contractor management in this post-modern era rudy phillis (pr. eng.) m. sc. eng. (bus. mgt.); b....
TRANSCRIPT
Contractor Management Contractor Management in this in this
Post-modern Era Post-modern Era Rudy Phillis (Pr. Eng.)
M. Sc. Eng. (Bus. Mgt.); B. Sc. Eng. Mining; TOC-Jonah
MSAIMM; MAMA; ASACMA; AAMMSA
Chief Executive: Ukhozi GroupChief Executive: Ukhozi Group
Introduction• Mining Industry Concern: Mining Industry Concern: “Contractor Management “Contractor Management
and their safe operation, in our industry”and their safe operation, in our industry”• Workshop Objective:
– BEST PRACTICE TOOLS FOR CONTRACTOR BEST PRACTICE TOOLS FOR CONTRACTOR MANAGEMENTMANAGEMENT
• What to change? & To what to change to?– Technical Questions– The 5The 5thth Discipline (Peter Senge): Discipline (Peter Senge):
1.1. Personal Mastery,Personal Mastery,2.2. Mental Models,Mental Models,3.3. Build Shared Vision, Build Shared Vision, 4.4. Team learning, & Team learning, & 5.5. Systems ThinkingSystems Thinking
• Focus: “HOW TO CAUSE THE CHANGE?”“HOW TO CAUSE THE CHANGE?” – Falls within fields of Psychology & Psychiatry
How to cause the change ?
Every improvement is
a change
Perceived threat on security / satisfaction
COMPROMISE Safe Productivity
Every change is not an
improvement
Most Management / Labour prefer comfort zones
Perception drives emotion
Emotional resistance
How to cause the change ?
Every improvement is
a change
Perceived threat on security / satisfaction
CULTIVATE Safe Productivity
Every change is not an
improvement
Most Management / Labour prefer comfort zones
Emotion of the inventor is stronger than resistance
Perception drives emotion
Emotional resistance
Induce Induce ImprovementImprovement
BEE Partnerships -Core Conflict
Pressure to Pressure to promote & protect promote & protect
ConventionConvention
BusinessBusinessFundamentalsFundamentals
SUSTAINABLESUSTAINABLEDEVELOPMENTDEVELOPMENT
Pressure to Pressure to promote & protect promote & protect
BEEBEE
Socio- PoliticalSocio- PoliticalImperativeImperative
BEE Partnerships -Core Conflict
Pressure to Pressure to promote & protect promote & protect
ConventionConvention
BusinessBusinessFundamentalsFundamentals
SUSTAINABLESUSTAINABLEDEVELOPMENTDEVELOPMENT
Pressure to Pressure to promote & protect promote & protect
BEEBEE
Socio- PoliticalSocio- PoliticalImperativeImperative
Conventional ‘modes of
operations’ works
BBSEE Charter is
Law
Background• Objective: Common frame of reference• Management in Antiquity
– (Source: Griffin, R.W. – Management 3rd Edition)• Evolution of Management Theory
– (Source: Russell, R. S., & Taylor III, B. W. – Production & Operations Management)
• Quest for a Postmodernist Theory– (Source: Blignaut, J. N., Department of Economics
– Pretoria University)• Characteristics of the paradigms • Cosmological views of the paradigms
Management in Antiquity• Practice of management dates thousands of years
– 3000 B.C. – Summarians, Greeks, Babylonians
• Management not considered a serious field
• Economics - the first discipline devoted to commerce
• Economists believed managerial practice to be efficient– Focus was on Economic Policies & Non-managerial aspects of
business
• Business (Family) goals were survival not growth
• Organisations were governmental– Unlimited powers over taxation
– Little accountability for waste
Evolution of Management Theory
• 1700s – Industrial Revolution: Widespread production of consumer goods
• 1776 – Adam Smith ‘Wealth of nations’ – labour division – Unprecedented advance in technology
• 1800s – Advent of Cost Accounting & other controls
• 1900s – Scientific Management – Taylor
• 1700s-1960s – USA dominance
• 1970s – International competitiveness led by Japan – Conversion from mass production – lean manufacturing
• 2000s – Y2K (No real return on IT investments)
Quest for a Quest for a Postmodernist TheoryPostmodernist Theory
• Source: Source: “Economic Thought: A passage through time & a Quest for a “Economic Thought: A passage through time & a Quest for a postmodernist theory”postmodernist theory” by: Prof. Blignaut (Pretoria University)by: Prof. Blignaut (Pretoria University)
19701970ss476476ss 13501350ss 15001500ss500500ssBCBC
Ancient Ancient ImperialismImperialism
MercantilismMercantilism
FeudalismFeudalism
IndustrialIndustrialRevolutionRevolution
SustainableSustainableDevelopment Development
33
22
11
44
55
17701770ss
ModernismParadigm
Post-ModernismParadigm
Black Death
SocratesPlatoAristotle
Characteristics of Paradigms • Modernism
– Human being as a rational, autonomous being
– Universe (nature) as object of the needs of the human being
– Absolute, deterministic influence of science & technology
– General optimism with regard to the prospects of development and growth – i.e.: Improvement
– Truth as objective and neutral
• Post-modernism– Human being as a relational
being
– Universe as dynamic organism
– Science: chaos & qualitative
– Development and progress – scarcity & limitations
– Truth, objectivity & neutrality subject to the role of belief & value systems
““Not merely an adaptation of old Not merely an adaptation of old Paradigms”Paradigms”
Cosmological View
• Modernism– Stable
– Closed
– Determined
– Predictable / measurable / controllable
• Post-modernism– Unstable / chaos
– Open (holistic) Systems thinking
– Relative / randomness / indeterminacy
– Complex
Problem: How is it done? Problem: How is it done?
Holistic / Systems Thinking / Scientific Approach
• Metaphysics, Ethics, Logic & Epistemology
• Three distinct stages of Science:1.1. ClassificationClassification
2.2. CorrelationCorrelation
3.3. Cause & EffectCause & Effect
• Only when stage 3 is reached is the subject a science
Cause & Effect Cause & Effect • Effect-cause-effect
– Research starts with one effect
• Once Predicted Effect is found does the research gain the name of THEORY
11
Effect Effect
22
Hypothesize Hypothesize a Plausiblea Plausible
CauseCause
33
Predicted Predicted Effect Effect
(different (different in nature)in nature)
Why did the Why did the apple fall down? apple fall down?
11
Falling Falling Apple Apple
22
GravityGravity
33
Electron revolving Electron revolving around a neutron around a neutron
33
Earth revolving Earth revolving around the Sun around the Sun
LAW governing LAW governing Management Management
• Operations Management = 1+4+3
11
ProductionProductionManagement Management
22
LAWLAW
33
Project / Project / Engineering Engineering ManagementManagement
44
Logistics / Logistics / DistributionDistributionManagementManagement
Business Complexity Business Complexity
• Holistic11
OperationsOperationsManagement Management
22
LAWLAW
33
People People ManagementManagement
44
Finance Finance ManagementManagement
77
MarketMarketManagementManagement
55
Strategic & Tactical Strategic & Tactical ManagementManagement 66
Sales Sales ManagementManagement
BEE Partnerships -Core Conflict
Pressure to Pressure to promote & protect promote & protect
ConventionConvention
BusinessBusinessFundamentalsFundamentals
SUSTAINABLESUSTAINABLEDEVELOPMENTDEVELOPMENT
Pressure to Pressure to promote & protect promote & protect
BEEBEE
Socio- PoliticalSocio- PoliticalImperativeImperative
Conventional ‘modes of
operations’ works
BBSEE Charter is
Law
Contractor issues • Contractor professionalism is somewhat wanting
– Site management take chances – behaviour management
– Resource management cost not discounted when estimating
• Entrepreneurship mentality (“one wo/man show”)– Disability of developing human resource capacity
• Contractor disability to grow NAV (Net Asset Value)– Plant/Machine acquisition vs Premium for Plant Hire
• Partnership mastery procedure is wanting– Disputes resolution – “Customer is King” (Judge & Jury)
• Contract feasibility – Banks want more– Cost of Capital – interest rates higher than Clients
– Contract profitprofit / periodperiod
(i) What to change ?
Contracts are at the
End-of-Life
Contractors work with unreliable resources for the
remaining contract life
Contractors compromise Safe Productivity
Resources are at the
End-of-Life
Financial Institutions insist on long-term
contracts & credibility
Contractors are forced to make plans to finish
works without “King” assistance
Contractors are under pressure to finish works, already delayed
due to unreliable resources
Contractors feel pressure to take chances
i.e.: skip steps / short cuts
(i) To what to change to ?
Timely issue of 5-year contracts with credibility
statement
Contractors work with reliable resources for the
contract life
Contractors cultivate Safe Productivity
Resources are at Start of life cycle
Financial Institutions insist on long-term
contracts & credibility
Contractor employees make use of “King” assistance of maintenance & expertise
Contractor employees have all necessary resources reliably to
conduct works
Contractors applies management tools
effectively & efficiently
(ii) What to change ?
Often Contractor employees perform works that don’t fall
within scope of contract
Contractors are desperate for work
Contractors simply cannot risk relations
with “King”
Contractors compromise Safe Productivity
Contractors are at the mercy of the proverbial “King”
for Future Contracts
Often “King”/ employees make requests that don’t fall within contract scope
Contractors are not setup to adequately
manage risks/hazards of out-of-scope works
(ii) To what to change to ?
Often Contractor employees perform works that don’t fall
within scope of contract
Contractors have 5-year Contracts
Contractors simply cannot risk relations
with “King”
Contractors cultivate Safe Productivity
Contractors are subject to a fair monthly performance review system (with invoices) for Future Contracts
Often “King”/ employees make requests that don’t fall within contract scope
Contractors & Client manage risks/hazards of out-of-scope works
Contracts allow for out-of-scope work
How to cause the change ?
Every improvement is
a change
Perceived threat on security / satisfaction
Contractors cultivate Safe Productivity
Every change is not an
improvement
Management / Labour prefer their comfort zone
Emotion of the inventor is stronger than resistance
Perception drives emotion
Emotional resistance
Induce Induce inventioninvention
Induce Improvement • Socratic Method
– Equip management with simple, practicle tools for clear verbalization of intuition
– Tools must allow for Management to test own beliefs in a critical manner & unleash true intuition
– Management must facilitate a discovery process:• Employees are allowed to derive solutions to their
problems vis-a-vis Management providing solutions
– Help employees recognize the limits of their knowledge & motivates them to learn
Conclusion• Postmodernist Paradigm
– Primate: Sustainable developent– Quest to invent a methodology that guarentees success
• ‘What to change’ and ‘To what to change to’ are technical questions – often intuitively known
• ‘How to cause the change’ – a psychological question– Manage human behaviour in line with company goals
• There is an integratedintegrated LAW that governs business management:– Law addresses the physical systems– Law addresses human systemshuman systems