Do you know that feeling when you finally clean your room after weeks and everything is exactly where it belongs? The way it soothes your eyes and calms your soul. Humans inherently love order and well-managed systems. The difference between how you feel in a well-organised grocery store compared to the other one where products are simply piled is quite prevalent. Having a system ensures the smooth and steady functioning of a business. An effective management system has that process thoroughly integrated and aligned with the strategy and objectives of the company. It acts as a map, guiding and empowering both employees and managers.
Management is, above all, a practice where art, science, and craft meet.
- Henry Mintzberg
Five Stages of Management System
Building an effective management system is similar to creating a closed-loop system where all stages are interlinked and interdependent for a great business outcome. A closer look at the five-step process will help you understand how it keeps the workflow rolling without any glitch.
Objectives remain the groundwork stage of a management system. A company’s objectives should be aligned with its mission, vision and value statements. While framing its objectives, a company should also consider its strengths, weaknesses and competitive edge. Once the objectives are in place, things can be conducted smoothly.
After determining a set of objectives, business owners or managers devise suitable strategies to fulfil those objectives. Strategies are the pathway of how a company wants to achieve its goals. With the strategies mapped out, a manager will know what is needed to be done and how.
Apple executed its ‘followers’ strategy well in 2007 when it launched its first iPhone. The Cupertino company opted out of the ‘first-mover’ status and waited long enough for the technology to evolve. The tech giant realised that being the first in business would not always guarantee success. Instead, the product needs to be fine-tuned and the initial technical glitches must be ironed out to ensure the great customer experience. Once household names like Kodak and Yahoo, who were the first in their businesses were unable to succeed in the long-run. Their competitors like Apple, Google, and Nikon simply waited for the right time to execute their ‘followers’ strategy.
Validation of strategy
If you have ever played football, cricket or any other sport professionally for that matter, you would have come across trails. Similarly, trials are also held by organisations to test their strategies and analyse their performances. A trial run gives a good estimate of how the strategy is likely to perform in the long run.
Operations are created to achieve the objectives and strategies established by an organisation. It covers the different departments and teams of the business that are working towards the same objectives and implementing the same strategy. While conducting operations, the improvements in the process, the sales achieved through it, and the overall expenditures are targeted. We see banks conducting operations every day where the different departments work towards the same goal.
This is the final stage where the plan is put into action. Execution reflects how effective the strategies are and how well the objectives are being achieved. All the planning in the world will be useless without execution. Smooth execution is essential to improve one’s performance.
Management System Standards
Management system standards (MSSs) are guidelines used by organisations to ensure that the management activities are performed in a systematic, legal and formalised manner. MSS encompasses a wide range of business activities and the number of companies adopting MSSs has only been growing. Back in school, there were certain disciplinary standards accepted by students to adhere to. Similarly, there are certain management standards that businesses adhere to, to functioning properly.
The first MSS was created in the field of quality management. It originates back in the 1950s where the US Department of Defense felt the need to ensure that the products it purchases meet a certain quality required. It also leads to a decrease in dependency on the suppliers’ inspection programs. The first MSSs has created monitoring and inspection of the quality while further making purchases from the suppliers.
The ball got rolling after the first MSS, and different management system standards were developed by different countries for different industry segments. For instance, CSA-Z99 standards were announced by the Canadian Standards Association for electrical and nuclear industries. The U.S. automotive industry also came up with noteworthy standards such as Ford’s Q101 standard. In the late 1970s, several organizations created certifiable MSSs in the field of quality management. Another popular example is the BS5750 standard, developed by the British Standard Institution in 1979.
What is ISO?
The International Organization for Standardisation (ISO) is an independent and non-governmental international organisation. In 1946, delegates from 25 countries gathered to discuss the future of International Standardisation. The ISO was officially launched with 67 technical committees, each containing a group of experts dealing with a specific subject. Since the launch, the ISO publishes monthly information about its technical committees, its standards, and any administrative changes that are made within the organisation. The ISO is a globally-accepted management system standard. ISO standards are working in the background of our day-to-day lives. It helps in the betterment of things by making it easy and safe.
How Your Business Benefits from Management Standards
If a management system is well-implemented, it strengthens the organisation. The International Organization for Standardisation (ISO) being an internationally recognized and accepted management standard, it brings economic, technological and social benefits.
A strategic approach
The updated business standards compel companies to adopt more strategic based thinking. The system highlights how, where, and why actions are performed. It should define objectives for the improvement of its products, processes, organizational structures, and its management system through the analysis of data.
Growth and better returns
Standards derived from the ISO contribute immensely to an organisation’s growth and economic sustainability. Several manufacturers and traders are not willing to work or deal with products that have no ISO Certification especially in industries like automotive and healthcare. Having an ISO certification leads to an increase in the profits of the business and the company’s overall growth. If a company is growing overall, it will provide better returns to investors and lead to overall development.
Increased confidence in processes
The relationships are different among the reliability and trust in a business. An ISO certification ensures that your suppliers are following proper business practices. This leads to an overall boost in confidence in the entire process.
The business standards that a company adheres to keeps evolving as the business grows. When you start a business, the supply chain is quite simplified compared to when the same business goes international. With more steps involved in the process, the more business standards are there to be met. The strategies also evolve as your business develops and play a key role in determining the company’s future. Read our article on ‘business strategy’ to find more about how to strategise your business effectively.