In the management system world ISO is often seen as a tool for compliance, consistency, and control.
But what if they could be more than that?
What if the very mechanisms designed to maintain order could also drive radical innovation and transformation?
This is the essence of creative destruction, a concept popularised by feller called Joseph Schumpeter, describing the process by which old systems are regularly and rigorously poked, prodded, challenged, dismantled and reassembled to make way for new, more effective systems and processes. We want you to use three components of your management systems to do just that. The three components are:
- Planning and objective setting
- Audits, and
- Non-conformance
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Doing so will make creative destruction not just possible, but essential.
1. Aims, Ambitions, Plans, Objectives and Targets: The Seeds of Innovation
All ISO systems should begin with your aims and ambitions; the establishment of your objectives, targets and measurable goals that guide your company performance. While these are often framed around efficiency, safety, or compliance, they can, and should, also be designed to challenge, overthrow, disrupt and even subvert, the status quo.
W. Edwards Deming, the father of modern quality management, emphasised the importance of constancy of purpose and systemic thinking. He argued that improvement is not a one-time event but a continuous journey. By setting ambitious, forward-thinking objectives, you can create tension between your current capabilities and your desired outcomes – this is the tension that provides the rocket fuel for innovation.
This will mean looking outside the organisation for what might be occurring that is beyond your control but which you may need to react to and looking inside the organisation at what you’re both good at and indeed what you’re not so good at.Â
Typical tools for exploring the external competitive environment are detailed in other blogs, for instance; 5 steps to business planning.
Digging deeper into internal objectives and targets, you might want to reduce production waste by say 50% – this may force you to rethink your entire supply chain. Â Alternatively, a goal to improve customer satisfaction might lead you to the redesign your product or service. Â These desires (objectives) then become strategic provocations, encouraging your teams to question existing processes and explore new possibilities.
2. The Audit Process: A Mirror for Self-Reflection
Audits (horrible word) are often perceived as bureaucratic exercises, but they can be re-focused as incredibly powerful tools for organisational introspection. ISO audits whether internal or external, provide you with structured opportunities to examine how well your systems are working and where they are letting you down.
One of our go-to guides, Matthew Syed, in his book, “Black Box Thinking”, draws parallels between aviation and healthcare; he shows how sectors that embrace failure as a learning opportunity massively outperform those that conceal it. In aviation, every incident is meticulously investigated, and the findings are used to improve systems. In contrast, healthcare (and the UK justice system… let’s not go there) often resists transparency equally often resulting in repeated mistakes.
ISO audits, when approached with a growth mindset, can function like aviation’s black boxes. They reveal gaps, inefficiencies, and blind spots. Rather than fearing these findings, organisations should welcome them as data-driven insights, evidence of where creative destruction is needed.
A well-conducted audit doesn’t just confirm compliance; it should challenge current organisational competence, it should ask:
- Why are we doing it this way?
- Is there a better method?
- What assumptions are we making?
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These questions can be the starting point for radical transformation and ongoing creative destruction.
3. Non-Conformance: The Engine of Evolution
Perhaps, the most potent driver of creative destruction within ISO systems is the non-conformance process. Non-conformances are deviations from expected standards, errors, failures, or inefficiencies that signal something is wrong.
However, please, please, please do not call it your non-conformance process! You’ll put everybody off before you start. The is an ISO requirement for a non-conformance process but we would absolutely encourage you to call it something else, make it your own. Essentially, it’s a “lessons learnt” process, so in the past we’ve had it called lessons learned, company learning, the ChIP process – where ChIP stands for Change Improvement or Problem. On one occasion it was also called the “Sputtering and Glitches” process and even the Experience Transformer – anything but non-conformance.
Traditionally, “non-conformances” are treated as problems to be fixed. But what if they were seen as opportunities to evolve?
Deming believed that variation is the enemy of quality, but he also understood that variation reveals the limits of a system. When an issue (non-conformance) occurs, it exposes a weakness in the process, a weakness that, if addressed creatively, can lead to a stronger, more resilient system.
Again, Syed reinforces this idea; he argues that failure is the raw material of success. Organisations that systematically analyse their failures, without blame, are able to adapt, learn, and innovate. These processes, when used not just to correct but to investigate and rethink, becomes the anvil on which continuous improvement is hammered out.
As an example, imagine a 20 strong financial services company who had identified a major problem after several clients reported delays in receiving monthly financial reports, impacting their ability to make timely decisions. Â The investigation revealed that the problem stemmed from inconsistent internal workflows and lack of standardised reporting procedures. The company responded by implementing a streamlined reporting protocol, introducing automated scheduling tools, and conducting staff training to ensure consistency. As a result, report delivery became more reliable, leading to improved client trust, better service quality, and a measurable increase in customer satisfaction.
Alternatively, imagine a manufacturing defect that leads to a product recall. Instead of patching the issue, the company uses the incident to redesign the product, improve supplier relationships, and implement predictive quality controls. The result? A better product, a stronger brand, and a more agile organisation.
Use Your Management System as a Platform for Creative Destruction
Management systems are most often associated with stability and control but deeply embedded in their structures are the very tools necessary to drive for radical change. By leveraging your aims, ambitions, objectives and targets, audits, and non-conformance processes as instruments of creative destruction, organisations can move beyond conformance to reinvention, and performance.
Deming taught us that quality is not a destination but a journey. Syed shows us that failure is not the end but the beginning. Together, their insights remind us that the path to excellence is paved with bold objectives, honest reflection, and fearless learning.
In the hands of visionary leaders and ambitious owners and managers, management systems become much more than just frameworks; they become launchpads for transformation and engines of creative destruction.
Related tools and ideas
Recommended references
- Black Box Thinking (book)
- Black Box Thinking (video)
Downloadable references
- Experience transformer form (article)
