ISO standardization Being Overtaken By Six Sigma
For years the largest of companies have required that their suppliers by ISO certified, a process that ensures basic standards in business operations and management. Critics of the process, however, argue that standardizing management eliminates the potential for entreprenureal growth in the first place. In addition, the certification is often criticized as being an indirect means of keeping smaller start-ups out of the bidding process. The rise of Six Sigma, however, is beginning to shake things up. Beginning with suppliers of GE, a number of smaller companies are pursuing Six Sigma rather than ISO as a means of verifying their business model and management structure. Typically the process is less costly, and according to some far more beneficial. Because of this initial success, the practice is spreading as more and more startups are foregoing the cost of becoming ISO certified and are instead focusing on Six Sigma integration. Inc.com Reports:
Arunas Chesonis, CEO of telecom company Paetec Communications, based in Rochester, N.Y., is also de-emphasizing ISO in favor of Six Sigma, in part because GE is both an investor and a customer. He began instituting ISO soon after starting Paetec in 1998. The standards, he says, were “a pretty powerful training tool” for new employees and signaled to potential customers “that we were the type of company that was focused on quality and process improvement.”
If an organization “implements ISO 9001? to obtain a certificate then it will obtain less value than a company that uses the standard to improve the system it uses to run the business.
The INC article focused on the woes of the former organizations and did not report on the successes of the latter.
Any company can use ISO 9001 to develop its process-based management system so it could be used to drive its core process to add value faster while the system enables employees to prevent loss sooner. The core process, by the way, translates the needs of customers into cash in the bank (ready for continual improvement to deliver six sigma performance).
Our website has described how our clients do this since 1997 and this is based on the hardcopy guidance we have published since 1987.