Policy Governance & Monitoring - Quality Approach
Qualityworld
Eyes and ears
It makes good business sense to monitor all operations and be more aware than the competition. Ian Dalling, director of Unified Management Solutions, suggests that as well as taking an integrated view of management, organisations should adopt an integrated approach to monitoring too
Integrated management is about forgetting to fragment management. This same principle also applies to integrated monitoring. It should be a holistic checking structure that connects with all other management arrangements to optimise the performance of the organisation.
As humans with advanced consciousness, we seek to understand via our five senses in order to maximise gain and minimise loss. We reactively learn from mistakes and proactively check that risks are adequately controlled or avoided in order to feel happy and confident. We make use of our intelligence, knowledge and experience and more attention is given where actions are critical such as crossing a busy road. As children our parents frequently say to us, 'look where you're going' and 'look what you've just done'. In this example, a successful person makes optimal use of proactive and reactive monitoring respectively.
A living and breathing organisation
These principles can also be applied to an organisation, commercial or otherwise. An organisation can be understood as a super organism that is sustained by satisfying the needs and expectations of its stakeholders who have varying degrees of interest in its quality, health, safety, environment, security, ethics, sustainability and financial performance. Like the individual, an organisation must monitor reactively and proactively as part of a plan-do-check-act cycle. Reactive monitoring employs inspection type activities to ensure that management arrangements are implemented, effective and meet best practice. It involves reporting, analysing and communicating negative and positive events such as an accident or an unusually delighted customer. It also allows learning from past experience while proactive monitoring checks out the organisation to prevent loss and maximise gain in the future. Monitoring also has the added benefit of acting as a feedback loop reinforcing good practice and deterring procedural violations.
All of the monitoring actions should be intelligently integrated and managed collectively, not in isolation. An organisation's limited monitoring resource must be used in an optimal way to justly satisfy stakeholders and customers.
The monitoring process should employ several diverse and complementary methods to efficiently address all areas of the organisation. Like an individual, an organisation should use both reactive and proactive monitoring methods.
But what needs monitoring?
What needs monitoring will be unique to the organisation but there are broad aspects that apply to most organisations. Figure 1 shows a unified model of an organisation. All of the components - management system, culture, knowledge base etc - individually and collectively determine the performance of the organisation and require appropriate monitoring.
Figure 1. Organisation Unified model
If the organisation is project-based then project monitoring that takes account of a project-specific risk register will also be required. All too often organisations use a standard non risk-informed approach leading to poor use of monitoring resources.
The management of monitoring needs to be carefully defined too. A gap in the monitoring arrangements or non-effective arrangements can expose the organisation to loss that may in extreme cases threaten the very existence of the organisation, for example the case of Barings Bank brought down by a rogue trader Nick Leeson.
Does everything need the same attention?
Some aspects of an organisation are obviously more critical than others. But how can we determine this in a systematic way? An integrated approach requires that we assess all the significant risks to the organisation and record them in a risk register. The register will ideally be universal using a common measure for all types of risk and record the totality of risk impacting the organisation. Quality can be included in the risk register if we express it as the risk of failing to satisfy customers.
The organisation's monitoring schedule should be risk-informed and take account of the degree that controls are contributing to risk reduction. Additional monitoring may be required where processes are complex, novel, infrequently performed or involve specialist equipment. Other factors may include employee experience and the implications of corrective action, for example, adding steel reinforcement after the concrete has been poured on a construction site would be difficult, costly and delay completion. Critical points like these are often referred to as 'hold points' and included in process plans.
Broad and narrow performance
Excessive variation in any parameter is a universal problem contributing to risk, not just in manufactured items but across the entire organisation. Research conducted with DNV on behalf of British Energy and BNFL showed that important parameters across an organisation may be individually improving, steady or deteriorating - performance is not homogeneous. In particular, the research showed that measured occupational safety performance should not be used as a performance indicator for plant safety performance.
Monitoring needs to take account of what and how something is to be measured and the degree to which any sampling measure is representative. Failure to achieve this can lead to significant loss or organisational collapse. Management systems, processes (core, supporting and contingency), competence, culture (including sub-cultures) and human consciousness can all be subject to local variation.
Dynamic monitoring and data management
Monitoring should not be a frozen structure. It should take account of current and future assessed risks, monitoring experience, planned initiatives, strengths and weaknesses of the organisation. The monitoring schedule should be continually reviewed and adjusted to ensure that it is meeting the needs of the organisation (figure 2).
Figure 2. Unified management system model
Proactive monitoring should be structured into a logical hierarchy, monitoring least frequently at the top using audits, and most frequently at the bottom using inspections and self monitoring (figure 3). Frequencies and content should be continually adjusted using both proactive and reactive data. This process can be made easier using a rating system to prioritise actions. The hierarchy of monitoring provides a source of information that may be selected for key performance indicators (KPIs).
Monitoring should be managed within the organisation's integrated computer database so that intelligent enquiries can be made across all of the organisation's data. Monitoring data should be classified by type, significance, process, project, customer etc. Observations can be equal if not more valuable than non-conformances, for example, a minor non-compliance with a generic standard or the established management system would be overshadowed by a suggestion that significantly improves a compliant process. The efficiency and effectiveness of processes is more important than blind compliance with management standards.
Figure 3. Typical hierarchy of proactive monitoring
Reactive and proactive monitoring statistics should be maintained and trends identified and investigated. This data can form part of a hierarchical structure of KPIs used to track the ongoing performance of the organisation. If variations occur in high level KPIs then subordinate KPIs can be investigated to help identify the problem areas. KPIs should provide the earliest possible warning that an organisation has deteriorating performance. Proactive monitoring like this is particularly important for major hazard plants because major accidents are high in consequence but low in frequency. Accident causation is also very complex with many sources of risk that must be managed effectively. A broad portfolio of KPIs is essential.
A monitoring organisation
Everyone should be involved in monitoring even if they are only self monitoring. Responsibilities need to be defined to design, execute and continually review the monitoring arrangements. This must be embedded as part of the overall management system and not separately structured. A hierarchy of structured reviews reporting up to a fully integrated management review can be used when there is too much material for a single review. Unless there is good reason, separate autonomous audit committees should be avoided.
Reactive monitoring
Reactive monitoring is used mainly when an incident or near miss has occurred (see figure 2). It is designed to:
establish the circumstances leading up to, during, and after the event
identify whether existing management arrangements were adequate
provide suitable records of the event for comparison with past and future events
comply with regulatory and corporate reporting requirements
Near miss reporting is preferable to accident reporting because it generates large amounts of data. Near misses represent failures in risk controls. HSE research shows that for each reported 'three-day lost-time injury', there are seven minor injuries and 189 near misses. Although near miss reporting is normally associated with safety it is just as applicable to other types of management, such as quality incidents upsetting customers. For personnel to freely report near misses there must be a 'just culture', previously termed a 'blame free culture'.
Accidents, incidents and near misses should be analysed to determine the direct and root causes. Corrective action is then taken to fix the direct cause of the incident and, where applicable, broader weaknesses in the management arrangements such as communication, training, documentation, risk assessment etc. Data collected form similar events occurring over a period of time can be used to review related risk assessments. Reports of positive events such as a congratulating letter from a customer should also be recorded, communicated and fed into the review process.
Proactive monitoring
Proactive monitoring is used to identify deficiencies in the organisation to prevent future problems (as in figure 2). Audits, surveys, inspections and other proactive monitoring methods such as benchmarking, health surveillance and random drug and alcohol testing etc can be applied internally and externally to the supply and delivery chains as appropriate. They should form a hierarchy of monitoring measures and take account of risk assessments and past monitored performance (as in figure 3).
A diverse range of audit approaches - including organisation-based and process-based - can add value. Audits and inspections should generally focus on all process potential losses rather than specifically on quality or safety. Involving all managers in monitoring helps them to keep in touch with processes and the workplace as well as being seen to be committed and involved.
Supplementary audits, reviews and inspections can also be conducted to focus on specific issues. These may follow an incident or other hot topic confronting the organisation such as a new regulation.
It pays to monitor
Management review should look at historical trends and monitoring results to be able to plan and resource continual improvement actions. Planning should take account of new ventures, new legislation and organisational change. Management overall and the monitoring and review components should each be integrated as far as it provides value.
Leading UK certification bodies state that surveillance savings of one third can be given to organisations with truly integrated management systems. An organisation will also make comparable internal savings supporting the certification process as well as savings in its internal audits. These are just some of the many benefits of integrated management that improve the efficiency and effectiveness of an organisation.
The greatest impact on organisations is people, because they are the source of all creativity but can also perform errors and violate procedures. A person who puts personal gain above the interests of the organisation and its stakeholders becomes a significant risk.
The CEO has the power to impede the monitoring processes and any actions that should be taken. Internal arrangements need to be in place to facilitate, and where necessary protect, independent monitoring and whistle blowing should an employee discover any regulatory or contractual violations. Many aspects of security management differ from others types of management because the hazard is invariably intelligent and will seek ways around risk controls.
Monitoring should be recognised and valued as an essential element of a management control and guidance system. It should be dynamic and based on the totality of the risk-informed needs of the organisation. Hierarchical structures can help manage an embedded, dynamic continuum of monitoring, spanning vertically from corporate leadership to the shop floor and horizontally throughout the core, supporting and contingency processes that link with stakeholder needs. Data should be analysed in detail and collectively as a whole. But monitoring those who work hard to avoid being monitored is likely to remain the greatest challenge.
Biography
Ian Dalling is a chartered electrical and mechanical engineer and began implementing IMSs in 1985 at Nuclear Electric. He has been a management consultant since 1990 and is the director of Unified Management Solutions which specialises in integrated management. He can be contacted at e: ian@unifiedmanagement.com.
Eyes and ears
It makes good business sense to monitor all operations and be more aware than the competition. Ian Dalling, director of Unified Management Solutions, suggests that as well as taking an integrated view of management, organisations should adopt an integrated approach to monitoring too
Integrated management is about forgetting to fragment management. This same principle also applies to integrated monitoring. It should be a holistic checking structure that connects with all other management arrangements to optimise the performance of the organisation.
As humans with advanced consciousness, we seek to understand via our five senses in order to maximise gain and minimise loss. We reactively learn from mistakes and proactively check that risks are adequately controlled or avoided in order to feel happy and confident. We make use of our intelligence, knowledge and experience and more attention is given where actions are critical such as crossing a busy road. As children our parents frequently say to us, 'look where you're going' and 'look what you've just done'. In this example, a successful person makes optimal use of proactive and reactive monitoring respectively.
A living and breathing organisation
These principles can also be applied to an organisation, commercial or otherwise. An organisation can be understood as a super organism that is sustained by satisfying the needs and expectations of its stakeholders who have varying degrees of interest in its quality, health, safety, environment, security, ethics, sustainability and financial performance. Like the individual, an organisation must monitor reactively and proactively as part of a plan-do-check-act cycle. Reactive monitoring employs inspection type activities to ensure that management arrangements are implemented, effective and meet best practice. It involves reporting, analysing and communicating negative and positive events such as an accident or an unusually delighted customer. It also allows learning from past experience while proactive monitoring checks out the organisation to prevent loss and maximise gain in the future. Monitoring also has the added benefit of acting as a feedback loop reinforcing good practice and deterring procedural violations.
All of the monitoring actions should be intelligently integrated and managed collectively, not in isolation. An organisation's limited monitoring resource must be used in an optimal way to justly satisfy stakeholders and customers.
The monitoring process should employ several diverse and complementary methods to efficiently address all areas of the organisation. Like an individual, an organisation should use both reactive and proactive monitoring methods.
But what needs monitoring?
What needs monitoring will be unique to the organisation but there are broad aspects that apply to most organisations. Figure 1 shows a unified model of an organisation. All of the components - management system, culture, knowledge base etc - individually and collectively determine the performance of the organisation and require appropriate monitoring.
Figure 1. Organisation Unified model
If the organisation is project-based then project monitoring that takes account of a project-specific risk register will also be required. All too often organisations use a standard non risk-informed approach leading to poor use of monitoring resources.
The management of monitoring needs to be carefully defined too. A gap in the monitoring arrangements or non-effective arrangements can expose the organisation to loss that may in extreme cases threaten the very existence of the organisation, for example the case of Barings Bank brought down by a rogue trader Nick Leeson.
Does everything need the same attention?
Some aspects of an organisation are obviously more critical than others. But how can we determine this in a systematic way? An integrated approach requires that we assess all the significant risks to the organisation and record them in a risk register. The register will ideally be universal using a common measure for all types of risk and record the totality of risk impacting the organisation. Quality can be included in the risk register if we express it as the risk of failing to satisfy customers.
The organisation's monitoring schedule should be risk-informed and take account of the degree that controls are contributing to risk reduction. Additional monitoring may be required where processes are complex, novel, infrequently performed or involve specialist equipment. Other factors may include employee experience and the implications of corrective action, for example, adding steel reinforcement after the concrete has been poured on a construction site would be difficult, costly and delay completion. Critical points like these are often referred to as 'hold points' and included in process plans.
Broad and narrow performance
Excessive variation in any parameter is a universal problem contributing to risk, not just in manufactured items but across the entire organisation. Research conducted with DNV on behalf of British Energy and BNFL showed that important parameters across an organisation may be individually improving, steady or deteriorating - performance is not homogeneous. In particular, the research showed that measured occupational safety performance should not be used as a performance indicator for plant safety performance.
Monitoring needs to take account of what and how something is to be measured and the degree to which any sampling measure is representative. Failure to achieve this can lead to significant loss or organisational collapse. Management systems, processes (core, supporting and contingency), competence, culture (including sub-cultures) and human consciousness can all be subject to local variation.
Dynamic monitoring and data management
Monitoring should not be a frozen structure. It should take account of current and future assessed risks, monitoring experience, planned initiatives, strengths and weaknesses of the organisation. The monitoring schedule should be continually reviewed and adjusted to ensure that it is meeting the needs of the organisation (figure 2).
Figure 2. Unified management system model
Proactive monitoring should be structured into a logical hierarchy, monitoring least frequently at the top using audits, and most frequently at the bottom using inspections and self monitoring (figure 3). Frequencies and content should be continually adjusted using both proactive and reactive data. This process can be made easier using a rating system to prioritise actions. The hierarchy of monitoring provides a source of information that may be selected for key performance indicators (KPIs).
Monitoring should be managed within the organisation's integrated computer database so that intelligent enquiries can be made across all of the organisation's data. Monitoring data should be classified by type, significance, process, project, customer etc. Observations can be equal if not more valuable than non-conformances, for example, a minor non-compliance with a generic standard or the established management system would be overshadowed by a suggestion that significantly improves a compliant process. The efficiency and effectiveness of processes is more important than blind compliance with management standards.
Figure 3. Typical hierarchy of proactive monitoring
Reactive and proactive monitoring statistics should be maintained and trends identified and investigated. This data can form part of a hierarchical structure of KPIs used to track the ongoing performance of the organisation. If variations occur in high level KPIs then subordinate KPIs can be investigated to help identify the problem areas. KPIs should provide the earliest possible warning that an organisation has deteriorating performance. Proactive monitoring like this is particularly important for major hazard plants because major accidents are high in consequence but low in frequency. Accident causation is also very complex with many sources of risk that must be managed effectively. A broad portfolio of KPIs is essential.
A monitoring organisation
Everyone should be involved in monitoring even if they are only self monitoring. Responsibilities need to be defined to design, execute and continually review the monitoring arrangements. This must be embedded as part of the overall management system and not separately structured. A hierarchy of structured reviews reporting up to a fully integrated management review can be used when there is too much material for a single review. Unless there is good reason, separate autonomous audit committees should be avoided.
Reactive monitoring
Reactive monitoring is used mainly when an incident or near miss has occurred (see figure 2). It is designed to:
establish the circumstances leading up to, during, and after the event
identify whether existing management arrangements were adequate
provide suitable records of the event for comparison with past and future events
comply with regulatory and corporate reporting requirements
Near miss reporting is preferable to accident reporting because it generates large amounts of data. Near misses represent failures in risk controls. HSE research shows that for each reported 'three-day lost-time injury', there are seven minor injuries and 189 near misses. Although near miss reporting is normally associated with safety it is just as applicable to other types of management, such as quality incidents upsetting customers. For personnel to freely report near misses there must be a 'just culture', previously termed a 'blame free culture'.
Accidents, incidents and near misses should be analysed to determine the direct and root causes. Corrective action is then taken to fix the direct cause of the incident and, where applicable, broader weaknesses in the management arrangements such as communication, training, documentation, risk assessment etc. Data collected form similar events occurring over a period of time can be used to review related risk assessments. Reports of positive events such as a congratulating letter from a customer should also be recorded, communicated and fed into the review process.
Proactive monitoring
Proactive monitoring is used to identify deficiencies in the organisation to prevent future problems (as in figure 2). Audits, surveys, inspections and other proactive monitoring methods such as benchmarking, health surveillance and random drug and alcohol testing etc can be applied internally and externally to the supply and delivery chains as appropriate. They should form a hierarchy of monitoring measures and take account of risk assessments and past monitored performance (as in figure 3).
A diverse range of audit approaches - including organisation-based and process-based - can add value. Audits and inspections should generally focus on all process potential losses rather than specifically on quality or safety. Involving all managers in monitoring helps them to keep in touch with processes and the workplace as well as being seen to be committed and involved.
Supplementary audits, reviews and inspections can also be conducted to focus on specific issues. These may follow an incident or other hot topic confronting the organisation such as a new regulation.
It pays to monitor
Management review should look at historical trends and monitoring results to be able to plan and resource continual improvement actions. Planning should take account of new ventures, new legislation and organisational change. Management overall and the monitoring and review components should each be integrated as far as it provides value.
Leading UK certification bodies state that surveillance savings of one third can be given to organisations with truly integrated management systems. An organisation will also make comparable internal savings supporting the certification process as well as savings in its internal audits. These are just some of the many benefits of integrated management that improve the efficiency and effectiveness of an organisation.
The greatest impact on organisations is people, because they are the source of all creativity but can also perform errors and violate procedures. A person who puts personal gain above the interests of the organisation and its stakeholders becomes a significant risk.
The CEO has the power to impede the monitoring processes and any actions that should be taken. Internal arrangements need to be in place to facilitate, and where necessary protect, independent monitoring and whistle blowing should an employee discover any regulatory or contractual violations. Many aspects of security management differ from others types of management because the hazard is invariably intelligent and will seek ways around risk controls.
Monitoring should be recognised and valued as an essential element of a management control and guidance system. It should be dynamic and based on the totality of the risk-informed needs of the organisation. Hierarchical structures can help manage an embedded, dynamic continuum of monitoring, spanning vertically from corporate leadership to the shop floor and horizontally throughout the core, supporting and contingency processes that link with stakeholder needs. Data should be analysed in detail and collectively as a whole. But monitoring those who work hard to avoid being monitored is likely to remain the greatest challenge.
Biography
Ian Dalling is a chartered electrical and mechanical engineer and began implementing IMSs in 1985 at Nuclear Electric. He has been a management consultant since 1990 and is the director of Unified Management Solutions which specialises in integrated management. He can be contacted at e: ian@unifiedmanagement.com.
posted by T at 5:38 pm
<< Home