murray easton

Nov08/MS292-08

A Complex Leadership ChallengeSurvival by engagement and empowerment

Murray Easton

Nov08/MS292-08

• Murray Easton• Barrow shipyard and challenges:

• The past• The challenges• The response

• Waste identification & Removal:• Overheads• Labour• Material

• Closing Observations• Questions

Business Improvement and the Removal of Waste

SafelyDeliveringAffordable

TogetherCapability

Nov08/MS292-08

My background

3

Nov08/MS292-08

The Product

4

Submarine Solutions Business Units

Barrow-in-Furness (4427)

Farnborough (82)

Weymouth (50)Filton (13) Ash Vale (38)

Total Employees – c 46002009

(numbers excl of apprentices, graduates)

Nov08/MS292-0804/05-MS001-05

Barrow Shipyard

Nov08/MS292-08 7

Historical View – The Challenges


TogetherCapability

• Cost plus contracts, behaviours and mentality, high quality/low productivity

• Monopoly – Trident

Then.... • Astute, a fixed price development ‘prime’ contract arrangement.

• 2002 – 3.5yrs late, £760M loss.

‘monster of the deep wreaks havoc’

Nov08/MS292-08 7

Historical View


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• Difficult to compete when you haven’t been playing regularly!

10 year gap design 10 year gap like-for-like production skills

Head

coun

t

0

2000

4000

6000

8000

10000

12000

14000

Astute ClassVanguard ClassUpholder

1988 1992 1996 2000 2004 2008

TrafalgarSuccessor

Workforce engaged in Submarine building

Other

Nov08/MS292-08 7

Historical Waste – If you could turn back time!


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Head

coun

t

0

2000

4000

6000

8000

10000

12000

14000

Astute ClassVanguard ClassUpholder

1988 1992 1996 2000 2004 2008

TrafalgarSuccessor

Workforce engaged in Submarine building

Other

Could have managed the samewith approx 7000 employees!

• Abolish the PCO

• Flatter organisation structure

• Re-baseline schedule

• Change contract to target costs, incentive fee

• Address behaviours and culture

• Complete overhaul of communication processes.

• Less hierarchical

• Increased employee engagement and teamwork

The Immediate Response


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Nov08/MS292-08 8

• 5 years ago Boat 4 was becoming increasingly unaffordable - threat to seven boat programme.

• Our team responded to the Affordability challengethrough performance, innovation and determination

• We did not have control of some external influences

Response - Affordability

12 3 4

Boat

Cost

30% Overhead

ReducedCost

ConsciousCulture

Supplier PerformanceManagement

20% Material

Reduced30% Labour

ReducedProductivity


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• Leadership drove a tenacious ZBB programme (Zero Based Budgeting)

• Questioned affordability of all non-essential expenditure

• War on waste.

Overhead Costs


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• Change of build strategy.• EB/Vertical Outfit.• Modules ‘vs’ stick build

• Productivity and Lean manufacturing.• Pipeshop; Victorian design• Pipeshop; based on Lean

• Safety culture

• Responsible behaviours (Organisation Development)• Sickness absence• Motivation• Reward and recognition (financial and non-financial)• Mature working arrangements (breaks, etc)• Etc

Labour Costs & Innovation

8

SafelySafelyDeliveringAffordable

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Nov08/MS292-08

• Major work improvements• DDH – Service Towers

• ‘plugged in’ tools, QC, Planning, Leadership, etc.

• Kitting – 100% kitted; 2 weeks supply on one pallet

• Value stream mapping

• Recruitment, attitude focus

• Coaching

• Collective and individual responsibility – One Team• Peer group pressure

• Challenge and be challenged – trust and respect agenda

Response – Labour & Innovation

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Safely

• We have challenged cost wherever and whenever appropriately

• IT Systems - we opted out from our IT provider.

• 40% improvement in customer satisfaction.

Affordability - IT systems

DeliveringAffordable

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Reduced by factor of

10!Downtimeper user

per month 3 2008

MinutesMinutes

2005 36

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SAFELY DELIVERING AFFORDABLE CAPABILITY TOGETHER

Nov08/MS292-08

• Embraced genuine 2 way communication philosophy.

• End to end comms process redesign; consistent themes, language and media.

• Regular face to face employee briefings by leadership.

• Employee forums.

• Team briefs.

• Visual management (supported).

• PRIDE – generating innovation and providing recognition.

Internal Communication, Engagement and Motivation

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SafelySafelyDeliveringAffordable

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Nov08/MS292-08

Culture and Behavioural ImprovementThe Change Wheel

PerformanceManagement

OrganisationFocus and

Clarity

LeadershipDevelopment

Reward andRecognition

Teamwork

Communication& Involvement

Behavioursto Succeed


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Nov08/MS292-08

LeadershipDevelopment

Reward andRecognition

• Development centres• Coaching• Conferences (engagement)

• Grading structure• All employee bonus (aligned to Exec bonus)• PRIDE (recognising innovation)

Culture Change

Nov08/MS292-08

PerformanceManagement

OrganisationFocus and

Clarity

• Build strategy• Logistics (kitting) & Supply Chain• Monthly performance and development reviews• Performance improvement plans (PIPs)• Visual Management (Lean)• Behavioural Performance Feedback (BPF)

• Objective deployment• Common and Functional clarity• Fixed people manager objectives (safety, quality and performance management)

Culture Change

Date/reference/classification

04/05-MS001-05

04/05-MS001-05

Vertical outfit of 5 pressure hull units has been achieved

25

Nov08/MS292-08

• What have we achieved?• Modules

• Achieved on a design not intended for modules!

Safely

Delivery - the last 5 years


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Modules SmallBig And

MassiveShift!Increased to

Boat 14 2003

650+ 2008

Boat 4

Nov08/MS292-08

Teamwork

Communication& Involvement

• Natural Work Teams (Psychologists)• Transactional Analysis (how we work together)

• Employee opinion surveys (39% - to – 80%)• External comms• Internal comms• Trade Union partnership working• Community newsletter• Celebrating success• Work, Life, Barrow

Culture Change

27

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Safely

Together - employee survey

• Employee survey 2008 - fantastic, well done Team!

• We still have issues - well understood and we continue to improve our ability to perform…


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Participation Double!Response

2004

39% 80%2008

Response

Trust RewardRespect Recognition

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Inclusive employee effort

- Diversity

- Graduates

- Apprentices

- Mature Apprentices

Nov08/MS292-08 10

• Absence waste = cost of those absent + cost of disruption in the business.

Sickness Absence

• Performance recognised via national HR awards. • If you need medical help - you got it. • We need you healthy – and we need you at work!

Down over two thirds!

Reduced to

per annum 9%+

2003 2008

per annum 2.5% Safely


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Safety

First Think Safe, Act Safe, Be Safe.

10RIDDORS

350Accidents

42Incidents

1566Near Misses

118RIDDORS

1323Accidents

21Incidents

9Near

Misses2003

Jan-Dec

2008Jan-Jul

SafetyFirst

• The threat of a serious accident always remains.

• Risks must be avoided, there is always more to be done.

• Point of Work Risk Assessments

• Ensure all assess own work area.

• Look after workmates/ colleagues and those around you.

•You have to ask, what are you going to do to ‘take care’?

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• Supply Chain• Key supplier forum

• CAD accuracy + Optimised Manufacturing Processes = Material cost saving through reduced waste• E.g. Pipework store of 3500 ferrous and non-ferrous pipes

Response – Material


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• Engineering, 15 design exercises. e.g. Gearbox and Chilled Water Plant; legacy designs and legacy equipment.

• Design for operation Y

• Design for maintenance N

• Design for manufacture N

• Redesign cost justification always an issue

Could Have Been Better?


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• Fundamentally the leadership need to relentlessly motivate the entire workforce to reduce waste by creating a culture of encouragement and recognition.

• Its an attitude of mind that has huge cost and performance benefits.

Final Observations


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Nov08/MS292-08

My Learning Observations of Leadership• Credibility• Capability• Courage• Commitment• Communication• Caring (and a large dose of emotional intelligence throughout

management)

• ....and FUN !(aka COMEDY, for those of you

that need CONFORMITY)!!!!!

Green Point Stadium (GPS), Cape Town

Andy Fanton, GPS Managing Director• “What a journey!• It’s true that each project is a step into the unknown. Of course,

there are plans and models of the ultimate structure but the journey towards that end is filled with moments that are tense, as well as moments that are awe inspiring, challenging, human, and often funny. Oddly the funny bits are the moments you cherish.

• Green Point Stadium is the last place I thought I would spend 32 months of my career. Having taken the step and completed the journey; I would not have missed it for anything! GPS is not just about the iconic jewel that was nurtured from nothing, it’s equally about the personalities I have had the pleasure of working with along the way. I can say with absolute honesty that Team Green Point is the best I have worked with in six countries over a period of 21 years.......

......continued.• There are two things that ring clearly in my mind when I reflect on

the project:• “Without Passion You have nothing…”• “Fear of Failure is a Fantastic Motivator…”• Chaps, we did it! Your unwavering commitment to the cause is

something to be proud of, I know I am. • I will miss our exchanges, but will continue to recall them with fond

memories as long as I live.• I think a poet once said that it was not the destination that mattered

but the journey. He was right, although I believe that our destination will become a famous place where people will gather to celebrate the triumph of the human spirit”.

...the customer’s message;

• “To my friend Andrew and the team:• It is said that “cometh the hour, cometh the man”. In the case of

GPS one should rather state that “cometh the hour cometh the team”! A building as iconic, challengingly complex, innovative and urgent as this could not have asked for, or received, the attentions of a more driven and competent group, indeed it deserved nothing less. Looking back, as we all will, the enduring memories will be of the people and not the difficulties encountered. So there we are, look back and know that it was a job well done, and, more importantly, one that could not have been better accomplished by any others! Know also that, as we move on to other challenges and other life paths that this is something to remember, as I certainly will, with pride, as none of us will ever walk this way again!”

• Silas Darby

Nov08/MS292-08 9

QUESTIONS?