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Are you planning to upgrade to ISO9000:2015?  If so, this article provides practical advice for organisations wanting to establish and demonstrate the links between their Quality Management System to the ISO9000:2015 Strategic Direction requirements.

In this post I look at what the ISO9000:2015 standard says about strategic management, some of the issues it raises and how to think about the design of the link between your Strategic Direction, your system of managing strategy and your Quality Management System.

It was a long term client of our strategy services, that raised our awareness of the implications of the 2015 version of ISO9000 (and ISO14000).  They use BSI for quality audits and advice.  They are already accredited to the ISO9000: 2008 Quality Management system.  By next year they want to operate, and be accredited to, the newer, improved, ISO9000:2015 standard (and also ISO14000).

It is clear that the ISO9000:2015 standard reaches into areas of strategy and the management of strategy, that the previous quality management standard did not go.  It won’t be a problem for my client.  They have clear links and a really responsive strategy review process.

However, let us explore what the ISO9000:2015  standard says, and its deeper implications for how most organisations manage their strategy.

A caveat: Looking at ISO9000:2015 from the perspective of Strategic management

I want to be clear up front. We are a niche consultancy specialising in strategy, strategic management and strategic performance management.  We are NOT a quality management or quality system audit company.  We do not accredit organisations in ISO9000 or any other standard.   Our clients say we do strategy management very well though.

When the client told me about the new standard I looked up what the quality management firms were saying.  Much seemed what I call “Thin consultancy”.  That is, they were saying you needed to make these links, but provided no information about how to do it, the various options available, nor their implications.  (You can read what I mean by “thin consultancy” here.)  It was all very “You should now link your quality system to you management of your strategy”.  There was nothing about how to think about the problem.

By contrast, we approach this topic as specialists in strategy, the management of strategy and the various systems of management around strategy.  I hope this is a different frame that gives us a different, wider, and more grounded perspective on these new ISO9000:2015 strategic direction standards.  A perspective that I hope you will find very practical and useful.

Let me explain how we see things, and hopefully provide a richer perspective.

The ISO9000:2015 Strategic Direction statement has far reaching expectations

When I first read Clause 4.1 of the new standard, I was quite surprised.  To see why, try this simple test.  First read clause 4.1.

“Clause 4.1 The organization shall determine external and internal issues that are relevant to its purpose and its strategic direction and that affects its ability to achieve the intended results of its quality system.”

Now remove the last four words of that clause… and re-read the sentence.

“Clause 4.1 The organization shall determine external and internal issues that are relevant to its purpose and its strategic direction and that affects its ability to achieve the intended results”

Surely, the intended results of the organisation should be the same as intended results of the quality management system.  If so, then there is no difference in meaning or scope!  The original sentence from the ISO standard has four redundant words at the end.

Quality is now demanded of your system of managing your strategy

On this basis, the implications of the link to strategic direction are far reaching.  This close link between the quality management system and your strategy management system may come as a surprise to many organisations.  Quality is no longer, simply, an aspect of strategy.  Quality must be demonstrated in how you manage your strategy.

ISO9000:2015 as just moved right into the space of

  1. The overall governance of the whole organisation and its strategy
  2. How it chooses, manages and adapts/refines its strategy (and demonstrates it is doing so)
  3. The design and operation of its strategic management system (or its system of management of its strategy)

It does this by placing three separate, but closely related demands on how the strategy is determined and managed.  These are:

  1. Being aware of, assessing and reacting to external issues that are relevant to strategic direction
  2. Identifying internal issues, assessing and reacting to them
  3. How the strategic management system as a whole operates, develops purpose, intended results and strategic direction

So how do we address this?

Well that comes down to how you think about strategy and how it should be managed as a system of management

Contrasting schools of strategic  thought

What is not clear to me is how the standard will handle differing schools of strategic thought.  For instance, many treat Strategy as a deliberate annual planning process.

More recently, strategy is seen as more emergent.  Strategy as a process of continuous testing and learning.

These are quite different processes and operate around different management systems.  They change how and when we talk about our strategy

Will the ISO9000:2016 standard demand detailed strategy document and constrain the strategy process to be an annual planning process?  Or will it allow a more emergent learning process?  We wait and see.


ISO9000:2015 external issues and strategic direction

Let us return to the ISO9000:2015 example. How, for instance, should we think about the links to the external world?

  • How do I represent the challenges of the external world? (Answer: Create tangible futures and scenario models.  Use these in your continuing strategy discussions).
  • Where do I gather this material?(Answer: External sources, market intelligence, your front line staff, anyone who talks with customers)
  • How do I change how we thing about the external world?  (Answer: Stop treating strategy as a deliberate annual process.  Treat strategy as a continuous learning process, where you are continually testing and refining your hypotheses about what is going on and how you should play in that space.  However, beware – this requires a significant management mind set and culture change ).
  • How do I create a useful conversation about the external world, during the development of the strategy?  (Answer: Create space and environments to explore the issues. Note where issues lie that need monitoring.  Monitor them. Use tools that support conversations about the external world.).
  • What management meetings should be set up that gather and discuss that material?  (Answer: put external information on the agenda of your monthly strategy review. )
  • How should they talk about the material: (Answer: Use it to create decision awareness, stage one of any decision process)
  • How do we deal with it? From a personal functional perspective, or as a team, and what are the implications of the two options?  (Answer: this is team problem solving, not narrow functional views.  You need a wide perspective.)

Let us break it down further: external issues

You cannot have a realistic strategy without considering and monitoring the external issues.  Monitoring external issues is a natural part of a good strategic management system.  Responding to internal issues is the same thing.

Similarities between monitoring external issues and organisational agility

A lot of organisations talk about being agile.  The problem is that agility requires two earlier steps.  You can have an agile organisation, (Think of a gymnast able to jump and tumble).  However, being able to jump is not the same as jumping at the right time.  Organisational agility is in fact a three part problem:

  1. Awareness: First the organisation needs to be aware of what is going on.  Miss signals and you cannot respond.
  2. Response: The organisation needs to choose action, based upon the interpretation of the signals. Management need to decide what to do about the issues and make a decision to act.  A lack of decision will undermine any agility. As will a failure to communicate any decision to act.
  3. Agility: Then, and only then, does agility kick in: the ability and flexibility of the organisation to take up the instruction and adapt to new circumstances.

Impediments in the awareness and response stages will undermine the agility of the organisation, no matter how agile the organisation could have been.  In this more detailed article (Organisational agility requires two preceeding capabilities) I argue that it is in fact a four part problem and make some wider connections.

The need to monitor issues, internally or externally, is of course imporant.  However, it also requires an organisational capability to explore and assess those signals, and to make decisions about appropriate response and action.

Building explicit external monitoring into the strategic direction agenda

We build this speed of response into the Strategic learning system through various management mechanisms, for example:

  1. Identification & monitoring: Identifying potential issues and threats that need monitoring, when we consider the future views and test them against the emerging strategy
  2. Making it everyone’s role: Gathering intelligence and issues from internal sources.  It is not just Senior Management’s job to look for potential issues.  They can come from front line staff noticing trends
  3. Building external monitoring into the management agendas: Explicitly having external monitoring on the management agenda of the strategic management meetings.
  4. Formalising the frequency of external views: The choice of speed at which the management team loop around the strategic learning model.

Six things to implement ISO9000:2015 external monitoring of strategy

  1. Recognise that you are gathering snippets of intelligence, rather than well formed issues.   Set up a system of collecting and
  2. Recognise that you are in the early stages of decision process: That is decision awareness and decision framing.
  3. Make space to explore and discuss these emerging idea.