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ISO 9004:2018 - Let's Look at Leadership

29 January 2020
There are thousands of ISO 9001 certificates in circulation globally and it is getting harder to differentiate your organization from your competitors if you are all technically working to the same quality management system, in this case ISO 9001.

Unfortunately, the reality of any organization certified to ISO 9001 or any other standard, is that organizations are either compliant or not, there is never a gold, silver or bronze category but we see a whole plethora of management systems. 

Some of this stems from whether or not the organization wants to have the approval for gaining improvements and structure to their business or just to have a certificate on the wall for commercial reasons. Management will either do the bear minimum to get certified or they will embrace the requirements and set themselves apart from the rest.

One of the methods you can use to set yourselves apart is to introduce the supporting standards to ISO 9001. ISO 9004:2018 is one of those standards and its title is “Guidance to Achieve Sustained Success”, a title which is fitting to its purpose. What the standard is trying to do is highlight some of the activities your organization should be looking at to gain the added benefits of having a quality management system. 

The ISO 9004 standard isn’t something that is certifiable but it is something you can implement in order to not only understand what ISO 9001 is trying to achieve but to also give you ideas and inspiration for improving your management system. 

When you read ISO 9004, one of the sections is on leadership and it expands upon ISO 9001 to help put some context around what leaders and top management should be doing to ensure they have an effective and sustained management system. 

Deeper dive into leadership

Anyone who is certified to ISO 9001 or is embarking on the road to certification should know that Leadership is one of the key elements of ISO 9001 and there is now more of an emphasis on having leadership control and involvement. 

Gone are the days where top management can just ask the “Quality Representative” or external consultant to maintain the system, they now have to take more ownership of the management system and business direction.

Some organizations will struggle with this element which seems strange considering these personnel are owning and running their own business. They do not struggle with running a business necessarily but they can sometimes find it hard to relate ISO 9001 against what they are doing on a day to day basis to set out the organizational direction and strategy.

I will highlight some of the requirements below and give some further insight into the meaning behind the element, it is highly recommended that you read the full standard to appreciate the system in its entirety.

General overview

ISO 9004 states that:

Top Management, through its leadership, should:

  1. Promote the adoption of the mission, vision, values and culture in a way that is concise and easy to understand, to achieve unity of purpose;

  2. Create an internal environment in which people are engaged and committed to the achievement of the organizations objectives;

  3. Encourage and support managements at appropriate levels to promote and maintain the unity of purpose and direction as established by the top management.

When I first read this clause the part that immediately came to my mind is “2.”, how does an organization create an internal environment in which people are engaged? One of the most interesting elements of auditing ISO 9001 for me is when I meet and have discussions with top management. Some of them are inspiring and I could sit and talk to them all day long and in some cases we have spent a few hours together. 

These leaders are usually managing the businesses that I would love to work within myself. Creating that type of environment is not easy and it can sometimes take years to change if the business is not there yet. One of the takeaways from this requirement is to share thoughts and insights into what direction you are taking the business and why you are doing certain things. The more open you are with your employees the more engaged and trustworthy they can be and will support you in any decision you will make.

To create this environment you might first want to look at “1.”, are your employees aware of your mission, values and culture in their own language not some MBA type words. If you are relatable to all personnel within the organization then you will likely get more buy in for what you are trying to do. 

There is no need to put in big fancy words, keep your mission and vision simple. One of the key mistakes is just writing it down on a piece of paper and sticking it on the wall, you should be communicating this to your employees verbally, allow them to ask you questions and get a better understanding of what you are trying to achieve.

You will notice that the words in this clause refer to top management as this could be a number of personnel within the organization. All of management has their role to play in communicating and controlling the leadership direction of the business and they all need to be behind the person at the top controlling everything and setting out the vision to begin with.

Establishing your Identity

One of the great leaders of the modern business era is Richard Branson, no one can deny that he is one of the greats. As large as his empire is and no matter how far away he lives (Nectar Island) he will always come out to meet the new employees of the business and get involved in company events. He is approachable and supportive and everyone knows his mission and vision.

To create a vision and mission you need to create an organizations identify; what’s your purpose, aspiration, principles, beliefs, attitudes and ethics. Leaders may personally have these identities but what are the organizations? You can look at some of the great leaders such as Steve Jobs who was allegedly not a nice person to work for so you could argue that his beliefs, attitude and ethics were not necessarily right for a business. 

However, he possibly had such a clear vision and beliefs around Apple and its empire that everyone bought into it and helped to create the corporation we all know today. You may not like the man at the top but you can love the organization and what its trying to create. You need to ask yourself, what is your vision and mission and how are you communicating this to the rest of the organization?

Communicating achieved success

This is an interesting point within the standard and something that is easy to achieve, the standard asks you to think about this requirement internally and externally. Do you share your successes and also failures if I was writing this clause. 

To help create the teamwork attitude you should ensure that you are communicating the good and the bad, everyone could have worked hard to achieve something and they didn’t quite make the mark but every cloud has a silver lining. Celebrate the wins and celebrate the failures as “defeat may serve as well as victory to shake the soul and let the glory out” - Edwin Markham.

One of the areas you should consider communicating are issues which may impact the business, this could include financial information but why should we be scared of communicating this? Not many organizations will communicate their financial information, whether it be the gross profit of specific jobs, lost money due to scrap or indeed the entire financial performance of the business. 

You don’t need to communicate every little detail but it’s sometimes useful to be very open with your employees and share the success but also the defeat. People are very understanding if they know the truth and if you communicate this along with your vision then I don’t think there are many people who would not get behind you.

Policy and Strategy 

The clause in the standard sets out what leaders should do about creating their policies and strategic direction but the interesting element in this clause to me is the requirement for “Top management to make strategic decisions regarding competitive factors”. Within the standard they set out a table and in that table includes a number of examples of actions to consider when addressing competitive factors.

One of the key questions I always ask leaders during the audit is “What makes you different from your competitors” and I get a foray of answers, some are interesting but often they are the usual “they can only come to us” or “we are cheaper” types of answers.

What leaders should do is consider what gives them the edge and start to exploit that either through your vision or even it can provide a marketing focus. What would make me use you over someone else who can provide exactly the same service or product?

Whatever your answer is, whatever it is that you feel makes you different, is that being communicated to your team as it could have an impact on your vision and decisions that are made going forward. 

If your differentiator is customer service then you need to communicate this and emphasise the importance of customer service, what is it exactly that sets you apart from your competitors? How can you measure or demonstrate that? There shouldn’t just be one competitive factor to think about, you should have a multitude of actions surrounding the business and strategic direction.

It’s important to remember that these factors can change depending on the business and market which is why it’s important to fully understand the context of the organization and your interested parties. 

What external and internal factors can influence your competitive factors and what do your interested parties need from you? Do your competitive factors line up with your interested party’s needs? Are you focusing on an area that isn’t important?

Examples to consider when addressing competitive factors:

Products and services
  • Focusing on current and potential customers and potential markets for products and services;
  • Offering standard products and services or designs specific to customer requirements;
  • Realising the advantages of being first to market or being a follower;
  • Scaling production from one-off to mass production, as appropriate;
  • Dealing with short innovation cycles or a stable long-term customer demand;
  • Managing quality requirements
  • Recognising demographic development and changing values;
  • Considering diversity;
  • Cultivating an image as an attractive employer;
  • Determining the desired competence and experience of people to hire;
  • Considering appropriate approaches to recruitment, competence development, retention, and leave management;
  • Addressing capacity flexibility by considering permanent versus fixed-term contracts;
  • Considering full time versus part time or temporary employment, as well as the balance between them
Organizational knowledge and technology
  • Applying currently available knowledge and technology to new opportunities;
  • Identifying the need for new knowledge and technology;
  • Determining when this knowledge and technology needs to be available and how to apply it within the organization;
  • Determining if this should be developed internally or acquired externally
  • Determining potential partners;
  • Driving joint technology development with external providers and competitors;
  • Developing customised products and services in joint undertakings with customers;
  • Co-operating with the local community, academia, public authorities and associations
  • Deciding whether process management will be centralised, decentralised, integrated or non-integrated, or a hybrid approach regarding determination, establishment, maintenance, control and improvement of processes, including the assignment of roles and responsibilities;
  • Determining necessary information and communications technology (ICT) infrastructure (e.g proprietary, customised or standard solutions)
  • Considering local, regional and global presence;
  • Considering virtual presence and use of social media;
  • Considering the use of virtual decentralised project teams
  • Establishing price position (e.g. low versus premium pricing strategy);
  • Determining prices by using an auction/bidding process


We could probably go into a lot of detail about objectives and what tools you can use but if we just read ISO 9004 we can highlight some of the key things to consider. Auditors will often see the same objectives “100% On time delivery and 100% quality”, there is not much effort put into these objectives and you need to think about who you are stating these objectives for; the auditor or your employees?

This requirement emphasises the importance of deploying objectives at relevant functions, levels and processes but also thinking about the short and long term goals. Think about the plan on how you are going to take the long term objectives and break them down into smaller chunks in order to achieve the long term.

When thinking about the objectives the management team often miss the point and set out the quality and OTD objectives stated above without thinking about the strategic direction, the interested parties needs and the competitive factors to exploit. 

The ISO 9004 standard states:

When determining the objectives, top management should consider:

  • To what extent the organization is aiming to be recognised by interested parties as: A leader with respect to competitive factors emphasising the organizations capability; Having a positive impact on economic, environemental and social conditions around it

  • The degree of the organizations and its people engagement in society beyond immediate business-related topics (e.g. in national and international organizations, such as public administration, associations and standardisation bodies)

You will notice that there is no words relating to quality within this requirement, that’s because it is asking you to think wider than this. Let’s just take for example a customer need (interested party need), if your customer is more concerned with the cost of something rather than it getting there on time then your focus should be on this. 

Maybe you would create an objective for a 5% cost reduction within your process and seek out those improvements, you can then pass on these cost savings to your customer and in turn this will make them return instead of going to your competitor.

You should always align your objectives with your overall strategic direction of the business which includes the interested parties needs, don’t just create an objective to suit an auditor as its not helping anyone.

The objectives also need to be communicated internally and ensure that they are aligned to each department. For example, how does a cost saving of 5% impact someone in production, what can they do to support this objective? Maybe you encourage one good idea each month from the production team and cost savings are split between the business and employees alike.

Communication is key

The last part in the ISO 9004 standard relating to leadership is communication. The effective communication of policies and strategy, with relevant objectives, is essential to support the sustained success of the organization. Communication is often overlooked within management systems and to have success you need to ensure this process is effective.

Think about what you will communicate and how often, you should provide a mechanism for feedback from your employees and allow questions to be asked. You might need to tailor your message differently depending on who you are communicating with but the more awareness and understanding there is the more successful you will be.

If you are interested in learning more about standards, NQA offer training click here.