Sunday, February 27, 2011

The Impact of Quality on Social Responsibility

The guidance standard ISO-26000:2010 Social Responsibility was published in November 2010. In applying ISO 26000:2010, organizations are advised to take into consideration societal, environmental, legal, cultural, political and organizational diversity, as well as differences in economic conditions, while being consistent with international norms of behavior. As Social Responsibility becomes increasingly important in corporate boardrooms, many organizations will turn to the Quality professional for assistance linking sustainability efforts to the strategic quality planning process to deliver business results. It is said what gets measured gets improved. In his latest blog post, ASQ Executive Director Paul Borawski asks, "how do we measure return on investment in SR to assess business value?".

On a macro scale, rather than measure a country's economic output as Gross Domestic Product (GDP) or as GDP per capita, a SR look at the relative output might prorate GDP by each country's area (sq miles). Such a measurement recognizes a culture of sustainability where resources are used more efficiently. For example:

Country          GDP               Area         GDP/sq mile
USA        $14.6 Trillion    3,717,792      $ 3.9M/sq mile
Japan      $  4.3 Trillion       145,883     $29M/sq mile

On a micro-economic scale, a SR measure of Return on Investment for organizations might be a mathematical equation describing Loss to Society, incorporating terms for materials efficiency, energy use, greenhouse gas and VOC emissions, water conservation, biodiversity, etc.throughout a product's life cycle.

As one example, my employer, 3M, has had a "Pollution Prevention Pays" program since 1975. Engineering, manufacturing, laboratory, quality and EHS personnel have participated in over 8,100 PPP projects that have prevented over 2.96 Billion lbs of pollution in their first year, generating over $1.37 Billion in savings. Nearly every 3M manufacturing facility, globally, is ISO-14001 registered. 3M leadership constantly reinforces its values, principles, code of ethics and business conduct in all of our operations worldwide.

Implementation of SR is best managed using traditional quality improvement and project management tools and techniques. Development of new SR metrics for the balanced scorecard will help organizations focus on the long-term objectives.

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