Hi everyone,

I have not posted on here in some time, but I do visit occasionally to do some reading/brushing up.

I'm currently working as an contract sales rep for a small company (less than 10 employees). Although this company is ISO 9001 registered, they have been losing money on a continuous basis, and the owner claims that they have been losing money every since they became ISO certified 4 or 5 years ago. My opinion is that they are losing money due to poor business management/lack of management support. For example, a product was a month late in being shipped to the customer, and when I questioned the reason why, nobody knew, nor had anybody did any kind of a corrective action investigation to find out why. The owner does not have a business plan, claims that he has never had one in the 18 years that he has had the company.

Anyways, the owner decided to lay off 2 people in order to try and save money/turn a profit, and you guessed it, one of those people was his only QA person, who is also the Management Representative for ISO.

I had just wanted to get everyone's thoughts on this?

Jonell

Sounds like the guy does have a plan, and it's working perfectly.

Hi everyone,

I have not posted on here in some time, but I do visit occasionally to do some reading/brushing up.

I'm currently working as an contract sales rep for a small company (less than 10 employees). Although this company is ISO 9001 registered, they have been losing money on a continuous basis, and the owner claims that they have been losing money every since they became ISO certified 4 or 5 years ago. My opinion is that they are losing money due to poor business management/lack of management support. For example, a product was a month late in being shipped to the customer, and when I questioned the reason why, nobody knew, nor had anybody did any kind of a corrective action investigation to find out why. The owner does not have a business plan, claims that he has never had one in the 18 years that he has had the company.

Anyways, the owner decided to lay off 2 people in order to try and save money/turn a profit, and you guessed it, one of those people was his only QA person, who is also the Management Representative for ISO.

I had just wanted to get everyone's thoughts on this?

Jonell


A difficult scenario, to be sure. However...

1. This violates his agreement to abide by the requirements of ISO standard.

2. From the little that you described, ISO is not causing his problems, nor will it automatically solve them.

3. I hope you have dusted off your resume and are protecting yourself, as well...

Hi Jonell,

Sometimes we just have to face the realities of life - one of which is the 'truth' hurts! If you give the most beautiful rose in the world to a monkey, it's just another part of a plant to them. Infact, they blame you for the torns that come with the flower. Monkeys are monkeys, maybe they will evolved to be like man in 50 million years!

There are plenty of such in a developing economy like ours. Looking at the positive angle, it's time real 'man' takes over - plenty of opportunities around.

A difficult scenario, to be sure. However...

1. This violates his agreement to abide by the requirements of ISO standard.

2. From the little that you described, ISO is not causing his problems, nor will it automatically solve them.

3. I hope you have dusted off your resume and are protecting yourself, as well...


hjilling,

Response to number 1: Maybe the owner is deciding to be the Management Representative themselves. That wouldn't violate his agreement would it? The standard doesn't require that the Management Representative has to be from the Quality organization. It requires that there be someone to represent management.

However you do have some valid points in my opinion.


Coury Ferguson

Firing (um, laying off) the management rep is perhaps the smallest of violations to the ISO agreement. Sure, an owner can claim anyone is the management rep, including himself, but if his name isn't anywhere to be seen in the system's management path it's a hard claim to prove.

If the management decides there is no need to follow the procedures, there is a very large violation right there.

If there is no pursuit of corrective actions or continual improvement, those are two more violations. Failure to note outcomes and measure effectiveness add to the nails in this fellow's ISO coffin.

There seems to be a very large misunderstanding at work. He seems to think ISO will make him money. He's wrong, of course. Doing things well makes the money, the ISO journey was just made to establish the structure.

I've seen his type before. Make the program so it's possible to get contracts, then forget all about what is written and do as the seat of ther pants see fit.

It's unlikely this fellow will change. I agree with the advice to head for higher ground. It is a good time to look for such opportunities.

perhaps the boss doesn't know what 'ISO' is supposed to do for his business. Perhaps he did what a lot of bosses do, hire someone to get them registered and maybe, the MR did that but put in a bureaucratic system, which some low cost registrar then sealed with a certificate. Who knows?

Someone should be able to help the boss turn it around;)

Andy

Someone should be able to help the boss turn it around;)
AndySure. The customers and the competitors will turn him around. One way....or the other.....
This case seems like just another example of the prototypical approach to ISO 9001 certification. You do it for marketing purposes. You don't implement a meaningful QMS. You don't bother with the cultural changes that most effective QMS's demand. You don't drive dysfunction out. Business as usual. A lone guy writing the manual, filling out forms, "keeping the system" and dressing windows....
You keep your business just like it used to be. But now, you are ISO 9001 certified. No changes in processes, no changes in sales.... just the added cost of the 3rd party auditor...
What surprises me (a little bit) is the fact that the owner (apparently) did not cancel the certificate. If he is willing to fire people to cut costs, he should have cancelled his ISO 9001 certificate.

What surprises me (a little bit) is the fact that the owner (apparently) did not cancel the certificate. If he is willing to fire people to cut costs, he should have cancelled his ISO 9001 certificate.

It's cheap marketing to keep it................:lmao:

Andy

Hello Jonell :bigwave:Sorry to hear that you are in dire straits...
I had just wanted to get everyone's thoughts on this?Just one: A company does not have to promote quality and improvement. Nor does it have to stay in business...

I don't know if your paycheck provider is about to start a death spiral, but the advice to start polishing your resumé sounds like a good one.

/Claes

[quote]Response to number 1: Maybe the owner is deciding to be the Management Representative themselves. That wouldn't violate his agreement would it?

That could be compliant, but I suspect in this case, competency would quickly be called into question (assuming the registrar auditor is doing his job??).

The standard doesn't require that the Management Representative has to be from the Quality organization. It requires that there be someone to represent management.

Actually, the 2000 version did away with this little loophole. The Mgt. Rep has to be a member of Management (cl 5.2). Seems they felt he had to actually have some authority.


However you do have some valid points in my opinion.


Thank you.

Hi all,

Thanks for all the great responses! There were some really great suggestions made as to the mindset of the owner. Most of them hit the nail right on the head. To give you a bit more info, I started repping for this company in September 06. Within 30 days, it became apparent that there were some real problems going on. The owner asked that I also do some business consulting, so I presented him with a proposal, which he never responded back to. I also gave him the contact info for a person at the Small Business Administration who would help him put together a business plan free of charge, as I felt that should be the first step taken. That was never done either. The first of the year the QA person asked that I come over and help out with an internal audit. The opening meeting for the audit consisted of her telling the owner that she was going to audit all of the elements of the system. I was astounded! That didn't sound very much like a process approach at all. Well, I got to audit top management, so I asked the owner usual questions, what is your quality policy, what are your quality objectives, etc. He didn't know the quality policy, he had no idea what quality objectives even were, let alone what they were for his company. The whole audit went like that, and I wrote up many non-conformances. 2 weeks later, the registrar auditor came in, spent 3 hours in the shop and passed them with no nonconformances.
Now that the QA person is gone, there is no-one to do internal audits, and the owner's wife called me to inform me that there is one that is overdue according to the audit schedule (she was hinting). I told her "Bummer" and left it at that. Just another example of no planning, in my opinion. I heard on more than one occasion from both the owner and his wife that the QA person did such a good job with the ISO, that they never had to ever be involved in it, other than talking with the auditor for about 15 minutes when it was time for a survellience audit. If that was the way that they wanted their QMS to work, then that should have been taken into account when they laid of the QA person. Also my opinion.
Change is a bad word in this organization, every suggestion for improvement that has been made has been met with great resistance. I think that the comment about a death spiral is exactly correct.

Jonell

Hi all,

Thanks for all the great responses! There were some really great suggestions made as to the mindset of the owner. Most of them hit the nail right on the head. To give you a bit more info, I started repping for this company in September 06. Within 30 days, it became apparent that there were some real problems going on. The owner asked that I also do some business consulting, so I presented him with a proposal, which he never responded back to. I also gave him the contact info for a person at the Small Business Administration who would help him put together a business plan free of charge, as I felt that should be the first step taken. That was never done either. The first of the year the QA person asked that I come over and help out with an internal audit. The opening meeting for the audit consisted of her telling the owner that she was going to audit all of the elements of the system. I was astounded! That didn't sound very much like a process approach at all. Well, I got to audit top management, so I asked the owner usual questions, what is your quality policy, what are your quality objectives, etc. He didn't know the quality policy, he had no idea what quality objectives even were, let alone what they were for his company. The whole audit went like that, and I wrote up many non-conformances. 2 weeks later, the registrar auditor came in, spent 3 hours in the shop and passed them with no nonconformances.
Now that the QA person is gone, there is no-one to do internal audits, and the owner's wife called me to inform me that there is one that is overdue according to the audit schedule (she was hinting). I told her "Bummer" and left it at that. Just another example of no planning, in my opinion. I heard on more than one occasion from both the owner and his wife that the QA person did such a good job with the ISO, that they never had to ever be involved in it, other than talking with the auditor for about 15 minutes when it was time for a survellience audit. If that was the way that they wanted their QMS to work, then that should have been taken into account when they laid of the QA person. Also my opinion.
Change is a bad word in this organization, every suggestion for improvement that has been made has been met with great resistance. I think that the comment about a death spiral is exactly correct.

Jonell


1. I would almost like you to post the registrar name, as a warning for the rest of us. Maybe, when you are gone form the company, you should send your complaint to them as directly.

2. There is a military term - UNK/UNK. It means Unkown/Unknown. They don't even know how much they do not know.

3. The benefit of the free enterprise system is that weak players get overtaken by strong players. The marketplace roots out weakness in favor of strength. Now weakness can include indifference, a lack of focus on customer satisfaction, being self-satisfied, not paying attention to your knitting... (are you listening Big 3?).

4. I've said it before, there are three kinds of companies:
Those who MAKE things happen
Those who WATCH things happen
Those who ASK, WHAT HAPPENED.

First, I sympathize with Jonell's situation. It is terrible to be on the sidelines and watch a trainwreck happen. It's even more terrible when you are on the train and know what is happening!

Second, I don't intend to derail this thread with "armchair psychology," but it might be beneficial to suggest to the wife (who also seems to be on the train) that both she and her husband get a full health checkup and to be sure to have themselves checked for "depression." This withdrawal from active and proactive interest in the business is completely atypical for an entrepreneur capable of building the business in the first place.

Over the 40+ years I've been in business, I've seen a number of former powerhouses seem to go to pieces. For the first 20 years, I was too naive to look beyond my own self-interest and I just shunned the unfolding situation.

One event, though, caught me in the net and I ended up losing about half a million dollars for my company on the crashed deal. The principals in the deal lost about 10 times that amount. What happened was a key lawyer in the deal went completely nuts from a brain tumor and irretrievably trashed the deal beyond the strict timetables required. His law partners went bankrupt trying to fix and pay off all the broken deals their partner had been involved in. I heard that one of the clients committed suicide as a result of losing EVERYTHING.

From that time on, I made it my business to keep the possibility of mental illness of one or more of the players as a factor in all my deals. It is the same sort of risk assessment as allowing for natural hazards or political risk when dealing with governments. I think it is as important to think about the possibility of mental illness as much as thinking of the possibiity of criminal or fraudulent activity.

So where does "opportunity" come in?
After our big disaster, my partners and I no longer shied away from "crazy" folks, but looked very carefully at the fundamentals of a business where a crazy (our own assessment - it could have just as easily been sheer stupidity or ignorance) person was involved and would make tender offers to buy them out completely if we thought we could turn the business around without the disruptive influence of the crazy person. Because of the special circumstances, we often bought such businesses at pennies on the dollar. In one case, we bought such a business for cash and resold it to the remaining employees using an ESOP (Employee Stock Ownership Plan) six months later for a 50% markup after we renegotiated many of the existing customer contracts and dumped nonprofitable customers.

We were outsiders, but, often, we had some insider who had heard of us suggest the deal to us. These insiders could be manufacturer's agents, accountants, attorneys, suppliers, or customers, and sometimes even direct employees of the business. There are many companies around similar to the one I was a partner in that do similar deals. If you are an insider in such a situation, there may be a benefit for you in acting as finder or even a prospective principal when you approach such a company about similar opportunities.

Second, I don't intend to derail this thread with "armchair psychology," but it might be beneficial to suggest to the wife (who also seems to be on the train) that both she and her husband get a full health checkup and to be sure to have themselves checked for "depression." This withdrawal from active and proactive interest in the business is completely atypical for an entrepreneur capable of building the business in the first place.http://www.flashplayer.com/forum/images/smilies/notworthy.gifAnother incredibly insightful comment. The smaller the business, the larger the impact of the owner's dysfunctions on to the business. Many small business owners change courses and strategies of their business, over time, based on what goes on their private and family lives. Little Johnny wants a Porsche GT3 for his 18th birthday, let's raise our prices...Ivana wants to remodel the beach house...Let's fire a couple of people and split the workload amongst the remaining poor souls that are lucky enough to work for me...
And, then, like Wes said, the clinical cases.....
Don't ever dismiss the "powers to be" agendas from the business likelihood to succeed.

http://www.flashplayer.com/forum/images/smilies/notworthy.gifAnother incredibly insightful comment. The smaller the business, the larger the impact of the owner's dysfunctions on to the business. Many small business owners change courses and strategies of their business, over time, based on what goes on their private and family lives. Little Johnny wants a Porsche GT3 for his 18th birthday, let's raise our prices...Ivana wants to remodel the beach house...Let's fire a couple of people and split the workload amongst the remaining poor souls that are lucky enough to work for me...
And, then, like Wes said, the clinical cases.....
Don't ever dismiss the "powers to be" agendas from the business likelihood to succeed.I agree it is an extremely insightful comment--could well be true (can we get that smiley for our smiley bank?--it's awesome!) but I fear the boss nor his wife will not follow such level headed advice to get a checkup that includes a probe for depression.

We were outsiders, but, often, we had some insider who had heard of us suggest the deal to us. These insiders could be manufacturer's agents, accountants, attorneys, suppliers, or customers, and sometimes even direct employees of the business. There are many companies around similar to the one I was a partner in that do similar deals. If you are an insider in such a situation, there may be a benefit for you in acting as finder or even a prospective principal when you approach such a company about similar opportunities.


Hey Wes.... I know of a company in southern CA that desperatly needs a change in ownership! ;)

Hey Wes.... I know of a company in southern CA that desperatly needs a change in ownership! ;)


Wes wouldn't give up Chicago for Southern California

Coury Ferguson

The statement quoted below, puts th whole problem with ISO and registrar's in perspective.

The whole audit went like that, and I wrote up many non-conformances. 2 weeks later, the registrar auditor came in, spent 3 hours in the shop and passed them with no nonconformances.


I once again ask the question, except for the trivial few, how many companies have lost their registration during a surveillance audit? The registrars will not do it because it would be a reflection on their competency.

Most companies are after the trophy (certificate) and refuse to grasp the business and process improvement that ISO can lead to if approached correctly. Unfortunately, the registrar's do NOT help with the underlying problem. Rregistration has turned into a VERY BIG money making scheme and nothing is to be done to upset that cart.:(

Hey Wes.... I know of a company in southern CA that desperatly needs a change in ownership! ;)If you are serious, send me a PM with details. Odds are, all they really need is my "gentle loving touch" - see my quest for case studies
Wes Bucey offers service as Strategy Advisor - Seeking Case Studies for Book (http://elsmar.com/Forums/showthread.php?t=9117)
http://elsmar.com/Forums/showthread.php?t=9117

Wes wouldn't give up Chicago for Southern California

Coury FergusonMaybe not full time, but I sure would pass up some of the winters!:D
Seriously, the longest I ever had to be actually on site in one of our takeovers before we groomed worthy managers to take over was between 4 and 6 months. Sometimes we held the company for as long as three years before flipping it for a profit and one or more of our partners would be on site for a number of days every month in addition to multiple phone calls, faxes, and telexes (this was before email and streaming video, folks!) With modern communication methods, actual on-site time could be far less today! I never decried absentee ownership, only absentee folks who ignored the business.

The statement quoted below, puts th whole problem with ISO and registrar's in perspective.

The whole audit went like that, and I wrote up many non-conformances. 2 weeks later, the registrar auditor came in, spent 3 hours in the shop and passed them with no nonconformances.


I once again ask the question, except for the trivial few, how many companies have lost their registration during a surveillance audit? The registrars will not do it because it would be a reflection on their competency.

Most companies are after the trophy (certificate) and refuse to grasp the business and process improvement that ISO can lead to if approached correctly. Unfortunately, the registrar's do NOT help with the underlying problem. Rregistration has turned into a VERY BIG money making scheme and nothing is to be done to upset that cart.:(
This may be gist for a new thread, but here's something to consider:
You wrote in another thread and it is pertinent to your comment here I was hired to develop an ISO-9000 quality system, but management will not support any efforts in that direction. Managers have told me that a quality system restricts what they can do and COSTS too much. What did you respond when managers said these things? Many of us just tuck our tails between our legs and slink away.

The most frequent shortcoming of Quality professionals is the tendency to leave passion at the door when we go in to talk to the "powers that be."

Here's the deal:

Quality professionals are experts.
Quality may not be free, but it does deliver value which outstrips cost.
Most managers are completely ignorant of items 1 and 2.Our primary job as Quality practitioners is not as policemen, but as educators. We are the only ones who can help managers understand we are experts and that we deliver VALUE.

Good salesmen understand the value of a "No!" from a prospect, because it helps them focus on the benefits that are most important to the prospect so they can show how that benefit is met by the product or service offered by the salesman. Similarly, Quality professionals take "No!" from a manager as an opportunity to educate and help managers learn the value and benefit of Quality.

When managers and hiring officers throw up a smokescreen of "designations" regardless whether they are ASQ or consultant-manufactured, the clever Quality practitioner takes that as an opportunity to point out any and all designations are merely pieces of paper; that the most important factor is the underlying Quality tools they represent and, further, ANYBODY can know and use those tools with or without the piece of paper, BUT only if the managers understand the value and benefit of the tools and allow them to be used.

The very best Quality practitioners have a variety of tools in their kit, but the expertise and value they offer is WHEN to use the tool, not merely HOW. Sadly, some folks with designations have only one tool in their kit and so are like my oft-cited grandson with only a hammer - everything looks like a nail to them. The true Quality professional makes it a point to differentiate himself from the hammer-wielding designation holder!

Hi Jonell,
I think you need to explain the owner, and you may probably did that::)
ISO 9000 is a very good Quality System but, do not replace or substitute all business practices and is not a cure for all!
Here are some of our customers needs:
• Delivers on time
• Proper quantities
• Products that performs to expectations
• Good customer service
• A reasonable price
• And of course make a profit
In order to be competitive suppliers are turning to other manufacturing techniques such as lean manufacturing in order to:
• Reduce process cycle time
• Have a quick-response
• Reduce costs
• Eliminate waste
• Make a profit

Today almost all the techniqes and systems are here for all of us, and all we need to do is to pick up the one that fits our actual needs.

I have always said "The standard - does not make a better product or a better business"...If you make rubbish and don't implement change then you will always make rubbish no matter how good your Work Instructions are or how well you monitor things. The standard is a set of guidlines only...it is not a skill set or a toolbox...If you are a bad businessman/woman then after implementing ISO you will still be one unless you change.

I have always said "The standard - does not make a better product or a better business"...If you make rubbish and don't implement change then you will always make rubbish no matter how good your Work Instructions are or how well you monitor things. The standard is a set of guidlines only...it is not a skill set or a toolbox...If you are a bad businessman/woman then after implementing ISO you will still be one unless you change.

Hi Greg,

I think that your statement hits the nail right on the head :agree1: . Companies struggle and lose money, not because they have become certified to ISO, or any other standard, but because they they refuse to/are afraid of change. It is much more comfortable to continue to do things as they have always been done, rather than to take a hard, honest look at the business and try to figure out how to improve (change) it.

Here's what I think happened with this particular company. When it was started almost 20 years ago, no one else in our area offered the products that they produce. The owner could charge whatever he wanted, take as long as he wanted to get a quote to a customer, and take as long as he wanted to get the product delivered to the customer, maybe make a couple of extra trips to the customer's shop to fix problems with the product he delivered...there was no competition locally to speak of and it was not cost effective for the customers to deal with suppliers that were not local. But things have changed drastically since the company was started. Now, with all of the technology out there, the distance to a suppliers' facility has become almost a non issue. (A customer needs a quote on something, he emails you the drawings and you do a video conference to discuss the project etc.), Unfortunately, the owner is still trying to do business the way he did almost 20 years ago. Customers expect a quick turn-around on quotes, they won't wait 2 to 4 weeks for you to "get around to it". They expect you to deliver the product on the date that you said you would deliver it, not a month after the due date. They also expect the product to correct when it is delivered, not after you've had to take it back to your shop a couple of times to fix the errors. And they want you to be cost competetive, because their customers expect the same from them.

Companies that are not willing to change will become companies that no longer exist.

Jonell

...Companies struggle and lose money, not because they have become certified to ISO, or any other standard, but because they they refuse to/are afraid of change. It is much more comfortable to continue to do things as they have always been done, rather than to take a hard, honest look at the business and try to figure out how to improve (change) it.

....But things have changed drastically since the company was started....

...Customers expect a quick turn-around on quotes, they won't wait 2 to 4 weeks for you to "get around to it". They expect you to deliver the product on the date that you said you would deliver it, not a month after the due date. They also expect the product to correct when it is delivered, not after you've had to take it back to your shop a couple of times to fix the errors. And they want you to be cost competetive, because their customers expect the same from them.

Companies that are not willing to change will become companies that no longer exist.

Jonell


Boy, you said a mouthful. I agree 100%. (I think you read from my sermon notes, in fact). I would add, this happens because often companies don't understand how much the landscape has changed. Or, they don't want to understand so they hide in their offices.

PS: That is why benchmarks are so important. In another thread, I am requesting benchmark data. So far, no one has posted any? Are we all doing that badly, or does no one want to know what is really happening out there? In automotive, getting competitiors general benchmarks is not so hard. The customers offer it up rather easily. That is why those companies have better performance numbers tahn many others.