Performance Excellence & ISO 9001:2000 ISO 9001:2000 Performance Excellence Models Financial Financial Performance 123 ©Hammer Quality Solutions 2004 Model for Organizational Effectiveness

Performance Excellence & ISO 9001:2000 Performance Excellence Models 1

Examples European Quality Award Kenyan Quality Award (KQA) Baldrige National Quality Program (US) California Governor’s Golden State Quality Award New York Governor’s Excelsior Award

Core Values of Excellence Models Visionary Leadership Customer-Driven Excellence Organizational and Personal Learning Valuing Employees and Partners Agility Focus on the Future Managing for Innovation Management by Fact Public Responsibility and Citizenship Focus on Results and Creating Value Systems Perspective Performance Excellence Models

–Focus on Results Customer-Focused Results –Satisfaction, Retention, Customer-Perceived Value –Key Product and Service Performance Measures Financial and Market Results –Key Financial Indicators, Return, Economic Value –Marketplace Performance, Market Share, Growth Human Resource Results –Employee Well-Being, Satisfaction and Development –System Performance and Effectiveness Organizational Effectiveness Results –Operational Performance, Productivity, Supplier Performance –Regulatory/Legal Compliance and Citizenship Performance Excellence Models

Performance Excellence & ISO 9001:2000 Financial Financial Performance 2

Quality Management & Financial Performance 5-year study* 608 award winners from 51 industries 77% from the manufacturing sector 140 award givers Customer & independent awards Award winners represent “effective implementation” Financial Performance * Impact of Total Quality Management on Financial Performance: Evidence from Quality Award Winners by Dr. Vinod R. Singhal, Georgia Institute of Technology and Dr. Kevin B. Hendricks, University of Western Ontario, March, 2000

Financial Performance Time Period Measurement for Award Winners (Example)

Financial Performance Results Implementation Period = No significant differences Post-Implementation Period = Significant differences Financial Performance

Award

Financial Performance

(<$600m) (>$600m)

Conclusions from Financial Study Significant positive financial impact Greater impact on smaller firms Core value focus is more important than customer criteria Patience is required and rewarded Financial Performance

Performance Excellence & ISO 9001:2000 ISO 9001:2000 3

Core Values & Principles ISO 9001:2000 is based on core values of Excellence Models Core values incorporated as 8 principles of ISO 9001: principles are mandated to emphasize importance ISO 9001:2000

Core Values from Excellence Models Principles from ISO 9001:2000

Principles to Requirements The 8 principles are woven into 5 main elements of ISO 9001:2000 »Documentation »Management »Resources »Product/Service Processes »Improvement ISO 9001:2000

Documentation Requirements Document Control Records Control Management Commitment Management Review Resource Management Training Infrastructure / Work Environment Customer Processes Design & Development Purchasing Production & Service Processes Calibration Customer Satisfaction Internal Audits Nonconforming Product Analysis of Data Continual Improvement Corrective & Preventive Action ISO 9001:2000

Customer Satisfaction & Improvement Requirements of ISO 9001:2000 are integrated with organizational capabilities to improve customer satisfaction Improving the effectiveness of quality processes increases customer satisfaction ISO 9001:2000

Effective Measurements = Effective Management ISO 9001:2000 provides effective measurements for management action Based on effective measurements, products and processes are improved to directly impact customer satisfaction ISO 9001:2000

ISO 9001:2000 & Performance Excellence Core values & principles provide focus for performance excellence Effective quality management impacts financial performance ISO 9001:2000 is a significant step toward performance excellence ISO 9001:2000

Steps to Performance Excellence

Leadership is not committed Leadership is not involved Executive management does not function as a team Poor implementation strategy Poor internal or external consulting advice Focus on certificate / not on effectiveness ISO 9001:2000 Why Do Organizations Lack Performance Improvement With ISO 9001:2000?

ISO 9001:2000