Qua Vadis quality management standardization?

International committee ISO/TC 176 is responsible organization for the general standardization in the field of quality management. That committee has defined in 2001 a long term strategic plan for the quality management standardization in document “Horizon 2010”. That consists of vision, goals, and strategic intents and strategies.

The whole international standards family of quality management consists of many different kinds of documents prepared by the ISO/TC 176 committee and some other sector specific standardization committees. Now the fourth generation of the ISO 9000 standards is under preparation consisting of amendment of ISO 9001 and revision of ISO 9004

• Amending ISO 9001, “Quality management systems – Requirements” includes only very few minor changes in the text.
• Revising ISO 9004, “Managing for sustainable success – A quality management approach” is a complete rewriting the whole standard in the form of general guidance.

The new ISO 9001 will be published in 2008 and ISO 9004 in 2009. Now draft documents are available.

Although the situation seems to be reasonably good in general and the basic ISO 9000 standardization (ISO 9001 and ISO 9004 standards) have had an enormous impact on the development of quality practices globally, this has not taken place without problems and drawbacks:

• There is stagnation in the development of the ISO 9001 standard. Factually there has been no essential development during the recent 20 years in the standard and no remarkable change is expected during the next 10 years. However, organizational business environments and communities are changing at increasing pace.
• Standard ISO 9004 is too general, vague, and customary and therefore hardly can provide practical guidance or support for organizations’ performance development. There are better other literature and reference material available for this purpose. Assessment model in the new draft standard is theoretical and does not reflect the needs of organizations. It cannot compete with the recognized performance excellence models (quality awards criteria).
• ISO 9000 standardization process is too slow and poorly managed and cannot follow the general development and trends of business environments and society at large.
• Standardization bodies have weak means to control or support the use of the standards. The use of the standards is directed strongly by commercial consulting / certification business but not by genuine business needs.

When we started the ongoing work with the next generation of the ISO 9000 standards we had a strong enthusiasm – at least with the ISO 9004 standard – to develop something different from earlier but later it proved that that was not possible with the existing standardization practices.

In spite of this harmful development in the standardization, however, organizations have all possibilities to get maximum benefits in their realizing ISO 9000 standards with their own proactive activities by:

1. Understanding the ultimate purposes of the ISO 9000 standards.
2. Avoiding the known problems of ISO 9000 applications, and quality realizations in general.
3. Liberating themselves from the enslaving formalism of the standards documents and consultants / certifiers.
4. Taking into account the genuine needs, expectations and environments of the business in question.
5. Applying also all other beneficial references with the ISO 9000 standards. A good way to start to use the ISO 9000 standards is to carry out self-assessment based on some recognized performance excellence model.
6. Challenging to the future by recognizing the weak signals in the standardization in a multi-faceted way.

There are serious problems in the prevalent quality management approaches

There are plenty of cases where established organizational quality management approaches don’t respond to the real needs of the organizations

• Business management is not involved / committed – Quality is only a specialist issue.
• Communication between business managers and quality experts is not effective.
• Quality initiatives are superficial. – Typical distinct quality (management) systems are not business-centred. There are too much copied solutions without innovations. Diversity in quality realizations is endangered.
• People don’t understand – not even experts – difference between the basic concepts of quality management (QM = organization-internal quality of management for excellence) and quality assurance (QA = external communication with stakeholders for confidence).
• There are many different, distinct, and competing quality methodologies on which even quality experts don’t share the same opinions.
• There are many other specialized managerial initiatives competing with quality development.
• Quality initiatives in organizations are certification-emphasized, not for enhancing real business performance. Certification is commercialized and lost its credibility.
• Formal documentation is highlighted instead of a comprehensive management and application of business information and knowledge.
• Too often quality related actions are only reactive and there are very little proactive innovations in the field of quality.
• Quality implementations don’t take effectively into account realities of the modern business environments that relate to the aspects of time, speed, agility, networking, complexity, tacit knowledge, and informal learning and innovation.

In very many cases quality development has not redeemed its promises indisputably.

Are there really any new innovations created for organizations' quality development after Deming, Ichikawa, and Juran? Is the quality profession not able to follow the general development of organizations' business development and trends of the society at large (see figure)? Is it only "Plus ca change, plus c'est la même chose “?

One may recognize the needs for change also through some factual signals:

• There is an expanding critical discussion about the prevalent approaches of quality discipline.
• There are many cases of coping and feeling satisfactory with certain theories, principles, techniques, methodology, etc. that are being tried / used distinctly (“one-leg approach”) and with risks (trepidation), e.g. related to ISO 9000, EFQM or SixSigma.
• There are some new (ad hoc) initiatives also in the quality management standardization (ISO TC 176) presenting business integrated development of quality management.

New principles, tools, and infrastructures are necessary for quality management to take into account modern changed business environments. This includes new crystallized understanding of the foundations and aims of quality profession and integrated approach with multifarious means (“multi-leg approach”).

In practice the new way to organizational quality realizations consists of three key aspects:

1. Integration: Organizations implement effective / efficient and business-relevant quality principles and methodology embedded within their normal business management activities for both strategic management and operational management. Conceptually this means change from quality management (management of quality) to quality of management.
2. Responsiveness: Organizations enhancing abilities to adjust quickly to suddenly altered external conditions, and to resume stable operation without undue delay that is based on dynamic and flexible business management.
3. Innovation: All quality realizations are organization-dedicated solutions. There is no single solution to organizations’ challenges. Organizations strive continuously for new organization-dedicated innovative and unique approaches. Multiple different choices for quality management are encouraged in competitive business environments. That especially emphasizes change from standard approach to organization’s own unique approach.

Carry out appropriate surveys, questionnaires, evaluations, etc. and use advanced on-line web tool

Surveys, questionnaires, evaluations, etc. are very essential activities in all quality integration realizations. They are needed for both operational and strategic management purposes. They may be comprehensive covering organizational entities as a whole or they may be focused on very detailed aspects only (see and click the following figure). Different evaluations are always a part of organizational development.

Key aspects of beneficial evaluation approaches are the appropriateness of questioning phraseology and the technique to collect answers, opinions, responses, etc. from the target audience. Especially the questioning technique and tools have remarkable influence on the answering easiness and percentage. An advanced questioning methodology is, however, more than only collecting information. It functions as a media between specialists and other parties. By means of that kind of tool any specialist can communicate his/her area of expertise that might be difficult to others to understand, and receive valuable information as a feedback. The tacit knowledge that different parties possess becomes visible by using an appropriate assessment tool. Within organizational environments, especially, this comes into question when professional specialist expertise is used in communication with the management, personnel, suppliers, customers, and other stakeholders.

ZEF evaluation methodology was originally developed in Finland at Oulu University as Z-scored Electronic Feedback (= ZEF) tool. Effectiveness of its two dimensional evaluation structure was validated by University of Lapland. Commercial ZEF solution is the product of Oulu, Finland based innovative company ZEF Solutions Inc. ZEF is an all-purpose tool for assessments and comparisons that is suitable for all kinds of organizations.

ZEF is web-based evaluation solution operating as SAAS (Software as a Service). It is a software tool with which one may collect and evaluate information effectively and efficiently from even a big group of people. The visual appearance is easy to use and interesting or even exiting to the end-users. E.g. in Finland ZEF tool has been used by hundreds thousands of ordinary citizens in several cases of general societal interest.

Evaluation made by the ZEF tool includes the following process phases:

1. Construct your questions on the two-dimensional matrix or use customized templates.
2. Send an e-mail invitation to your target group to take part in the survey on the Internet.
3. Follow up the progress of the survey in real time and send reminders to the participants when required.
4. Get graphical reports that present average and variation of the individual answers in two dimensions. (see and click the following figure) Also verbal comments, explanations, questions, etc. may be obtained from the responders.

As an example ZEF tool may be used for an effective organizational self-assessment. It is very easy to apply with different self-assessment criteria, e.g. ZEF assessment application for Malcolm Baldrige short form assessment ”Are we making progress?”. There is also available the “3-In-1 assessment” ZEF application where all aspects of full Malcolm Baldrige and EFQM criteria and ISO 9000 standards have been combined. This application for example has also modified to health care services by using the guidance document CEN/TS 15224.

Detailed business information is obtained from ZEF raw data through statistical treatments. All individual respondent answers to the query items in the ZEF evaluations are recorded as separate data pieces that are then used for statistical analyses:

• The basic ZEF report presents the means and standard deviations of all respondents’ answers per query items in two dimensions
• The result data may be arranged according Z-score transformation to a normalized form that is useful when seeking to compare the relative standings of items from distributions with different means and standard deviations.
• Answers from respondents may be grouped in arbitrary way or presented as individual answers.
• Results of different ZEF evaluations, e.g. from different points in time, may be compared by using ZEF’s “comparison engine” function.
• Raw data of evaluations may be presented in the formats of Excel (.xls) or "Concurrent Versioning System" (.cvs) in order to facilitate the use of more sophisticated statistical tools, e.g. SPSS, for data analyses.

Challenging against quality burn-out

There is a lot of stagnation, doubts, and even frustration about quality related initiatives in many organizations, e.g. application of ISO 9000 standards and quality awards criteria has routinized into stereotypic rituals. Major reasons for this kind of harmful development obviously include lack of innovation, lack of courage to take radically new approaches, and immense busyness of business people.

What should be done for rehabilitating the whole quality professionalism and discipline?

When implementing quality management (QM), one should reform QM principles and create new effective professional methodology to be employed in a natural and innovative manner integrated with organization-specific business emphases and within contemporary management infrastructures and business environments. General ISO 9000 Quality Management Principles and Core Values and Concepts of the quality award models can be as a good starting point for this development. New business models and emergent technologies may cause problems but may also offer new challenging solutions.

When striving for competitiveness in these circumstances one could underscore the following aspects:

• Recognizing business performance excellence instead of a narrow quality thinking
  
• Striving for flexible realization of quality of management and leadership instead of distinct and vague quality management (i.e. management of quality)
  
• Adopting organizational learning instead of continual improvement
  
• Applying the "systematicity" (systematic approach) of the quality of leadership instead of formal and distinct quality systems
  
• Using business-related principles and actions of the quality of leadership instead of formal and general quality assurance requirements only
  
• Setting stretched business objectives instead of minimum standard requirements
• Aiming at innovative and unique solutions instead of stereotyped systems
  
• Relying on genuine and effective internal business performance self-assessments instead of third party audits and certifications of "artificial" quality systems
  
• Getting advantage of tacit knowledge instead of only records of explicit data and information
  
• Having genuine impacts on the company's quality approach and success by the behaviour of the top management.
  
• Using company's own internal expertise and effective cooperation with world-wide quality experts' network instead of external consultants

Basically, effective implementing organization-dedicated business integrated QM does not call for any extra measures or investments. General information sources e.g. ISO 9000 standards and performance excellence models can still be utilized as reference materials innovatively. Experiences have proved that it is always worthwhile to improve the existing management systematicity of the organization based on a systematic methodology. For QM the organization must be always ready but never finished. Managing for sustainable business success through quality is only possible if the responsible top manager is aware and actively and practically committed in his / her personal role to get quality happen in the whole company. Additionally, it is needed a productive cooperation between business leaders and quality experts.

Effective learning is the key for enhancing quality in management and leadership

Successful organizational management is based on right knowledge and managerial skills to use the knowledge for the current business needs. Organizational knowledge is particularly based on exchange of information between customers, employees, shareholders, suppliers, business partners, and the great public.

Organizational and personal learning are prerequisites for enhancing management/leadership skills in striving for business success. These skills are needed at different levels in organizations, including the board, executives, directors, managers, process owners, project managers, and individuals (self-management).

Aim of the Knowledge Work Environment (KWE) is to facilitate effective and efficient knowledge-intensive and networked business activities. Management/leadership is most important area of these activities in all organizations. KWE provides means for learning through improving internal and external interactive and collaborative communication of management, and building social knowledge and intelligence. Management learning is integrated with normal managing activities of the business leaders.

Typically management learning in organizations is based on training by traditional or e-learning means. However, investments in these solutions have not proved effective. Only basic management/leadership skills may be learned by traditional training programs. Business leaders are busy and not interested in using ordinary e-learning means. E-learning solutions based on “learning management systems” have not been encouraging. Systems are too expensive, learning too boring, search of material (learning objects) too cumbersome, and reusable objects not really reusable. Additional challenge is that half-life of the relevant business knowledge has shortened. KWE provides remarkable improvement to the current problems of organizational training and e-learning applications.

Effective learning requires application of new learning theories like connectivity, interactivity, and sharing information. Factually 80% of learning takes place by informal learning, e.g. by serendipic or parasitic learning. KWE is to realize these new learning theories in practical business cases by using modern IT (Interactive Technology) solutions. It also facilitates learning in networks which is practical situation in all business cases.On-the-job learning offers cost-effective way to link learning to the organizational needs and priorities.

KWE consists of ability to lead knowledge workers into electronic work areas, where they work in collaboration to learn by building new knowledge. They have also all relevant explicit information easily available through related documents. The basic KWE tools include blog, wiki, aggregator, forums, and files that are based on modern proved social software and Web 2.0 technology. Software for the tools-components are from the open source software community that is the biggest resource in the world for developing software products. Open software is easy to modify and customize, and it provides rapid application development.

A practical and significant example of managerial learning environment is related to organization’s strategic management process. Strategic management is strongly knowledge-based collaborative and innovative activity, and typically involved by organization's board of directors, executing managers, selected experts, personnel and stakeholders' representatives. KWE provides a new innovative approach for integrating quality into a management system and in that way realizing also a modern "quality management system". In organizations, there is a lot of similar networked collaborative knowledge-intensive cooperation. Especially benefits of using the KWE approach are obvious in cases where participants are busy and geographically scattered and where arranging synchronous of physical meetings is difficult. Typical cases suitable for KWE include expert groups, e.g. product designers, HRM people, quality managers, maintenance people, project groups, process teams, supplier or customer networks, networked SME's, e.g. small cooperating consulting or expert companies, and networked learning in educational institutes.

How to manage complex responsive processes of relating?

Ralph Stacey’s well-known statement is “complex responsive processes of relating”. That includes three essential aspects for organizations' business processes:

• Business processes are processes of relating. That is to say that all processes are always related to some other actor(s), e.g. other processes, customers or other stakeholders, etc. These other actors may be within the same organization or in other organizations. There are always both intended and unintended relationships, potentially even hostile actors.
• Business processes respond to the needs and expectations from the related other actors. That is definitely the basic purpose of business processes.
• Business processes are always complex because all details of needs and expectations, process activities, or relating features cannot be in full certainty defined or agreed. This aspect is particularly related to the multifarious characteristics of the process activities and related actors, especially due to human actions.

It is very easy to accept that really all business processes have these features. This is also reason to the major problem of process management. How to manage this kind of complex responsive processes of relating?

• Management of the processes cannot be based on explicit information only with 100% certainty or agreement.
• All processes include always some degree of risks on not fulfilling all needs and expectations.
• Process activities or relating activities may develop towards chaos or anarchy.

In fact, processes include many different kinds of activities. From the management point of view, different activity categories may be described with “Stacey matrix” presentation.




One single business process may include activities representing all these different categories. One simple management approach is not sufficient to manage all differing features of a business process if you are really striving for an excellent process performance. Appropriate management actions should be selected based on the degree of certainty and level of agreement on the issue in question.

An effective management of complex responsive process of relating requires explicit consideration of the following three elements:

• Identity of the relating processes through identifying the set of characteristics by which a process is definitively recognizable. In practice that may be done by a systematic process plan. Process plan also identifies activities and human / automatic actors within the process.
• Relationship of actors considering the level of agreement and degree of certainty according to the Stacey’s matrix. Also the balance and level of win / win is important for relationship realization.
• Communication between actors that may be open, restricted, or fuzzy. Of course completely closed communication cannot be case of business processes.

If the relating processes are not clearly identified (process plans), the situation fall into pieces of interacting process-internal actors, and even may develop towards chaos or anarchy.

In our process networks, there may be also unknown (see process X in the fugure) and even hostile processes.

The challenge of modern business managers: How to solve the agility / maturity dilemma?

There are two contradictory schools of expertise for how the organizational management system should be realized and developed:

• The Maturity School
• The Agility School

Representatives of the maturity school say that one should build a consistent system for management that covers organization’s all activities. Then the organization is capable to fulfil successfully all relevant requirements from organization’s stakeholders. This is typical approach e.g. among traditional quality experts and their quality management systems based on international standards.

The agility people think in a completely different way. They say (see The Agile Manifesto): “We are uncovering better ways of doing business. Through this work we have come to value:

• Individuals and interactions over processes and tools.
• Working solutions over comprehensive documentation.
• Customer collaboration over contract negotiation.
• Responding to change over following a plan.

That is, while there is value in the items on the right, we value the items on the left more.” Their approach is also very well justified and it has recognized advocates especially among modern software and ICT businesses.

Thus, we have really a dilemma: A situation that requires a choice between options that are equally unfavorable or mutually exclusive. And business practitioners easily confront with these both options in their every day activities. But how to solve the dilemma that seems to be already in principle impossible to be solved?

The dilemma cannot be solved at the operational level where the problematic situation exists. One should consider the question at higher level of comprehension. Then it is possible to find that solution is in maturity – not necessarily in building practical operational system(s) – but in maturity in having profound knowledge and understanding reality of the business case holistically. Then one can recognize how comprehensive and what kind of systematic approach is suitable and how to behave in an agile way in practice.

One may find this solution to the dilemma already from the ancient poem #26 of Chinese Lao Tzu:

"Heaviness is the root of lightness.
Stillness is the master of agitation.
And so the wise person:
Travels all day, not departing from the heavy baggage wagon although there are grand sights, he sits calmly aloof.
Why is this?
A 10 000 chariot lord,
mindful of his self, takes the world lightly.
Light, then lose the root.
Agitated, then lose the mastery."

Achieving quality through managing business processes

Management of business processes is definitely the most important and practical subject matter to get quality happen in all kinds of organizations. Proved practices, however, demonstrate that although process management is an incredibly simple thing, its implementation seems incredibly difficult because it always puts a strain on the company's leadership issues. Development of the business processes and their management is a long-term effort and should take into account realities of business environments in question.

Systematic process ideas were used already in ancient plant and construction activities. The concept is also often referred to in cases of natural development. Through industrialization processes became an everyday concept in so called process industry. From 1980’s process approach has been used for computers’ internal activities according to structured analysis and design technique (SADT). However, in a large scale business process approach has been used comprehensively for the benefits of business management only for less than twenty years, and during that time a lot of practical means have been developed for managing business processes. In these approaches, especially learning from system theory and system dynamics was used. To the quality management standards ISO 9000, process concept was introduced in the 1990’s.

Processes in general adhere always to all kinds of doings or activities. In fact, originally the process concept just denotes any kind of activity or operation. When these activities within an organization are linked together to achieve organization’s business results, one may talk about business processes. Organization's business processes is an orthogonal dimension to organizational structure. Organization's overal business performance is the result of managerial solutions both in processes and in structures, however, naturally the the structures should support the processes.Structural questions of business processes have become an interesting management issue in order to increase effectiveness and efficiency of the business operations. In some cases, however, there has been a danger that structural aspects, e.g. formal process diagrams, were being harmfully over-emphasized in process management.

Due to its business significance, process management is a comprehensive business management issue by its basic nature. Today, however, truly effective and efficient process management implies a radical change to the established management thinking and structures in many organizations.

Major motivation in organizations for strengthening process-focus in business development is based on the following objectives:

• Focusing through the whole organization on customers and aiming to fulfill customer-needs competitively
• Avoiding problems of company-internal interfaces and responsibilities: operating effectively and efficiently, ”smoothly”, through the whole organization
  
• Making human quality (i.e. individuals and teams) development effective based on the needs real process activities
  
• Enhancing process-innovations in addition to product innovations
• Getting benefits of real options from process-based investments

All business results are achieved through managing business processes and projects. Basic (or core or key - different terms are used in different organizations) business processes imply continuously running interlinked business activities, and projects are singular processes for unique business tasks.

Both strategic and operational management are needed in a comprehensive process approach, the strategic one focusing on managing the network of inter-linked business processes as a whole business system, and the operational one on managing single processes and projects.

Most practical means to support organization-wide management of business processes are:

1. Process plan for managing each single business process
2. Business process framework for managing the whole system of business processes within an organization
3. Procedure document defining the principles, responsibilities, structures, and practices being used for process management in an organization

Business processes are managed within an organization through strategic and operational decisions and methodologies by responsible business people. However, business processes are to interact with external actors that are not necessarily under contol of the organization. Especially modern flexible and dynamic business environments set challenging requirements for managing business processes. In fact, business processes are complex responsive processes of relating.

From quality documentation and IT systems to leveraging the usage of information and knowledge for the purpose of managing business performance

Very often in quality approaches, quality professionals have placed stress on documentation (or particularly on quality documentation). Often they have referred to requirements of ISO 9000 standards or quality award criteria. However, the real requirements for documentation come only from business needs, not from standards which are only guiding documents or general models for operations. Instead of quality documentation, one should consider the documentation needed by good business management as a whole. Practices for documentation for managing an organization have developed from passive and separate documents to dynamic and flexible systems for leveraging usage of information and knowledge in collaborative group work. Old solutions (which however are still used in many organizations) include:

• Loose and fragmented paper documents
• Copied or printed manuals, procedure documents, record reports, and certificates
• Fragmented documents in information technology (IT) systems
• Semi-structured IT systems or intranets with variable share of Office and HTML documents

Organization needs to share information and knowledge among its managers, employees, and people of stakeholders. In order to manage situation, organizations have invested in IT solutions. However the development and use of the IT solutions has been problematic in practice. During the past years many IT applications have made the jobs of people more complex and difficult, rather than simplifying their work. In many cases the data sources, systems, and applications are located throughout the organization. Corporate-wide systems are complex and designed for a specific purpose and function, so the IT department is required to deploy many different and often unrelated applications and modules to fill the information and processing needs of the entire organization. Incredible amount of training time is needed for an employee to learn how to effectively use such a complex suite of applications and all of the processes and steps involved to complete their assigned responsibilities. The corporate intranets were originally designed and implemented to meet the needs for shared information across the organization. Correspondingly Internet and extranet solutions were developed for external purposes. Using the corporate intranet, employees are able to access corporate information using web browser to find forms, open applications to perform their jobs, and review a customer's project status, and for many other activities. The corporate intranet solution provides navigation to different enterprise systems and documents. Corporate intranets are responsible for hosting a multitude of applications and exponentially growing number of documents to be available for employees. As intranet sites grew larger, a new set of problems created related chaotic situations with information access, knowledge-sharing, and security. Key problems of corporate intranets relate to the following issues:

• Employees need to make more informed and consistent decisions.
• Employees are asked to complete more activities online.
• Intranet sites contain thousands of pages and continue to grow.
• Intranet pages must be continually updated.
• Employees must access information from multiple sources.
• Navigation through your organization's intranet becomes difficult.

There are doubts about real benefits of the existing business Internet and extranet solutions. Anyway, all these IT solutions have been used very poorly for the purposes of quality management and quality assurance.



Effective use of modern disruptive information technology gives completely new possibilities especially strengthening applications in the area of tacit knowledge that, in fact, covers the most important and biggest part of business knowledge. These new solutions include:

• Portals and portlettes
• Collaborative learning / group work and social networking infratructures

Portal is a modern solution for knowledge-content businesses and seen as a solution to chaotic information situation in organizations. E.g. corporate portal expert Heidi Collins "Portals: Escape from Intranet Hell?" Portal is a single, Web-based interface into the world of heterogeneous and incompatible information and knowledge sources distributed across the telecommunication network. For quality management a portal may offer "A cutting-edge gateway to quality-related business reality for enhancing quality awareness, improved use of expertise, performance management and interested party confidence." This approach may be called as "eQuality Portal". Portal provides automatic services for quality management to the members of an organization as well as to its partners. Portals use Internet technology, but basically a portal is very different from simple Internet or intranet pages of organizations. Portal has general features that are beneficial for all kinds of knowledge-based activities including:

• A consistent view of the relevant business community
• Information organizing and searching capabilities
• Direct access to knowledge and resources
• Direct links to relative data and knowledge experts
• Individual identity and personalized access to content

Negative point is that portals are rather expensive and therefore suitable primarily for big organizations. Modern Web-operated social networking applications based on simple and cheap solutions of disruptive innovations have a wide variety of quality management related uses such as personal management, collaborative learning, carrying out cooperative projects, and supporting cooperation in networked business environments. Their main strengths include customizable group systems that allow many groups to work simultaneously on sharing individual knowledge and to create new mutual knowledge. This may be done with appropriate new tools for projects, calendar, tasks, forums, conferencing, information / knowledge links, chat, reviews, voting, files, instant messages, resource profiles, etc. Designed to ease problems solving with group based working, the solutions make it possible to work in groups, inside and outside the organization. This gives advantages to organizations which have a lot of work groups that have to be in contact with each other around the globe. E.g. a virtual network of quality managers of a corporation or a larger business community may be created on this basis.

“You get what you measure” or not?

Very strong topic today in all management doctrines is measurement. This is also emphasis in many quality management approaches. The old saying “you get what you measure” is used in many contexts all over the world, and it has had influence on reinforcing interests in measurements. E.g. Google finds as much as 17800 hits for this statement. Is this saying right? Do you get what you measure?

Measurements are important in all kinds of activities including managing organizations but their emphasis is very often wrong. You don’t necessarily get what you measure, and what you get through measurements is not necessarily good for organization or people being managed.

This topic is related to the knowledge theme that I considered in my previous blog. Measurements results represent explicit knowledge but business intentions and real business results are of tacit knowledge of business leaders and workers in the organization. No measurements can be objective but they are always affected by the intension and awareness of somebody – even in physics objectivity is impossible. What is being measured, by what kinds of means or methodology, what is obtained through measurements, and how the measurements results are understood – they all depend on somebody’s intention and awareness.

Dr. W. Edwards Deming said (e.g. in "The new economics") that information is not knowledge. Knowledge comes from theory. Without theory, there is no way to use the information that comes to us on the instant. He also emphasized that there is no true value of any characteristic, state, or observation. Therefore he called for creating profound knowledge for leadership. He also warned about people rewarding based on quantitative measurements. This was his well-known deadly disease #3 of leadership. According to his arguments “evaluation of performance, merit rating, or annual review nourish short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, nourishes rivalry and politics. It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. It is unfair, as it ascribes to the people in a group differences that may be caused totally by the system that they work in.”

More important than to create scrupulous and even harmful business measurement systems, is to get tacit knowledge of business leaders and workers effectively interact with each other for creating extensive profound knowledge within an organization. After that also measurements based explicit knowledge gives new views for managing an organization to sustainable success development.

The most well-known and recognized general model for management is the P (Plan) - D (Do) - C (Check) - A (Act) model according to Deming and Shewhart. This model is also an appreciated tool of quality management. Traditionally PDCA model has been applied principally in the context of explicit business information. The challenge, however, to business management is to combine explicit and tacit knowledge in making business decisions in businesses. According to the figure, managerial actions based on facts from operations are combined with the tacit knowledge of managers. "Ba" is a Japanese concept expressing a collaboratively living environment promoting change of knowledge and creating managerial profound knowledge or even wisdom.