In order to fully understand how things work I often find it rewarding to drill down in definitions of terms. I recently did an exercise to better understand the true meaning of management system, as defined by ISO. I created an “exploded view” of the definition and mirrored that towards my own experience in design of management system.
The ISO definition of management system can be visualized by below picture:
(ISO full sentences are in the end of this blog post.)
So, what do we understand from above? Let me start from the outmost right box, “objectives”. The management system has to include establishment of objectives, as these sets the direction of what to achieve in the company by operational activities. The performance of the company, viewed by results versus objectives, is as well an important indicator to the performance of the management system and should be used for improvement purposes. For the development of the management system, long term objectives should be used as input.
Let’s then follow the arrow from Top Management downwards and the first box is about “overall intentions and directions”. This box guides and directs the organization on how to act in operational activities. Furthermore “overall intentions and directives” should include important characteristics to be used as input when the management system is designed. Examples of this are business model, identification of key markets / customers, and important aspects in order to stay competitive, etc.
If we then follows the arrow “of a” it points at the box “group of people and facilities”. This box identifies who has to do the work and the facilities are supporting arrangements like buildings, equipment and support functions like HR, business control, etc. From a design perspective, the content of this box highly impact characteristics of the management system. Examples are competence availability or needed, location of facilities or resources, etc.
In the definition of a management system the “group of people and facilities” has to have an arrangement of “responsibilities, authorities and relationships”. This is often expressed in organization structures, reporting lines, decision power, etc. I believe this is one of the most commonly used building blocks of a management system and is one of the first things an organization under change is asking for. I think this is highly connected to human behavior or needs. Most people need to see where to “fit in” and an organization chart is the simplest solution to this need. An organization chart is a part of the management system and has to be created in the design work.
If we now move up to the box “group and people…” and follow the arrow from the left, we come to the box “coordinated activities”. This is the first part of the definition of “management” and is on an operational level about distributing tasks to, not only individuals but also groups of people within the company. Coordination has to be done in a coordinated and measurable way. In a design perspective this is about governance and control, decision data, decision meetings, what plans to create and means to follow up these, etc.
Our final box in this exploded view of the management system is the first one to the right from “system”. In the box text the key word is “elements”. How shall we understand elements? In my way of thinking this is the value creation activities that provide enough value for stakeholders in order for the company to survive and to be successful. All of these activities interacts and/ or have relations to each other. They have relations and interact internally as well as externally. From an operational perspective this is what a company does. From a design perspective this is visualized via processes and operational procedures. With a clever design of the management system the company will be successful.
ISO 9000:2005 definitions of terms used:
= System to establish policy and objectives and to achieve those objectives.
= Coordinated activities to direct and control an organization.
= Set of interrelated or interacting elements.
= Overall intentions and direction of an organization as formally expressed by top management.
= Group of people and facilities with an arrangement of responsibilities, authorities and relationships.