by The HLH Team
There is a distinct difference between change management and change leadership.
We often hear stories from organizations who have embraced process improvement (and we certainly have our own), and many of the stories follow the same plot line: upper management sees how identifying and eliminating waste will benefit their people, their customers, and their bottom line. They teach their staff the 8 Deadly Wastes and explain how process improvement will make people’s lives easier. Employees are willing to give this “lean” approach a try, and small efforts start to produce wins in some areas. Everyone pats each other on the back, and 4 months later those wins have evaporated and it’s back to square one.
Implementing actual change in any organization – whether it’s your business, your family, your community – takes prolonged effort and commitment from the people who have influence. In other words, change takes leadership, and we often make the mistake that managing change and leading change are the same thing. They aren’t, and here’s how they’re different:
| Change Management |
Change Leadership |
| A set of processes, tools, and mechanisms designed to make change smoother by:
· Getting stakeholders to buy-in to the change
· Keeping the change process under control
· Ensuring the project stays on budget |
A network of practices that designed to drive change ahead by:
· Articulating a vision of the future
· Mobilizing the resources needed to make that vision possible in concrete terms
· Putting an engine on the whole change process to move things forward faster and smarter |
| Useful for small-scale change |
Essential for systemic change |
| Typically driven by a small group of change managers who may be helped by external consultants |
Undertaken by leaders – people who:
· Have a clear vision for a better future for the entire organization
· Inspire stakeholders to believe in the change
· Empower people to push toward the change |
| Always planned and deliberate |
Always urgent, relying on speculative action to implement good, but unproven, ideas |
Here’s the takeaway: implementing process improvement or lean management techniques needs to be a systemic change if it’s going to stick, and that means that change leadership, not change management, will be what’s required.
Here are 4 key questions you need to (clearly and articulately) answer to start establishing yourself as a process improvement leader:
- 1) What will process improvement do for my organization?
- 2) What 3 things will I need to do differently in order to get better in my role as a change leader?
- 3) In 3 areas of my organization, how will process improvement actually look once it’s implemented?
- 4) What difference will improving processes make in the lives of employees and customers?
“For companies to change, we need to stop thinking like mechanics
and to start acting like gardeners.”
— Alan M. Webber
by The HLH Team
“Lean is a way of thinking, not a list of things to do.”
-Shigeo Shingo
Working on a big project can waste resources in so many ways. Endless email chains, departments that don’t know how to work with each other, and a general inability to focus on a project over and above the daily whirlwind all cost us dearly.
Toyota’s Answer:
Developing a new car isn’t easy. In fact, it’s one of the most complex tasks a car company undertakes and can be a project-management nightmare of manufacturing, engineering, and safety issues. It’s a process that takes most car companies 36 months; Toyota does it in 20.
A pioneering champion of Lean, Toyota employs Obeya as one of the pillars of its production system. It’s a simple project-management method that saves time and money by adding one crucial element: dedicated space.
Room for Collaboration:
In Japanese, Obeya translates to “large room” or “war room.” It’s exactly that. An Obeya is a room dedicated to a project. It’s where important meetings happen, progress is posted, and all key decisions are made.
If you’re a Star Trek fan, think of it as the bridge. If you like military history, it’s your war room. Toyota calls in their brain, the center of the nervous system that is the Toyota Production System. It’s a space dedicated to focused communication about the project: information pours in, gets synthesized and digested, and then decisions are made and priorities selected from there.
Project over Silos:
Companies specialize in different things. Whether you want them to or not, silos emerge around those specialities so that each department can function at its best.
Silos function well when each is designed to contribute autonomously from the others. But when a project emerges that requires them to work together towards a common goal, the system can easily break down. Departmental priorities conflict with the project’s priorities and inefficiency runs rampant.
In the Obeya, the project rules. Silo politics are checked at the door, and in that space every stakeholder contributes their expertise to the overarching goal. It’s a simple, elegant, and difficult goal.
The Power of Visuals:
Visual aids like Kanban boards play a key role in Lean. When walking into the Obeya, you’ll get an instant idea, via the graphs and boards around you, of where the project is at. Plaster your walls with everything that shows your team what’s happening.
Obeyas eliminate the need for constant email updates, or hunting for status updates, or trying to get hold of other departments to find out where they’re at. Hours of time-waste get eliminated by making it visual for all.
Emerging Trend:
Obeyas have started to catch on, with big companies like Nike now employing it successfully. Business blogs and pinterest boards are full of ideas on how to assemble agendas and build visual walls to create the perfect collaborative space.
The kind of non-siloed communication fostered in an Obeya can be the gateway and driving force to implementing Process Improvement across your business. Keep it collaborative, set the silos and egos aside, and your Obeya can be what you need to get high-level buy-in for your Lean ambitions.
by The HLH Team
“A great coach tells you what you need to hear, not what you want to hear.”
-Sagi Kalev
Here’s what the trap looks like:
You’re in charge, and the future of the company is on your shoulders. Your employees can’t understand that; they don’t know the pressure. You think that needing to focus on your job is more important than helping them with theirs. You save time by giving orders and not listening to their ideas. This is the authority-trap, and it’s easy to fall into. Barking orders is quick; engaging in dialogue takes time. Time that could be spent on other parts of your job.
Being a Boss:
Bosses give orders. Bosses make sure that everyone is exactly where they place them, doing what they want them to do, so they can focus on making the big decisions.
The boss thinks that their time is more important because they’re the one in charge.
Here are a few signs that you’ve fallen into the authority-trap:
- You talk more than you listen. A lot more.
- You like to work away from your employees, and are often inaccessible. They slow you down.
- Your employees work for you because they’re scared of what will happen if they don’t.
- You need to be Cc’d, kept in all loops, and control everything that’s happening.
Being a Coach:
When a boss climbs out of the authority-trap, they become a coach. And here’s the difference:
- A coach listens more than they talk. They know their employees hold the key to growing their business, and that their perspectives matter.
- Coaches inspire trust. People want to excel for them because it makes them feel like part of the team.
- A coach likes to work where the action is, and has an open door policy so employees can run ideas by them, and give honest feedback.
- Coaches challenge their employees to do better. They delegate, give real responsibility and demand accountability, and push their team to grow the company.
The Road to being a Coach:
Coaches grow companies, and quality employees would rather work for a coach than a boss. But that doesn’t mean that a coach is a pushover. Far from it. A coach challenges and pushes employees to be their best and encourages them to find their strengths and hidden talents.
Here are some steps to becoming a coach:
- Practice aggressive listening – Become an Aggressive Listener
- Don’t lead by email. Get out there with your team and have the informal, face-to-face conversations that really matter.
- Reward your most engaged, energized staff with more of your time. Help them nurture their ideas, develop quarterly rocks with them (What Are Your Rocks?), and push them towards growing themselves and the business.
- Don’t embarrass people in front of their peers. Praise them in public and go behind closed doors to correct them in a constructive way.
- Don’t be everyone’s friend. A coach is not a friend, he’s a coach.
- Confront poor performances and/or bad attitudes quickly. Defend your team, and take decisive action if you must.
by The HLH Team
“The essense of the Kaizen strategy is that not a day should go by without some kind of improvement being made somewhere in the company.”
-Masaaki Imai
The majority of business leaders who try to embrace Lean will fail. They won’t fail because they aren’t motivated or committed, but because they weren’t able to change the culture of the workplace.
Process Improvement can’t come from the corner office, and it can’t be driven via email. It needs to percolate into how your team thinks and feels about their daily routines. That culture is a unique combination of philosophy and action called Kaizen.
What is Kaizen:
Kaizen is Japanese for “change for the better.” As a Lean tool, it focuses on creating a workplace culture wherein everyone, from Janitor to CEO, is empowered to think about small changes that they can make to eliminate waste and simplify overly complex processes.
It’s not about big changes. It’s about making sure everyone knows where the stapler is (and puts it back after). It’s about re-delegating so that a file passes across one less desk on its way to being finalized. It’s about changes so small you wouldn’t notice them, until they accumulate and become real profitability.
Philosophy from Action:
There are 2 elements to Kaizen – the goal oriented actions and the culture-building philosophy. You can’t implement a cultural shift, but you can get everyone involved in its daily actions. Those actions, over time, build the culture.
Kaizen isn’t abstract theory. It’s an apparatus of actions, each designed to make one small change. Here’s what a specific Kaizen action looks like:
- Set a goal to make a small improvement in one department
- Bring in people familiar with that department’s processes and access what improvement can be made
- Implement the improvements
- Review anything that’s working with the change
- Have a plan to make sure the improvement is long term sustainable
Repeat this action, department after department. Give ownership to the departmental team for identifying and fixing, and provide them them the resources to do it.
Don’t go for the giant complex changes. Improve slowly, step by step. 50 small improvements, made consistently over time, will make a larger cultural change than 5 big ones.
The actions will build the culture. People will start to look for improvements in their departments, and as the improvements accumulate and they start seeing real progress they’ll feel proud of what they’ve done. With that pride, they’ll want more, and that is the heart of the cultural shift you need.
The Power of a Collective:
It’s impossible for you, as leader, to identify, eliminate and protect against the waste that’s engrained into everyday processes across your company. It won’t work unless everyone has bought in, and a culture of Kaizen, developed from the actions you’re taking, becomes the true driving force.
The key to building the culture is consistency of action. If it’s sporadic, exhausting, forced, or half-ass, it won’t build culture. But once a culture of Kaizen has taken hold in your business, every team member will come to you with ideas to improve.
Further Reading (our first introduction to Kaizen): 3 Qualities of A Leader
by The HLH Team
On December 13, 2017, the Department of Finance gave Canadian taxpayers some additional information regarding the proposed changes to the tax on split income (“TOSI”) rules regarding certain adult shareholders of private corporations. Intended to be a simplification and a more targeted approach than the original proposals introduced over the summer, these revisions are as follows:
- Spouses aged 65 or over will be excluded from the rules, provided that the owner “meaningfully contributed” to the business.
- Owners aged 18 or over who contribute an average of at least 20 hours a week to the business will be excluded from the TOSI rules.
- Adults 25 or over who own 10 percent (of votes and value) or more of a corporation are exempt from the rules. However, where that corporation earns 10% or more from the provision of services or is a professional corporation, this exemption is not available.
- Individuals who use their lifetime capital gains exemption on qualifying small business corporation shares or farm or fishing property are excluded if they would not have otherwise been subject to the highest marginal rate of tax under current legislation.
- Adults aged 18 to 24 will be exempt if they have contributed their own capital and the dividend paid passes the reasonableness test.
- Adult shareholders 25 years of age or older who do not meet any of the above exclusions are subject to the reasonableness test to determine whether TOSI applies.
Given the above changes, the Department of Finance states “the vast majority of private corporations will not be impacted by these proposals.” However, we point out that professional and service corporations continue to be the seemingly hardest hit by the rule changes. As well, although the government touts the latest changes as “clear, bright-line tests”, we challenge that much subjectivity still remains regarding the definitions of “meaningful contributions” or the “reasonableness test”. A lot of “grey” areas may be left up to your local CRA auditor to decide upon.
The revised proposals are projected to be effective for 2018 and subsequent taxation years and the government intends to legislate these measures as a part of the upcoming budget process in early 2018. As a result, it’s a good idea to discuss with your tax advisor how these changes may apply to you and what actions, if any, should be taken to minimize the impact of the new rules.
On the other side of the legislative branch of our Parliament, the Standing Senate Committee on National Finance also released its report entitled “Fair, Simple and Competitive Taxation: The Way Forward for Canada.” This report was the conclusion of two months of meetings, submission reviews and interviews of Canadians from all across our country. In their executive summary, the Committee states a few very direct recommendations:
- “…most witnesses told our committee that the proposed changes should be withdrawn in their entirety. We are inclined to agree. We are not convinced that the government has made a good case for its proposals.”
- “We also believe that we need an independent comprehensive review of our tax system to ensure that it is not overly complex, maintains our economic competitiveness and is fair to all Canadians.”
- “Canada needs a strategy to ensure our tax system encourages, rather than inhibits, innovation, entrepreneurship and economic growth.”
The Committee’s seemingly direct challenge to our Members of Parliament is refreshing to see. The principles they point the reader to in their report seem like valuable and worthwhile goals to pursue. However, it remains to be seen whether their report will influence the path these proposals take through our Parliament.
For all his work in the above-mentioned areas, our Finance Minister, Bill Morneau has recently been named the Canadian Press’s “business newsmaker of the year”. Let’s just hope that he doesn’t go for the repeat in 2018!
Link to Department of Finance – Backgrounder on Simplified Measures to Address Income Sprinkling
http://www.fin.gc.ca/n17/data/17-124_1-eng.asp
Link to Standing Senate Committee on National Finance – Fair, Simple and Competitive Taxation: The Way Forward for Canada
https://sencanada.ca/en/newsroom/fairtax-ation/
