Critics of the ISO 14001 EMS standard point out that the standard is a conformance standard (e.g., focusing on process and procedure), not a performance standard (which mandates specific outcomes). What happens when you take the best from each of these differing approaches to management standards? In this article, author Bob Pojasek compares the Responsible Care® standard (like ISO 14001, a conformance standard) with an environmental performance standard based on the Baldrige model. He goes on to demonstrate that the best solution may just be one that marries the best of both.
Introduction
In this article, Responsible Care® is compared with an environmental performance standard based on the Baldrige model. Responsible Care, like ISO 14001, is a conformance standard, not a performance standard. So what does this mean? Is it important? Is there something that can be done to change this situation?
Let's begin by looking at the concept of conformance. Both Responsible Care and the ISO 14001 standard are designed to make certain that an organization's commitment to the Responsible Care Codes or environmental management system (EMS) conforms to the criteria set by the standard and measured in the conformity assessment. An organization can seek a conformity assessment through self-testing, third-party verification/certification and/or other activities. Such an evaluation will include an examination of elements of the organization's written environmental policies and procedures, its EMS components and functionality, its records and documentation and its internal auditing system. In most cases, the conformity assessment process includes the finding of deficiencies that create the need for corrective and preventive action.
A performance standard, on the other hand, focuses on the efficiency and effectiveness of the program, not restricting its opinion to whether it conforms to the standards. Efficiency refers to the central issue of proper deployment of resources (i.e., human, financial and material) and whether these resources have been put to optimal use or whether environmental improvement could have been achieved with fewer resources (e.g., a pollution prevention program).
Effectiveness is concerned with whether the Responsible Care Code or EMS has led to the achievement of the intended effects. There are two parts to the effectiveness: The question of whether the policy objectives (including the goals and objectives) have been achieved, and the question of whether the achievement of the objectives is clearly the result of the policy that was pursued. Performance can only be measured when the goals and objectives are clearly stated and quantifiable with before and after metrics.
Management Systems Verification (MSV)
MSV is a protocol-driven process used by the American Chemistry Council (ACC) and its member companies to evaluate five major management systems elements that apply to all the Codes of Management Practices in Responsible Care. There are six specific codes:
- Community Awareness and Emergency Response (CAER)
- Pollution Prevention
- Process Safety
- Employee Health and Safety
- Distribution
- Product Stewardship
These codes comprise of 106 specific management practices.
The structure of the protocol is designed to evaluate five management system elements that are modeled after the ISO 14001. These elements are as follows:
- Policy and Leadership
- Planning
- Implementation, Operation, and Accountability
- Performance Measures and Corrective Action
- Management Review and Reporting
Each of these elements applies to all of the Responsible Care Codes and their management practices.
"Attributes" were created to reflect common threads in the system. A listing of the attributes by management system element can be found in Table 1. Questions were derived for each of the attributes. They were designed to be open-ended to evoke discussion, demonstration and example. These questions have not been made publicly available. The MSV protocol looks for specific attributes that describe necessary systems, organizational structures, and policies for each of the management system elements.
The basic technique of using the MSV protocol is to have a verification team apply the open-ended questions in a panel or group interview environment. The team is typically comprised of a lead verifier, a supporting verifier, a facilitator and a representative of the public. The verifiers are from other companies and are selected on the basis of qualifications, availability and acceptability to the company being verified. The company selects the public participant, often coming from a Community Action Panel (CAP). All the panel members receive one and one-half day training in the process.
The scope of the MSV varies according to the needs of the company, but typically will require from 2 to 3 days on site for the verification team to complete its work. A typical itinerary for the team would include:
- Team visits company corporate office - interview CEO/Panels
- Team visits site(s) - interview panels
- Walk-through at sites to meet workers at random
- Commercial and other stakeholders interviewed - many by telephone
- Daily wrap-up report at corporate and site offices.
A couple of months prior to conducting the MSV, the facilitator retained by ACC works with the company to make sure it understands the protocol. The company arranges all logistics and schedules. An internal MSV team identifies and prepares "appropriate" interviewees. Verification questions are sorted by interviewee and panels are scheduled by combining several line and functional areas.
A draft report is prepared based on daily briefings within 30 days of the visit. The draft report is reviewed by the verifiers, ACC legal, and the company (factual only). Only the company receives a copy of the final report. All documentation, notes and other information used by the verifiers are destroyed. The report highlights strengths in the program and "opportunities for improvement." Depending on the scope of the verification, the report can be between 20 - 50 pages. A number of the ACC member companies have posted the entire report on their Internet sites.
The MSV report is unlike the formal audit or independent assessment, and does not rely on evidence of documentation. The interview process is designed to minimize adversarial and defensive posturing by the company and works best in an environment of mutual trust and understanding where information can be freely offered and exchanged. In order to insure the best possible environment for a MSV, the verifiers are taught to be non judgemental. The public participant on the team is coached by the facilitator on these amenities but there are no restrictions, other than the company's right to select the public member, on what the individual may ask.
While the MSV is not intended to be a true compliance audit against the 106 management practices of Responsible Care, it is a high-level verification process that can establish with good certainty the presence and function of EHS systems and processes in an organization. The real value of using MSV and participating in the MSV process, as stated by a number of participants, is the visibility EHS management is given to "all levels of management, particularly CEO, line and middle management, and the buy-in that is given to implementation of the management system. Secondarily, they also indicated MSV was most useful as a benchmark exercise for examining "Examples of Excellence." These examples are published company programs that are found to be exemplary examples of how one company addressed an attribute within Responsible Care. When these activities are clearly 'above the bar' relative to Responsible Care implementation, one-page descriptions are prepared together with a company contact. These summaries of best management practices are published for the exclusive use of ACC member companies. They can also be accessed on the ACC's extranet - the member-secure section of the web site.
New Mexico's Green Zia Program
An example of a performance-based EMS program is "Green Zia." http://p2.utep.edu/projects/index.cfm. Green Zia is a voluntary program developed by the New Mexico Environment Department with the collaboration of the New Mexico Pollution Prevention Advisory Council. It is based on the Malcolm Baldrige Quality Model. Green Zia is designed to help organizations of all sizes (companies, municipalities, service organizations, micro businesses, etc.) achieve environmental excellence through continuous environmental improvement. Unlike Responsible Care and ISO 14001, Green Zia has made substantial program improvements in each of the three years that it has been in use. It also builds on more than 13 years of continuous improvement in the Baldrige program itself.
The Baldrige Criteria for Performance Excellence (See Table 2) serve both as a basis for organizational self-assessments and for achieving the National Quality Award by the president of the United States each year (Green Zia is a Governor's Award in New Mexico). In addition, the criteria have three other important roles in strengthening competitiveness of those organizations that use them:
- To help improve performance practices and capabilities;
- To facilitate communications and sharing of best practices information among organizations of all types; and
- To serve as a working tool for understanding and managing performance, planning and training.
Companies that use the Baldrige Criteria in the Presidential Award Competition, on the average, outperform the Standard & Poor's 500 index by almost 5 to 1. Approximately 30 countries and 43 of the 50 states use Baldrige as the basis for their quality award programs. The program is transparent and all the program information is publicly available on the Internet.
Similarly, the Green Zia program is a prevention-based EMS that relies on thorough knowledge of processes and a structure for continuous improvement to reduce or eliminate all wastes from the organization. A well-designed system incorporates leadership, planning, involvement from interested parties, information and analysis, employee involvement, process management and results. The Green Zia EMS takes advantage of existing business management approaches to improve environmental performance. An organization with this kind of system in place is well on its way to environmental excellence. However, readers shouldn't think of Green Zia simply as an award program.
Here is how the program works. An organization prepares a detailed 50-page "application" that responds to the criteria, items, guiding principles (also called core values), and links between these components. There are approximately 119 management practices included in the 18 items spread across the 7 program criteria. All the questions are publicly available on the Internet and were derived in a fully transparent process. There is training available to the organizations to show them how to complete the applications. Baldrige has sample applications available on its web site.
A panel of trained examiners is convened to score the application on a 1000-point basis using a rigorous scoring method. The panel may have three examiners and a senior examiner. Their scores must agree with one another in each item within 20%. The senior examiner must present the scores to a panel of judges before the scores are accepted. If the score is approaching what is considered to be excellence (i.e., around 600 to 700 points), a visit is scheduled to verify that the application accurately represents the situation. Examiners receive annual training of two days that includes scoring actual examples.
The scores are results-driven. Approximately one-third of the total points come from three results items. Organizations are expected to track and trend their results and trend their results against other companies similar to their own (i.e., benchmarking). The first 15 items are answer the question "how?" Scoring well in any of these items represents having a best practice for that item. The MSV program, like the ISO program, asks the question "what?" It is harder to derive a best practice from a "what" question.
The author has prepared a 30-question diagnostic by applying factor analysis to the 119-question process. This diagnostic can be utilized using software that prompts the user for further information when required. An application can be printed out and bundled with the information cited for submission to the panel of trained examiners.
Once the scoring is complete, the panel of examiners prepares a feed back report. It provides the applicant with a listing of strengths in each of the 18 items along with "opportunities for improvement." Depending on the ground rules, the score may or may not be provided. Some programs choose to provide the score in a range.
Proposal for an MSV Based on the Baldrige Model
In the August issue of Quality Progress, a proposal was made to combine the conformance-based ISO 9000 standard and the performance-based Baldrige criteria (i.e., MB-9000). It was argued that one system may not be sufficient. However, the author did not argue for another standard. Since ISO 9000 is simply a generic framework around which and within a quality system can be built, there is no reason why ISO 9000 cannot be customized to a particular organization.
Perhaps MB-9000 should be called ISO 9000 with a Baldrige supplement. The registrar need then only be concerned in carrying out either a registration or a surveillance audit, with two factors in the audited organization's quality system:
- Does the quality system comply with the provisions of ISO 9000?
- If the supplement is a recognized supplement, does the organization comply with it?
The registrar can then award certificates stating that the organization complies with ISO 9000 with the MB supplement. There are other supplements available in the ISO 9000 arena (e.g., QS-9000 and TL-9000), and there could be supplements developed for ISO 14001.
Let's consider how the MSV program would work if it had a MB structure. First of all, nothing would change in the Responsible Care Codes. The Green Zia (Baldrige Model) would be accessed for performance items, which would be used in place of the five major system elements. Since this has not yet been attempted, it might be instructive to see how leadership could be handled as an example.
MSV addresses leadership in the Policy and Leadership management element. This addresses the leadership exhibited by senior management in setting clear policy and guidelines for performance, and for enhancing the value of the Responsible Care ethic within the organization. Senior management demonstrates leadership and commitment for their organization by active participation in the creation and implementation of a clear and visible policy that:
- Involves a demonstration of a personal commitment and dedication to Responsible Care;
- Is relevant to the nature and scale of the organization's products and processes;
- Fosters openness in dealing with stakeholders and takes into account public and employee inputs;
- Sets a framework for reviewing and establishing Responsible Care and environmental, health, and safety goals, objectives, and targets;
- Includes a commitment to continual improvement of the management of chemicals;
- Includes a commitment to comply with relevant legislation and regulations;
- Reflect the company's commitment to the Guiding Principles of Responsible Care: and
- Is documented, maintained and communicated to employees.
Green Zia Item 1.1 (Organizational Leadership) looks to the top leadership to provide vision and commitment to continuous environmental improvement that is communicated and demonstrated to employees, suppliers, customers, oversight agencies and other interested parties through their direct involvement, strategic plans, alignment of resources, performance measures and management review. The following areas need to be considered:
- How does management demonstrate commitment to continuous environmental improvement on par with other major organizational goals through policy statements, incorporation and integration into other programs and other activities?
- How does management conduct proactive communication with regulatory agencies, employees, customers, lenders, suppliers, investors or other interested parties to improve environmental performance and gain support for and communicate related successes?
- How does management provide support for continuous environmental improvement at all levels of the organization, and how is it integrated into core business practices?
- How does management assure that continuous environmental improvement is incorporated into strategic plans, action plans and performance measures, and how does management review results and assure that they are tracked throughout the organization?
Links should be established with items 2.1, 2.3, 4.2, 5.1, 5.2 and 5.3 in the performance standard. An additional link needs to be recognized to the leadership guiding principle (See Table 3). Green Zia also has Item 1.2 that addresses Community Leadership, but this element is not focused on top management.
It is easy to see that Green Zia creates a strong role for top management in the EMS program using "how?" questions, not "what?" questions. The organization is graded on its approach to leadership - How it addresses the item requirements including the method(s) used. The factors used to evaluate approaches include:
- Appropriateness of the methods to the requirements
- Effectiveness of use of the methods and the degree to which the approach is systematic, integrated, and consistently applied; embodies evaluation/improvement/learning cycles; and is based on reliable information and data
- Alignment with organizational needs
- Evidence of innovation.
In addition, the organization is grated on deployment of leadership - the extent to which the approach is applied to all requirements of the item. The factors used to evaluate deployment include:
- Use of the approach in addressing item requirements relevant to the organization
- Use of the approach by all appropriate work units.
These items need to be addressed in a Malcolm Baldrige supplement to the MSV program. Similar effort needs to be made for the other 17 Green Zia items contained in the seven categories (See Box 4). The first 15 items create results - outcomes - in acheiving the purposes given in the item. The factors used to evaluate results include:
- achieving the purposes given in the item. The factors used to evaluate results include:
- Current performance
- Performance relative to appropriate comparisons and/or benchmarks
- Rate, breadth, and importance of performance improvements
- Linkage of results measures to key customer, market, process, and action plan performance requirements identified in the business overview and in approach/deployment ratings.
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Table 4. Baldrige Model Evaluation Items |
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The result of the inclusion of these performance elements would be a MB structure that is scored by independent, trained examiners and trended by the company each year. The organization plans for and can show improvement each year in the overall score based on the total number of points issued by the examiners. Using this MB structure approach will promote the development of best practices in the management of the EMS or Responsible Care Codes since high scores in each of the 15 items (i.e., aside from the 3 results items) represent best practices in those items. Furthermore, the MB structure will highlight environmental results, other interested party results and financial results of the Responsible Care program (See Table 5 for details.).
The three "results" items represent 325 of the 1,000 points in the MB supplement to emphasize the importance of a results-driven performance system. While the companies will demonstrate improvement on the basis of a total score, they can target future improvement efforts by focusing their efforts on items where they could better address in the coming year. Experience shows that excellence probably lies in the 700-point area. To get there, you must have good results and some best practices. The company cannot score badly in any of the categories and still get that many points. Details on the scoring can be found in the Green Zia Program Information Guide.
Combining Baldrige and MSV
ACC and its member companies have a vibrant and internally well-accepted MSV program in place. It remains to be seen as to whether it will be accepted by the communities, regulators, NGOs and other stakeholders. Since there is no scoring and annual application, it may be hard for the companies that utilize this model to demonstrate continuous improvement.
If the ACC decided to adopt a performance-based model, they could redesign their program to replace the five major systems elements with the seven Baldrige criteria and 18 items. The 106 management practices would be tested with "how?" questions within the Baldrige model. Member companies would complete applications or use a computerized diagnostic that would be scored by trained examiners using a rigorous scoring methodology. There are trained Baldrige examiners in 43 of the 50 states at the current time. The organizations that trained them could assist in setting up the program or ACC could do this on a national basis. Participating companies could receive their score (or range) along with the feed back report. Each year, they would repeat the process and demonstrate their continuous improvement. The scoring method and questions would be made publicly available. Each member company could decide for itself whether to make the feed back report and the scores available to the public. The ACC could still have best practices to distribute among its members. The aggregate scores could be made public to show how the membership is improving in its performance under the Responsible Care Codes. In addition, aggregate results, including the financial results, could be made public by the ACC. The MSV program in its current mode only supplies anecdotal and case specific information.
Concluding Thoughts
An MB structure applied to the MSV program could be a great alternative for any ACC member organization wanting a clear performance basis for their Responsible Care program. Creating and using the MB structure would enable the organization to build upon the sound conformance-based Responsible Care program already in place. This MB structure will reinforce and measure the commitment to continuous improvement and will lead the user to develop best practices in each of the 15 items. By linking all these items, the Responsible Care program can truly be integrated into the core practices of the organization in a way that is less likely in the conformance-based mode. A quick comparison between the current MSV Program and a Performance Program Model can be found in the following summary table.
| MSV Program | Baldrige Model |
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Protocol-driven; focus on external review |
Application-driven; focus on internal preparation |
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Protocol questions not publicly available |
Questions available to all on the Internet |
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Subjective anecdotal and case information |
Rigorous, publicly available scoring methodology stressing performance |
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Five elements focus on "what?" |
15 items focus on "how?" |
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106 management practices |
119 management practices |
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10 Guiding Principles in Responsible Care |
11 Guiding Principles in Baldrige |
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Rating performed on-site by independent examiners |
Scoring performed off-site by independent examiners; on-site only to verify excellent scores |
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Examiners get 1 ½ day training |
Examiners get 2 days training each year with practice scoring a case application |
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Feed Back Report with strengths and opportunities to improve |
Feed Back Report with strengths and opportunities to improve |
Finally, the MB structure allows comparisons between different organizational types, since the focus is on the "how"-not on the "what"-of EHS or Responsible Care management. It would allow for direct ("apples to apples") comparisons between the organization, its customers, its suppliers, carriers, distributors, contractors, and sales and headquarter operations. This structure closes the circle in that it allows organizations to have some conformance on the environmental management best practices while tracking the performance of the supplemental items. Maybe it is worth taking a look at after all!
Acknowledgement
Portions of this paper were originally published by the author in "International Environmental Systems Update" newsletter (CEEM, Inc.; February 2001). That paper compared ISO 14001 to performance models including EPA's Performance Track Program and Green Zia.
About the Author
Robert Pojasek is president of Pojasek & Associates, a Boston-based management consulting firm specializing in business risk evaluation involving quality, safety and the environment. Dr. Pojasek is also an Adjunct Professor at Harvard University's School of Public Health. For more information, contact Dr. Pojasek by telephone at 781-641-2422 or by e-mail at rpojasek@sprynet.com.
