Identity of an Organization: ISO 9004:2018’s Most Important Feature

World-class performance results when workers care about their organization

Published: Monday, August 13, 2018 - 12:03

ISO 9004:2018—“Quality of an organization—Guidance to achieve sustained success” expands considerably on the former (2009) revision. It introduces the important concept of “quality of an organization” (Clause 4.1), which makes excellent sense. If the organization’s processes are of high quality, we can expect good outputs, or at least rapid corrective and preventive action (CAPA) in response to problems.

The standard consists mostly of common-sense practices, many of which also appear in ISO 9001:2015 (which the standard cites). Section 6—“Identity of an organization” deserves particular attention because it can convey an overwhelming competitive advantage. This section is tied closely to Clause 9.2—“People,” and its focus on competence, motivation, empowerment, and engagement of the organization’s members. It also includes “unity of purpose,” a phrase that appears twice in Section 7—“Leadership.”

Identity of an organization

Clause 6.1 says an organization is defined by 1) its identity; and 2) its context. Clause 6.2 defines the identity as the organization’s mission, vision, values, and culture. This ties in directly with quality of an organization, which reflects the organization’s inherent characteristics as described in Clause 4.1. Culture is, however, a shared set of values and expectations, or “the way we do things around here,” so we can treat culture and values as a single factor. Clause 6.2 also calls for alignment of the culture with the mission and vision, but a world-class culture will automatically align with almost any mission and vision, as depicted by Henry Ford in My Life and Work:

“The health of every organization depends on every member—whatever his place—feeling that everything that happens to come to his notice relating to the welfare of the business is his own job.”¹

World-class performance results when workers care enough about their organization to address risks and opportunities outside their job descriptions, and when they are also sufficiently competent and empowered to take, or at least initiate, appropriate actions. Both competence and empowerment are aspects of ISO 9004:2018.

The importance of culture can’t be overemphasized because, “In more than 130 interviews with high-performing CEOs, across a wide variety of industries, culture was almost universally cited as the single most important factor contributing to company success,” according to Soyina Coke in the article, “Five Levers for Building Your Desired Culture.”² In the BSI webinar, “Creating a Safety Culture in Manufacturing,” presenter Kate Field noted that “Culture is [often] a more powerful way of controlling and managing behavior than organizational rules and regulations.”³ Culture should align with rather than contradict the organization’s mission and goals, as reflected by its rules and other documented procedures.

Identity: A proven organizational advantage

The underlying principle was, in fact, recognized more than 150 years ago. In 1831, Gen. Carl von Clausewitz wrote in his book, On War:

“In this manner, in proportion as the Government separated itself from the people, and regarded itself as the State, War became more exclusively a business of the Government, which it carried on by means of the money in its coffers and the idle vagabonds it could pick up in its own and neighboring countries. The consequence of this was, that the means which the Government could command had tolerably well-defined limits, which could be mutually estimated, both as to their extent and duration; this robbed War of its most dangerous feature: namely, the effort towards the extreme, and the hidden series of possibilities connected therewith.”⁴

That is, government leaders (i.e., executives) used the obsolete business model in which an organization uses whatever financial resources it has on hand to hire people whose loyalty had to be bought with relatively poor wages, and kept through ferocious discipline. They did not regard enlisted soldiers as relevant interested parties, but rather as resources to be hired when necessary and discharged as quickly as possible. Armies did not exactly attract the most competent, loyal, or engaged people, as depicted by famous marching songs of the 18th-century. George Farquhar’s “Over the Hills and Far Away” describes how Britons would enlist in the army for almost any reason except patriotism.

Our ’prentice Tom may now refuse
To wipe his scoundrel Master’s Shoes,
For now he’s free to sing and play
Over the Hills and far away.

...We all shall lead more happy lives
By getting rid of brats and wives
That scold and brawl both night and day
Over the Hills and far away.

“Marching Through Rochester,” or “The Bold Fusilier” (sung to the same music as “Waltzing Matilda”), depicts the usual motive for enlistment: There is no wages or employment for me. The governments in question got what they paid for—men whom the Duke of Wellington described as “the scum of the earth,” although he added that army discipline made fine fellows of them.

King Frederick II of Prussia said essentially the same thing 50 or more years earlier. Inhabitants of cities and farmers were exempt from military service as long as their taxes supported the army that protected them. In the compilation of his writings, Frederick the Great on the Art of War (Da Capo Press, 2009 edition), he says, “For this reason our armies for the most part are composed of the dregs of society—sluggards, rakes, debauchees, rioters, undutiful sons, and the like, who have as little attachment to their masters or concern about them as do foreigners.”⁵ The enlisted soldiers cared about little more than staying out of trouble, and getting paid and fed. Demotivated modern employees, and that means most employees as noted in a 2013 Gallup survey, similarly do as little as they can to continue to collect their pay.

Clausewitz then described the limited efforts, and consequently the limited results, that governments (i.e., company owners) could achieve with such armies. Rulers dared not risk the destruction of an army, for they lacked the resources with which to raise another, and most wars therefore ended with negotiated treaties rather than total victories or defeats. Frederick the Great observed, as Clausewitz did, that all European armies were similarly deficient in commitment, which resulted in an environment in which no ruler could do serious harm to another. Frederick also lamented how European armies were so unlike those of the Romans, who “fought for their families, household gods, their fellow citizens, and everything else that was dear to them....” This was in fact a major risk and opportunity for Europe’s governments; namely, that an organization would arise that shared these Roman values and beliefs. This is exactly what Revolutionary France achieved, as depicted by Clausewitz:

“War had again suddenly become an affair of the people, and that of a people numbering thirty millions, every one of whom regarded himself as a citizen of the State.... By this participation of the people in the War instead of a Cabinet and an Army, a whole Nation with its natural weight came into the scale. Henceforward, the means available—the efforts which might be called forth—had no longer any definite limits; the energy with which the War itself might be conducted had no longer any counterpoise, and consequently the danger for the adversary had risen to the extreme.”

This “identity of an organization,” in this case not only the French Army but France itself, is exactly why Napoleon conquered most of Europe. France did not have better weapons than its adversaries, but it had 1) soldiers who regarded themselves as French citizens rather than mercenaries; and 2) the enthusiastic support of the French people.

This leads us forward to Soyina Coke’s statement, “In more than 130 interviews with high-performing CEOs, across a wide variety of industries, culture was almost universally cited as the single most important factor contributing to company success.”

Clause 7.1.1 (a)—‘Unity of purpose’

Rome’s success secret
The Romans to whom Frederick the Great referred deserve particular mention in the context of unity of purpose, which is an element of organizational values, and culture, and therefore organizational identity. There is a reason why the Roman Republic and Empire lasted almost two thousand years, with the last remnant falling to the Ottoman Empire in 1453, and why Roman history still has an enormous influence on modern culture. This was unity of purpose as depicted by Lord Macaulay’s poem Horatius, about three Roman soldiers who held a bridge against the enemy to give their comrades time to destroy it.

For Romans in Rome’s quarrel        
Spared neither land nor gold,          
Nor son nor wife, nor limb nor life,
In the brave days of old.     

Then none was for a party—           
Then all were for the state;  
Then the great man helped the poor,           
And the poor man loved the great;
Then lands were fairly portioned!   
Then spoils were fairly sold:
The Romans were like brothers       
In the brave days of old.

It was exactly this kind of unity of purpose that enabled Rome to win the Second Punic War, even after it lost an entire army to Hannibal at Cannae, and Roman allies began to defect to the Carthaginians. Almost any other nation or city state would have collapsed, but the Romans spent whatever they had to raise more armies and continue to fight until they won. The Roman Empire fell much later when it lost its organizational identity and unity of purpose by 1) allowing ambitious generals and politicians to pursue their own interests at the country’s expense; and 2) outsourcing Rome’s security to mercenaries and foreigners.

The faltering Roman Empire, in other words, relied on the counterparts of Frederick the Great’s “dregs of society.” When the dregs in question, along with the genuine but non-Roman professional soldiers among them, woke up to the fact that they controlled the means of violence while their paymasters controlled only the money, they came to the obvious conclusion.

There is a lesson here for companies that outsource their key activities and, even worse, tell experienced workers to train their replacements so they can pay the replacements as little as possible. These companies should not be surprised when experienced workers walk out and sell their hard-earned skills to the nearest competitor, and also when they can’t hire anybody who can find work elsewhere.

Competence and motivation

The Russian Army, as commanded by Aleksandr V. Suvorov during the 18th century, was probably the only entity that could have beaten Napoleon during the 1790s or, had Suvorov lived, early 1800s. Suvorov did beat everybody he fought, including some of Napoleon’s future marshals. While conscripted Russian serfs had no particular reason to fight for the tsar, Suvorov made them feel like they were the most important members of the Russian Army—even to the extent of engaging and empowering them as recommended by ISO 9004:2018 clauses 9.2.2 and 9.2.3. Enlisted soldiers in most armies dared not do anything without an order from a superior, but Suvorov encouraged them to exercise judgment and initiative to get results.

Suvorov also ensured that his soldiers were the best trained in the world, which supports ISO 9004:2018 Clause 9.2.4—“Competence of people.” Lord Byron’s Don Juan dismissed Suvorov’s success secret as a waste of time:

Glory began to dawn with due sublimity,
While Souvaroff, determined to obtain it,
Was teaching his recruits to use the bayonet.

It is an actual fact, that he, commander
In chief, in proper person deign’d to drill
The awkward squad, and could afford to squander
His time, a corporal’s duty to fulfil

A painting by Klavdy Vasiliyevich Lebedev (1862—1916) depicts Suvorov holding a musket—an enlisted soldier’s weapon that few officers of that era would so much as touch—while instructing soldiers on how to use a ladder to go over a fortress’s walls. Suvorov did construct a mock-up of Ismail’s fortifications on which his soldiers could practice in preparation for the actual assault in 1790, so this is probably the context of Lebedev’s painting. Lord Byron added, “He show’d them how to mount a ladder (which was not like Jacob’s) or to cross a ditch.”

Most armies delegated this kind of work to noncommissioned officers, but Suvorov’s personal leadership (ISO 9004:2018 clause 7.1) by example showed the previously unmotivated recruits that they were the most important members of the Russian Army; battles were won primarily by the enlisted soldiers’ muskets rather than the officer’s swords. It also showed the entire organization that “training is the most important thing we do here,” with the result that the training got done.

In contrast, as George Michael wrote in Lean Six Sigma (McGraw-Hill, 2002), even W. Edwards Deming could not hold the attention of executives after their CEO told them how important it was that they learn total quality management from him—and then walked out of the room. ⁶ Suvorov also wrote his Science of Victory to be understandable by enlisted soldiers as well as officers, thus communicating (clause 7.4) the organization’s policies and strategy as well as its shared values.

My opinion is that competence and motivation should, as prerequisites, precede empowerment and engagement in the standard. People who aren’t competent, and must therefore be told what to do, can’t exercise the judgment and initiative that make up empowerment; and if they aren’t motivated (i.e., committed to the organization for more than a paycheck), they have no reason to do so. The key takeaway is, however, that the competence, motivation, empowerment, and engagement aspects of the identity of the organization made the Russian Army the most formidable war machine in Europe during the late 18th century.

The answer to French nationalism was eventually Prussian nationalism, which caused men to join the Prussian Army out of loyalty rather than a desire for pay. France’s mistreatment of Spanish peasants incited the latter to become partisans, and to fight at least nominally for their king, while Russian civilians similarly harassed the French. That is, the answer to a strong organizational identity was the development of at least moderately strong organizational identities by France’s rivals.

These issues are every bit as important today, and they have exactly the same implications. Only 30 percent of U.S. employees are, on average, engaged with their work, while 20 percent are disengaged. Only 35 percent of managers, the people upon whom the organization relies to lead by example, are engaged while 14 percent are “actively disengaged” ⁷. If almost two thirds of the managers are unengaged, why should the workers care? In addition, “But in about 85 percent of companies, our research finds, employees' morale sharply declines after their first six months—and continues to deteriorate for years afterward” ⁸.

Can our organization be the one in six exception?

Can we nonetheless achieve similar results in industry? The Ford Motor Co. proved during the first quarter of the 20th century that it can indeed be done, and not with décor, fancy meeting rooms, or innovative employee perquisites. Writing of the leadership culture at that time, Ford’s production chief Charles Sorensen said, “With this group, work was play. If it had not been play, it would have killed them. They were as men possessed. They often forgot to eat. They drove themselves much harder than they drove anyone else.”⁹ He added that these leaders had to be visible on the shop floor, and that he didn’t allow even superintendents to have private offices. Instead, they had to practice what Tom Peters calls “management by wandering around” (MBWA) and what the Japanese call gemba management.

Ford himself had an office, but he didn’t use it very much. His security chief Harry Bennet wrote, “Henry Ford loved machinery. He was never in his office. He circulated through the plant observing with an expert eye—encouraging with the useful suggestion.... At all times he knew what was happening in every department.”¹⁰ Recall that Suvorov made it clear that the muskets of the soldiers won the battles, and Ford made it similarly clear that the machines in the factory, and the employees who ran them, earned unprecedented profits for the business and also unprecedented wages for the workers.

The identity of the organization comes from the top down. ISO 9004:2018 describes some of the things leaders must do to build a world-class identity, and history shows some additional practices that have proven overwhelmingly successful.

In summary:
• Organizational identity and organizational culture are easily the most important factors in business competition. Technology and financial resources, while important, often can’t offset a poor culture, while a world-class culture finds ways to offset technological and financial disadvantages. Napoleon Bonaparte said of this, “An army’s effectiveness depends on its size, training, experience, and morale, and morale is worth more than any of the other factors combined.”
• Achieve unity of purpose by recognizing that our relevant interested parties, including our suppliers, employees, and customers, are partners who need a square deal from the relationship, as opposed to adversaries whom we seek to exploit.
• A square deal for employees earns their commitment, which is a prerequisite for empowerment and engagement. Training (i.e., competence) is the other prerequisite. Organizations must create and maintain, rather than hire, engaged and empowered workers.
• What leaders do, as opposed to what leaders say, communicates to the organization what is important. Personal leadership of worker training, projects that involve worker participation, carried out on the shop floor (gemba) go a long way here.

Sources cited
1. Ford, Henry, and Crowther, Samuel. My Life and Work. Doubleday, Page & Co., 1922.
2. Coke, Soyina. “Five Levers for Building Your Desired Culture.” Quality Digest, July 11, 2018.
3. “Creating a Safety Culture in Manufacturing,” webinar by BSI Canada, July 19, 2018.
4. Clausewitz, Carl von., trans. by J. J. Graham. On War. Routledge and Kegan Paul (ninth printing, 1968).
5. Luvaas, Jay, trans. Frederick the Great on the Art of War. Da Capo Press, 1999.
6. George, Michael. Lean Six Sigma: Combining Six Sigma Quality with Lean Production Speed. McGraw-Hill, 2002.
7. Gallup. “State of the American Workplace: Employee Engagement Insights for U.S. Business Leaders.” 2013.
8. Sirota, David; Mischkind, Louis A.; and Meltzer, Michael Irwin. “Stop Demotivating Your Employees!” Harvard Business Review, 2006. Results are based on a survey of 1.2 million employees at 52 (primarily) Fortune 1000 companies.
9. Sorensen, Charles E., with Samuel T. Williamson. My Forty Years with Ford. Wayne State University Press, 2006 reprint of 1956 edition.
10. Bennett, Harry, as told to Paul Marcus. 1951. Ford: We Never Called Him Henry. Tor Books, 1987 reprint of 1951 edition.

About The Author

William A. Levinson

William A. Levinson, P.E., FASQ, CQE, CMQOE, is the principal of Levinson Productivity Systems P.C. and the author of the book The Expanded and Annotated My Life and Work: Henry Ford’s Universal Code for World-Class Success (Productivity Press, 2013).