Your processes aren’t “one and done”, are they? Of course not. Those are events, not processes. We need to document events, but not for the sake of repeatability.

Processes are events or tasks we want to repeat an unknown number of times; we’d like some processes repeated indefinitely. If we want our business processes to be consistent — to yield predictable, consistently good results — we need to document them.

We document processes (i.e., write procedures) to ensure consistency and quality of the results. We also document processes so we can train (and retrain) employees. No matter who is performing or supervising the process, no matter when or where they’re taking part, we want quality and consistency.

To develop what we call a “well-defined process”, we use a couple of simple, effective process modeling tools: the SIPOC Diagram (or process map) and the Process Model.

The SIPOC Diagram

This tool gets its name from its five components:

• Supplier;
• Input;
• Process;
• Output; and
• Customer.

Figure 1 - SIPOC Diagram

This tool needs little explanation: because it’s visually oriented, the SIPOC diagram is very effective at breaking down language and other barriers. It helps people understand the purpose for the process and, when linked with similar diagrams of other processes, explains its relationship to other business activities.

The Process Model

Like we said, a one-time event is not a process, just like a one-time repair is not a corrective action. A true process is a cycle — the Deming Cycle, or PDCA, to be exact.

Figure 2 - the Process Model

This ISO process model does an excellent job of illustrating a typical process:

• You PLAN the process, establish process objectives (what the result should be), state the various requirements (customer, regulatory, standards-based, internal, etc.), and describe how you will get from point A to point B and back again;
• You DO, performing the process and collecting process data;
• You CHECK on the process, reviewing the data you’ve collected and analyzing process performance (not just according to stated objectives, but also for variability, consistency, and trends); and
• You ACT on your review findings, either continuing with the process unchanged or modifying the process to make it work better and implementing the process with those revisions.

The PDCA Cycle is the ideal framework for developing business procedures. That’s why at Bizmanualz, we use the process model as the basis for our procedure templates. The process model works for any procedure, whether it’s in Accounting, Human Resources, Sales/Marketing, or any of your other departments.

You’ll find that when you use these simple and effective tools to guide your procedure development, your processes will be well-defined processes and you’ll reach more of your objectives.

Thanks once again for your time and your comments.

* * * * * * *

What about you? Have you used these tools recently? Did you find that they were extremely helpful, or not at all? What tools do you use to develop your procedures?

Have you used Bizmanualz policy and procedure templates? What did you think of them?

Earning the AC-S award is an outstanding accomplishment. The Toastmasters educational program is self-paced; earning the AC-S demonstrates Steve’s strong self-discipline, dedication, and his desire to continually improve himself.  Additionally, it shows enthusiasm and dedication to the Toastmasters program and the individual’s club (in Steve’s case, South County Toastmasters). By achieving the AC-S rank, Steve demonstrated the ability to share his communication skills with other club members and help them improve theirs.

Steve Flick, Bizmanualz Product Director

To be eligible for the AC-S award, you must have:

• Achieved Advanced Communicator Bronze award (or achieved Able Toastmaster award or Advanced Toastmaster Bronze award)
• Completed two additional advanced communication manuals
• Conducted any two presentations from The Better Speaker Series and/or The Successful Club Series

Steve has been an active Toastmaster and a member of SCTM since January, 2005. The AC-S is the third award he’s earned; he received his “Competent Communicator”, or CC, award in 2006 and his “Advanced Communicator-Bronze” (AC-B) in 2008.  The next level in the Communication track is “Advanced Communicator-Gold”.  Steve has also served SCTM in virtually every officer role, including club President and Vice-President of Education, and is a member of SCTM’s Speakers Bureau.

Steve has been with Bizmanualz since May, 2005 as Product Director, Quality Manager, and ISO 9000 Quality Auditor.

About Bizmanualz

Bizmanualz is speeding-up the evolution of SaaS-delivered document compliance applications.  The company’s policy management software is designed for ISO 9000 document compliance and encompasses a full library of over 2,000 policies, procedures and forms for various business departments.  This SAS 70 Level II certified solution “simplifies document compliance” and allows clients to focus on their core business functions. More than 20,000 companies rely on Bizmanualz solutions and services to comply with document management requirements.  Bizmanualz is located in Saint Louis, MO. and is an ISO 9000 certified company.

About Toastmasters International

Toastmasters International is a non-profit international organization aimed at helping people become more competent and comfortable speaking in front of any audience.  A worldwide network of local clubs teach communication and leadership skills to over 260,000 members. South County Toastmasters (club #1957) was chartered in October, 1975 and has established an enviable record of achievement, including President’s Select Club status every year since 1977.

Contact:

Dan Davison, 314-863-5079,  dan@bizmanualz.com

It is interesting to note that, in many cases, the internal control system at many companies consists of volumes of instruction-like procedures that document activities. If a company is taking the time and effort to develop a procedure-based financial control system, it’s worth the additional effort it takes to:

• Understand major financial processes;
• Establish key finance polices and goals (including performance goals and accurate financial statements);
• Determine which processes introduce the greatest amount of risk and which are material to our financial goals;
• Prioritize development of the internal control system according to materiality, risk, and other important criteria;
• Incorporate best practices; and
• Foster an environment in which continual improvement is the status quo.

Is there a better indicator of an effective system of controls than clear goals and key performance metrics that are consistently measured and regularly improving? And are you taking advantage of the financial control system to improve process results and your financial performance?

Easily Editable Procedure Templates for Internal Control


CFO Accounting Procedures Series

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Accounting Procedures Manual

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Financial Procedures Manual

Improving Processes in the Production Area and the Office

Discussions of process improvement and quality commonly reference the production area, or shop floor. Is it any less important for your other key office processes (for example, accounting and finance) to function effectively and efficiently? If you’re a service provider rather than a manufacturer, are quality and process improvement less material? (Of course not.)

How well does your company manage financial aspects like working capital, debt and investments, and leasing? These are as vital to a company’s success as efficient product design and production, yet few attempt to understand and improve finance processes to the same degree as, say, the product development process.

In fact, a lack of focus on finance is common, especially among privately-owned SMBs. Research shows that a majority of SMBs do not create capital plans, do not actively manage working capital, nor do they conduct analysis of financial statements.

Do you know if you’re making money on the cash you borrow? How about the assets you deploy, like accounts receivable, inventory, or cash? What about asset acquisitions you make? These are hard questions but they’re the kinds of questions you should be asking before you raise debt or equity capital.

What really represents the bigger threat to the success of your business:

• One of your Receivables staff borrowing 5-10 euros from petty cash when they’re short of cash and they want to go out to lunch on Friday? Or…
• Not having well-thought-out and consistent methods for managing high level finances that — if your financial situation suddenly and significantly worsened — could result in millions’ worth of losses?

The answer should be obvious.

A Financial Control System that Focuses on Improvement and Success

We’re not implying that businesses ought to ignore cash drawer controls. What we are suggesting is that focusing on low risk/low payoff components while neglecting key aspects doesn’t indicate a system of controls that appropriately addresses risk or that has its priorities in order.

Focusing on the mundane or trivial will do little to improve your overall financial performance! Internal control systems should be designed for continual improvement in key aspects of your operations, such as:

• Regularly reviewing and improving the overall capital structure;
• Using a capital plan to minimize the cost of capital while strengthening your debt/equity position;
• Managing working capital so excessive inventories and receivables do not sap your financial resources;
• Ensuring proper calculations and scenarios are explored while making debt & investment or leasing decisions; and
• Maximizing returns while minimizing costs for cash and merchant accounts.

A system of well-defined processes is not only about control or compliance: it is also about consistently striving to do a little better. Control systems that are designed only to achieve compliance are doing the bare minimum, which means they represent missed opportunities — opportunities to gain and keep a competitive edge, for instance.

That ought to be enough reason for any size and type of company to think about using the process approach to ensure continual improvement and an effective system of internal controls.

To help you build an effective system of internal controls for success, consider the Bizmanualz Finance Policies, Procedures, and Forms manual. Download a sample and see for yourself what companies like yours have saved in planning and development alone!

We regularly send out e-mails, to continually keep our name in front of potential (and existing) customers. Some of us even have LinkedIn^TM and Facebook^TM pages (Figures 2, 3) where we invite not just commentary, but participation and engagement.

We have a plan for strategically managing our web presence. In that plan, we:

1. Establish SMART objectives;
2. Develop and implement the various aspects of our web presence (web pages, newsletters, social media, etc.);
3. Monitor, measure, and analyze to see if we’re meeting planned objectives;
4. Make changes to the plan, as needed, and implement them; and
5. Continue to monitor, analyze, change, ad infinitum.

Why does that 5-step plan look familiar? It’s the “Plan-Do-Check-Act” (PDCA) cycle! It’s how companies ensure product quality, continual improvement, and customers who are more than satisfied — they’re actually advocates!

Figure 1

Ask yourself, “Are we doing that?” Do we have a plan, or did we just throw something out there so we could say, “We have a web presence”?

Figure 2

Without a clear, comprehensive plan, your web presence can do you more harm than good. If you’re lucky, prospects and customers contact you about broken links, inconsistencies, and the occasional link to a product you discontinued months or years ago. In reality, most of your target market just “walks away” and never comes back.

Figure 3

The best advice I can give you is to establish a process of developing, implementing, and maintaining your company’s web presence before you build a single page online or send out a single e-mail. To do that, you need to understand:

• What your company stands for (its vision and mission);
• What you want to accomplish in the short and long term (i.e., what objectives you have for your web presence, specifically, and how – and if – those objectives tie into your company’s overall objectives);
• How extensive your web presence could (or should) be; and
• Why it’s important to establish a system of internal controls early and not let your efforts, accidentally or otherwise, go off target.

If you haven’t had a program for managing your web presence up to now — not a problem! There’s no reason to believe that because you’ve been working without one, you can’t implement one at any time. It may seem difficult at first, but the reward is unquestionably well worth the effort.

Take a few steps back and reevaluate your situation from a user’s perspective. If you have a particularly trustworthy customer, one you can count on to give you an unvarnished (but not a brutal) opinion, ask for their input. Find out whether they’re getting what they want from your web page and your social media. Find out if their objectives align with yours, and vice versa.

Refresh – reinvigorate – your web presence a little bit at a time. You don’t need to get everything done in a day or even a month or two. Work on the “low-hanging fruit” first, then move on to areas where your weaknesses aren’t so problematic.

And remember — stick with the plan! Keep reminding yourself — you only get one chance to make a first impression!

* * * * * * *

If you see an inconsistency or error on another company’s web site, do you say anything or do you let it go? Does it make a difference if they’re a vendor/customer of yours or not?

The economy is said to be improving. Though they’ve had their ups and downs, the Dow, NASDAQ, and other market indexes are up from a year ago. The housing market may have also hit bottom.

One indicator that doesn’t bode well, however, is the unemployment rate. Firms still aren’t hiring. They’re getting by with what — or whom — they have. What does this mean for the currently employed? It means we’re expected to be more efficient…more productive. “We’ve go to do more with less!”, we so often hear it. This is frustrating for both sides. Employees are trying their hardest, in virtually all cases. And, employers want to keep growing.

As a manager or owner, simply telling your employees “we have to be more efficient” won’t motivate them. Saying, like wishing, doesn’t make it so. You have to be a mentor and coach to get the most out of your employees — all of them.

You say you “don’t have time for that”? Well, do you have time for inadequate performance? Do you have time to replace and train a replacement? Time to acclimate them to the “company way”? Time to recoup the investment you’ve already made or the experience? The wisdom?

How do your employees stack up to expectations? Are they performing at a satisfactory level? If not, could that be due to:

• Poor training?
• Inadequate equipment?
• Time pressure?
• Lack of priorities and/or organization?
• Poor communication?
• Lack of motivation?

Home in on the reason(s) for employees’ underperformance to determine if better coaching will address them.

What, When, and Why — Does the employee know what to do, when to do it, and why? If not, you need to tell (maybe even show) them.

What Is and What Should Be — What is the standard of performance and how does the employee measure up to it? Does the employee know what the standard is? You have to let them know clearly what’s reasonably expected of them.

Communicate — Does the employee know his/her performance isn’t meeting the standard? You need to let them know.

Train — Does the employee have the skills needed to do the tasks required of them? If not, you need to invest time in training to get higher performance in return.

Realistic Expectations — That standard of performance: is it reasonable? What’s it based on? Is your standard current? Stretch goals are fine…as long as they’re fact-based.

The Butterfly Effect — What impact does substandard performance have on the rest of the organization? The employee may need to be reminded of his/her place in the firm, their relationship — direct and indirect — to everyone else, and how inadequate performance affects other people and processes. The organization is, after all, only as strong as its weakest links.

Ample Resources — Does the employee have enough (time, money, materials, etc.) to get the job done? You have to see that they do.

Performance Hurdles — Is something beyond the employee’s control affecting his/her performance? Is there something you, the employer or manager, can do to help?

Positive Feedback — Is the employee getting the occasional, well-placed “attaboy”/”attagirl” for a job that exceeded expectations? Or, are they being “rewarded” by having more responsibilities heaped upon them? “You did this so well, we’re going to give you more” can be as damaging as “You stink!”

Motivation — Is the employee’s heart in the job? If not, more training, better equipment, and more resources (like time) aren’t going to solve the problem of poor performance.

Now, let’s say you’ve analyzed the situation and have come to the conclusion that coaching will help turn the employee’s performance around. Here’s how you might go about it:

1. HOLD THE COACHING SESSION IN PRIVATE

Nobody but the two of you need be involved.  Be warm and courteous. Remain calm and keep a positive attitude.

2. CLEARLY STATE UP FRONT THE REASON FOR THE SESSION

Don’t be blunt, though. Say “I’d like to discuss (XYZ)”, rather than “I need to talk to you about your recent performance problems.” You want to engage them, not talk at them.

3. SHOW YOUR CONCERN FOR THE PERFORMANCE ISSUE

Example: “It looks like we’re not following up with customers as quickly or as thoroughly as we should. We used to get back to 80% of our customers within 10 days of their purchase. Now it’s more like 10%.” Focus on the problem, not the person.

4. DESCRIBE THE WAYS IN WHICH THE PERFORMANCE ISSUE AFFECTS OTHERS (INCLUDING YOU)

Example: “When we don’t follow up with customers in a timely manner, they probably feel like we don’t care about anything but their money.” Emphasize “we” and “the team”. Putting the focus entirely on them only deepens the sense of isolation they already feel.

5. ACKNOWLEDGE THE EMPLOYEE’S SIDE OF THE ISSUE…AND LISTEN

Regardless of whether the employee apologizes, rationalizes, promises to do better, etc., hear them out. They may have a valid explanation (like that they’re overworked — you might do more with less but you can’t do more with nothing).

Remember: there are always at least two sides to every story.

6. GET THE EMPLOYEE’S INPUT ON HOW TO IMPROVE THEIR PERFORMANCE

Ask, “What can be done to improve our follow-through with customers?” There may be some beautiful gems hidden among their thought nuggets – help them find those gems. After all, they’re on the front line every day, so they’ll have insights you won’t.

7. DISCUSS POSSIBLE SOLUTIONS

Work with the employee to develop a number of potential solutions to the performance issue. Make use of the employee’s ideas and offer guidance, but don’t take over the project. You’re a coach, not a critic.

8. AGREE ON A SOLUTION AND ACTIONS TO TAKE

Identify what you both think is the best solution. Agree on how to arrive at the solution and on reasonable deadlines. Be clear of your intent – that you want status updates so you can help them, not because you get any joy out of “riding” them.

Be sure to put the action plan in writing and make sure you both have a copy.

9. CHECK ON THE EMPLOYEE’S PROGRESS AND CONTINUE TO GET THEIR FEEDBACK

Give them additional guidance and reinforcement. Don’t hover around them constantly. Just make sure that they’re not stuck on something. If they have ideas on how to improve the process or the result, listen and evaluate. If they have a good idea, let them run with it.

10. GIVE POSITIVE FEEDBACK FOR POSITIVE RESULTS

Every time the employee meets a deadline or hands in a “deliverable”, give them a sincere “Good job!” Don’t say, “That’s more like it”, or “You should’ve been doing this all along.”

Remember — even star employees who are strongly self-motivated (and there are probably more of them out there than you think) can use a sincere pat on the back…or a handshake…or a shout-out. So, you can imagine how an employee who’s been struggling will benefit from quality feedback.

You’ve been there. You know how good it feels when someone takes you under their wings. Give back what you got.

Now it’s time for your feedback. Tell me what you think.

* * * * * * *

References

Toastmasters International Advanced Communication and Leadership Program, “Interpersonal Communication” — Project #4, “The Coach”.

]]> http://www.bizmanualz.com/information/2010/06/28/ten-keys-to-improving-employee-performance.html/feed 3 http://www.bizmanualz.com/information/2010/02/12/7-keys-to-developing-great-procedures.html http://www.bizmanualz.com/information/2010/02/12/7-keys-to-developing-great-procedures.html#comments Fri, 12 Feb 2010 19:04:44 +0000 Steve Flick http://www.bizmanualz.com/information/?p=1630 Bizmanualz is one of the leaders in policies and procedures documentation. Our policy and procedure manuals are written with small to medium businesses (SMBs) in mind. Thousands of companies that have been looking for a way to develop and implement a system of effective policies and procedures quickly have relied on us.

We’ve worked steadily on improving our procedures, using the process model (or the Deming Cycle) as the basis for improvement. The typical business process isn’t static, and your procedures shouldn’t be, either. The best companies are the best because they know “change is the only constant”.

So, procedures that describe processes have to be written with change in mind. That’s what we’ve done, and that’s what you need to do as you move forward, molding the procedures to your company’s — and your customer’s — needs.

So, how do you develop great procedures? With these seven keys:

• Purpose;
• Policy;
• User Involvement;
• Clarity;
• Accuracy and Completeness;
• Feedback and Control; and
• Continual Improvement.

PURPOSE – What’s the goal of this procedure? What’s the point of writing it? What problem are you trying to solve by implementing the procedure?

POLICY – Policy provides the “what”; the procedure provides the “how”. So, what policy do you want carried out in this procedure?

USER INVOLVEMENT – The person who’s writing the procedure may or may not have any experience with the process. The writer doesn’t need the experience so much as they need to ask the right questions. Can they get the process owner to describe the process, and can they convey that information clearly and accurately?

Having to explain the situation forces the process owner to look at the process from a different angle. It makes them look at things in a different light. It may even make them ask, ”Why ARE we doing this?”

Both parties – the writer and the process owner - being full participants in procedure development means a better result for all.

CLARITY – Also known as simplicity, or directness. Don’t put a lot of verbiage or twisted logic in the procedure. Tell the ones who will be involved in the process how it operates and what’s expected of it — and them.

Or, show them. Nothing — not even the ISO 9001 standard – says the procedure has to be in writing. Don’t let language be a barrier.

ACCURACY AND COMPLETENESS – A procedure has to have everything your staff needs to know in order to perform the process well and with consistency. You can’t leave critical steps or information out.

FEEDBACK AND CONTROL – A procedure should follow the Plan-Do-Check-Act model. Don’t forget that “check” step. If you’re not measuring performance and analyzing the measurements, how do you know if the process is in control?

How are you going to know if you’re approaching your goals, or what to do next if you’re not measuring? You can’t improve a process without gathering feedback and acting on it.

CONTINUAL IMPROVEMENT – If you plan to write and rewrite a procedure until it’s perfect, you’re wasting your time. Recognize that no process will ever be perfect. Build in room for improvement. Implement the procedure, check it, improve it, and implement the improvement. Keep repeating the process. Remember — the best companies know change is the only constant.

If you have questions or concerns, or you need help, please contact us right away. We measure our success by your successes.

Best wishes,
Steve

4. Document Review & Approval

Even before our Quality Management System was ISO 9001 certified, we observed ISO 9001 requirements for product review.  It just makes good business sense, doesn’t it?  You wouldn’t release the first draft of a web page, a prototype, your first take in the recording studio, or a brand-new web app without reviewing it, would you?

In our case, we’ve come up with a straightforward plan for product realization.  It’s a task list (Figure 1) that starts with defining product requirements and “ends” with gathering feedback from customers.  We identify the resources required at each step and set a target date for completing each task.

Figure 1

We then prepare the first draft of a document, conduct a review, use the review notes to revise the document, and review the revision(s). Eventually, the procedure is approved and we go on to other project tasks.  This review-and-approval cycle is applied to every document in the P&P manual.

A NOTE OF CAUTION: When you develop your own procedures — whether you use our product, someone else’s, or decide to go it alone — avoid the classic analysis paralysis, or delayed perfection, trap.  Try too hard to get a document perfect and you’ll never release it.  It will never be good enough.

Go for “good enough” and improve the document as you go.  ISO 9001 acknowledges the fact that perfection is impossible — that’s why there’s a continual improvement clause (8.5.1) in the quality standard.

5. Putting on the Finishing Touches

Of course, procedures aren’t the whole story when it comes to building “policy and procedure” manuals.  Every manual has a table of contents, an introduction, a “manual preparation” section, and an index.  Each of those also goes through a review-and-approval process.

Once we’ve completed the manual content…we still have a lot of work ahead of us.  We take the Microsoft Word files comprising the manual and bundle them into a single PDF file for our printer-servers — that file has to be reviewed and proofread, too.

“Install” copies of the manual (one for CD, the other for download) must be made and tested.  If the manual in question is part of a bundle — let’s say we’re including it in our CFO Accounting Policies and Procedures set — there’s another set of “install” copies.

Two control copies of the manual are printed and kept in the main office. Web pages (e.g., shopping cart, information page) are updated, keywords are purchased, a “press release” is prepared, and a brief announcement is prepared for the weekly e-newsletter.

The product release is formally announced, the new product is given a prominent spot on our website’s homepage, and the product is released for purchase.

6. Releasing the Product

Chris Anderson, our Managing Director, reviews the Realization Plan and, when he’s satisfied all pre-release tasks are completed and documented, indicates his approval for release by signing the Plan form.

In advance of the release, we prepare a number of promotional pieces (e.g., announcements, introductory offers) and release them just days in advance of the product release to get some buzz going.

7. Your Feedback

After the product has been on the market for about three months (give or take a day or two), we begin to solicit feedback from purchasers of the product.  Actually, if you order a printed manual, we ask for your feedback from the moment you open the box.  The CD-ROM is affixed to a letter of introduction, in which we ask for your input.

We need your feedback — good, bad, or indifferent.  Feedback is the key to continual improvement.  If your customers don’t tell you anything, you keep on going as if there is no problem — at least, until the product isn’t selling.  (And wouldn’t you prefer knowing well before that?)

Getting customer input — and acting on it — is what makes an OK product good and a good product even better. So, I’ll close this article with a plea: Let us know what you like — and what you don’t — about our products and services.

If we’re doing well, tell your friends and business colleagues.  If we’re not, tell us.  At Bizmanualz, product and process improvement is our business: Improving our processes to serve you better comes first.

1. Subject Research

In the not-too-distant past, we primarily searched the Internet for clues as to what people wanted. We’d find what topics people were interested in by doing the same thing you do: searching by keywords.

We’ve matured somewhat since those days.  We’re still conducting online research, but we’re also looking for visitors to our site — readers like you — to tell us what’s important to them.

While our real expertise lies in quality, process improvement, lean thinking, and the like, our most popular policies and procedures (P&P) manuals continue to be on subjects that pertain to every business.  Our Accounting, Computer & Network, Finance, and Human Resources products are our most popular.  In those cases, we identify common practices, look for “best practices” in each instance, distill them, and have subject matter experts review our work.

2. A Design and Development Plan

Early on, we devised a realization plan for our manuals, basing it primarily on clause seven of ISO 9001, “Product Realization”.  We begin with a checklist of all the items we put into every manual (e.g., table of contents, index, introduction).  We then add the particular topics to cover in procedure form, estimate the time and other resources needed to complete each task, and set a target date for each item.

Of course, we use this checklist not only to provide a record of events, but also to determine (in a post mortem) where our design and development process didn’t work as desired, so we can improve the D&D process for the next project.

3. Writing Procedures

Chris Anderson has written about ballistic, controlled, and adaptive processes.  Procedures in our older products tended to describe mostly ballistic processes.  Our more recent products have been improved considerably by the introduction of the ISO process model, the “Plan-Do-Check-Act” cycle.  While it’s not possible in every case, most of our procedures are modeled on the PDCA cycle.

The first step in such a procedure is planning an activity or series of activities, followed by doing the activity and gathering data as the activity progresses.  The third step is the act of checking, or reviewing, the data to see if the process is in control and yielding the expected results.

Gathering data and analyzing them are the most crucial aspects of the PDCA cycle, so we provide guidance for data collection — sample forms (logs, checklists, etc.) – with most of our procedures.

You may adapt the provided forms to your unique circumstances, or you may substitute forms you already use (e.g., ledgers, order forms) for those provided.  Remember — you cannot improve a process that you don’t monitor and measure.

The fourth, but not final, step is acting on the data.  The “act” step is not the ultimate one because the process is – or should be - cyclical.  If you’re doing it right, it’s really a “Plan-Do-Check-Do-Check-Do-Check”, etc., cycle. The data tell you how to act — bring the process back into control or, if the process is in control, either allow the process to continue and keep monitoring or make adjustments to reduce process variation even further.

So, we’ve written this procedure.  We complete it by building in:

• A focused policy statement;
• Roles and responsibilities;
• The purpose of the procedure;
• The procedure’s scope (who/what is affected);
• Definitions of important terms;
• Resources and References;
• A Revision History table; and
• Sample forms, some of which may be required by standards or regulations.

Next week, we’ll look at the remainder of the process, beginning with the document review.

Do you have any questions at this point?  Please feel free to contact us right away.  If you prefer, hold onto your questions until next week when we finish the story.

As always, best wishes and best of luck.

Steve

That is the role of corrective action in continual improvement of an organization.  In a reactive organization, we constantly react to problems in a corrective mode.  We make the short term fixes – over and over and over again.  The goal of implementing corrective action is to identify and to address the root cause of problems so they don’t reoccur.  Therefore, root cause analysis is at the heart of an effective corrective action program.

Root cause seems to be an appropriate term for several reasons.  First of all, it focuses on the source of the problem.  Next, it implies that the source or true cause of the problem is hidden and out of view, which is why an analysis is needed.

Correction Can be the First Step

Simply addressing the symptoms without addressing root cause sometimes creates more problems in the long run.  A classic example is expedited orders.  A customer calls because an order is late.  So, to expedite it, someone takes time and effort to move the order more quickly through the process.  Of course, in giving this order priority and moving it ahead of other orders in the pipeline, more orders are going to be late.  Now more customers will be calling, more orders will be expedited, etc.  So we can see how the process of expediting this order, in effect, causes a chain reaction and negative spiral.

Does that mean that when a customer calls because an order is late that we shouldn’t expedite it?  Of course not.  The point is that expediting the order shouldn’t be all we do.  We should investigate why the order was late and collect some basic information.  How often do orders ship late?  How often do customers call and complain about order being late?  What is the apparent reason this order was late?

Not All Problems Call for Corrective Action

At this point, we are just trying to collect some initial data to determine if this calls for corrective action.  As we discussed in a previous article, not every problem or nonconformance requires corrective action.  How to determine if a corrective action is needed varies by organization.  It may be left up to individual employees or process owners, some might have a CAPA (Corrective Action Preventive Action) committee, and others may leave it to management.  The need for corrective action should be evaluated along several dimensions. How often does it happen? How important or critical is the issue? How are customers impacted?  The answers determine if there is need for corrective action.

In our example, if this was a rare event due to a special case with minimal customer impact, then perhaps we perform the correction (expedite the order) and do nothing more.  If orders are regularly late, or if the customer was severely impacted, then it is a candidate for corrective action and root cause analysis.

Root Cause Analysis Tools Identify the Cause of Problems

Once you decide that corrective action is appropriate, there are a multitude of root cause analysis tools to employ.  The tool you select should depend on the skill and training of those employing root cause analysis, and on the complexity of the issue you are trying to solve.

Figure 1: A Fishbone Diagram

While the complexity of corrective action tools range widely from fairly straightforward (i.e. Five Whys) to fairly complex (Current Reality Tree), most are found to be fairly effective at reaching potential root causes if properly carried out.  Perhaps the most popular tool, and in the middle in terms of complexity, is the Fishbone Diagram (also called the Cause and Effect Diagram or Taguchi Diagram) as shown in Figure 1.  More experienced and skilled teams seem to be more effective at using complex tools.

The Team Is More Important than the Tool

However, the largest factor determining the effectiveness of root cause seems to be, according to the research, how effective the corrective action team works together.  Critical areas seem to be a knowledgeable facilitator, how comfortable the team is challenging assumptions and critically evaluating the direction of the analysis.  Another important factor is including corrective team members from outside the area of focus.  Someone not locked into a certain way of thinking can bring a fresh perspective to the root cause analysis, which in turns leads to thinking outside of established patterns.

Besides the experience of the team, the type of problem or nonconformance should also play a role in selecting a tool for corrective action.  For example, using a simple tool like Five Whys might seem appropriate for determining why a customer’s order was shipped late, but where issues of health, safety or other high risks are involved, a more comprehensive tool like Current Reality Tree, Cause and Effect Diagram, or Interrelationship Diagram would be more appropriate

Common Factors for Root Cause Analysis

There are at least 10 root cause analysis tools, and they all seem to have their supporters and detractors.  You should choose which ever tool fits your organizational needs the best, or even mix and blend methods if you feel it is effective for your purposes.  Then training should communicate established root cause analysis practices throughout the organization.  Which ever method you choose to use in your organization, there are some common areas of importance:

1. Clearly define the problem or non conformance.
2. Gather all the information you can related to the problem.
3. Brainstorm to identify inputs, suppliers, and activities related to the problem, and note any that might have a potential causal relationship with the problem.
4. Use research, investigation, and experiments (hard data) to eliminate potential causes not associated with the problem.  For those remaining, identify which causes if removed or changed will prevent recurrence.  Remember, there may be more than one potential cause, but the goal is to identify as few potential root causes as possible.
5. Identify ways to eliminate the causes and prevent recurrence, focusing on activities that are within your control and do not cause other problems.
6. Implement the changes.
7. Verify after an appropriate period of time that there is no reoccurrence.  (Some organizations require that verification be performed by someone not involved in the root cause analysis.)
8. If there is reoccurrence of the problem (not all root cause analysis will be effective the first time) then use what was previously learned to identify and eliminate other possible causes.
9. Periodically verify the effectiveness of the corrective action program and the associated root cause analysis.  If corrective actions are not, in a large view, successful at identifying root causes and preventing reoccurrence, then new methods, a new process, or additional training may be needed.

While the many tools available for conducting root cause analysis may all be effective, their effectiveness is very dependent on how they are implemented:  data collection, involvement and training of team members, a communicative and qualified facilitator, how questions are asked and answered, and follow-up verification.  They are all critical to the success of the root cause analysis process, upon which corrective action relies.

Another important factor to consider is when to stop searching for root causes, and instead select action items to address identified root causes.  If you keep searching, you can always find more and more potential root causes.  Use experience, knowledge, and intuition to know when you have dug deep enough looking for causes, and now it time to take action.

But like anything else, the way to improve and be successful at corrective action and root cause analysis is to practice it.  While literature and training are great ways to get started, it is through executing the root cause analysis process that you will learn and improve.  And successful corrective action and root cause analysis are critical to achieving continual improvement in your organization.

Get a Handle on Your ISO 9001 Required Records

Clause 7 “Product Realization” (recall that we can substitute “service” anywhere the word “product” occurs) covers the spectrum from product development (literally from the moment an order is taken or a product conceived) until the product is shipped to the customer.

Besides understanding and complying with the “shall statements” in Clause 7 (as we discussed for Clause 5 and Clause 6), a key element to complying with ISO 9001 Clause 7 is getting a handle on the required records.  A lion’s share of the ISO 9001 required records (14 of 21) come from Clause 7.  These include

• Clause 7.1 Planning of Product Realization – 1 record
• Clause 7.2 Customer Related Processes – 1 record
• Clause 7.3 Design and Development – 5 records
• Clause 7.4 Purchasing – 1 record
• Clause 7.5 Production and Service Provision – 3 records
• Clause 7.6 Control of Monitoring and Measuring Equipment – 3 records

Some organizations seem to struggle with all the required realization records.  For example, I recently worked with a company that took great effort and pride in their meticulous record keeping.  The problem was, however, that they did not understand how the records they kept met the record requirements of the ISO 9001 QMS.

As you create a QMS to comply with Clause 7, there are two things to always keep in mind:

1)  What do I need to do to comply with the requirements?
2)  How can keeping these records help my organization?

In order to comply, particularly in terms of records, an organization has to reflect on the specific requirements listed, as well as on how this record fits in with the unique ways each organization fulfills product realization.  Ensuring you comply with the spirit and letter of the ISO 9001 Standard will require taking some time to understand the requirements and to reflect on your realization processes.

Understand Specific ISO 9001 Requirements for Records

As we know, the ISO 9001 QMS requirements are not very detailed or specific when it comes to record keeping.  It is this generic approach that gives ISO 9001 the flexibility to be applied to disparate organizations.  So each organization can define exactly what form the records will take, and what kind of information will be collected.

But there are some specifics associated with each record that one must be aware of in order to comply with ISO 9001 requirements.  For example, Clause 7.3.4 states specifically that the design and development review records shall contain the results of the reviews and any necessary actions.  So, early in the effort to create records to comply with Clause 7, an organization must have a clear picture of what records are needed and what specifically must be included in the record.

Using ISO 9001 Records for Continual Improvement

While compliance is important, the whole goal of implementing ISO 9001 is to improve as an organization.  So how you use the records to help the organization improve is equally important.  The point of keeping records is not because ISO says we need to, or even because auditors want to see them (though it does, and they will…).   In several places of the ISO 9001 QMS requirements (i.e. Clause 4.1e) the standard requires organizations to monitor, measure, and analyze processes.  Records play an important role in that they are used to capture data and information about processes that are used for monitoring, measuring, and analyzing.

This is what record keeping is really about.  Using them to understand your processes and learn ways to improve.  Are we capturing the customer requirements properly and avoiding rework, scrap, and other waste?  Are design reviews generating actions that improve the product and meet requirements?  Are design projects on schedule and budget or do they consistently suffer from scope creep or delays?  Are process objectives being met?

Employ the ISO 9001 Process Approach

One useful way to get a handle on realization records is to consider product realization as a set of processes, and then identify where, as part of the process, a record is generated and what record requirement is fulfilled.  Ideally, realization processes, like all processes, should have key objectives established that measure effectiveness.  The goal should be to collect information in the records that relates to process effectiveness.

Your ISO records should tell you a lot about how effective your processes are operating.  If they don’t, then perhaps you are meeting bare minimum ISO requirements by generating the record, but you’re not meeting the spirit of the ISO standard by using the QMS for continual improvement.  And the continual improvement philosophy applies to the records themselves.  If you find that you are not getting useful information from your records, then change what you are doing.

Try to Simplify ISO Compliance

With so many required records from Clause 7, it also important to look for ways to streamline and simplify the record keeping.  Do you need 14 different forms?  For example, perhaps a general form can be used for all the design and development records.  For the calibrations records, it may be easier to track the calibration of monitoring and measuring equipment electronically in a database or spreadsheet instead of on paper.

As always, the best approach is to start simple and build on it as you identify needs and areas for improvement.  It is easier to build on a basic, simple system than it is to strip unnecessary elements from an overly complex system.

Using and Auditing ISO 9001 QMS

Now we have covered all the clauses of the ISO 9001 QMS that have requirements.  If you build your ISO compliant QMS in phases over a period of time it becomes less daunting.  Obviously, we could not cover all the elements of compliance, but hopefully we have delineated a path to compliance in manageable steps.

If you recall, earlier we only created drafts of some system procedures.  As you use and review your system, you should get the procedures in finalized forms and release them into document control.  To verify and improve the QMS you should regularly audit it (including records, documents, and improvement activity).  But the most important thing you can do with you ISO 9001 QMS is use it.  Communicate the QMS to the staff; involve them with reviewing procedures, keeping records, and conducting process reviews.  Develop an internal auditing staff who understands the requirements and the organizational goals in employing ISO 9901.

Once you feel comfortable that your ISO Quality Management System is operating and functional, you are ready to contact an ISO 9001 Registrar and set up an audit for certification.  If you need help building your ISO 9001 QMS, we have products and consulting services that can help.  We also offer public and on-site ISO 9001 Internal Auditing classes that can help get the most out of your continual improvement efforts.