LRQA launches agenda for change

28th November 2006

Mike James, Vice President of EMEA for LRQA, today set out his company’s leadership agenda for the management systems industry, at the inaugural Business Assurance Summit in Barcelona.

His speech outlines the critical issues facing management systems over the next ten years. It also reflects the management systems challenges highlighted in LRQA’s senior management research study, introduced by Professor Andrew Kakabadse and available above.

LRQA has also set out a clear 10-point agenda for change for the management systems industry.

The Agenda for Change

LRQA recommends:

• That systems develop away from a narrow focus on the recipients of the services, to a broader range of interests of all stakeholders, and particularly those holding a financial stake.
  80% of senior managers strongly perceive the main purpose of the system to be that traditionally held: customer satisfaction and product quality.
• That management systems data actively contributes to the internal governance of organisations - ensuring that strategy is carried through to action, and that values and principles are upheld in operations day-by-day.
  More than 80% of managers believe systems improve environmental and social performance, but only 25% see clear links with governance and protection of shareholder value.
• That ALL leading organisations adopt a materiality process, which means they report to stakeholders on their real risks, with real data fed directly from their management systems.
  While 80% believe their non-financial information is accurate, only 33% of managers think it is targeted on current risks to the business.
• That ALL senior managers see management systems as a key corporate asset, and that they actively seek to share their understanding with their business partners.
  66% of senior managers currently see their management systems as a key corporate asset, but 60% don’t then require their suppliers and partners to adopt these systems.
• That as business and supply-chains expand on a global basis, management systems are trusted as an indicator of reliability for contractual arrangements, including mergers and acquisitions.
  At present, 41% of senior managers distrust the quality of assurance in emerging markets, yet up to 70% rely on this assurance when selecting their partners.
• That the performance of management systems is evaluated for its contribution to risk reduction and business impact.
  While up to 88% of senior managers want to use systems to reduce business risks, only 55% believe they can actually measure their business impact.
• That management systems are employed to manage a broad range of strategic management imperatives and that management systems integration drives business process improvement.
  Fully 66% of senior managers say they’re already pursuing management systems integration.
• That all management system assessments become a genuine way of providing business assurance, helping organisations to look both forwards (identifying areas of future improvement) and backwards (validating the impact of past improvements).
  Today, 73% of senior managers say they expect assessments to focus on business issues and to evaluate the effectiveness of actions taken.
• That every CEO understands the value of the management system in delivering sustainable business, and invests time and energy in making sure systems receive both financial investment and personal commitment.
  Nine in ten (89%) senior managers believe that the support of leadership makes employees more likely to adhere to a system.
• That the management systems professionals are highly regarded by their organisation as a result of the inputformation they provide to strategic planning.de for the business’s strategic plan.
  Just half (52%) of senior managers believe that systems professionals are currently highly valued by their organisation.

These ten agenda items should be the natural consequence of senior management understanding more about management systems.But this understanding will only come about if management systems professionals actively participate in integrating and sharing their management systemsdeliver tangible results for the business - reducing risk by integrating and sharing disparate management systems; better connecting them to core financial and HR systems; and improving their evaluation and reporting.

As Mike James says, management systems professionals will have to get a lot better at the ‘politics’ of organisations if management systems are to fulfil their potential.

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