The Value and Importance of Effective Management Review

Quality System Lead Assessor Nigel Turner discusses the methods by which organizations can fully benefit from their management review process. 

Whichever management system standard or combination of standards your organization is involved with, you should be familiar with the term Management Review. The review process is one of the cornerstone requirements of management system standards and is an element that your Assessor will always be interested in reviewing and discussing with you – it is a mandatory element of all assessment and surveillance visits where the core quality function is being evaluated. 

So how can we get full value from this very useful management system function?

What is the purpose of Management Review?

The idea behind the review process is to take a regular and systematic step back from the day to day running of an organization and review the performance of the management systems, and their continuing suitability, adequacy and effectiveness. 

In the 2015 updates to the standards there is greater emphasis on more broad-based thinking to ensure that systems are fully aligned to the strategic direction of the organization – something that was always implied in previous versions but never actually stated – until now. 

The importance of ensuring that systems remain focussed on the direction of the business, are improved to reflect changes that have occurred in the company’s context and to take advantage of opportunities whilst fully addressing risky areas of the business, These must be continuously reviewed under the management review process. 

The other key areas are to review:

• Actual results relating to the performance of the business and its systems
• Data on the performance in meeting the quality objectives and key performance measures for the organization
• Learning from what has gone wrong
• Looking at trends in problems encountered with a view to improving practices to eliminate their causes. 

The management review requirement provides the management team with an opportunity to look in on its business from a different angle and to critically evaluate the period, improve the approach and plan for the next one. 

Who should attend and why?

Standards require that the system is reviewed by top management – that is the leader(s) of the organization. For example in ISO 9001, systems must be evaluated to ensure alignment with the organization’s strategy. It would not be feasible to conduct an effective review, if those responsible for the strategy were not present. 

As a business leader you will want to demonstrate to your Assessor that you are committed to the management system that you commissioned and confidence in this commitment will be undermined if the review process takes place without you, moreover you should be genuinely engaged with understanding how systems have performed in your organization and interested to find areas to improve performance.

You will spend much time reviewing your financial performance and results, and by taking the same approach to understanding that system performance directly affects this further down the line, the requirement is aimed firmly at getting you to understand that effective systems result in good financial performance.

Examples of this include the elimination of waste, optimising operational efficiency, reducing complaints and improving customer satisfaction levels – from all of these results, improvements can be generated which will impact positively on the overall results of your financial performance.

How often and when should the review process happen?

There are no firm requirements for the frequency of review but it is generally accepted that the process is cyclical around the organization’s financial year. It makes most sense to review systems and results in line with the business cycle’s financial year as the performance will potentially impact on budgets available for investment for improvement which may be desirable as one of the outputs of the review. 

If the timing of the main management review process is not aligned to the financial year – ask yourself why? The idea of planning as an output of the review to set goals and objectives for the forthcoming period should be one which the management team embraces. 

Guidance on management review issued as part of the system standards makes it clear that the review process does not have to be a separate activity from processes already in place in an organization, for example the review agenda can be built into existing systems of board meetings, or management briefing sessions and the agenda does not have to be covered all at once. 

It will be important to have an agenda, or matrix covering all the required elements to ensure that they are all considered over the period but there does not have to be a separate review meeting. That said many registered organizations do hold specific management review meetings to focus in on the quality agenda.

It is not best practice to hold just one review in the period – quarterly or six-monthly interim reviews will provide opportunities to review progress against objectives and adjust strategy and resources, if necessary, to ensure that the organization meets its goals at the end of the period. 

Imagine sitting in an annual review to find that the management of objective performance has not been effective and opportunities and targets have been missed due to a lack of focus. That said, too many reviews will result in the team discussing day to day issues and individual problems and not taking that step back to examine trends mentioned earlier.

Preparing and planning for the review

So you have the review agenda in place and the meeting scheduled – what are you going to discuss? 

The key area here is actual results that demonstrate the performance of systems. The only way to review results is to ensure that data is available for presentation in the meeting and therefore this will need to be collected and collated into a form that can be presented, discussed and evaluated by the meeting.

For example, for quality:

• How has the core process performed?
• Have products/services/processes been delivered as planned or where have the failures occurred?
• What is the costs of failure, complaints, credit notes, negative feedback from customers, audit findings etc.?
• How have suppliers supported the organization in the period and where have there been problems? 
• What data will show to the level the objectives and strategy within the organization that have been fulfilled?  This will be a combination of process and financial data and should be formatted to demonstrate trends. 

The other key area to review and evaluate is the context – a new term in the 2015 standard revisions.  What is new, what has changed? The actions of customers, competitors, changes in the legal framework in which the organization operates, the availability of new technology, staff resources and knowledge, the state of the economy, actions of other stakeholders and any other factors can all affect the performance of the organization and its systems and provide new opportunities and risks to plan for. 

You should make time to ensure that the context is fully understood and that this can be reflected in an informed discussion. Please see our full article on Context for more information.

The purpose of the meeting is to take a factual approach to discussions and decision making and without seeking those facts in preparation the meeting will not be fully effective. Your Assessor will be looking to gain confidence that you understand your organization and are designing your management system to fully suit its needs as it evolves and the depth of analysis used as management review input greatly contributes to this – do not make purely speculative or anecdotal comments in support of performance – use the actual data to provide this confidence. 

Conducting the review and preparing its outputs

The discussions and analysis that take place in the review must be documented.  It is usual for outputs of the review to comprise of minutes, an action plan, objectives and targets for their achievement.  Any minutes should reflect that the team has reviewed and discussed the results and input information and any actions arising from the discussion – is the team happy with the results and what improvements can be made for the next period.

Be critical – is the process really fully effective if we are presiding over failure trends – what can we do to eliminate the causes of the problems we see?

Have objectives been achieved and if not why not? What actions can be planned to improve performance and remove to obstacles that have hindered progress in the period?

Changes and actions should be documented into some form of action plan, either incorporated in to the review minutes or as a separate plan. The latest version of the standards place much more emphasis on planning to achieve objectives. To ensure that allocated actions are clearly understood, any plan must now:

• Determine what needs to be done
• What resources will be required
• Who will be responsible
• What timelines are involved
• How the results will be evaluated

After the review… monitoring and follow-up

Circulate the output meeting minutes and action plan as required and create a follow-up plan. This could be via the next scheduled meeting through the audit process or maybe via another, more informal means with the individuals involved.  

Ensure that all of the team are aware of your focus in ensuring that actions are undertaken that contribute towards achievement of the objectives and encourage communication regarding any setbacks or problems and ensure that individuals have the required level of support, time and resource to enable actions to be properly implemented.

By adopting this culture and approach and remaining systematic in the conduct of management review, organizations will not only easily maintain their management system approvals with NQA but will reap the benefits of a real improvement culture which uses the systems of the business to contribute towards the delivery of real results.

Author: Nigel Turner, NQA