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Opportunities in context of ISO 9001:2015

Discussion in 'ISO 9001:2015 - Quality Management Systems' started by Leonid, Jan 4, 2016.

  1. Jennifer Kirley

    Jennifer Kirley Moderator Staff Member

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    FMEA is too limited, which is the reason why the ISO Technical Committee has insisted it is not required. An opportunity is a set of circumstances which makes it possible to do something. Taking or not taking an opportunity then presents different levels of risk. Please see the guidance document Risk-Based Thinking in ISO 9001-2015.
     
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  2. hogheavenfarm

    hogheavenfarm Well-Known Member

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    I agree with you Jennifer, although opportunities do not necessarily present risk, and if they do, they are really no longer opportunities but risks, and then can be addressed with FMEA. And if all opportunities present risk, then really there is no need for ISO to specify opportunities as a separate item from risks, since they are one and the same.
     
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  3. tony s

    tony s Well-Known Member

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    The RBT guidance of ISO/TC 176 provides samples on actions to address both risks and opportunities. An activity with specific goals (i.e. arriving safely and timely on a meeting by crossing a road) may encounter risks and opportunities. The guide provided sample actions on both.
     
  4. Jennifer Kirley

    Jennifer Kirley Moderator Staff Member

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    Opportunities and risks are not the same. Opportunities do often come with their own risks. The organization is asked to do more than react to identified risks; we are asked to also look around, evaluate chances for new or improved things, of course having evaluated them for their own risks and then addressed them as is fitting.

    Traditional FMEA is designed for risks only. If we add a column for opportunities, we could use that to identify and address risks for opportunities listed in a SWOT analysis, or that are identified as a means of addressing previously recognized risks.
     
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  5. tony s

    tony s Well-Known Member

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    RBT wants us not just to be cautious. It also encourages us to look at things optimistically. Opportunities can also stem from identified risks. Once opportunities are identified then actions can be taken to address them.
     
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  6. hogheavenfarm

    hogheavenfarm Well-Known Member

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    Still playing devils advocate here, if (virtually) every opportunity involves some risk, and if risks in general (thru FMEA) are to be minimized or avoided, does this not mean that a company that seeks ti minimize risk will minimize opportunities as well? It seems to me that the standard steps outside the bounds in expanding the scope to include business strategy and execution. Improvement to a product or service I understand, business opportunity not so much. If introducing an opportunity creates additional risks, then its a risk, not an opportunity. If there is no risk associated, then the company would have taken it up immediately. Existing opportunities are there because there is risk involved in taking them. Enough examples abound, Galaxy Note 7, Volkswagen, Windows 10, Ford Pinto...etc.
     
  7. Ganesh Sundaresan

    Ganesh Sundaresan Active Member

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    Guess not. One of those occasion when the opportunity to enjoy an Ice Cream overshadows the Risk of getting Sneezy that comes with it.
     
  8. Jennifer Kirley

    Jennifer Kirley Moderator Staff Member

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    I suggest we are overthinking this. Maybe it would help if we think of risks on a tactical level (a superglue experiment might not result in an expected manner) and opportunities on a strategic level (the formulation might be marketable for a different purpose). But opportunities can also bear their own risks, which must be addressed in an appropriate way, again on a tactical level.

    The Post-It Note by 3M provides a decent example.
     
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  9. Andrej

    Andrej Member

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    I agree that SWOT should be performed at strategic level.

    There is very interesting article Beyond SWOT And Towards Change by Howard Smith at
    http://www.bptrends.com/publicationfiles/07-06-COL-P-TRIZ-6-SMITH.pdf

    This kind of analysis should be performed at strategic level. For opportunities that are identified by management at strategic level there should be certain actions on tactical level depending on the type of identified opportunity.

    The FMEA analysis can be primarily used to improve reliability of a system or a process. If we are trying to identify opportunities to decrease costs, we could use cost driver analysis tool to identify opportunities to decrease costs in proves steps. If we are trying to find opportunities to reduce time in a process, we could use tools to analyze time consumption for each process step and then determine activities which will enable us to shorten time in a process step or where possible to perform process steps in parallel.

    I think that the use of FMEA alone will not be enough to identify activities needed to implement opportunities.
     
  10. Jim Hume

    Jim Hume New Member

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    I know I'm late to the game here, and I am relatively new to the ISO world, but as Management Representative for a company finishing the transition from 9001:2008 to 2015, I am wresting with the concepts of risks and opportunities. In annotating the Standard, this is my current take on the 2015 Standard:

    I think it was poor judgment by ISO to tie opportunities into risks the way they have. It is more confusing than helpful, in my opinion. Keeping the two concepts (risk and opportunity) separate is much more logical and reflects common sense. I don’t deny that some risks are related to or associated with opportunities, but I don’t see how it is at all helpful to relate them so much as they are in the 2015 Standard. For example, the Standard says: “Risk is the effect of uncertainty and any such uncertainty can have positive or negative effects. A positive deviation arising from a risk can provide an opportunity, but not all positive effects of risk result in opportunities.”

    So, essentially, ISO made up its own definition for “risk”, bringing “positive effects” into it. To me it is much more helpful to see risks as potential negatives, and opportunities as potential positives. That simple! Just because a risk that stems from an action which also carries opportunity doesn’t mean the “risky” part(s) have positive features. Also, risk is not the effect of uncertainty; instead, risk is the potential for negative effects caused by action(s) and/or surrounding circumstance(s)—and the uncertainty lies in whether or not potential effects will be realized upon taking or refraining from a given action.

    I'm not sure that Jennifer Kirley and I are on the same page, but I agree that there is a lot of overthinking going on here. I would love to be enlightened and have my mind changed so that I don't resent one of the key concepts of the Standard which is our company's Bible, but for now I think this whole risk/opportunities concoction by ISO is a major weakness of the Standard. Anyone able to help me overcome this resent?
     
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  11. hogheavenfarm

    hogheavenfarm Well-Known Member

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    Hi Jim, I still believe this RBT thing was a huge mistake, but thats my own opinion. You are correct in that "risk" has ALWAYS carried a negative connotation. And it is not the "effect of uncertainty". I do believe that this will be sorted out, at least to what auditors require to see, as time goes on. One of the early predictions back in 2014 was that FMEA would never be involved in RBT because it it not required. Now I read in many places that FMEA is "the way" to address risk. So much for predictions. The continued "fuzzing" of 9001 to make it adaptable to all has made it more subjective than ever before. The best advice I ever read was to keep your quality manual, and add a "definitions" section where YOU define precisely what you believe the standard requires and how you will address THAT. I have done that in several places in our to ward off the dreaded "interpretation gurus".
     
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  12. Andy Nichols

    Andy Nichols Moderator Staff Member

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    Jim: If you talk with your management team, maybe through using a SWOT or similar tool, you'll discover that "opportunity" and "risk" go hand in glove. For example, taking on more work from a customer (higher volumes) is a great opportunity. If it means adding a second shift to cope, there's the risk. Don't make it into rocket science. What you might find is that many leaders don't necessarily understand risky behaviors.
     
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  13. Jennifer Kirley

    Jennifer Kirley Moderator Staff Member

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    The Technical Committee's guidance paper on risk originally called opportunity "the upside of risk." They changed that almost two years ago... opportunity is not meant to be mysterious. It is exactly what the word says it is.

    Business leaders understand risk but are perhaps too comfortable with accepting it; maybe it seems easier than addressing it. The Quality Cost Curve can help understand liability, but there has been a long list of bad decisions in accepting risk. Lowering the air pressure on Ford Explorer tires to address the vehicles' tendency to roll over in sharp turns. The flawed back door latch in Chrysler minivans. The tweaked emissions software in Volkswagen (and other brands, we are learning). And lots more. No doubt the list of good decisions is longer; they just don't get the attention.
     
  14. Jim Hume

    Jim Hume New Member

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    hogheavenfarm: Thank you for your reply. The "definitions" section in the Quality Manual is a great idea-- I can't believe I didn't think to do this sooner.

    Fortunately, the ISO definition of risk hasn't presented any significant obstacles other than causing a little confusion and poor attitudes from some QMS managers. And I respect what Andy Nichols is pointing out, but it doesn't change my mind. Even if risk and opportunity can go hand in glove, they are still fundamentally different concepts; and risk does not necessitate opportunity, nor vice versa. In other words, just because a risk exists, it does not follow that a corollary opportunity accompanies that risk. More importantly, just because the same set of actions and/or circumstances offer both risks and opportunities, it does not mean that it is helpful to lump them all under one umbrella called "risk" or "RBT."

    What is lost by keeping risks and opportunities as separate concepts with different definitions? If we define "risks" as nothing other than negative (or undesirable) potentials caused by a given set of conditions, and "opportunities" as nothing other than positive (or desirable) potentials caused by a given set of conditions, do we lose an important functionality that the ISO definition affords us?

    Also, what do you make of the last part of the Standard's definition of risk, which reads "but not all positive effects of risk result in opportunities"? What are some examples of positive effects of risks that do not result in opportunities? Why are these non-opportunistic positive effects worth noting? What did the ISO committee intend to say here?

    When I continue this discussion, I will relate some specific examples of risk and opportunity in our business (we service and sell medical imaging equipment, especially CT and MRI). Thanks all!

    Edit add: Andy, thank you for your reply, too! I guess what I am saying is that ISO 9001:2015 made risk into rocket surgery when it could have been kept nice and simple as I'm suggesting.
     
    Last edited: Aug 14, 2017
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  15. Jim Hume

    Jim Hume New Member

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    After another day of reflection, I have come around a little bit. Since the 9001 Standard's definition of risk uses the word can, some of my criticisms don't really apply (i.e. "Risk is the effect of uncertainty and any such uncertainty can have positive or negative effects. A positive deviation arising from a risk can provide an opportunity, but not all positive effects of risk result in opportunities").

    I still don't understand how ISO was so sloppy about a definition which is one of the most crucial in the 9001 Standard. "Risk" has only negative connotations in the five major English dictionaries I checked; however, ISO decided to allow risk to be synonymous with "great opportunity" since, by their definition, a risk can be 100% positive and 0% negative.

    Please, I would much appreciate it if anyone can shed some light on this mysterious part of the definition: "A positive deviation arising from a risk can provide an opportunity, but not all positive effects of risk result in opportunities." There must be something I'm missing, but not sure it's important.

    I'm on a mission to improve employee attitudes toward ISO, so that is the practical motivation I have with all these gripes I'm posting.
     
  16. Andy Nichols

    Andy Nichols Moderator Staff Member

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    Because when you're writing for so many countries, compromises in language are likely, Jim. At least, I think that's the risk!:D
     
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  17. Jennifer Kirley

    Jennifer Kirley Moderator Staff Member

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    I have often pointed out that the standard's selection of terms seems odd, and I think we can point to the fact that the standard is, indeed intended for global use. If you think about it, we who use English as a first language are very often the worst of its abusers. And not all English words translate well into other languages.

    It might help to look at the synonyms of the term risk.

    What other term should they have used? Consider the other potential ways to use the word "run..." (as in to run a machine). The ISO people would have probably instead have selected the term "operate" so as to be more clear to those for whom English is a second language. The standard is for everyone.

    I think it is less important to spend so much energy on this type of discussion, and more important to just get to the matter at hand.
     
  18. Jim Hume

    Jim Hume New Member

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    Appreciate the feedback. I understand that the Standard is written for many countries, but if anything, I think that supports my argument. For people who English is not their first language, it would make more sense to use words as they are typically used in English. I know that a few synonyms of "risk" reflect a positive connotation (e.g. fortuity, fortune), but I can't find a single definition with the positive connotation; this is based on dictionary.com, thesaurus.com, and all five hard copy dictionaries I've looked at.

    Regarding the comment "it is less important to spend so much energy on this type of discussion, and more important to just get to the matter at hand", I am getting at the matter that concerns me, namely the decision by ISO to combine the concepts of risk and opportunity. I claim that nothing was gained by doing so, and that nothing would be lost by keeping risk and opportunity as separate concepts/definitions. Does anyone dispute this? Anyhow, just to be super clear, my main questions are: Is anything valuable gained by adding opportunity to the definition of risk? -- or, from the other angle, would anything be lost if ISO were to have defined risk as "a potential negative or undesirable effect"; and opportunity as "a potential positive or desirable effect"? (Jennifer, when you ask what other term should they have used, the latter definitions of risk and opportunity are what I would have used, so I would keep the term risk except change the definition the Standard uses.)

    I'm not trying to troll or intellectually masturbate; I really am asking if you all think I am missing something valuable about the Standard's definition of risk? If you have a good answer, then I will use it to explain to some brilliant engineers and others that are brainwashed with the idea that ISO is full of BS and/or not worth the time. I think they (and I) have a valid inquiry.

    And, once again, does anyone want to take a shot at this inquiry... Please, I would much appreciate it if anyone can shed some light on this mysterious part of the definition: "A positive deviation arising from a risk can provide an opportunity, but not all positive effects of risk result in opportunities." I literally have no idea what was intended here. There must be something I'm missing, but not sure it's important.
     
  19. Jennifer Kirley

    Jennifer Kirley Moderator Staff Member

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    Let me rephrase.

    There is a choice of terms that are available for groups of users. Some terms do not translate well into other languages, for example German and Farsi, and others have synonyms that could generate confusion.

    As a child I read Amelia Bedelia books that highlighted the potential confusion that can arise from a person trying to use unfamiliar words. Suggesting people adhere to our preferred terminology doesn't help when our own terminology is impacted by cultural and regional slang and dialect. Our goal is not to encourage others to use English more like we do, especially when we in the U.S. also use our language with as much variation as we do.

    As for your question: please reconsider my story about the Post-It Note.

    1) It was a failed superglue experiment (one risk in design is failure to produce a worthy item: the substance was a failed deviation in original design intent).
    2) Its results languished for years until someone conjured a potential use for the substance (an opportunity). Failure to recognize opportunity is a market risk. However, it's possible the market simply was not ready for the product.
    3) An early mis-step in marketing (3M gave it s stupid name, otherwise botched the market study, or the clientele simply did not feel ready for the product) was a risk associated with the opportunity. But we must not assume every opportunity comes with risk.

    A risk is not always an opportunity; some risks are so great they are simply negative. Others may have what we call (others may not understand the slag) "a silver lining."

    Does this help?
     
  20. tony s

    tony s Well-Known Member

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    IMHO the words risks and opportunities in tandem, although "sprinkled" all over the standard, is primarily intended to be employed "when planning for the QMS" (clause 6.1.1). The standard prescribes that organizations should pay attention to the potential negative/positive circumstances that can affect their expected results. For non-native English speaking people like me, ISO's definition of risk (i.e. "effect of uncertainty") complicates rather than simplifies our interpretation. Anyway we can rely on our own understanding of the conventional definitions of risks and opportunities to guide us in our strategic/operational planning processes.
     
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