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A critical process used in safety, quality, environment, and regulatory programs is the process that manages change. The reason for this is that change creates the opportunity for new risk to be introduced, existing risk to be modified, or latent risks throughout the organization to be exposed. The impacts of change can result in: Mission and Strategic Risk - uncertainty in your ability to achieve short and long-term mission success Performance Risk - uncertainty in your ability ability to achieve performance objectives Value chain Risk - uncertainty in your ability to create existing value Compliance Risk - uncertainty in your ability to achieve quality, safety, environmental, and regulatory outcomes Productivity Risk - uncertainty in your ability to drive down cost and improve efficiencies Systemic Risk - uncertainty in your ability to isolate risk and avoid risk propagation Organizational and Structural Risk - uncertainty in your ability to maintain appropriate resources and systems needed for mission success Reputation and Social Responsibility Risk - uncertainty in your stakeholder's ability to trust you Innovation Risk - uncertainty in your ability to create new value streams Transformation Risk - uncertainty in your ability to transfer new value streams to the performance zone Audit and Certification Risk - uncertainty in your ability to pass an audit or achieve certification That is why highly-regulated companies in high-risk sectors invest in advanced Management of Change (MOC) systems to effectively manage risk. These systems provide companies with the ability to: quickly identify high impact changes, develop and execute change plans tailored to the level the risk, and monitor risk during and after the change is made. The best companies also consider how overlapping and cumulative changes impact mission success. As is often said (but not so often heeded), it is usually not a single change but rather a series of small changes made over time that leads to a serious incident. Make certain this doesn't happen to you. If you have a basic MOC procedure you may want to consider the benefits of an advanced process to make certain risk is properly managed.

The role of compliance should be to help organizations ensure that outcomes are achieved through proper governance and the management of uncertainty. It should operate more like a Project Management Office (PMO) does in helping projects succeed instead of as a traffic cop waiting to pull you over at the next audit. It's time to put compliance at the front of the line where it can show everyone how to ethically contend with regulations. It's time for compliance to say YES we can and here's how rather than no you can't. #LeanCompliance #Compliance

This post is written by our guest blogger Barbara Kephart. Textiles from the Jacquard Loom Museum of Modern Art, New York City Photo by Barbara Kephart I adore all types of technology. My favourite is the selfie toaster that imprints your photo directly onto your morning toast. In my opinion this toaster is a must for every modern kitchen. It is these types of creative automated inventions that make me wonder why was it created, and what problem was it trying to solve? So when I was visiting the Museum of Modern Art in New York City a few months ago I was overjoyed to discover an exhibition called Thinking Machines: Art and Design in the Computer Age, 1959–1989. This exhibit combined art and design to trace back how computers transformed and reshaped our lives. The questions that came to my mind when touring the Thinking Machines exhibit was: what causes ineffectiveness in our processes, and does technology help or make it worse? In the year 1804, a man named Joseph Marie Jacquard asked this same question. Jacquard was born to a family of weavers and strived to improve the textile loom used to create fabrics. The loom at that time was based on earlier inventions by other inventors. Jacquard wanted to improve the manual and labour intensive process to weave existing designs. He created a head that controlled a chain of punch cards laced together in a sequence, and each row of punched holes matched one row of thread in the design. With the Jacquard head attached to existing looms, the time to create a textile was considerably shortened and the loom could be operated by one person instead of multiple people. The Jacquard Loom in operation A Jacquard Loom Weaver Photo: Horace Bristol/Three Lions/Getty Images Jacquard recognized the nature of weaving was repetitive, and his invention changed the way patterns were created. According to The Institute, the Jacquard loom quickly became the standard during the industrial revolution for weaving luxury fabrics. The first punch card computer invented in the early 1880’s by Herman Hollerith was said to be inspired by the Jacquard loom. Hollerith’s new company called the Tabulating Machine Company eventually became IBM. And Charles Babbage, known as the “father of the computer”, was also influenced by Jacquard’s work. Some historians believe the Jacquard loom was the earliest computer as it produced an output (the woven fabric) in response to the input (the string of punch card designs). Many process experts also believe it was the earliest known form of LEAN techniques in the workplace, since this invention and the later power driven loom set in motion a stream of continuous improvements over time. I find it fascinating how Jacquard’s work influenced modern computing and process improvement techniques. However automation of textiles led to mass production of clothing and left many workers unemployed during the industrial revolution. When we fast forward to present day there is an overabundance of clothing choices; I can buy six inexpensive shirts that may never get worn. When I donate these shirts to a charitable organization, they are offered to individuals in a developing nation who find the shirts culturally inappropriate and all six shirts land in that country’s landfill. This is an unintended consequence of automation. A LEAN process is supposed to eliminate waste, but in the case of textile automation we may be creating more waste over time. When considering whether or not to automate, we should be asking the most important question of all: what is the real problem we are trying to solve and will automation always be the answer? No, I do not own a selfie toaster. But to those of you that do, as you gaze at your toast each morning you could ask - has this really solved my problem? #Automation #LeanImprovement #Lean

There is never enough time, knowledge, or resources to contend with all the risks that a company faces. Therefore, they must choose which risks to address. This is not easy and cannot always be determined by ranking based on risk scores. To know which risks are important you first need to have clearly defined outcomes and objectives. This is because the risks that matter are connected to them. Unless you know what outcomes/objectives you are targeting, you cannot improve, you cannot know what changes will hinder or advance yours goals, and you cannot know which risks really matter. #RiskbasedThinking #Compliance #ComplianceExcellence

Every business operates in the presence of uncertainty. This uncertainty creates the opportunity for risk. Compliance programs buy down risk to ensure outcomes are achieved. That is why we have quality, safety, security, environmental and regulatory compliance programs and why they need to move beyond adherence to prescriptive requirements and focus on achievement of outcomes. #ComplianceInsights #RiskbasedThinking

Almost all compliance initiatives depend on management systems to ensure obligations are met. This applies to safety, quality, environmental and regulatory objectives. When it comes to improving the effectiveness of these systems you need to start at the program level. This is where outcomes are evaluated that in turn drives changes at the system level. #ComplianceInsights #ComplianceImprovement #ComplianceEffectiveness

Meeting compliance is critical to those that work in highly regulated industries and specifically to those that are responsible for safety. Today, compliance demands come from many sources and include both mandatory along with voluntary commitments to industry standards, guidelines, and stakeholders. The intention of all compliance programs is to implement how these commitments will be met so that the desired outcomes are achieved. This requires that outcomes are documented, measured and periodically evaluated. Unfortunately, for many companies, their compliance systems are not able to carry the weight of their current obligations, let alone handle increased demand. Here are five reasons why compliance is falling behind. 1. Unsustainable Programs Management programs often do not have clear charters that document compliance commitments, outcomes and the level of obligation.They often are still based on paper paradigms and do not exploit best practices or current technologies. It is common to find that compliance programs do not include adequate support for: Change management Risk management Continuous improvement Compliance assurance Process support Without these capabilities it is not possible to sustain compliance let alone improve. 2. Reduced Workforce The workforce is getting smaller, younger and has less experience knowing how to meet compliance and therefore rely on programs, systems and processes to fill in the gaps. Given the state of compliance programs, workers will often lean on their own ideas of what should be done. This leaves companies vulnerable to unnecessary compliance risk. 3. Increasing Compliance Demand The face of compliance is changing. Regulators are moving away from prescription to performance based specifications. In addition, compliance often now requires additional capabilities to support: risk based methods, evidence based processes, along with advancing program maturity through a model of continuous improvement. These changes affect how a company approaches compliance. At a minimum, this moves the focus from complying to regulatory elements to achieve compliance outcomes driven by risk based commitments. Some standards organizations are softening the impact by publishing umbrella guidelines or making compliance voluntary. However, there should be no mistake, there is a sea change and compliance is changing and for many it already has. 4. Poor Processes Current processes that deliver program objectives tend to be based on activity and not on outcomes. As a result, associated procedures can become overly prescriptive and simplistic in their approach in an attempt to keep things simple. This is a false economy that leads to a one size fits all approach resulting in too much effort for some cases and not enough for others. Processes based on this approach will contain excessive waste as people spend time: entering data that is not needed, waiting for unnecessary work to be done, creating reports that no one reads, and not having the information that is needed to achieve compliance outcomes. 5. Sporadic Improvement Compliance programs do not change very often and only do so when there are findings arising from audits that are conducted yearly or less often than that. In addition, there is often no process in place to improve compliance capabilities in between audit cycles. The pace by which programs improve is far too slow to keep up to current obligations let alone adopt new ones. One year is far too long to wait to find out you are out of of compliance and for improvements to occur. #ComplianceTheats #ManagementProcesses #Risk #OperationalExcellence

In a previous blog, I outlined 5 threats to compliance. In this blog, I will look at how to address them. At first glance, it may seem appropriate to conduct more audits to identify compliance gaps and then make the necessary changes. This is in fact the most common approach across many industries. While the audit-fix cycle can achieve results, it is a brute force approach to improvement. The output from audits tend to create action items and sometimes quite a few. Death by a thousand action items is how many managers feel about this approach. This problem is similar to what happens when instead of fixing potholes the road should be expanded to handle more traffic. In the current business climate of "doing more with less" not only is no one looking for this, the prospects of doing anything other than fixing potholes seems remote. So many go back to fixing potholes only to repeat the process after the next audit. However, this audit-fix cycle while insufficient to address compliance gaps, also leaves companies vulnerable and not able to make required transformations from prescriptive-based compliance evidenced by audits to performance-based compliance evidenced by achieving outcomes. The latter is required more and more from standards and regulatory bodies. 5 Compliance Multipliers To achieve this transformation it is necessary to take existing effort and do more with it. This means that you need some sort of force multiplier to provide, instead of a mechanical advantage, a compliance advantage. The following approach anticipates the impacts arising from the sea-change in compliance along with consideration of the current business climate specifically: the reduction in workforce, loss of compliance knowledge, and years focused on prescriptive compliance. Each multipler takes compliance effort and increases its affect similar to what a lever does when creating a mechanical advantage: 1. Managed Obligations Identify and clarify compliance obligations Identify what is Critical to Compliance (CTC) Identify how progress will be measured Align with strategy, mission, and goals 2. Increased Capabilities Make room for compliance improvement to occur Eliminate Non-Value Added (NVA) activities Free up resources to work on improvements Exploit existing technologies 3. Embedded Compliance Embed Critical to Compliance (CTC) Actions Embed evidentiary actions and documentation Introduce normative standards and best practices 4. Leveraged Rules Break old rules and eliminate work-arounds based on old habits Leverage new rules to maximize compliance outcomes 5. Continuous Improvement Monitor measures of compliance, performance, and effectiveness Establish incremental and continuous improvement process Companies will benefit from using these compliance multipliers to amplify their existing effort so that they can better meet and sustain compliance. #ComplianceImprovementSteps #ComplianceMultipliers #Proactivecompliance

If opportunity doesn’t knock, build a door – Milton Berle There is ample evidence that employees do not just wait for life to happen to them. Rather, they try to affect, shape, curtail, expand, and temper what takes place in their lives. This is at the heart of what it means to be proactive and the catalyst for operational excellence initiatives across the majority of industries and organizations. However, research tells us that a precondition for proactive behavior is situational accountability. Where there is clear accountability you are more likely to find employees being proactive. "The dynamics of proactivity at work", Adam M. Grant, Susan J. Ashford, 2008 That is why it is important that companies take ownership of their obligations as the first step in improving their performance and their compliance.. Performance models (and this includes compliance) based on the reactive audit-fix cycle have not been able to keep up with continuous streams of changes that come from all directions. To achieve mission success in the presence of continuous change, you need proactive behaviors which in itself is: a process that anticipates, plans, and acts to ensure that objectives are met and outcomes are advanced. This applies to all activities that service the value chain particularly compliance programs. Here we find that compliance has been too slow, and too late to keep up with ensuring that companies stay within the lines. This increases the chance that only one recall, one defect, one violation, or one incident may result in the loss of business. Companies do not need to wait for the audit committee to knock on their door to create the opportunity for improvements. They can start building more effective programs today. To reduce the possibility of loss of business, it is essential that compliance adopts a proactive mindset that encourages continuous improvement towards strengthening an organization's ability to always be in compliance. These abilities include: obligation management, risk management, and compliance assurance tied to mission outcomes. Increasing the effectiveness of these programs will result in greater certainty that outcomes will be achieved and greater resilience to threats. Both of these lead to increased stakeholder trust. And it is this trust that determines whether or not a company will survive should an adverse situation occur. #Proactive #OperationalGRC #OperationalExcellence #RiskbasedThinking #ComplianceInsights

"We must make decisions, here and now, even though the best means and the best goals can never be discerned with certainty. An aim, an ambition, provides the structure necessary for action. An aim provides a destination, a point of contrast against the present, and a framework, within which all things can be evaluated. An aim defines progress and makes such progress exciting. An aim reduces anxiety, because if you have no aim everything can mean anything or nothing, and neither of those two options makes for a tranquil spirit. Thus, we have to think, and plan, and limit, and posit, in order to live at all." – 12 Rules for Life - Jordan B. Peterson Peterson associates decision making with aim and the process of aiming. Aim can be defined as the thing we are pointing at or the act of aiming itself, to intend or direct for particularly effect or purpose. Peterson speaks to the effect. Aim provides a structure necessary for acting. This structure affords us with "a framework, within which all things can be evaluated", which is how aim helps us make decisions. A decision is a conclusion or resolution made after evaluating the effects of conditions, current and planned actions, and progress towards where we are aiming at. The kind of things we might evaluate include: Uncertainty - threats and opportunities Results - progress Effectiveness - progress against effort Capability - competency and capacity Character - virtues and values Peterson, continues to say, "if you pay attention, when you are seeking something, you will move towards your goal. More importantly, however, you will acquire the information that allows your goal itself to transform … If you bend everything totally, blindly and willfully towards the attainment of a goal, and only that goal, you will never be able to discover if another goal would serve you, and the world, better." What Peterson is saying is profound and very much applicable to both personal and corporate achievement. The goals themselves will not save us. We need to be open to changing them and reorient ourselves as reality manifests itself. It is precisely this that makes what we are aiming at so important. Peterson suggests the more our aim has to do with character and ability the better we can prevail against adversity and challenges both in our personal and corporate lives. Perhaps the most important decision then is where we are aiming. That is why when we aim we need to aim high or as Peterson writes, "we need to orient ourselves towards the most possible good." I believe this text from the World English Bible says it well: "whatever things are true, whatever things are honorable, whatever things are just, whatever things are pure, whatever things are lovely, whatever things are of good report; if there is any virtue, and if there is any praise, think about these things. (World English Bible - Philippians 4:8 ) Thinking about these things will help orient our goals and even our values, that is, what we think is important. Who knows what our lives, families, community, or even our businesses might look like if we did. #Ethicalcompliance #Value #DecisionMaking

When my children were younger we would regularly go on road trips to visit family. Five minutes after leaving the house they would start asking a question which they would not stop asking until we got to our destination, "are we there yet?" Even at their age they knew that progress was an important thing to measure. When it comes to compliance we also need to answer this same question. However, it is is not as easy as reading the odometer on a car or looking at the GPS. One of the reasons why this may be difficult is that compliance may not have the necessary instrumentation to determine progress. I often hear from managers that they are not sure what they should be measuring or what indicators to use. Without knowing what to measure it is not possible to know your progress. However, you might also conclude that the problem could well be that compliance does know where it is going and without a destination you also cannot measure progress. Perhaps, herein lies the rub. To explore this further let's consider a quality program that uses ISO 9001 to define normative behaviors. According to ISO 9000, effectiveness is defined as “the extent to which the anticipated results/objectives are achieved." Having goals around effectiveness is reasonable and something companies should have, although reportedly 70% of companies do not measure the effectiveness of their compliance programs. Measuring effectiveness requires that two aspects are evaluated: effort and outcome ; where: effort is the time, money, resources committed to building, maintaining, and improving a compliance program, and outcome is defined as the impacts that these efforts have on the level of compliance and business performance (margins, safety, customer satisfaction, stakeholder trust, and so on) It is common to only focus on effort when first building a compliance program. As companies progress in their compliance maturity the focus shifts to outcomes. However, determining effort and tracking outcomes is not common which may be attributed to a lack of compliance maturity or as research also shows a lack of proper motivation. Studies have shown that if the motivation for pursing compliance is stimulated by external pressures, such as pressure to obtain ISO 9001 certification, then organizations end up conforming only to administrative or surface level requirements without optimizing their program effectiveness. In these cases companies are not interested in whether their program is effective but merely that they are able to obtain certification. For many companies, compliance was about jumping into the car and just start driving. Maybe that was enough back then, however, now the kids in the back want to know where you are taking them and when they will get there. And they will not stop asking until you give them an answer. The first step is to change compliance from an external motivation to an internal one. This involves taking ownership of your compliance obligations and deciding what your destination is, which may be many along the way. You will then be able to measure your progress along with effort so that you can know how effective your program is. #ComplianceEffectiveness #MeasuringEffectiveness #CompliancePrograms

One of the key misconceptions about LEAN is that its goal is to reduce the workforce. No wonder people might resist adopting it. However, as we shall see, LEAN is about engaging the workforce and not letting them go. To better understand this we need to go back to the early days of LEAN when it was first introduced by Taiichii Ohno at Toyota in the 1950s. In the book entitled, "Management Lessons From Taiichi Ohno," Lesson 6 talks about what a leader should do when an improvement is made. Instead, of letting a person go, you involve them in working on more improvements. When Ohno introduced this concept he called it the "outside line man." These people would eventually become known as team leads. Over time, Ohno would take a group of leads and create a maintenance department whose job was to do kaizen (i.e. continuous improvement). This department, made up of people who had worked on the line before and understood how things worked, would now be tasked to make further improvements so that more people could be taken out of the line. They also created new lines with the freed up resources and the knowledge they had learned. "Making an improvement that can take one person out results in just one person's cost being saved. If you take that person and have her make improvements, you start getting savings of two, three, four, and five people and so forth. Taking out the best person and making her improve the rest is really effective." This multiplication effect is what makes LEAN transformational. Companies that adopt LEAN to reduce their workforce miss out on benefiting from further savings. They also end up removing the very people they need to transform their business to compete better, increase quality, and achieve the intended outcomes from compliance. Instead of letting workers go, keep them and improve. To learn more on how to apply LEAN Thinking to your business visit our website at www.leancompliance.ca #LeanImprovement #TaiichoOhno #OperationalExcellence