ISO 9001:2015 and Pulse
Companies with ISO 9001 certification have until September 2018 to adapt their management systems to the latest version, ISO 9001:2015. In this article I’ll briefly review how the Pulseguide and Agile Pulse can function as a simple solution to meeting the new standard.
The goal of Pulse is to establish a working method and flow which can help companies make an impact by creating new market opportunities as well as become more competitive by utilizing these opportunities faster than the competition. Many companies with Pulse have shown that with Pulse they have increased their market share and profits. The key to being prompt is not only understanding uncertainty but also how to handle it.
The goal of ISO 9001:2015 is “to improve the organization’s overall performance and create a solid foundation for sustainable development initiatives” and risk-based thinking is identified as the most important tool for achieving that aim. The latest version of ISO 9001 has come even closer to the objective of Pulse.
Risk-based thinking is something new in this version of the standard. Risk encompasses the different forms of uncertainty which can affect an operation. Risk isn’t necessarily all bad; in fact, risk can contain opportunities
In earlier versions of the standard, the term quality was used frequently. At its core, quality is dependent upon how we handle uncertainty. Within lean, the term waste has been used instead. Risk-based thinking, quality, waste, uncertainty are all different names for the same basic phenomena (although it should be noted that the correct term within physics is entropy).
The standard has left open how risks are identified and handled within an operation. One requirement is that there are methods for handling uncertainty in all parts of an operation. Because Pulse is built to handle uncertainty, we can say that Pulse is one way to implement risk-based thinking which fulfills and exceeds the new standards for an operation’s strategy and development.
Some Examples of How Uncertainty is Handled in Pulse
Below you can find some examples of risk-based thinking, which permeates Pulse and in ISO 9001 should permeate all aspects of the management system.
A project plan always contains uncertainty: unexpected problems show up and resource needs are changed. Risk-based thinking means accepting this uncertainty and having a process which can handle a steady stream of problems and still continually change any resource needs. Problems are handled within projects through special routines – partly by handling problems within projects and partly by identifying problems which the project doesn’t have the ability to solve by itself. Resource changes are taken care of with weekly resource Pulse meetings.
Traditional project planning has attempted to handle risks using thorough detail planning and risk elimination. These are not the best methods for handling uncertainty. On the contrary, detail plans quickly become obsolete in the real world. In Pulse, the project group draws up a brief project plan (referred to as a synchronization plan) in which detail planning follows the progress of work. The idea that uncertainty and that unexpected events will happen is used as a starting point so that Pulse is constructed to handle this truth in a systematic and traceable way.
There is always uncertainty in all work. It can be proven mathematically that larger tasks have greater uncertainty than smaller tasks handled in progression. Therefore, we divide up work into shorter segments which last about a day, which are distributed to participants at a Pulse meeting. This is the same basic idea which lean production uses by manufacturing at one time only the small number of articles needed for that occasion. Utilizing this lean principle creates a radical reduction in uncertainty (in lean, this is referred to as waste).
The same basic principal of dividing things up into smaller pieces is present in work with strategic design. The red group (or product team) divides development work into projects which have a limited scope. This reduces uncertainty within not only each project but also within the whole enterprise.
The above example is mostly about the uncertainty in an operative operation. Within strategic work, the yellow group (or portfolio team) or red group handle uncertainty foremost in relationship to the rest of the world (for example, risks which are present in new deals and upcoming investments). When setting business goals, an analysis of strengths, weaknesses, threats and opportunities is made. By doing this, threats can be changed into opportunities when we choose to act before the competition does.
PDCA (Plan, Do, Check, Act)
Another consistent principal the standard uses is PDCA (plan, do check, act).
Plan can be seen in clause 4. The Context of the Organization, 5. Leadership, 6: Planning and 7: Support.
Do is clause 8. Operation, in which mainly clause 8.3 Design and Development of Products and Services touches on development work.
Check is clause 9. Performance Evaluation.
Finally, act, is about clause 10. Improvement.
Further below, I will briefly discuss the different clauses of the standards and how these objectives are handled in Pulse. Everything described in the standard is not included in Pulse; for example, production is not usually included. Pulse is a framework for strategy and development. Every company which implements Pulse has done so based in their own context. My discussion is therefore primarily concerned with a principal plan in order to show how Pulse and 9001:2015 are linked.
4. The Context of the Organization
Requirements in clause 4 are about an operation’s strategic direction, its interests and how the operation is run. In Pulse, this work is done in the group we refer to as the “yellow group,” or more formally, the portfolio team. Using terminology used in ISO 9001, we could call this work a “yellow process.”
Pulse is based on risk-based thinking, which in the case of yellow work means understanding that there is uncertainty between an operation and the outside world. Because the rest of the world is constantly changing, the yellow work is constantly ongoing in order to handle new and changed risks as well as uncertainty. In practice, this means that the yellow group has Pulse meetings at least twice a week in order to pursue their strategic work and to handle deviation and disruption in an operation.
It should be noted that because the outside world is constantly changing, the yellow work will never look the same. It is not possible to define specify which matters will need attention and it is therefore impossible to have a generic working process for how tasks should be handled. At the same time, we need a structure with simple rules for the yellow team to coordinate effectively. We have solved this by defining a meta-process which can handle all types of incoming tasks. This solution applies to all of the different aspects of Pulse.
With that said, there are different task types which are reoccurring, including the formulation of the strategic direction. For this kind of work, Pulse has many tools in the form of methods. One of these methods describes the segmentation of the market. With segmentation, the yellow and red group analyze their ability to fulfill client needs as well as respective segments’ financial attractiveness (in other words, the market’s value and how far away the operation is from acquiring this monetary value through the channels the operation has). If the market is further away, the investments and risk will be greater but if the market grows, the potential is greater. The yellow group decides which risks the operation is prepared to take, including how market potential should be handled, and assigns investments to realize any potential.
The yellow group decides which projects will be started up. Due to a finite amount of capacity, the yellow group has a top 10 list of upcoming projects which are ready to be started up as soon as there is free capacity. The yellow group visualizes this list to show technical and commercial risks and potential. All projects cannot be low-risk with low potential, nor can they all be high-risk with greater potential. A good top 10 list contains both short, simple and relatively risk-free projects leading to small gains along with longer, innovative, and risk-filled projects with greater financial potential. When there is a free slot in the system, the yellow group selects a project from the top 10 list and starts up the project. By using this method, the yellow group can make sure that the portfolio with ongoing projects has a balanced mix of risk and opportunities.
The yellow group does many things which fall under clause 4, such as prioritizing the project portfolio and the top 10 list.
Clause 5 is about how an operation is run and how management takes responsibility for leading the operation. The standard says that management must use risk-based thinking, process management and customer orientation.
Pulse is an organizational model which is based on a network of Pulse meetings where uncertainty and risks are handled and decisions are made. In the center node of the network is the yellow group. All development work is client-focused. Even if many agents are involved in the work, the yellow group has the last word in setting the operation’s agenda. Decisions, as well as early discussions which lend support to decision-making, are made during demonstrations, workshops, and Pulse meetings.
ISO 9001 uses many terms which I find confusing. The term policy is possibly the hardest to understand in the standard. The result is often a short blurb (a “quality policy”) which can be found framed on the wall. Even if it’s not wrong to hang up a policy on the wall, it’s not what was intended. I’ve chosen to interpret policy as principles to make it more understandable.
Pulse comes with a finished set of principles on how we handle uncertainty. The goal is to reach high profitability by supplying profitable products to a market that’s continually changing. For every principle we’ve connected one or more methods. These methods together form what we in one word call Pulse – that is, how we work within the different groups (processes) in order to handle risk and opportunities.
Pulse is an organization model and within our model there are suggestions for roles, responsibilities and powers. The yellow group draws up and decides on the network organization before introducing Pulse. When Pulse is introduced into an operation, on-site routines are developed so that the different areas can work together meet the needs of the operation. This is done through working groups with representatives from all the concerned areas of the operation. In practice, this results in a quality management system which is present on a Pulse board in the Pulse room.
All planning in Pulse is based on the fact that uncertainty is always present. As I previously mentioned in the entry on risk-based thinking, risks are minimized by dividing them up into a project with short work packages. Pulse uses real time planning which means that the planning is done progressively, depending on how a particular situation develops, which significantly reduces uncertainty.
All teams and projects define goals for their work through a series of workshops within the Pulse organization according to established procedures. All planning is carried out by the same people that will be doing the work and not by someone from the outside, such as a manager or project leader.
Risks, problems and other forms of uncertainty are also taken care of at regular Pulse meetings through the use of a specific procedure. Documentation is necessary for any problems as well as how these problems are handled. This documentation is so simple that it can be done during a Pulse meeting (which is 15-20 minutes long), even if several problems arise on the same day.
The clause about support contains many sub-clauses, but it’s most important to recognize that the operation should be able to identify and provide crucial resources. The operation should also be able to understand its own potential and limits.
Operative work in projects and assignments takes up the most resources in development work. One of the basic principles of Pulse is setting limits for how much work an operation has the ability to handle. We set these limits by limiting the number of Pulse boards for a project so that it is not possible to have too many projects running. If we estimate that the operation only has the ability to handle five projects we limit the amount of Pulse boards for projects to five. If five projects turn out to be too many, this becomes clear during the resource Pulse meetings because there will be a lack of resources in the lowest prioritized projects. The yellow group then has the opportunity to put the project on hold.
In Pulse, resource management occurs weekly through resource Pulse, where resources are focused on prioritized work, such as projects and assignments. The goal of this is to not split up the staff among too many assignments at the same time.
The model for Pulse does not contain everything found in clause 7 of the standard. The operation has to supplement anything that is missing, just like in all of the other clauses.
8 Operations, 8.3 Design and Development of Products and Services
The figurative engine of progressive development work within Pulse is the red group, which is focused on strategic design. Because the outside world is constantly changing, their work must have enough resources and constantly be in progress. If not, the growth of uncertainty in relation to the outside world leads to risks that are difficult to manage.
There is normally a red group which has a Pulse meeting every day to make sure that work advances. Either by itself or working together with others, the red group handles studies and analyses. They prepare and define larger developmental work, which is handled in the form of projects.
To minimize uncertainty within projects, we use mission command tactics. This means that the project group plans the project with a vision, synchronization plan and risks. The project group is responsible for holding daily Pulse meetings where uncertainty is handled through real-time planning, management of new risks and problems as well as collective decision-making.
Coordination between the strategic management and the project occurs through Pulse meetings, workshops and demonstrations. Demonstrations are when project participants show how they have made sure that sub-results are accurate through verification and validation.
9 Performance and Evaluation, 10 Improvement
The two last clauses in the standard are about evaluating performance and implementing improvements that lead to improved performance.
The standard uses the PDCA model when discussing improvements. They start with planning and later measure the results. This approach has its origins in detail commando management in which the manager plans and the workers carry out the work and I believe this method is flawed. That’s why in Pulse we use the OODA model: observe, orient, decide and act. In OODA we start with “measuring” – pulling in meaningful information from our surroundings. We do this through daily development work when designs and ideas are tested, as well as during interactions with internal and external interests.
In Pulse, we measure performance in many different ways. Projects are worked on in small steps where every sub-result must be verified or validated. A medium-sized project can have 50 to 100 sub-results and just as many checks to compare with the expected results. The tempo of a project is directed by specific hand-over points decided in advance. If the project loses speed, measures may be called for to improve the situation. Normally, these measures include more frequent Pulse meetings to improve the strength of the teamwork.
On the yellow group’s board there is a “balanced scorecard.” All operations must choose which financial ratios they wish to include, but according to the standard, customer satisfaction must be included. However, the predominate information which the yellow group makes use of is internal information about the progress of work within the operation. Issues and problems which haven’t been able to be resolved anywhere else should be brought up in each portfolio Pulse meeting.
The red group follows product portfolio parameters, such as sales volume, margins as well as quality issues for products that have been launched. If these parameters do not develop as planned (according to the business goals), the red group can call for new measures to correct the issue. Measures can be anything from marketing campaigns to increase sales to developing new and more attractive products and services. The red group also follows the progress of the projects. Results from verification and validation are examples of information which is used to evaluate performance and initiate improvements.
The focus of a Pulse meeting is partly to orient (or to create an understanding of the situation, how it should be handled and any present risks) and partly to decide (or decide how the group should move on concerning the situation at hand in order to reach their goals). At Pulse meetings, information on the Pulse board is used together with any other information which is communicated by the participants of the Pulse meeting.
ISO 9001:2015 and Pulse
The companies which have introduced Pulse already have the lion’s share of a management system in place in order to attain an ISO9001:2015 certification.
With the 2015 version, ISO 9001 has taken a large step in the direction to agility we use in Pulse.