How Universal Avenue prepared to scale with a Quality Management System – Part 3 by Thom Iddon

If you haven't already, please return to Part 1 and Part 2, to ensure you have the full understanding.

Lesson #5: measure and measure up

What, how and when

The word “measure” is mentioned no fewer than 31 times in the ISO 9001 quality standard. Determining whathow, and when to measure will crop up frequently during implementation.

The best answer is to measure whatever adds valueautomatically, and continuously. Best case scenario you’ve built your platform with tracking in mind. Worst case scenario you will need to track manually at predetermined intervals. Only estimate as a last resort, and treat those estimations with the respect they deserve.

Balancing quality and growth goals

Perhaps the biggest challenge you will face is balancing the primacy a standard places on quality with the pressure to grow quickly. This is especially true for VC-backed startups.

The best answer is to strike a balance. There’s no point in prioritising quality to the extent that you’re 98%-perfect product never hits the market. Likewise, even the most dazzling growth can’t outpace dizzying churn brought on by poor quality.

Aim to strike a balance between quality and growth. Don’t let one outpace the other too much

OKRs

Our ode to striking this balance is our OKRs (Objectives and Key Results). This is how they work:

  1. Each quarter the management team defines 3 company objectives for the coming quarter and 3 key results for each company objective
  2. Every other team defines 3 team “child” objectives, linking them to one or more of the “parent” company objectives, and 3 key results for each team objective
  3. Since our product team is large and grapples with multiple projects, we carry the OKR logic down one generation more — “grandchildren” (see below). The key logic stays the same: each objective links to the parent objective the level above.

 

 


Universal Avenue’s OKR tree

The beauty of OKRs is to elevate quality and growth (or any other goals for that matter) and align the entire company around them.

 

Lesson #6 the certification process

What we’ve covered so far

  1. Choose your standard
  2.  
  3. Choose your QMS — build, buy or subscribe
  4. Work with the standard; start broad and narrow in
  5. Work on your biggest pain points first.

The internal audit

When your QMS starts to take shape, schedule your internal audit. Consider this a dry run before the real audit. Most often it is conducted by the same consultancy that supported your implementation.

The internal audit takes 1 day for your average startup and includes members from each team. Here’s how our looked:

  • 0900 — Introduction
  • 0930 — Management
  • 1030 — Partners & Brands
  • 1130 — Finance & HR
  • 1300 — Product
  • 1400 — Operations & Analytics
  • 1530 — Conclusion

The output of the internal audit is the internal audit report, which details the nonconformities you need to fix before the external audit, and constitutes the basis of the management review.

The management review

The purpose of the management review is to prod and probe your nascent QMS, using the internal audit report as your north star. You should look for weaknesses, like failing processes and outdated policies, and propose updates in anticipation of coming changes, like new products and new markets.

Spend 30% of the session identifying problems and 70% working towards solutions. You don’t need to come up with all the answers now, but you do need to allocate resources to find and implement the solutions. It should take roughly 1 day and is best conducted offsite. The entire management team should participate, along with the implementation manager, and any other team members with key roles to play.

The external audit

You’ve made it! Almost. The external audit is the culmination of all your hard work and preparation. It’s conducted by a certified ISO auditor, who cannot belong to the same body as the implementation consultant. It’s delivered in 2 stages.

  • Stage 1 is used to determine that you fulfil the minimum criteria required to progress to stage 2. It can be done onsite or offsite.
  • Stage 2 is when the auditor dives into the detail, interviews team members, and ultimately determines whether or not you’re compliant.

Best case scenario, you will breeze through stage 1, and complete stage 2 certified with minimal improvements to implement.

Worst case scenario you’ll face a lot of changes to implement directly after stage 1 and need to wait some months for stage 2.

Most companies pass both stages 1 and 2 with important but not critical changes to implement. This is most time consuming first time around, but much easier during recertifications providing you keep your QMS updated.

 

Lesson #7 getting down to brass tacks

How much does all this cost?

As you’ll recall, we chose to build our own QMS and document everything ourselves. One more advantage of this approach was to reduce bought in cost.

In 2019, we spent:

  • 41 265 SEK (circa $4,300) for 35 hours of consultancy, including the internal audit
  • 35 000 SEK (circa $3,600) for the external audit

We secured re-certification for 2020, 2021 and 2022 at an average price of 20 000 SEK (circa $2,100).

Then, of course, there is the substantial cost of building the QMS and documenting the processes from scratch.

But regardless of whether you choose to outsource or insource this work, you can’t scale without it.

Sweet, sweet certification

Sweet, sweet certification

You did it. You have a certificate for the wall and a logo for your email signature.

But more importantly: you have a newfound confidence in your company processes, start to finish; you’re in a position to scale with intent; and you’ve significantly reduced the red-tape between you and your next big partner.

Good luck!

 

The 15 most important takeaways
1. Select a quality standard that suits your business
2. Many consultants are eager to add a startup to their credentials and may offer a favourable rate
3. Colleagues will more likely embrace changes to an existing system than adopt an entirely new one.
4. Document what adds value and nothing more
5. You can only be as compliant as your product is ready for market
6. Ensure the full management team is fully onboard before communicating the quality programme down the organisation
7. Your product team will be quickest to grasp the quality approach and first to question it
8. Operations benefit most from a QMS and outside management bear greatest responsibility for its upkeep
9. Strike a balance between quality and growth. Don’t let one outpace the other too much
10. Compliance should be the by-product of optimising your business. Bend the standard to serve you, not the other way around
11. Your QMS is only useful if it is used. Embed it deep within your existing practices and it will grow organically as your company does
12. Use terminology with a good cultural fit.
13. Don’t duplicate ever. Preserve one source of truth
14. When documenting always ask yourself: “How soon will this become redundant?
15. Find a good version control system and stick with it — you’ll thank us later

This is Part 3. Catch up on Part 1 and Part 2 for a full understanding.

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Thom Iddon-Escalante is a Stockholm-based digital marketer and entrepreneur. Formerly Operations Director at Universal Avenue, where he was responsible for scaling logistics and support teams, he recently became Marketing Director at Formulate. When he's not focused on growing tech start ups, he enjoys listening to podcasts, playing rugby, and spending time with his 2 year-old son.