|A Holistic Approach to Management Systems Standards |
by Richard J. Forselius, Sc.D.
The management of any organization can be improved if the organization is considered a series of inter-related systems. The systems approach suggests that internal management systems are both intra-related and inter-related with the environment of the organization. Management systems standards (MSS) are emerging in virtually all disciplines.
Well-intentioned management systems specialists in their particular area of expertise promulgate these. Their intention is that it makes sense to have an accepted global standard to allow conformity throughout the world. But many managers fail to examine the intra- and inter-relatedness of their organizations management systems.
When examined holistically, in many cases, these many new and emerging standards may add significantly to the cost of doing business with marginal, if any, additional benefits. Minimally, it is imperative to perform return on investment (ROI) analyses periodically to ensure added benefits or avoid future costs.
Strategic Standardization Management
Several of the most successful U.S. businesses credit the strategic adoption of standards in processes and products, or strategic standardization, with helping them achieve industry leadership. Strategic standardization is the way business leaders leverage standards, both technical and management, to build and sustain a competitive advantage or avoid a competitive disadvantage.
Strategic Standardization Management (SSM®) is a macro process and management leadership discipline that investigates, defines, recommends and implements standardization strategies and policies. It is a process by which internal managers assess and optimize the organizations influence in the industry committees of U.S. standards developing organizations (SDOs) and elsewhere.
SSM® recommends the use of a systems approach to managing standardization activities within an organization. SSM® is not a management trend. It is an on-going philosophy that it is in the organizations best interest to influence SDO committees through informed representation, to modify or initiate standards that reflect the optimum business and product plans of the organization.
Influence is accomplished through the use of company or industry representatives in relevant committees with a mandate to initiate or modify standards that reflect the optimum management, business, technology and product plans of the organization. This is achieved through effective influence, increasing technical and management competencies, gaining competitive information, assigning metrics to key processes, and managing achievements against goals.
The Generalist Void
Very few management professionals recognize the need for generalist assistance. Subject matter experts (SMEs) deservedly gain high recognition within the organization and industry in their respective fields. SMEs must be versed not only in the technologies being addressed by their committees, but also in the organizations strategic and tactical goals. These experts often suggest the need for the organization to gain notoriety and recognition by being externally audited and subsequently registered to (or certified in) a discipline-specific management systems standard. The problem is that a thorough return on investment often does not occur, and MSSs are then promulgated in many, many areas of the organization.
It is difficult to recognize the interactions of various internal systems that vie for registration to external MSS. Therefore, it is now imperative for the organization to employ a management systems generalist who can assess the promulgation of MSS holistically and perform a return on investment analysis and assess whether it is truly in the best interest of the organization to continue to pursue registration to discipline-specific MSS.
The renowned management systems theorist Russell Ackoff has suggested that systems should be looked at in an output-oriented way, or teleologically, rather than in an input-oriented way, or deterministically. Therefore, rather than examining the discipline and its inputs, an examination of the outputs should occur. In other words, perform competitive and market analyses, and return on investment analyses, rather than value the input to the system, which is to follow a prescribed approach to a management system rather than one of the organizations own design.
The Popularity of Management Systems Standards
We have observed the evolution of management systems standards in a very wide array of disciplines (see sidebar). Formerly, international standards were predominantly technical in nature, prescribing preferred particular technical approaches to problems, and agreed upon by the consensus of materially affected parties. In fact, in the United States, this is a requisite for classification as an American National Standard (ANS) by the American National Standards Institute (ANSI). These standards have been developed by organizational technical representatives through a prescribed, disciplined process in which documents are carefully prepared, balloted and reviewed. These documents must be periodically reviewed for continuing validity.
What is new is that now organizational technical experts are developing consensus management systems standards in committee meetings, or deciding to adopt these documents, which are created by other technical experts in well-intentioned committees throughout the world. These standards now represent the management system, or prescribed approach to managing the discipline. They often do not guarantee that the organization actually creates a better product, for example, only that a management system is in place that is defined and repeatable.
Management systems standards are particularly viable for organizations that lack standardized internal policies and practices by discipline, and the ability to implement common approaches across business units, manufacturing centers, throughout the world, or at subsidiaries or joint ventures. However, many organizations already have discipline, policies and practices in place to ensure a standard approach internally.
The Cost of MSS
Implementing an external MSS can be very costly for organizations, whether changing over from an internal practice or implementing a new MSS. Typical costs are derived from:
Modifying internal documents to expand upon or interpret externally imposed MSS.
Engaging the services of consultants to advise.
Conducting internal audits.
Utilizing the services of a registrar organization to conduct external assessments.
Registering to industry-specific derivatives to the MSS.
Repeating the process periodically.
Few SMEs recognize all the requisite costs associated with attempting to register to a new MSS. Although well intentioned, their advice is usually generic in nature: It makes sense for us to bring in this MSS. A return on investment valuation, including both potential positive returns (more product sales, higher recognition in the market, standardization of approach and potential efficiency gains) and avoidance of negative consequences (e.g. competitor X is doing this and will gain market share at our expense; registering once will avoid multiple customer audits) should be accomplished. To do this, the SME needs assistance from a management systems generalist who can prescribe a valuation model approach, working with organizational internal financial models, much as one would evaluate a capital purchase or any research funding.
The management systems generalist would be trained in the principles of Strategic Standardization Management, a concept put forth by several principles in the ANSI federation in the early 1990s. The following section summarizes this approach.
The Evolution of SSM®
It is impossible for an organization not to comply with the requirements of some standards. This is true of both manufacturing and service firms. However, considering the availability of widely recognized SDOs and global pressures to standardize products, it is a superior business strategy to explicitly address standardization. SSM® was first advanced by Robert Walsh at ANSI and published in a 1993 pioneering paper by Diego Betancourt of Polaroid Corporation (Strategic Standardization Management: A Strategic Macroprocess Approach to the New Paradigm in the Competitive Business Use of Standardization) as an MS thesis at Lehigh University.
SSM® is a full-time activity in which an organization creates structures and designates internal associates as SMEs to complete needed tasks. The following are dominant activities:
Identifying standardization opportunities that will increase organizational advantages in the global marketplace in concert with business and strategic plans.
Recognizing and aligning with the appropriate organizations and industry committees with the greatest potential for success.
Developing appropriate SSM® assessment and implementation models.
Assuring active, integrated and efficient participation in leadership positions of standardization and conformity assessment activities worldwide.
Providing a continuing assessment of the organizations SSM® activities and their impact on organizational businesses and products.
Coordinating design, manufacturing, environmental, and quality planning and practices internally.
Investigating the approaches of competing and recognized organizations to identify best practices (benchmarking).
Recognizing and monitoring emerging MSS worldwide.
Promoting SSM® as a key business strategy.
These activities impact almost all parts of an organization. A new system of management is required to ensure that these activities are adequately performed. Because SSM® tends to be diffused within the organization that focuses on its core competencies, it requires continuous monitoring and cannot be left to chance. It requires a level of organizational commitment and stated support from top leadership.
MSS will continue to emerge in virtually all disciplines, promulgated by well-intentioned SMEs in their particular area of expertise. Their intention is that it makes sense to have an accepted global standard to allow conformity throughout the world. The problem is that many managers fail to examine the intra- and inter-relatedness of their organizations management systems. When examined holistically, in many cases, these many new and emerging standards will add significantly to the cost of doing business with marginal, if any, additional benefits. Minimally, it is imperative to perform ROI analyses periodically to ensure either added benefits or avoided future costs.//
Copyright 2002, ASTM