performance culture uptime apr 12

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Creating thePerformance

Culture

the magazine for maintenance reliability professionals

CMMSYou Told

Us

HeresWhat WeHeard

HUMAN ASSET MANAGEMENT

www.uptimemagazine.com

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IS MY MACHINE OK?A FIELDGUIDE TOASSESSINGPROCESSMACHINERY

Robert X. Perez and Andrew P. Conkey 2012, 300 pages, Illus., ISBN 978-0-8311-3440-2, $29.95

This handy guide for assessing the potential risk of failure offers a solid basis for reliable and safe machinery operation. Combining

the most commonly used assessment tools into one source, it is meant to be taken into the field by operators, plant supervisors,

maintenance personnel, and reliability professionals in order to make informed decisions about their equipment.

Features: The only reference available that assembles a body of sound operating practices. Includes guidelines for gauging

machine maladies, such as vibration and pulsation. Provides guidelines for key machine factors, such as lubrication condition,

temperature limits, alignment, and balance standards. Presents numerous relevant examples within each section aimed at helping readers understandthe proper application of the various assessment methodologies.

THE RCM SOLUTION

Nancy Regan 2012, 256 pages, Illus., ISBN 978-0-8311-3424-2, $49.95

A how-to generic approach, with minimal theory. Offers a basic, common sense approach to RCM. Major coverage of SAE

JA1011 compliant RCM. Presents detailed processes to use when RCM doesnt apply. Overall, a total solution for implementing

RCM for any type of organization.

Table of Contents: Introduction to Reliability Centered Maintenance (RCM). Introduction to The RCM Solution. Facilitated Working

Group approach. Reliability Centered Maintenance. The RCM Solution. Task Synchronization. Analysis Validation. Implementation. The Use of

Software. How to Start - and successfully maintain - an RCM program. Preparing for an Analysis. The Power of RCM. Common Misconceptions of

RCM. An Introduction to Facilitation. Participative Problem Solving: A Working Group Approach to Formulating Valuable Solutions.

EFFECTIVE MAINTENANCE MANAGEMENT, SECOND EDITION

V. Narayan 2011, 375 pages, Illus., ISBN 978-0-8311-3444-0, $49.95

This completely updated edition and unique guide examines the role of maintenance in minimizing the risks relating to safety orenvironmental incidents, adverse publicity, and loss of profitability.

Features:New coverage of Risk-Based Inspection and Instrumented Protective Functions. Accounts of the Longford (1998),

Columbia (2003) and Sayano-Shushenskaya (2009) disasters reinforce the evidence for the event escalation theory explained in chap-

ter 9. Two new chapters on Information for Decision Making and Improving System Effectiveness.

COMPLETE GUIDE TO PREVENTIVE & PREDICTIVE MAINTENANCE, SECOND EDITION

Joel Levitt 2011, 398 pages, Illus., ISBN 978-0-8311-3441-9, $49.95

As the first resource to give true emphasize to the four aspects of success in preventive maintenance systems this new edition sharesthe best practices, mistakes, victories, and essential steps for success.

Features: Includes check sheets, history of PM, stories, photographs, and case histories. Contains a glossary of terms. Provides

sample task lists for a variety of equipment with some of the logic behind each task. Offers templates for developing your own

tasking. Includes protocols for detailed economic analysis with examples.

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Uptime is named after the single most important

topic in process manufacturing. Uptime is a result

of doing all the right things. Even safety is a byproduct of

doing all the things necessary to get uptime.

We at SAMI, and others in our eld,

routinely write and speak aboutthe methods and success stories

that have resulted in substantial improve-

ments. These are inspiring stories and give

us insights as to which tactics to use, how

to deploy them and the kinds o gains we

can achieve.

The truth that most o us preer to hide is

that most o these successes were not sus-

tained over time. So many o the improve-

ments we make create anecdotal stories.

One-time events. Sometimes we get bot-tom-line changes mentioned in our stories

(additional production or reduced costs),

but mostly we talk about a unit or a line

and the changes in availability or another

key perormance indicator (KPI).

Permanently aecting the bottom line

o the company is a ar more daunting task

than improving the availability o a ma-

chine, or improving a KPI. In benchmarking

studies, the relative position o the mea-sured plants seldom changes in the long

term, looking at a 10-year time horizon. For

instance, most reneries are benchmarked

by Solomon Associates. The relative posi-

tion and strengths/weaknesses o thesereneries very seldom change.

Why is that? Why is real, measurable,

bottom-line change so dicult to get?

It comes down to culture. Cultures resist

change like crazy. Thats one reason why

Toyota and Honda remain so good at what

they do. They are so conscious about creat-

ing the right culture that they spent years

at it beore a product ever came o the line.

Each new person who joins the company

learns expectations, methods and team-

work. You can change out the entire work-

orce over a period o time, but the values

and expectations remain embedded.

This is also true or the low perormers.

They transmit values and expectations as

well as the best companies.

Culture Determines ResultsMy point in presenting this article is that

culture determines results. You can haveall the best practices in the world. You can

measure 100 KPIs. You can have 15 #1 pri-

ority initiatives in a company (and most

Creating thePerformance

Culture

Brad Peterson

human assetmanagment

HaMmanagement


5/95 april/may12

do). These things are all meant to drive changes

in the behaviors o people on the plant foor and

the supervision who manage them.

Lets say that again: All the improvement work

we do is trying to change the behaviors o the peo-ple in the plant.

This may be the most important sentence in

this article. I you dont understand or agree, Ill

give an example or two.

The topic o saety has been prominent in in-

dustry or about 25 years. We have seen waves

o attempts to improve saety results. At rst, we

measured incidents. Things got a little better.

Then we tried training and awareness, and little

jingles that people should remember when theyare working. Didnt see much change. We nally

saw a breakthrough when behavior-based sae-

ty (BBS) became the standard. We

gained an understanding that

what people habitually do gets

predictable results. We began

measuring not only lost time

incidents (things ater the

act), but the behaviors that

create the incidents (near-misses). By ocusing on sae

and unsae behaviors, our re-

sults in saety have improved

dramatically.

Behaviors as the core o re-

sults are not a new realization:

We are what we repeat-

edly do. Excellence then, is

not an act, but a habit.

- Aristotle 384 BC 322 BCIt comes down to this:

1. A culture is the sum of all

the behaviors in a group.

2. A culture determines the

outcomes in every business.

3. To change the culture, you need to change

the behaviors of all the people involved.

We have observed recently that the largest

and most sophisticated companies (industrial

companies who lead their industries) are ob-

serving this:

All the KPIs are reported as GREEN (every-

thing is working great).

Results are fat or declining.

I we make sure we have no identied gaps,

we cannot change. GAPS are our riends or im-

provement. Why do we game the KPIs? Try to

make them look great? Because they are tied

to our compensation! We are smart guyswe

know how to make the KPIs look really good.

(Figure 1)

Articles written in journals like Uptime ocus

on measuring KPIs. We are measuring KPIs be-

cause we want to improve our results and com-

ply with company policy and standards.

Executives are measured on results. Results

are the consequence o what we do.Whats missing is measuring behaviors. Change

the behaviors sustainably and you get a dierent

culture and dierent results. The Performance

Culturemeasures all three. (Figure 2)

Behaviors and practices determine uptime

and overall production reliability, the holy grail

o manuacturing.

With these things in mind, just what is a Per-

formance Culture? How do we know we have

one?We measure our broad areas. We call them the

4 Ps of thePerformance Culture:

(Figure 3)

1. Perormance

2. People

3. Purpose

4. Predictability

1. Performance.

First and oremost, Perormance Culture

companies make their numbers. They set

realistic targets and achieve the produc-

tion, saety, expense, revenue, ROI, inven-

tory and pricing targets they set.

Next, they satisy their customers. In many

cases, they delight their customers, going

beyond the agreements.

Third, you can see that their results trend in

the right direction, getting better and bet-

ter when measured over time. Continuous

improvement is part o the abric o com-

panies like Toyota and Honda.

Figure 1:

The Heart of the

Performance Culture

Figure 2: Performance Culture Drivers

Leadership

Training&development

Communication

Performancemanagement

Businessprocesses

Workmanagementprocesses

Productionprocesses

Workmethods

Pre ventive&predictivemaintenance

Tools(RCM,RCA,StatisticalAnalysis)

Equ ipmentconditionFocusedreliabilityimprovement

Processcontrol

Lossmapping

Predictablesupplychain


6/96 april/may12

2. People.

In a Perormance Culture, managers realize

their most important resource is their peo-

ple. Their selection process assures a t in

values, as well as capability. They develop

their sta by ormal training, increased re-sponsibilities, coaching to improve, or or-

mal evaluations. And sometimes they have

the luxury to learn by ailing.

One o the things we notice immediately

on entering a plant where theres a Per-

ormance Culture is the type o energy ex-

pended by the sta there. Everyone is busy,

but its not a rantic, out-o-control busy.

Theres intensity, a quiet purpose. When

people talk, its mostly business-related,problem-solving and coordination. I have

heard that Google is like this; everyone is

intent on keeping Google at the top.

A great aspect o working in a per ormance

culture is that people trust each other. Trust

has two major pieces: First, am I willing to

make everyone successul, do I tell the

truth, do I have integrity? Second, am I ca-

pable and competent at the tasks to which

I have committed? There is so little wasted

eort when people meet these conditions

o trust.

3. Purpose.

In his book Built to Last1,Jim Collins says every

successul company has a higher spiritual pur-

pose. A purpose that creates value or society,

not just makes money or the shareholders. The

ullled purpose creates value or their markets

and good nancial results are an outcome o do-

ing well. A great company ocuses on its values. In

such an organization, there is no doubt

as to what those values are because they

orm the basis or every decision made. For

instance, our highest and clearest value is

integrity. In dealing with our clients, our-

selves, our contractors, our markets and

regulators, there is integrity in all we do

and it helps us create the trust we need to

be eective. Sometimes it means we dont

get business because another rm may

promise things they cant deliver. In our

case, it means we get a lot o repeat busi-

ness.

A major portion o purpose is knowing the

target. What do we want to achieve? Whats

the end in mind? People who know the

outcomes they are collectively working to

achieve need little supervision. Everything

they do is aligned to the company direc-

tion, to the extent that the vision and goalshave been embedded.

Jim Collinss Good to Great2 is a touchstone

or me. I keep going back to try to under-

stand whats important. His descriptions o

Level 5 and Level 4 leaders set the tone or

excellence: Level 5s are

humble and know they are

part o a vast system o people doing

their best or the company. Level 4s are

charismatic leaderswhen they leave, thecompany has no North Star to guide them.

Everyplace we go we see silos, usually by

unctional area. The very lack o teamwork

and common business processes creates

serious issues with results. The issues with

results create the need or nding a scape-

goat. And everyone is right! Maintenance

cant perorm because o production not

giving them the equipment to maintain.

Production cant perorm because main-tenance doesnt keep the equipment run-

ning. Only teamwork can get us out o the

catch-22.

4. Predictability.

The Perormance Culture is all about pre-

dictability. The point is to be consistent in

our results, in our approach to our people,

in our values and in our purpose. Making a

record one day at the cost o perormance

the next is not what greatness is about.

Greatness is about doing the right things

consistently and improving on what we do

all the time. Its about understanding what

our customers want and need, and exceed-

ing expectations. Consistently, predictably.

Saety and integrity are core principles to

running any operation. In the past 10 years,

behavioral-based saety has made greatstrides in becoming part o most cultures.

At the same time, we see reactive cultures

trying to emphasize saety. Based on our

observations, we conclude that its an oxy-

moron to have a sae work environment

thats reactive. Reactive environments by

denition arent in control o the equip-

ment, nor are they able to provide proper

equipment care, planning and schedul-

ing o work. Inevitably, this puts pressureon the individual operator or technician

to keep an operation running without the

proper study, parts, equipment, reaction

to alarms, etc. Predictability or saety goes

hand-in-hand with predictability o pro-

duction.

Having the right data, knowing what to

do with it and operating rom data-based

decisions will deliver predictability aster

than any method. This is a disciplined oper-

ation by denition, as it requires analysis o

whats important to start with, then having

the discipline to enter data that may not

seem immediately relevant to the provider.

Making the time to analyze data, mix in the

proper experience and come to a consen-

Figure 3:

Performance

Culture Spider Chart:

Sample Data


7/97

sus on action plans will eliminate a lot o

alse starts. Doing things once, doing them

right and eliminating root cause will help

assure every other part o the Perormance

Culture.

Variability in manuacturing operations is aact o lie. It takes many orms, including

customer demand, operating speeds, pro-

cess and equipment parameters, materi-

als and nished product. Variability in any

orm produces waste, and as variability in-

creases, perormance is adversely aected.

It aects the operation in one or more o

the ollowing ways:

Lost throughput

Wasted capacity Infated cycle time

Larger inventory levels

Long lead times and/or poor customer

service.

CASE STUDYWe worked with the oil and gas production

operations o a European-based oil major to

achieve three goals:

1. Improve production output;2. Reduce costs;

3. Improve asset integrity within the existing

operating budget, as

opposed to special studies and interven-

tions.

The vehicle was through improved main-

tenance and controls within their managing

system. When we began our work, their Peror-

mance Culture analysis summary showed themeasurements shown in Figure 4.

The company was regarded as a rst quartile

operator in its industrydemonstrating how

low the bar is or this industry when you see

the huge opportunity or improvement demon-

strated by this spider-diagram.

The issues demonstrated in the 12 elements o

the Perormance Culture were:

1. Meets Its Numbers - Despite being a topquartile perormer in the categories o pro-

duction loss and operating expense, both

o these highly important metrics were

trending in the wrong direction.

2. Satises Customers - Increasing unplanned

production losses were causing occasion-

ally missed customer nominations at ex-

port points.

3. Continuously Improves The organization

had ongoing improvement initiatives, butthese projects required a substantial push

eort rom the sta to engage the eld.

There were ar too many to attend to and

most showed no progress at all.

4. Develops Employees Individual and po-

sition developmental plans existed along

with signicant training resources. Al-

though these were in place, there was a

high level o under-utilization o trainingand personal development resources.

5. Focuses Energy The organization was

data and inormation rich. However, there

was insucient ocus on the critical ew

parameters that were driving production

and expense.

6. Creates Trust A low level o trust existed

between the eld sta and oce sta. This

was primarily the result o multiple high

priority initiatives that would start/stop,were chronically under resourced and usu-

ally had little ollow through and no ac-

countability.

7. Lives Its Values The organizational values

were clearly communicated and largely ex-

hibited with occasional exceptions.

8. Embeds Vision and Goals Goals and ob-

jectives were communicated in the organi-

zation rom the top down. However, goals

were not uniormly cascaded down intothe organization. This created misalign-

ment on the asset and regional levels with

top-level goals.

9. Wins with Teamwork Although subtle,

the organization was siloed in several

ways. Territorial divisions existed between

unctional organizations (i.e., operations,

maintenance, logistics, procurement, etc.),

as well as the eld versus the oce sta.

Some teamwork was exhibited at the asset

level within unctional organizations.

10. Assures Saety and Integrity There was

a high ocus on saety, health and environ-

mental issues. Saety-critical work always

received the highest priority and saety

perormance was high.

There was no understanding of the value of imple-menting these practices and disciplines. Was SAP PM

implementation an exercise of some administrativemandate, or was this a business imperative, leaving

hundreds of millions of dollars on the table?

Figure 4: Performance CultureSpider Chart - Pre-Implementation


8/9

11. Decides by Data As mentioned previ-

ously, the organization was data rich and

monitored many parameters. It was not

eectively using the data and reporting

system as management tools to guide the

decision-making process. The result was alot o cost to measure and little application

o the inormation.

12. Eliminates Variability Due to increas-

ing unplanned outages, production and

expense budgets were being missed. With

the lack o data-driven decisions, waste

was being introduced by emotional and

gut eeling actions to address issues. The

variability trends were consistently in the

wrong direction.

What We Did:The presenting problem was their ailure to

implement SAP PM, in spite o several attempts.

The underlying cause was identied as option-

ality. The culture o oil and gas exploration was

entrepreneurial and lacked discipline. Manag-

ers elt they had the option o ollowing best

practices.

Perhaps a better cause o optionality would

be lack o clear leadership. There was no under-standing o the value o implementing these

practices and disciplines.

Was SAP PM implementation an exercise o

some administrative mandate, or was this a busi-

ness imperative, leaving hundreds o millions o

dollars on the table? The magnitude o the op-

portunity was never quantied, the implemen-

tation plan had little eld input and there was

no plan to coach or sustained perormance

o excellent practices. Without these methods

in place, the implementation was doomed,

as indeed it is throughout the SAP imple-

mentation universe.

We began with a strategic plan or opera-

tions. Everyone has a strategic plan or the

business, but improving operations seems to

be a series o overlapping initiatives, all well-

meaning, yet overwhelming in their resource

demands, leading to rustration and very little

progress. We worked with a team o people in

the organization to clearly delineate:1. Where they were now;

2. The uture state o where they envisioned

they wanted to be;

3. The strategies to bridge these gaps, and

the projects and sequence to imple-

ment the strategies;

4. The overall implementation plan or all 28

properties, which varied dramatically in

size and geography;

5. The business case, cost and benets or the

overall plan implementation.

This plan was the vehicle to implement all 12

elements o the Perormance Culture. It got lead-

erships attention because the value o the plan

was a result o over $1 billion dollars per year in

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additional cash fow. The uture state described

how the organization would work, what the

work would be, how it would achieve its num-

bers and what data would drive decision mak-

ing. The organization structure, the cross-unc-tional teamwork required, the job development

and gaps in personnel and skills were all laid

out. A result o the implementation would be

to measure and reduce variability, including the

operators job descriptions, roles and responsi-

bilities, and planning all work to eliminate most

opportunities or saety lapses.

The implementation was laid out to develop

more than 100 subject matter experts; this was

in no way a SAMI Project, but ully owned byour client. We put part o our ees at risk and

acted as a partner in the implementation and

results, not simply as a consultant. We could

veto changes in the project plan when we knew

they would compromise results. We moved re-

sources around to make sure every property

met with maximum success. We had a planned

implementation period o two years. However,

we nished in 18 months. Everyone knew the

change was coming. It wasnt optional. And ev-

eryone was prepared in advance to get aheado the curve.

The results were spectacular: Unplanned

downtime went rom 6% to 1% and planned

downtime was reduced by one-third. Platorms

that were experiencing a trip a day moved to a

trip per month or less. Productivity increased by

50% and saety critical backlog went to nearly

zero. Total operating costs were reduced by$25,000,000 annually, or 20%.

The resulting measure o the Perormance Cul-

ture is shown in Figure 5.

We did an audit o the business processes in

2011. We ound that 85% o what was imple-

mented was still being used many years later.

ConclusionWe are what we repeatedly do. Excellence

then, is not an act, but a habit.

Culture determines results. Until you under-

stand and embrace that, your proessional lie

will be like Sisyphus, rolling a rock up a hill, only

to have it roll down again and having to start

all over. (In Greek mythology, Sisyphus was a

king punished by being compelled to roll an

immense boulder up a hill, only to watch it roll

back down, and to repeat this throughout eter-

nity.)

Changing results requires changing behav-

iors or the long haul. A project, a computer

system, all the initiatives in the world will notchange a culture.

We understand and agree that technical

and tactical competence is important, but

the sustainability o such approaches is to-

tally dependent upon the behaviors sup-

porting the Perormance Culture.

Over the course o our proessional lives,

SAMI has made a study on the Keys to Sus-

tainability. I the keys to sustained peror-

mance stem rom the culture, then how do

we change the culture?

Our ndings are conclusive and in agree-

ment with Jim Collinss in Built to Last1, Stephen

R. Coveys in 7 Habits3and Stephen M.R. Coveys

in The Speed o Trust4. Perormance is an out-

come o doing all the right things, which are

embedded in the Performance Culture. The

right things involve having the right elements

or:

Perormance (meets numbers, satises cli-

ents, continuously improves)

People (develops employees, ocuses en-

ergy, creates trust)

Purpose (lives its values, embeds vision and

goals, wins with teamwork)

Predictability (assures saety and integrity,

decides by data, eliminates variability).

We know how to measure these items. We

know how to correct them and we know how

to engage our clients to make these permanent

behaviors. The Performance Culture is not a

mystery, but a path towards excellence.

REFERENCES

1. Collins, James C. and Porras, Jerry I. Built to Last:Successul Habits o Visionary Companies. NewYork: Harper Collins, 2002.

2. Collins, James C. Good to Great: Why Some Com-panies Make the LeapAnd Others Dont. NewYork: Harper Collins, 2001.

3. Covey, Stephen R. The 7 Habits o Highly Eective

People. New York: Free Press, 2004.4. Covey, Stephen M.R. The SPEED o Trust: The One

Thing That Changes Everything. New York: FreePress, 2006.

The Performance Culture is a registered Trade Mark

Brad Peterson is the Chie Executive

Ocer o SAMI. As the ounder andprincipal owner o SAMI, Brad is sought

ater as a speaker and advisor to

companies around the world. Prior toounding SAMI, Brads experience has

included practice leadership in twomajor management consulting frms. His education

includes an undergraduate (Phi Beta Kappa) and

Masters degrees in Physics and a Masters degree inCounseling Psychology. www.samicorp.com

Figure 5: Performance

Culture Spider Chart -

Post-Implementation

Culture determines results.Until you understand and

embrace that, your

professional life will be likeSisyphus, rolling a rockup a hill, only to have it

roll down again andhaving to start all over.

performance culture uptime apr 12

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