rumors are flying around the Internet that British Petroleum is considering removing Tony Hayward from the company’s top post. Apparently investors like the idea, as BP’s stock price has steadily risen since the rumors began.

People may feel like it’s a good start, as Hayward seems to have become a greater liability than an asset to the oil giant. However, one grand, symbolic gesture — one more sacrificial lamb — doesn’t get to the root of the problem. We have much further to go. Hayward is at the top of the company but the failures that led to the oil catastrophe have not nearly been all his or his company’s doing.

BP’s failure was part of a systemic failure: there is plenty of blame to go around. Rather than blame everybody (which helps no one), we have to correct the system in which this fiasco occurred or devise a new system.

Where to start?  We might take care of the problem this way:

• Compile lessons learned and share them with the industry.
• Rewrite industry (and other) standards to put a greater emphasis on safety.
• Enforce existing regulations before writing new ones.
• When writing a new bill (and this goes to any bill, not just those dealing with oil and gas), the legislature cannot be allowed to hide laws by combining them, related or not. One bill for one issue.
• Spend money on enforcement (i.e., hire qualified people, train them well, and pay them what they’re worth).
• Break up the MMS and organizations like it. The Materials Management Service has been responsible for gathering rights fees, etc., and they’ve been responsible for enforcing oil-and-gas-related statutes and requirements. Often, these two work at cross-purposes: as we saw, the MMS didn’t want to enforce laws that might put the brakes on revenue. Those functions have to be kept separate so there’s no confusion about what’s important.
• Restore “reinvestment in the company” as a business tenet. Paying out profits to shareholders and executives while infrastructure and technology lag isn’t sustainable.
• Fine anyone or any organization that misled anybody at any point (misinformation, late or no information, deflecting blame, covering up problems, etc.). This alone could raise enough money to put the issue behind us.
• Get the world on the same standards. It’s too easy for a company to say, “We don’t like the tax laws here, so we’re moving offshore” or “It’s cheaper to operate “over there”, so we’re going over there.” Artificially low wages and taxes, as well as lax standards and enforcement, relocates the problems and potentially intensifies them. Relocating a problem doesn’t solve it and it can create more.
• Accept responsibility. Management can certainly do its share but so can the rest of us. We need to find our collective moral compass and use it all the time.

Do you have any suggestions or ideas for preventing a recurrence of this unfortunate situation? What would your corrective or preventive actions be? Should compliance with ISO 9001 and ISO 14001 be required of all oil and gas companies (and their subcontractors)? Should policies and procedures be transparent?

Thanks for your time.

Much has been made of procedure writing, both here at Bizmanualz and around the Internet, but very little is said about an equally important part of the design and development process — procedure review.

Many problems with procedures that crop up after they’ve been implemented are traceable to inadequate or no review. Let’s say a procedure as written describes an ideal process, performed under ideal conditions (i.e., real-world conditions aren’t taken into account). If this isn’t caught in a procedure review, the end product will meet requirements only through luck. Luck being notoriously unreliable, inconsistent, and uncontrollable, you’re clearly better off with a review.

Why do you review anything? To ensure the accuracy and completeness of whatever it is you’re reviewing and to make sure everyone has the same understanding of the policy, process, or situation. In short, to ensure effective communication, which will lead you to the desired outcome.

Effective communication is a big reason why the international quality standard, ISO 9001, mandates design and development reviews (clause 7.3.4).  If you don’t review, you risk missing any number of product requirements, both stated and unstated, and you risk losing customers.

Need another reason to review policies and procedures? No one is perfect and no process is perfect. No one will write the perfect procedure the first time, every time.

Furthermore, no one — NO ONE! — can multitask. Your technical writer wears several other hats, right? That person is bound to temporarily lose focus on the policy or procedure they’re writing when other projects and other managers are continually demanding that their stuff is mission critical, “…so drop everything and work on this.” (Now, where was I?)

We all agree, then, that policies and procedures have to be reviewed, right? So, how’s it done? Well, one method that works is based on speech evaluations as done by Toastmasters. For a Toastmaster, learning how to evaluate a speech - or a written document - is as critical as learning how to give a speech or write one.

Objectives

Always start with the objectives or requirements. Were they clearly communicated to the technical writer? Did he/she understand them? Do you? Were the objectives prioritized and categorized? Were they SMART objectives?

Review

Did the technical writer achieve the stated objectives/requirements? (Have a list of the objectives in front of you as you review the document.)

Also, list some important, yet unstated, objectives. For example, correct spelling and good grammar are often taken for granted. Don’t make that mistake. Make up a checklist for often overlooked items, like “Are important terms defined?” and “Is ‘active voice’ used?”

Did the tech writer go beyond the stated objectives? For example:

The procedure mentions a packaging machine that a first-time reader may not be familiar with. The tech writer includes a long shot (photo) of the machine and a closeup of the control panel. The pictures aren’t a requirement; furthermore, they (and additional photos) push the document beyond the stated requirement of “six pages, maximum”.

Which is the SMARTer objective, user understanding or document length?

Reward

In your review, whether its written or oral, be sure to lead with those aspects of the procedure where objectives were met or exceeded. If critical objectives were not, consider possible explanations for that (the writer’s level of experience, competing projects, the amount of information provided them, clarity of the objectives, etc.).

The point is not to let the writer “off the hook” (or to find a hook to hang them on). It’s about encouraging the writer - praising what they did well and asking them to do better. Tell them, “Here’s what you did well.”

Don’t be vague or insincere, either. Don’t fish for compliments — you’re not helping them by telling them that their capitalization was great, or they had all the commas in the right places.

Be truthful, be specific, and give them something to build on.

Respond

Tell the writer exactly what you see in the procedure (ex., will the reader know who’s supposed to do what, when, and why?) Restate the objectives and indicate which were met, which were exceeded, and which weren’t met. Use a numeric scale in your review (rarely is anything “black or white”).

Beyond that, does the procedure “flow”? Did they use the PDCA model correctly? Did she or he use words, voice, style, grammar, etc., effectively? Does the story - and the message - come across clearly?

Tell them what they did well and point out specific opportunities for improvement. Hand the document back to them with another objective: you need the revision back for a “final” review by a specific date.

Remember that policy and procedure review is an integral part of a design and development process. After you’ve reviewed the document, the writer will probably have to make some changes. After the writer has revised the document, review it again.

Don’t review it to death, however. Four or more reviews of the same document should tell you that the review process has broken down…somewhere. It might be time - at least temporarily - to bring in another pair of eyes.

As a reviewer, you’re obliged to:

• Be sure that stated and unstated objectives were met;
• Be fair;
• Be consistent;
• Be thorough; and
• Point out strengths and opportunities for improvement in the document and in the process.

And as one of my favorite sports announcers (Jack Buck) used to say after every broadcast, “Thanks for your time this time. ‘Til next time — so long.”

* * * * *

For more on evaluation, see “The Three R’s of Evaluating“, by David Hobson, DTM (”Toastmasters” magazine, Nov., 2007).

Companies have a variety of reasons for wanting to get their document management process under control.  What are the four main reasons for investing in a good document management system software?  How about security, saving money, efficiency and compliance.

Document Management Software Security

Electronic files are a lot more secure than paper files.  Document management software can provide an audit trail that tracks every document change and even file views.  Electronic systems can be easily backed-up in case of natural disasters like fire and flood.  Bottom line: your electronic files are safer and more secure.

Document Management Software Savings

The cost of manually producing, storing, retrieving and transporting paper documents and records is high, very high.  People are expensive and using people to file, find and move documents is just not practical anymore.  Think of all the money you can save, and office space you can free up, if you eliminate paper documents and records. Document management software virtually eliminates the cost of searching for, or worse recreating lost documents.

Document Management Software Efficiency

Retrieving paper documents from your storage location (is it off site?) is a ridiculas waste of time. How long do you have to wait to obtain paper files?  Document management software systems let employees quickly access documents and records from their desks, over the internet.  So no matter where you are you can now quicky and easily retrieve important documents and records.

Document Management Software Compliance

If document and records control are a requirement for compliance with Sarbanes-Oxley, ISO 9001, HIPAA, or some other regulations then document management software systems are simply the fastest, easiest, and cheapest solution.  All of your policies, procedures, work instructions, forms, regualtions, and customer documents can be tracked, controlled, and managed per your compliance requirements.  Document management software provides compliance at a glance, access control, physical security, audit history, review and approval work flows, email alerts, and comment tracking.  Reduce your document audit findings and keep you company in compliance.

Document management security, cost savings, efficiency and compliance are the four main reasons for investing in document management software systems.

The latest revision of the international aerospace quality standard — AS9100C in the Americas, JISQ9100 in Japan, EN9100 in parts of Europe, and known by other names elsewhere — was released in February, 2009.  However, supporting standards (e.g., AS9110) and auditor training were not yet ready.  AS9110 and 9120 were released in July, 2009, and auditor training on the revised standards is being developed.

The International Aerospace Quality Group (IAQG) recently published the transition schedule for the 2009 versions of Aerospace Quality Management Systems Standards AS9100, 9110, and 9120.  Major transition milestones are:

• April 30, 2010 - Begin training trainers and auditors on revised standard, accredit certification bodies (CB)
• July 1, 2011 - Begin performing aerospace quality audits in accordance with 2009 revision (rev. C)
• July 1, 2012 - Withdraw 2004 revision (rev. B) and perform all audits according to 2009 revision ONLY

In addition, the IAQG has published a set of “supplemental rules“ for certain stakeholders, such as training providers and CBs, to help ease their transition from the 2004 to the 2009 version of the standard.

Also, see the article “Revised AS&D Standards Take Flight“, appearing in the July, 2009, issue of Quality Progress for additional information.

The Securities & Exchange Commission is scheduled to decide before the end of 2011 whether US companies will be required to prepare their financial reports according to international financial reporting standards, or IFRS, rather than according to generally accepted accounting principles, or GAAP.  If the SEC takes this step — and most every indication is that it will — the largest public companies would begin reporting according to IFRS in 2014.  All public companies would have to implement the international standards at some point in 2016.  That means that large companies could begin implementing IFRS as early as 2011.

Some multinationals are in the process of switching to IFRS in their American operations.  They’ve been using IFRS in their non-US operations and financial results reporting according to a single set of standards promises greater efficiency and, therefore, less cost.  A move like this, if undertaken by many more companies in the next year or so, may make the decision to switch accounting standards easier for the SEC.

What about private companies, though?  What about companies with just a few hundred employees, or fewer?  Well, there’s been some talk (but not a lot) that small-to-medium enterprises (SMEs) — companies with fewer than 250 employees — might not be required by Federal law to use the IFRS standards.  However, market forces alone promise to exact a toll on the company that wants to stick with GAAP since commerce in some quarters has been global for decades and is becoming increasingly so in virtually every area.  We see stories all the time about small, family-run businesses eager to sell overseas.  If switching to IFRS helps them achieve their goals, they’ll use it.

The FASB and the AICPA have been working closely with the IASB in preparing for the conversion and between them and the IRS, there isn’t much enthusiasm for managing two sets of standards.  Just last week, the IASB and FASB talked about their continuing commitment to the improvement and convergence of IFRS and GAAP.  The AICPA has already developed courses so that accountants in the US can make the transition.

Small companies ought to be able to make the switch easier than public ones.  To make the conversion even easier for small-to-medium enterprises, the IASB published a slimmed-down version of the IFRS earlier this year.  Simply titled “IFRS for SMEs”, it comes in at around 230 pages, so it appears the IASB really wants to get all types of businesses (and their accounting firms) on board.

Now, my questions to you, the audience:

• Are you looking into IFRS compliance?
• Are you already taking steps to comply with IFRS?
• What are you doing to drive compliance to accounting standards?  What tools are you using or what do you plan to use?
• Which of your Accounting Procedures and Processes — as well as other processes – will need to change?
• What accounting internal control issues are most important to you?
• How can we at Bizmanualz help?

Simplifying procedures is a great way to save money and at the same time prepare for growth. By simplifying your procedures, you can cut waste with confidence that you are not cutting essential value-added services customers want to buy. Simplifying procedures prepares your company for growth because it streamlines your operations, documents them, and thus makes it much easier to replicate your operations at another location.

A new operation based on proven procedures is easier to manage because you can evaluate its performance against known metrics. And should the metrics indicate a need for adjustments-typical when rolling out a new location-staff will have procedures in place to affect needed changes. This significantly reduces the risk of opening a new location.

If you want to learn more about how you can save money and prepare for growth, check out our consulting pages. We can help you simplify procedures faster and more efficiently than you can do it yourself because we are continuously writing, publishing, deploying and updating policies and procedures. Our latest procedures represent lessons learned by our thousands of world-wide customers. Developed according to international ISO standards, Bizmanualz procedures move you further, faster. Save time. Why reinvent the wheel?

Check out our consulting pages. Or call me right now. Bizmanualz can help you save money and grow today. Contact: Dan Davison, Vice President Sales & Marketing, Bizmanualz, Inc. tel. (314) 863-5079 x23, Dan@Bizmanualz.com.

By 2011, the US Securities and Exchange Commission (SEC) is supposed to have decided if it should begin making rules for the utilization of the International Financial Reporting Standards (IFRS).  The SEC has already developed a “road map” for the use of financial statements.  AICPA has been instrumental in paving the way for the adoption of IFRS.  By 2014, US companies are supposed to have made the switch from the use of Generally Accepted Accounting Practices (GAAP) to IFRS.

The differences between IFRS and GAAP are many and adopting IFRS — even with short- and long-term convergence projects on which the IASB and FASB are collaborating, and the ongoing guidance that these and other organizations will surely provide — will not be an easy task for American companies.

For example, GAAP and IFRS differ with respect to inventory valuation (IFRS does not permit the LIFO method) and revaluation of property, plant, and equipment (IFRS permits consideration of fair value, whereas GAAP only considers historical costs).  Other areas where there are significant differences include compensation linked to GAAP financial metrics (which obviously will go away) and revenue recognition (where GAAP is more detailed, extensive, and even industry-specific).  Finance, Operations, and Human Resources are just three areas where the changeover will have a significant impact.  In fact, the volume of changes alone portends a great deal of difficulty for most US companies between now and 2014.

Also, because the GAAP system is so deeply ingrained in the American way of conducting business, there is concern in the US and around the world that the transition may not go well.  It’s the same as with any other behavior that becomes habit: people have to implement the IFRS and people generally don’t handle change well.

There are some outside the US who fear the upcoming implementation of IFRS in the US because — they feel — the US may not “leave well enough alone”.  Yet, since much of the world has already adopted IFRS, companies in the US will have to follow suit…won’t they?

What do you think?  Will the adoption of IFRS in the USA go smoothly?  What will 2014 look like in the field of American accountancy?  What impact will the changes have on your business?  What are your thoughts?  Your concerns?

On Oct. 16, 2009, the U.S. Occupational Safety and Health Administration (OSHA) and the Employee Benefits Security Administration (EBSA) announced the release of a number of new compliance assistance resources.

You may visit the following sites for more information:

• http://www.osha.gov/dcsp/compliance_assistance/new_ca_products.html
• http://www.dol.gov/ebsa/
• http://www.dol.gov/

To stay informed of the latest developments, the Department of Labor recommends you subscribe to their e-mail updates.  There is a subscription link at the top of the DoL home page (http://www.dol.gov).

Wednesday, October 14, 2009, is the fortieth World Standards Day.  Every World Standards Day has a theme — this year’s is “Tackling Climate Change Through Standards”.

What Is World Standards Day?

In 1946, representatives of twenty-five countries gathered in London, England, to create an international organization focused on facilitating standardization. ISO was formed one year later but it wasn’t until 1970 that World Standards Day was first officially observed.

Organizations primarily responsible for World Standards Day include the:

• International Organization for Standardization - ISO;
• International Electrotechnical Commission - IEC; and
• International Telecommunication Union - ITU.

These and other organizations developed World Standards Day to raise awareness among regulators, businesses, and consumers about the importance of standardization to the world economy.

Each year, ISO determines a theme for World Standards day based on one key aspect of standardization.  Last year’s theme was “Intelligent and Sustainable Buildings”.  The year before that, it was “Standards and the Citizen: Contributing to Society”.  This year, it’s Climate Change.

The environment has been a recurring theme of World Standards Day (1990, 2001, 2008, and again this year).  In addition, this year’s WSD serves as a lead-in to the upcoming UN Climate Change Conference taking place this December 7-18 in Copenhagen, Denmark. ISO, ITU, IEC and others have been working to ensure that Climate Change conference participants are aware of the solutions offered by existing — and future — International Standards, such as ISO 14001 and ISO 9001.

Do you plan to take part in the UN Climate Change conference? Are you doing something special to observe World Standards Day? Or, do you have a question about standards or how to implement them?  In any case, I’d like to hear from you.