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Carnival of Quality Management Articles and Blogs

Carnival of Quality Management Articles and Blogs – May 2020

Welcome to May 2020 edition of Carnival of Quality Management Articles and Blogs.

For the year 2020, we have chosen the core subject of Revisiting Basic Quality Concepts w.r.t. the sustained success of the organization As of now we have visited

We take up Risk Based Approach as our core concept this month–

The most prevalent change that the advent of 21st century has witnessed is the extremely dynamic rate of change. If change was the constant of later part of 20th century, it is almost becoming beyond human comprehension rapid rate of change that is becoming the new-normal with passing of every year of the present century. This rapid change is making what w=is already ‘known’ now ‘known unknown’. The uncertainty that this rapid rate of change ushers in creates the world around extremely fluid.

For our present purpose of “Revisiting the Basic Quality Concepts’ we will briefly look at two articles published in HBR – one in 1994 and the one in 2012.

The first article, A Framework for Risk Management  by Kenneth A. Froot, David S. Scharfstein, Jeremy C. Stein  (November–December 1994 Issue of HBR) is based on finance specific perspective of Risk.

The risk-management paradigm rests on three basic premises:

      • making good investments.
      • to making good investments by generating enough cash internally to fund those investments.
      • maintaining adequate cash flow

A risk-management program, therefore, should have a single overarching goal: to ensure that a company has the cash available to make value-enhancing investments.

By recognizing and accepting this goal, managers will be better equipped to address the most basic questions of risk management.

If we paraphrase the message of this article for the organization as whole, we understand that basic aim of risk management practices is to ensure that while maintaining its near and medium term operating parameters the organization should sustainably manage its competitiveness in the areas of its core competence, as relevant to its present and future context.

The second article, Managing Risks: A New Framework by Robert S. Kaplan and Anette Mikes (June 2012 Issue of HBR), places the risk in a more broader perspective .

The article presents a new categorization of risk.

Category I: Preventable risks.

Category II: Strategy risks

Category III: External risks

The article goes onto examine the individual and organizational challenges inherent in generating open, constructive discussions about managing the risks related to strategic choices. The authors argue that companies need to anchor these discussions in their strategy formulation and implementation processes.

The authors caution the organizational leadership by bluntly stating that  managing risk is very different from managing strategy.

Active and cost-effective risk management requires managers to think systematically about the multiple categories of risks they face so that they can institute appropriate several and collectively interactive processes for each.

An approach based on adherence to minimum regulatory standards and avoidance of financial loss creates risk in itself. In a passive stance, companies cannot shape an optimal risk profile according to their business models nor adequately manage a fast-moving crisis.

In conclusion, the article looks at how organizations can identify and prepare for non-preventable risks that arise externally to their strategy and operations.

A thought provoking paper – Value and resilience through better risk management by Daniela Gius, Jean-Christophe Mieszala, Ernestos Panayiotou, and Thomas Poppensieker –  at Risk Insight studies by McKinsey and Compony provides a specific actionable perspective  –

More rigorous, debiased strategic decision making can enhance the longer-term resilience of a company’s business model, particularly in volatile markets or externally challenged industries..

Organizations need to manage their operations such that investments in product quality and safety/ environmental or societal expectations standards adopted by it can bring significant returns. And enable processes that are less prone to disruption when risks materialize.

To achieve standing among customers, employees, business partners, and the public, companies can apply ethical controls on corporate practices end to end.

Building robust, effective risk management is three-dimensional project: 1) the risk operating model, consisting of the main risk management processes; 2) a governance and accountability structure around these processes, leading from the business up to the board level; and 3) best-practice crisis preparedness, including a well-articulated response playbook if the worst case materializes..

Having accepted that uncertainty is a constant in business, robust risk management can help companies adapt and thrive. How risk management can turn a crisis into an opportunity is a re[presentative case study that demonstrates how using risk management processes and structures to identify and mitigate a wide variety of risks, even when what arises is not one of the feared scenarios, the business will be in a stronger position to respond to crisis and grow.

Risk Based Thinking and the risk management are very actively debated and documented topics in the management academics and the practice.

In a limited span of our present view, we recognize that by recommending these two additional readings –

To conclude, every organisation should see risk-based thinking as an opportunity and a step in the right direction of attaining the sustained success.

[N.B. – Detailed note on Risk Based Approach can be read / downloaded by clicking on the hyper link.]

We will now turn to our regular sections:

In the series the Organizational Culture, we have taken up  Organizational culture’s relationship with organization’s strategic direction. The critical message is that hat whatever form the relationship between organization’s culture and organization’s strategic direction shapes, in order to attain the sustained success, the culture and strategy should seamless aligned. .

We now watch ASQ TV, wherein we look at a few relevant videos from the archive:

  • Quality as Strategy – Greg Watson, ASQ past chair and ESTIEM professor, asks viewers if they believe there is, “a difference in having quality strategy or Quality as strategy?”

Jim L. Smith’s Jim’s Gems posting for May 2020 –

  • Growth – It is natural to focus on our strengths and pretend our weaknesses don’t exist. To grow, however, requires that we admit where we’re weak and then work to strengthen those aspects of our life – personal and professional…Choose to embrace and engage those opportunities now while placed in front of us. Embrace these opportunities even though they may seem a little uncomfortable….And as we grow, the positive possibilities will grow even more superlative in our world.

I look forward to your views / comments / inputs to further enrich the subjects of Basics of Quality and Organizational Culture and their role in Creating and Maintaining Sustained Success.

Note: The images depicted here above are through courtesy of respective websites who have the copyrights for the respective images.

Categories
Carnival of Quality Management Articles and Blogs Management System Standards

Carnival of Quality Management Articles and Blogs – March, 2016

Welcome to March 2016 edition of Carnival of Quality Management Articles and Blogs.

We commenced the familiarizing ourselves with the changes in the Revision of ISO 9001 (:2015) with the December, 2015 episode of our blog carnival. Then, in the January 2016 episode, we took up Process Approach in the 2015 revision of the standard, as our first topic. In February, 2016, we had taken up first part of Risk-Based Thinking that primarily addressed the concept as has been taken up in ISO 9001: 2015.

Now, in this month’s episode we will look up as to how Risk-Based Thinking is looked upon in more general perspective.

Risk Management Process - ISO 31000

RIsk_Proability_Effect
                             Risk_Probability_Effect

 

 

 

 

 

 

 

 

Managing Risks: A New Framework by  Robert S. Kaplan and Anette Mikes – presents a new categorization of risk that allows executives to tell which risks can be managed through a rules-based model and which require alternative approaches.

Category I Risks – Preventable Risks – arising from within – best managed through active prevention: monitoring operational processes and guiding people’s behaviors and decisions toward desired norms.

Category II: Strategy risks -A company voluntarily accepts some risk in order to generate superior returns from its strategy…A strategy with high expected returns generally requires the company to take on significant risks, and managing those risks is a key driver in capturing the potential gains.,, Strategy risks cannot be managed through a rules-based control model. Instead, you need a risk-management system designed to reduce the probability that the assumed risks actually materialize and to improve the company’s ability to manage or contain the risk events should they occur.

Category III: External risks – Some risks arise from events outside the company and are beyond its influence or control. Sources of these risks include natural and political disasters and major macroeconomic shifts. External risks require yet another approach. Because companies cannot prevent such events from occurring, their management must focus on identification (they tend to be obvious in hindsight) and mitigation of their impact.

The Changing Role of Risk Manager takes the sense of 10 senior risk experts across Europe to understand the role of risk manager and explore what skills and behaviours tomorrow’s generation of risk managers will need.

Risk Based Thinking Handbook – William A. Levinson has done an excellent job of explaining the role of waste (from the LEAN perspective) and how it can increase risk to organizations who fail to “see and think” that the many forms of waste are a source of operational risk to the organization. Among this book’s most important takeaways is that a risk or opportunity can hide in plain view unless our workforce knows how to identify it….Another of this book’s key missions is to equip the reader to “grok” ISO 9001 as a synergistic framework that helps an organization achieve its goals. “Grok” is originally from Robert A. Heinlein’s Stranger in a Strange Land, and it means to understand and internalize something completely.

What is Risk-Based Thinking?…. In order to successfully implement the concept of risk-based thinking, be sure to follow these tips:

  • Analyze risks and prioritize them.What risks are acceptable no matter the outcome, and what risks should be avoided?
  • Have plans for addressing risk.Can any risks be avoided and how? How can risks be minimized?
  • Check effectiveness.Once plans have been called into action, reassess the situation, several times of needed, to understand how effective it has been.
  • Learn from experience and push to improve.No matter the outcome of risk assessment and mitigation, use all the information possible for creating improvements.

How People Can Get Better At Risk-Based Thinking and Improve Their Organization’s RBM – Ben Locwin takes the process of buying lotteries, evaluating risk of use swimming pools by the toddlers and similar examples to emphasize the fact that most of us tend to take the past behaviour as an indicator of the future. That can be classified as a classic understatement.

Q9C Quality Consulting’s blog tag Risk Management has several more articles of interest on this subject.

We take a look at some video clips:

Risk Management 101: What is Risk Management?

Introduction to Risk Management

A New Look at Risk Management is an ASQ video.

Understanding ISO 9001:2015: Risk and Opportunities

This is the first year of implementing ISO 9001: 2015, Certainly, in the days to come, the concepts like Risk-Based Thinking will evolve and attain higher level of maturity, We, therefore, will continue to look at the developments over next couple of years.

We will now turn to our regular sections:

ASQ CEO, Bill Troy in his ASQ’s Influential Voice blog-column, has presented a roundtable discussion on Careers in Quality.

We now watch the latest ASQ TV  episodes:

  • Creating and Sustaining a Culture of Quality – In this episode we dig deeper into transforming the organizational culture into a culture of quality and a simple communications tool that can help create a culture of quality.
  • Quality and FDA – Quality plays an important role in industries regulated by government bodies like the U.S. Food and Drug Administration. A representative from the FDA talks to ASQ about this role, as well as an upcoming regulation that will affect consumers. The quality tool flowcharting is also explained and demonstrated.

In Jim L. Smith’s Jim’s Gems for the month of February, 2016, we have –

Jim's Gems

I look forward to your active participation in enriching the blog carnival as we pursue our journey in exploring the happenings across quality management blogs…………

Categories
Carnival of Quality Management Articles and Blogs Management System Standards

Carnival of Quality Management Articles and Blogs – February 2016

Welcome to February 2016 edition of Carnival of Quality Management Articles and Blogs.

We commenced the familiarizing ourselves with the changes in the Revision of ISO 9001 (:2015) with the December, 2015 episode of our blog carnival. Then, in the January 2016 episode, we took up Process Approach in the 2015 revision of the standard, as our first topic.

Now, in this month’s episode we will look up as to how Risk-Based Thinking has been addressed in the 2015 revision of the standard.

We first take up the what the Standard itself states in Clause A.4, sub clause 0.3.3 of this concept –

Risk-based thinking is essential for achieving an effective quality management system. The concept of risk-based thinking has been implicit in previous editions of this International Standard including, for example, carrying out preventive action to eliminate potential nonconformities, analyzing any nonconformities that do occur, and taking action to prevent recurrence that is appropriate for the effects of the nonconformity.

To conform to the requirements of this International Standard, an organization needs to plan and implement actions to address risks and opportunities. Addressing both risks and opportunities establishes a basis for increasing the effectiveness of the quality management system, achieving improved results and preventing negative effects.

Opportunities can arise as a result of a situation favourable to achieving an intended result, for example, a set of circumstances that allow the organization to attract customers, develop new products and services, reduce waste or improve productivity. Actions to address opportunities can also include consideration of associated risks. Risk is the effect of uncertainty and any such uncertainty can have positive or negative effects. A positive deviation arising from a risk can provide an opportunity, but not all positive effects of risk result in opportunities.

Risk Management is the foundation of ISO 9001_2015

As its continuing initiative, to explain the new concepts in the revision of the Standard, ISO/TC 176/SC2 has presented on its site –

In the revised standard, ISO 9001: 2015,

  • in Clause 4.1 the organization is required to determine the risks which can affect its ability to meet these objectives
  • in Clause 1.2 top management are required to commit to ensuring Clause 4 is followed
  • in Clause 1 the organization is required to take action to identify risks and opportunities
  • Clause 8 – the organization is required to implement processes to address risk
  • Clause 1.3 and 9.3.2 the organization is required to monitor, measure, analyze and evaluate the risks and opportunities
  • In Clause 10 the organization is required to improve by responding to changes in risk

ISO 9001:2015 – Risk based thinking – Declan Cahill – Risk Based thinking is now present in so many standards….Examples include – ISO 14971, OHSAS 18001, ISO 14001 and ISO 31000. For most organizations, it is a mind-set that many are comfortable communicating and operating with on a daily basis.  By alignment with these standards, the ISO 9001 standard itself is being continually improved in order to minimize the work involved where requirements of various standards are integrated…..Where there are risks and the enterprise has put in actions or fixes to prevent or minimize the occurrence of these specific risks, every enterprise should be careful to consider how strong these fixes are and what these fixes are dependent on, i.e. human behavior, infrastructure & utilities.

Risk 4.1

“Risk Based” vs. “Threat Based” Thinking – Risk based thinking is entrenched in historical facts. It examines the past for clues to the future. Risk based thinking operates under the premise that if it has not happened in the past then it is not likely to happen in the future…..Threat based thinking is formed when it is understood that just because an event has not occurred in the past, that does not rule out the potential for it to occur in the future.

Risk - Lewis2005

A risk-based-thinking-model for ISO 9001: 2015 – Bob Deysher states that the concept of “risk” in the context of international standards relates to uncertainty in achieving the core objectives of the standards, viz. to provide confidence in the organizations’ consistent ability to provide customers with conforming goods and services and to enhance customer satisfaction. The risks and opportunities have to be identified in the context of the organization.

ISO 9001:2015 – Risk Based ThinkingOne of the key changes in the 2015 revision of ISO 9001 is to establish a systematic approach to risk, rather than treating it as a single component of a quality management system. Risk-based thinking is something we all do automatically and often sub-consciously. e.g. if I wish to cross a road I look for traffic before I begin. I will not step in front of a moving car. Risk-based thinking is already part of the process approach. e.g. to cross the road I may go directly or I may use a nearby footbridge. Which process I choose will be determined by considering the risks. Risk-based thinking makes preventive action part of the routine. Risk is often thought of only in the negative sense. Risk-based thinking can also help to identify opportunities. This can be considered to be the positive side of risk. Crossing the road directly gives me an opportunity to reach the other side quickly, but there is an increased risk of injury from moving cars. The risk of using a footbridge is that I may be delayed. The opportunity of using a footbridge is that there is less chance of being injured by a car. Opportunity is not always directly related to risk but it is always related to the objectives.

Risk-Based Thinking and ISO 9001:2015Chad Kymal and R. Dan Reid – Definitions of risk vary, even within documents published by the International Organizations for Standardization (ISO)… SO 9001 focuses on “risk-based thinking,” although it stops short of actual “risk management.”…. In ISO 9000:2015, “Quality management systems—Fundamentals and vocabulary,” risk is defined as the “effect of uncertainty.” Notes in the definition further describe risk as a “deviation from the expected,” either positive or negative. The term “uncertainty” is clarified as a lack of information or knowledge about an event that can be expressed in terms of consequences the likelihood of occurrence. Lastly, ISO 9000 states that risk is related to potential events, and that it’s typically expressed as a result of the likelihood and consequence of such an event…..Risk appears in the normative parts of ISO 9001 eight times, and risk-based thinking appears once. Risk and risk-based thinking appear many times more when we study the informative portions of the standard.

Here is a video of the Interview with Chad Kymal: Risk-based thinking and ISO 9001:2015,

Some more videos on the subject:

Corrective or Preventative Action – The new risk based methodology for ISO 9001:2015?

The Process Approach and Risk-Based Thinking – posted by T. D. Nelson – this webinar provides a more general education about the process approach and risk-based thinking as well as their implications for quality management system definition, documentation, and assessment.

We have far more material than what can be accommodated in one post. So we will continue our discussion on the subject of Risk Based Thinking in ISO 9001: 2015 in the March, 2016 episode as well.

We will now turn to our regular sections:

ASQ CEO, Bill Troy in his ASQ’s Influential Voice blog-column, in Changing Company Culture: December Round Up, takes up Luciana Paulise’s views about what determines organizational culture and how factors define a company’s culture and sums up the reflections of Influential Bloggers on how culture is changed within an entire organization in response of Luciana’s ideas.

He also presents a guest post, Evolving Quality to Enable and Support a Global Digital Organization by Prem Ranganath, who blogs @ The Art of Quality. In Prem Rangnath’s experience, the top three trends that shaping the future of quality in IT, based on current and emerging customer expectations are:

  1. Quality has a strategic role in enabling successful digitization and digital product management
  2. Focusing on a Minimum Acceptable Product (MAP) is important for Minimum Viable Products (MVP) to succeed
  1. Expectations for quality are increasingly focused on collective experiences

We now watch the latest ASQ TV episode:

Advice for Quality CareersIn this episode, learn why quality can benefit anyone’s job, how to develop qualifications employers seek in quality professionals, and see why salary trends are looking up for jobs in quality…

In the third year of ASQ TV, please take a moment to complete this brief survey. Your feedback is vital to the ASQ TV continuous improvement plan. Take the survey

Whilst on the subject of Quality as a career, tips for others in the field, and how Michael Jordan relates to the quality profession, read Jim Gem’s “13 Steps to Get Ahead”

In Jim L. Smith’s Jim’s Gems for the month of January, 2016, we have.

Jim's Gems

  • Four Thoughts about Selling Ideas – “In my work with quality professionals, I am constantly amazed at how many lament that their wonderful ideas did not see the light of day because ‘short-sighted’ management didn’t endorse them.”
  • Choose to Make This Year Great – To have the best year you’ve ever had, live each of the coming days as the best person you’ve ever been.
  • Think Positively, Then Do It! – To achieve your dreams and aspirations, choose to put your time and energies into living and working toward your highest intentions.

I look forward to your active participation in enriching the blog carnival as we pursue our journey in exploring the happenings across quality management blogs…………