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by Laura Smith

Here’s a question worth examining: Why would municipalities and government agencies look to well-established manufacturing business models to improve performance and save money?

An increasing number of government agencies--from the U.S. Department of Energy to county governments all over the United States to El Salvador’s Ministry of Finance and local governments in Japan--have found that registering to ISO 9001 (which contains guidelines for a quality management system) and/or ISO 14001 (a standard outlining the basics of an environmental management system) have major benefits. Among them: cost savings, improved public perception, and happier, more focused employees.

However, while agencies that have registered to ISO 9001 and/or ISO 14001 report that adherence to the standards has been largely beneficial, compliance doesn’t come easy in most cases. Shaping government administrations to fit the stringent requirements of ISO 9001 and ISO 14001 takes considerable thought, especially for government workers unfamiliar with the new processes. These trailblazing agencies often have rocky paths to navigate.

So what’s behind this trend? The answers are both illuminating and surprising.

Seeds of change

For Mike Higginbotham, Jefferson County ( Alabama) environmental representative, the journey to ISO 14001 registration started several years ago. The Jefferson County Commission told its administrators that it wanted to demonstrate innovative environmental stewardship and save money in operations costs. Environmental protection had always been important to the county--it was one of 14 communities that participated in a U.S. Environmental Protection Agency-sponsored program to help local governments develop environmental management systems. But after completing the program, the county decided to go one step further.

“We started looking at the options, and ISO 14001 was right there,” he says. “It was a perfect fit for what we wanted to do.”

Implementing processes acceptable for registration to ISO 14001 was difficult in the beginning, but in 2001 Jefferson County registered six departments to ISO 14001, including its courthouse, a rehabilitation center, a warehouse and a hospital maintenance division.

Since then, the county has saved a great deal of taxpayer money. Its electrical and water use are way down, and recycling has increased dramatically. There’s also hope that the county’s ISO 14001 registration will raise its bond rating--a huge benefit that has far-reaching implications.

“There was a real sense of accomplishment when we finished the process,” Higginbotham says. “We were able to look around at the work we’d done and say it was a team effort.”

Registration to ISO 14001 and ISO 9001 are well-established features of the manufacturing sector, but their less tangible benefits in government are sometimes harder to quantify. Registration has its own challenges in the public sector. Among them are restricted public funds, more red tape and an often-stagnant administrative culture--government workers suspicious of implementing a traditionally manufacturing business model into their familiar workplaces.

Another challenge unique to government agencies working toward registration to ISO 9001 or ISO 14001 is finding officials familiar with the process, says Calin Moldovean, TÜV America management services director. White-collar executives usually have extensive knowledge of business management systems, but those with experience in quality management tools are less common. Therefore, part of his job in the auditing process is education.

“I always tell our clients that learning [quality management processes] isn’t rocket science,” Moldovean says. “The struggle isn’t that they’re uninformed, it’s that they just haven’t been exposed to these principles. Once they’re exposed, then it becomes easy for them, and they’re able to implement those new skills in a way that will greatly benefit their organizations.”

New and improved

Quality management’s emphasis on conformity and efficiency highlights the similarities in both government administration and manufacturing. In other words, while the product may be different--whether it’s quality customer service or a well-built engine--registration to ISO 9001 improves it.

So it is with the Phoenix Police Department’s Records and Identification Bureau (RIB), which in 2003 became the first law enforcement department in the United States to register a unit to ISO 9001. David M. Amari, the department’s ISO 9001 management representative, reports that registration has improved the unit’s effectiveness.

“Our business is life-altering, both for our officers and the people we serve,” Amari says. “So we have to be good. Our records have to be precise and complete. And our registration gives us the strong guarantee that it is.”

The department began to focus on improving the quality of its services in 2000, when it circulated a new strategic plan that focused on continuous improvement, a quality-based organizational culture and shifting from a production- to a knowledge-based organization. It sounds like a mission one would expect from a traditional manufacturing company, but it resulted in more streamlined processes and even more precise record keeping. The focus on quality worked so well that the department wrote a second strategic plan in 2001, “Reorganizing for Continuous Improvement, Volume II, Focus on Quality,” which described a complete quality management system. The challenge was identifying a methodology that would accomplish the department’s goals, according to Amari’s case study. The objective was achieved through the standardization of the department’s work processes and subsequent registration, an achievement city administrators are proud of.

“I think what I find most impressive about the application of the ISO standard to the operations of the RIB is not the improvement in service that was achieved, although that is certainly significant,” says Tom Lannon, assistant police chief. “What really impressed me is the enthusiasm the process generated in the employees, the input that was offered by the people who actually perform the work and the way that feeling of ownership and empowerment has been sustained. It changed the way people look at what they do.”

Phoenix’s RIB is a good example for other police departments of successful ISO 9001 implementation. Especially in law enforcement records divisions, which manage voluminous amounts of information that must be accurate and up to date, ISO 9001 registration and quality management are particularly valuable. Moldovean expects that other police departments will probably follow Phoenix’s quality management example.

Developing best practices and quality management processes helps local governments align their regulations with complex state and federal mandates. At a February conference on homeland security attended by local government officials, Moldovean reports that many attendees were confused about how to implement new regulations. The confusion illustrates the need for a management system that coordinates all aspects of an agency.

“There’s a bombardment of regulations right now, especially related to homeland security, that directly affect local governments,” Moldovean says. “But there’s not a lot of coordination. Without coordination, it’s like putting together a giant puzzle without any map showing how it fits together.”

New trends

Bob Danhauser, ISO 14000 manager for AQA International Inc., has seen the registration process through two sets of eyes: as a registrar and as a client seeking registration. As a manager with the Charleston Commissioners of Public Works, he helped that agency register to ISO 14001, a process that took three years and significant lobbying to convince reluctant employees that the process was even worth the effort. Today, he’s a registrar and the CCPW has maintained its registration.

Audits of government agencies are often more difficult than those of manufacturing organizations because their “product” is invisible. In addition, many public agencies have diverse, independently operated units that don’t easily fit into ISO 9001 or ISO 14001 molds. AQA International Inc. registered the North Carolina State Zoo to

ISO 14001, for instance. The large number of federal and state permits required for the facility’s exotic animals and plants make it one of the most complex audits Danhauser has ever performed.

“The zoo has to have tons of permits and emergency response plans for all the animals in case of weather or emergency and all kinds of other events,” Danhauser says. “Auditing something like that is incredibly complex. There are just so many things to include in the audit.”

But while the auditing processes might be more complex for public agencies, don’t let that scare you. The benefits of registration to ISO 9001 and/or ISO 14001 are numerous: operations cost savings, liability protection, bond ratings hikes, lower insurance premiums and improved public perception.

“The more progressive counties are almost all looking at registration to save money and become more efficient,” Danhauser says.

Registration abroad

The trend toward registration to ISO 9001 and ISO 14001 in government extends far beyond U.S. municipalities. Barely a year after the publication of ISO 14001 in 1997, the first local government in Japan achieved registration. By the end of 2001, more than 300 were registered to the standard. According to Kazuhiko Mizuno, president of the Japan Quality Assurance Institute, the Japanese public administration sector accounted for 3.2 percent of all ISO 14001 certificates as of 2002. While the Japanese public sector’s embrace of ISO 9001 has been slower, Mizuno reports that there is increasing interest in that standard, as evidenced by increasing numbers of people attending ISO 9001 seminars.

The Japanese embrace of ISO 14001 is remarkable. ISO reports that as of 2002, eight of the country’s largest 22 cities were registered to ISO 14001. The reasons given for seeking registration are varied: to change mindsets in preparation for mergers with other local governments, increase public satisfaction, streamline workloads and shift emphasis from planning to deliverables. In Japan, ISO 9001 has been deployed to respond to the country’s fiscal crisis caused by the burst of its economic bubble.

In El Salvador, the Ministry of Finance implemented ISO 9001 in 1999 in an effort to overhaul its communications processes, reorganize files and regain public confidence in its customs department. The result was the creation of an almost brand-new customs department, with one of the most modern facilities in Central America. The implementation shortened response time from days, to hours, and finally to minutes. In the process, El Salvador’s customs department was transformed into a benchmark for other Latin American countries.

“Calls from businessmen asking ministers to intervene in expediting urgent imports are no longer necessary and relations between customs and other government institutions are now characterized by cooperation and rapid solutions to problems posed,” the ministry reports in a case study examining its implementation.

Mexican government authorities report that ISO 9001 registrations of government agencies doubled every two years between 1995 and early 2001--a total of more than 700 registered institutions and an average growth rate of 116 percent. The registrations have resulted in more accountable and efficient public agencies, reports ISO 9000 consultant José de la Cerda Gastélum.

A survey Gastélum performed of Mexican companies revealed that three of the country’s largest companies--PEMEX (a public oil company), CFE (a public electricity provider) and SECOFI ( Mexico’s Economic Development Secretariat)--were registered to ISO 9001.

Finally, Sheikh Hamdan bin Rashid Al Makhtom, deputy ruler of Dubai, and Mohammed Khalfan bin Khirbash, minister of state for financial and industrial affairs, directed all government ministries and public sector agencies to implement ISO 9001 by the end of 2004. The reason? Government officials were impressed by the 1999 implementation of ISO 9001 in the country’s Ministry of State and Industrial Affairs, which transformed that administration into a customer-focused work culture.

Quality matters

This trend of public bodies registering to ISO 9001 and ISO 14001 is probably still in its infancy. It remains to be seen if the government agencies that register to the standards will change them in the future, but it’s already clear that registration is changing government. It’s hard to see it as anything but positive that governments standardize their practices, streamline their processes and model their administrations after successful businesses in the private sector.

Regardless, the agencies that have mounted registration initiatives deserve recognition for their trailblazing efforts. They’ve shown that quality matters--especially in government.

About the author

Laura Smith is Quality Digest’s assistant editor.