The Business Management System – Five Deadly Sins

The misconception of management system purpose

Management systems can be established by different objectives such as;

  • Safeguarding people, the environment and asset integrity
  • Assuring fulfillment of other corporate social responsibilities
  • Compliance to statutory and regulatory requirements and the achievement of licence to operate approvals
  • Certification to industry standards; e.g. ISO management standards
  • The pursuit of Operational Excellence

The management system can (and should) govern many different activities in a total management context. Different system objectives require different approaches to building the system.

Additionally, management systems tend to evolve into being overly complex and bureaucratic under the assumption that procedures and instructions control human behaviour and ensures high performance.

A management system is basically a tool for strategy execution and forms in a risk management context nothing more than an administrative barrier against failure. Without the right amount of human competence, capability for problem solving and leadership for system implementation such barrier would only be of poor value to any organisation.

Should the organisation experience success despite having an unfit management system it would most likely be on the account of other factors; e.g. extremely passionate people and leadership, an extremely favourable market position or – to some degree – just pure luck.

Lacking system structure and scope of application

Some organisations offer different products and services in different market segments catering for different risk management approaches and the corresponding governing risk controls. With different management system objectives – and complexity within an organisation’s environment – it is critical that the system is carefully structured and scoped for each individual need.

In achieving good system structure and scope a good starting point would always be the identification of high level processes (value chains) representing the business model of the organisation. With a complexity in offered products and services it is vital to establish clear boundaries of each system component from one another.

A logic and easily navigable system structure – e.g. a structure which corresponds to actual work flow – will provide the necessary overview in which managers and staff easily can locate applicable processes and their related documentation in a meaningful context.

Work flow orientation – or process orientation – is a key foundation for any well structured management system and in assuring that organisational barriers do not stand in the way of effective work execution.

Poorly defined processes and procedures

A business process should always have a defined purpose with a clear linkage or relevance to business objectives and strategy. The successful process output must further be defined by specific criteria in order to determine process execution success from failure.

A need for performance improvement would obviously call for a change in the applicable business process being the process itself or how the process is executed.

Some processes would typically have a need to be supplemented by supportive documentation; e.g. project management models, procedures, checklists, work instructions or guidelines providing (where relevant) standardised instruction and guidance for work execution.

Poorly defined processes and associated documentation make management system auditing nearly impossible at which the auditor needs to exercise a highly undesirable and unfortunate subjective opinion in order to reach some kind of meaning conclusion to audit findings.

Lacking leadership for implementation

It is basically everybody’s responsibility to implement the management system, however, people in management roles (especially top management) has a specific leadership mission in articulating management system requirements towards peers and subordinates at any given opportunity – particularly when experiencing non-compliant or inappropriate behaviour.

Managers who understand company strategy should find themselves in a favourable position when creating the right context for management system implementation.

It can often be experienced with companies’ job adds for leading quality or HSE personnel that they are tasked with the (impossible!) responsibility to implement the management system. Within such companies the management system would most likely remain poorly implemented and thus create unsatisfactory company performance.

Management system requirements should be ranked alongside professional competence requirements and dealt with accordingly. Organisations failing to do so will most likely never ripe the fruits of a conforming company culture.

Lacking leadership for continuous system improvement

No management system is perfect and all people are bound to make occasional mistakes.

Managers should, however, be constantly curious about and focused to pursuing understanding of the reasons behind failure and never accept non-compliant or inappropriate behaviour as ‘the nature of business’ or ‘unavoidable’.

In fact, many company turnarounds described in leadership literature have the thing in common that top management consistently kept their organisation within planned arrangements and facilitated continuous improvements along their strategy execution.

This cannot be achieved by one single person but only through a dedicated leadership collective who consistently understands to create the right future management system solutions.

Managers are generally in a need for having access to networks to seek out common solutions to common problems. They should by all means be supported in establishing such networks.

Companies can thus create significant improvement capability in building up a strong leadership culture working together for the purpose of achieving company objectives.