The concepts of an effective management system Dr. Chris Bamber, PhD, MSc, MIQA

1. The concepts of an effective management system Dr. Chris Bamber, PhD, MSc, MIQA Warning:This presentation has little to do with integration and everything to do with running an organisation

2. What is a management system? To answer this, we probably need to understand what; • a system is and then what • a process is and what • management means

3. What is a system? • A system is described as “a model of a whole entity” 1 1 Checkland, P.B., (1988), “Systems Thinking, Systems Practice”, John Wiley & Sons, Chichester.

4. What is a system? • “A system is a set of processes and resources that are designed and performed in order to achieve a desired objective, such as a ….” 2 1 Kaarapetrovic, S and Willburn, W (1998) “Concepts of integration of quality and environmental management systems” The TQM Magazine, Vol. 10, No. 3.

5. What is a system? Do systems stand alone? NO Systems are affected by and affect their environment

6. What is a system? • Systems change over time • Purpose, environment, configuration, decay, development, mature • Systems therefore potentially have many futures Can the future of an organisation be determined or influenced in any way? Can we direct an organisational system? YES

7. What is a system? Because we know systems have many potential futures, organisational systems must be managed - but how? “The boundary of a system can only be defined when the purpose of the system is known ….. The boundary will enclose the organisational processes and resources that make the system act in the way it does”

8. What is an organisational system? “We have to develop a sense of connectedness, a sense of working together as part of a system, where each part of the system is affecting, being affected by the others, and where the whole is greater than the sum of the parts.” 3 Otherwise we sub-optimise the system from Deming or Juran - American quality gurus Think about the human system or a humans sub-system (dietary system/respiratory system etc.). It would be totally stupid to have a super giant high performing liver, or left leg or …….. Increasing functional performance with disregard to the system can be suicidal – this is analogous to organisations! 3 Senge, P.M., (1997), The Fifth Discipline: The Art & Practice of The Learning Organisation, Century Business, London.

9. Functional Hierarchy vs. Product/Service Flow

10. Process based business systems follow:- The future Plan 1 Plan Act Do Act 1 Do1 Check Check 1 Management system &continuous improvement Continuous business improvement

11. What is an organisational system? continued • Processes deliver what the system exists for • Directed/purposeful change means the processes need to improve • To direct a process means change • It is the people that have the most influence on processes and change of processes • This means training is required in understanding what a process is, how we can manage processes and how we can improve the system.

12. KPI’s (Key Performance Indicators)

13. ‘Key Performance Indicators’ Stakeholder needs Customer needs Business objectives (quality, environmental, health and safety etc.) Monitor performance & improve Processes (including projects) Key performance indicators

14. What is a KPI? • Metric not a target, often percentage • Efficiency (in the process) - process • Effectiveness (of the process) - product • Financial • Different levels of KPIs, business, process • Management by fact • Managing processes not procedures • Meaningful to those involved

15. ISO 9000 Quality Management System One view of an Integrated Management System AHAS18000:Draft Policy Occupational Health & Safety & ISO 14001 Management Environmental Strategy System Management System QMS EMS Core Management Principles (Shared Vision) Policy Policy & & Strategy Strategy OHSM&S

17. A Typical System? Understanding the Market Bringing about change Business Planning Monitor & measure Performance Design / enhance Services Communicate Services Deliver Services Managing People Managing Assets Managing Finance ‘What are your processes?’

18. Money People Management Management Market Knowledge Bringing about Business Planning change Meeting Customer Asset Management Choice Performance Growing the Lifestyle Services monitoring business Managing ICT Marketing new & infrastructure existing products & services SP@CE Processes

19. Lets look a system and process modelWas this an IMS?What can we do with this approach to integrate quality, health and safety and environmental

20. Integrating through the use of risk management principles • We could assess each process using a risk management approach • The framework could be Q, S and H, E or anything else you may want to think about • Each process would have key risk indicators (KRIs) • KRIs would lead to management decisions

21. ‘Key Risk Indicators’ Stakeholder needs Customer needs Business objectives (quality, environmental, health and safety etc.) Monitor performance & improve Processes (including projects) Key Risk Indicators

22. Think differently Business System first and then integration will be built in not forced in