Business Plans vs. Management Systems Meeting ISO Standards
As a manager, you have always been taught to have a business plan. Outlined ahead is the structure of both a business plan and a business management system so you can quickly see the difference between the two.
As a member of the plenary group in Canada to bring auditor certification to the country, initiated by the Chartered Accountants of Canada, I brought to the attention of the banks the need to make the business plan structure more like the management system structure, so that companies would sustain their businesses for the long term.
The first component that is missing in the business plan is the process approach, which requires the business owner to identify the interconnection of its business processes.
The emphasis in the business plan is on “planning,” not on the sustainability of the business management system. A management system structure requires the organization to identify its risks tied to its processes in its planning stages, and then to put in place support systems and controls. The emphasis in a management system is on continual improvement of running the business by monitoring and measuring operations and ensuring data
analysis and performance evaluation through internal and third-party audits. This is a key area that is missing in the business plan (see Figure 11.1).
Regardless of the size of an organization, the goods or services, or the sector, systems thinking is important for the effectiveness and efficiency of business operations.
Where Is the Weak Link in Your Management System?
Figure 11.2 shows you the key process areas for an organization: (1) its leadership and planning of its business processes, (2) processes for the implementation of the business, and (3) the operational controls and monitoring and measurement analysis for the improvement of the processes. Understanding the risks tied to each of these areas and the weak links associated with the process helps the organization manage and grow the business with strength.