Applying Deming’s principles to hiring auditors

W. Edwards Deming's principle of profound knowledge holds immense relevance when it comes to the hiring, retention and empowerment of skilled and conscientious auditors.

Renowned as a statistician and management consultant, Deming laid the groundwork for modern quality management through his pioneering work. He introduced the concept of ‘profound knowledge’, encompassing interconnected theories and principles that assist organisations in enhancing their processes, products and services. These principles bear direct relevance to the recruitment and training of skilled auditors, consequently impacting the financial health of an organisation.

Profound knowledge comprises four interrelated components: appreciation for a system; knowledge about variation; theory of knowledge; and psychology. Let us delve into how these principles apply specifically to auditors.

(a) Appreciation for a system: Deming stressed the importance of viewing a system as a whole and understanding how all the parts work together. 

In the context of auditing, a conscientious auditor understands that the organisation's system health is not just about the numbers; it is also about the processes and systems that generate those numbers. They will look for ways to improve those processes and systems to ensure that the organisation is operating effectively and efficiently. Conscientious auditors should have a systems-thinking approach when auditing a quality management system (QMS) and will identify any areas where the system parts are not working together efficiently. 

A less conscientious auditor may not have this approach, however, focusing only on individual components of the system. Or they may focus only on the numbers and not understand the underlying systems and processes, putting the organisation at risk.

(b) Knowledge about variation: Deming emphasised the importance of understanding variation in a system and how it can impact the quality of the output. 

Conscientious auditors understand this principle and use it to identify any variations or inconsistencies in the QMS being audited. 

(c) Theory of knowledge: This principle emphasises the need for organisations to continuously improve knowledge and understanding of their processes and systems. 

A conscientious auditor seeks to learn about the organisation's processes and systems in order to make informed decisions about the QMS health of the organisation. A more cursory auditor may not have the necessary knowledge or expertise to make informed decisions, potentially leading to inaccurate assessments of the organisation's quality system. 

Deming believed that continuous improvement was essential for maintaining a high-quality system. Conscientious auditors encourage organisations to continuously improve their QMS and identify areas for improvement. 

(d) Psychology: This Deming principle emphasises the importance of understanding human behaviour and motivation in the context of organisational improvement. Deming believed that understanding human psychology was important for managing and improving a system. 

As it relates to corporate QMS health, a conscientious auditor understands the potential for bias or unethical behaviour and takes steps to mitigate those risks. 

A less conscientious auditor may not be able to control their attitude effectively and may not manage people appropriately during the audit process.   

"Conscientious auditors assist in an organisation's continuous improvement, which helps the QMS to become a strategic asset. The involvement of less scrupulous quality auditors can result in the exact opposite."

Rasoul Aivazi, International Project Quality Lead Auditor.

Impact on Total Quality Management

Total Quality Management (TQM) is a management approach that seeks to optimise the quality of products or services by involving all employees in the organisation to continuously improve processes, products, and services. 

When the auditors responsible for ensuring the quality of a product or service do not follow the TQM principles, the entire TQM process becomes compromised and the overall performance of the organisation may suffer.

Adding value over time 

Conscientious auditors play a crucial role in implementing and maintaining an effective ISO 9001 QMS, ensuring a QMS meets the required ISO standards and achieves the organisation's quality objectives. 

On the other hand, quality auditors who do a cursory job can compromise the QMS by failing to identify nonconformities, or not helping to continuously improve processes. This can result in a negative impact on product or service quality, customer satisfaction and overall business performance.

Conscientious auditors assist in an organisation's continuous improvement, which helps the QMS to become a strategic asset. The involvement of less scrupulous quality auditors can result in the exact opposite. 

Impact on financial health

Auditors who take shortcuts and do not delve too deeply can negatively affect a corporation's financial health in several ways. 

If an auditor fails to identify nonconformities or issues with the organisation's QMS, the organisation may continue to produce substandard products or services, leading to customer complaints and returns. This will ultimately result in decreased revenue and profitability.

If the auditor provides a false or inaccurate certification, such as upgrading unqualified auditors – or if they lack the required auditing experience to fulfill requirements – the audited organisation may be at risk of significant financial losses and reputational damage.

If the organisation relies on the false certification to secure contracts, they may face legal action or penalties if the certification is found to be fraudulent.

In addition, if the auditor fails to identify safety and quality risks, the organisation may face safety hazards and quality issues that can harm employees, customers and the environment.

How to avoid ineffective auditors

Organisations can take several steps to avoid using ineffective auditors.

Step 1: Conduct background checks

Before hiring an auditor, it is essential to verify their credentials and check references, to ensure they are qualified and reputable.

Step 2: Use accredited certification bodies

Only work with certification bodies that are accredited by recognised accreditation bodies, to ensure auditors are properly trained to follow strict standards.

Step 3: Train employees

Educate employees on the importance of working with skilled auditors and the risks of using auditors who take shortcuts, including training on how to spot – and report – fraudulent activity.

Step 4: Regularly review certification

Review certification regularly to ensure it is up to date and valid. This includes verifying the credentials of the certification body and auditor.

Conclusion

Deming’s principle of profound knowledge holds great relevance for hiring, retaining and empowering conscientious auditors, as opposed to individuals who bear the title but who do an ineffective, or even fraudulent, job. Implementing this principle contributes directly to the overall QMS, financial wellbeing and reputation of an organisation.