ISO 9001:2015- 4.1 Understanding the organization and its context (Part 3)

 

In this post I continue presenting to you the description and application of a detailed analysis method for each of the clauses, sub-clauses and requirements included in the ISO 9001: 2015 standard. In this one I will present the third step of this method and I will explain a tool that you can use to identify the external issues that are relevant to the quality management system, according to subclause 4.1.

I think it is important to insist on the proper understanding of the requirements of ISO 9001: 2015, as well as those of other management system standards.

Most organizations do not have correctly identified their external issues, neither their internal issues that are relevant to its purpose and strategic direction, and that affect its ability to achieve the intended results of its quality management system. In general, their identification is incomplete, their inclusion in the system is confusing, and their relevance is generally not clarified, either in the purpose of the organization or in its strategic direction.

You can already imagine the consequences for an organization to not correctly identify and, therefore, not being able to monitor or review the information corresponding to the issues that are pertinent, so that they allow the owners (shareholders) to update, rethinking or reorienting the purpose (mission and vision) of the organization, or, where appropriate, the top management to formulate the strategic direction to establish, implement or review the strategies related to  quality of the organization.

Unfortunately, generally speaking, this situation is not detected when monitoring, internal audits or management review are carried out, nor externally when organizations face evaluations either by their customers, or for obtaining the certification of its quality management system.

In fact, as far as I know, there are very few auditors, no matter how many qualifications some of them may show, who have the competence to detect these inconsistencies and non-conformities to the requirement of the standard. As I can see it, this happens because most auditors are very concerned about their training in the audit process and taking care of the proper development of the process, in accordance with the ISO 19011: 2018 standard, which many of them do not pay due attention to understanding the requirements of this one or other standards, when it comes to combined audits for integrated management systems, in order to formulate the precise questions or make the information requirements to detect this type of non-compliance.

I look forward to supporting management system auditors with these descriptions to fully understand these requirements.

In Part 2 of this topic, I mentioned to you that in order to help to define both external and internal issues, in relation to the purpose or strategic direction of the organization, analytical methods such as the PESTLE can be used as support to identify external issues, as well as the McKinsey 7S method in order to identify internal issues.

After having exhaustively broken down the requirements of ISO 9001: 2015 standard (Step 1), and having analysed all the relevant terms of each requirement (Step 2), the next step for the analysis of the requirements of this standard is the following:

Step 3.- Define what support elements or analysis methods can be used to meet each requirement and use them appropriately.

Once we define each requirement and clarify what it really establishes, we should begin to work on investigating and identifying what support elements we have at our disposal to comply the conditions established in the requirement that we are analysing.

As we have previously seen, this subclause 4.1 tells us, in its first paragraph, the following:

The organization shall determine the external  and internal issues that are relevant to its  purpose and strategic direction, and that affect its ability to achieve the expected results of its quality management system.

Similarly, in accordance with step 1 of this method of analysis, this paragraph is exhaustively broken down to four requirements, and applying step 2, we describe the terms that this sub-clause presents, differentiating between the terms of purpose and strategic direction, as well as between relevant external issues and relevant internal issues.

Now, to carry out the step 3 of this method, what I recommend to organizations, is that they form a work team in which the leader of the quality management program participates, as well as some members of senior management, to analyse the corresponding to the strategic direction, and if possible the CEO and some of the owners, shareholders, or members of the Board of Directors to analyse what corresponds to the purpose of the organization. It would be very useful if a person who could lead the application of the tool called “brainstorming”, with its parts of “analysis” and “prioritization of elements”, would assist. This task should be used in parallel with two other tools, the PESTLE (Analysis of Political, Economic, Social, Technological, Legal and Environmental External Factors), and the method known as McKinsey's 7 S, which owes its name from the seven terms it uses, Strategy, structure, systems, shared values, skills, staff and style. All the people who make up this group must be people who have knowledge of the organization, its mission and vision, as well as its financial performance, quality, competitiveness, among other relevant factors for the organization's quality management system. I believe that it is more valuable to carry out this task in a single meeting, than to do it in two or more, since it is difficult to reach a high level of concentration among the participants more than once.

It would be a good thing if the control elements and records that should be used in the formal meetings of the organization were generated, such as the following:

 

• Invitation or meeting request, so that those requested people can prepare the relevant information that corresponds to them to prepare and present at said meeting. To do this, those summoned must be notified that they present all sources of information that can be taken as a valid reference on the relevant factors for the organization, both those that may be under the control of the organization, the internal ones, and those that are outside of the control of it, which are the external ones. This information may be in reports from the organization itself, various specialized publications, whether from industrial associations or chambers, universities, research centers, among others.

• An agenda, so that the people who are going to attend know what the meeting is going to be about, and the scheduled time for it. The central point of that agenda should be to identify and analyse the issues relevant to the organization.

• An attendance record, in order to generate an evidence of the participants in the meeting.

• Meeting minutes, also to generate evidence of the agreements reached at said meeting.

• The documents resulting from this meeting.

 

Once the group is assembled, and having completed the initial formalities, the three tasks should be completed, with a competent facilitator (coach) to act as a leader. It is important that this person has the ability to generate conditions of confidence and concentration so that people participate actively, applying their knowledge, intelligence and expertise.

The first task would be for the working group to identify external issues relevant to the organization's quality management system. I suggest using the tool called PESTLE, which I will describe below.

PESTLE analysis

PESTLE analysis is a strategic management tool used to identify, analyse, organize, and track key external factors that may impact an organization now and in the future. This framework examines issues that can be beneficial or detrimental to the organization, due to political, economic, social, technological, legal and environmental forces, to inform strategic planning and decision making.

 

This method of analysis can help a work group to better understand both the markets and the competitive position for the organization strategic plan and conduct market research in new or existing markets. What is intended to achieve with this scheme is the following:

PESTLE SCHEME 

The PESTLE analysis can be used in all industrial sectors at the strategic, departmental or project level, to assess the characteristics of current and future markets, and can be used as an input for planning, marketing, organizational change, development of products, business, management systems and project management.

If you want to carry out a PESTLE analysis that is useful to you, it is important to take the following considerations:

• You should select the participants in the working group carefully, so that they can provide expert knowledge, although it is also important to have new perspectives.

• If you identify people who can contribute that knowledge in remote places, use technological tools to involve them so you don't miss out on their participation.

• Promote individual thinking for the generation of ideas, then share and analyse them in a group and then combine the problems identified to obtain a general image.

• Participants should be asked for their ideas to be specific.

• When possible, encourage the use of quantitative data to focus on the core of the problem.

• Provide adequate time in the session in order to classify and prioritize ideas.

• Document the results.

• Communicate the results to stakeholders

• Periodically update the progress of the actions.

With all this in mind, the first task would be to brainstorm all the elements that could be considered as pertinent external issues either for the purpose or for the strategic direction and that affect its ability to achieve the intended results of its quality management system. There could be a large number of items listed and not all relevant.

The brainstorming task should focus, at this stage, on all external issues to the organization that are deemed relevant to both the purpose and the strategic direction and that affect its ability to achieve the intended results of its quality management system.

It is important that you know that these tools can be used by the organization to establish its strategies, either at a general level or by segments of interest. In this case, if it is to meet the requirements of ISO 9001: 2015 standard, you must restrict these tasks to external issues relevant to the quality management system. If these tasks are to be performed for integrated management systems, the external issues to be identified should be relevant to those specific systems that the organization is managing.

As an example, I present you the following table, using a template that I consider appropriate, in which I show you an example of a possible result:

 

After completing this task, you should use a tool that helps identify internal issues, such as the McKinsey 7S model, but I will introduce that to you in the next post.

Author: 

Ernesto Palomares Hilton