Murray Easton

Engineering and Construction

Nov08/MS292-08

A Complex Leadership ChallengeQuality of Performance and Product

Nov08/MS292-08

“Leadership is about capacity – the capacity of leaders to listen and observe, to use their expertise as a starting point to encourage

dialogue between all levels of decision making, to establish processes and transparency in

decision making; to articulate their own values and visions clearly, but not impose them –

initiating change that makes for substantive improvement rather than managing change”

Live safety and quality – zero compromise

Leadership

SafelyDelivering

Affordable

Together

Capability

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 4600

2009(numbers excl of apprentices, graduates)

Nov08/MS292-0804/05-MS001-05

Barrow Shipyard

Nov08/MS292-08 7

Historical View – The Challenges

SafelyDelivering

Affordable

Together

Capability

• 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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Capability

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

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

Headco

unt

0

2000

4000

6000

8000

10000

12000

14000

Astute ClassVanguard Class

Upholder

1988 1992 1996 2000 2004 2008

TrafalgarSuccessor

Workforce engaged in Submarine building

Other

Nov08/MS292-08 7

Business Improvement – If you could turn back time!

SafelyDelivering

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Capability

Headco

unt

0

2000

4000

6000

8000

10000

12000

14000

Astute ClassVanguard Class

Upholder

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

• Less hierarchical

• Increased employee engagement and teamwork

The Immediate Response

SafelyDelivering

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Capability

Attitude + Behaviour = Performance

SafelyDelivering

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Capability

ProcessesProcesses

ProcessesProcesses

ProcessesProcesses

People

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

34

Boat

Cost

30% Overhead

Reduced

Cost Conscious

Culture

Supplier PerformanceManagement

20% Material

Reduced30% Labour

Reduced

Productivity

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Capability

Nov08/MS292-08 8

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

• Questioned affordability of all non-essential expenditure

• Cost consciousness

Overhead Costs

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Capability

Nov08/MS292-08 8

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

• Productivity and Lean manufacturing.• Pipeshop V1• Pipeshop V2

• 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

SafelySafelyDelivering

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Capability

Nov08/MS292-08

Lean Engineering Principles

16

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

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

Nov08/MS292-08 88

SafelySafelyDelivering

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Capability

Nov08/MS292-08

Culture and Behavioural ImprovementThe Change Wheel

Performance

Management

Organisation

Focus and

Clarity

Leadership

Development

Reward and

Recognition

Teamwork

Communication

& Involvement Behaviours

to Succeed

SafelyDelivering

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Capability

Nov08/MS292-08

Performance

Management

Organisation

Focus 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

Nov08/MS292-08

Leadership

Development

Reward and

Recognition

• Development centres• Coaching• Conferences (engagement)

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

Culture Change

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

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% SafelyDelivering

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Capability

Safety

First Think Safe, Act Safe, Be Safe.

10RIDDORS

350Accidents

42Incidents

1566Near Misses

118RIDDORS

1323Accidents

21Incidents

9Near

Misses

2003Jan-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’?

Nov08/MS292-08 13

Safely

Safety 2009+

• The next phase of the Safety First campaign includes:

•Behaviour and personal responsibility•SHE - Safety, Health and Environment•Product Safety •Nuclear Safety•“We are no longer a shipbuilder that builds nuclear vessels, we are a nuclear facility that builds submarines”

Delivering

Affordable

Together

Capability

All of usContractors Apprentices New starts

Nov08/MS292-08 8

• Supply Chain• Key supplier forum

• CAD accuracy + Optimised Manufacturing Processes = Material cost saving through reduced waste• E.g. Pipework

Response – Material

SafelyDelivering

Affordable

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Capability

Nov08/MS292-08 9

SAFELY DELIVERING AFFORDABLE CAPABILITY TOGETHER

Nov08/MS292-08 8

• Individual and company ownership of quality and safety to the extent that the regulator was prepared to reduce his oversight with the confidence that we were managing our own safety and quality, sharing identical values.

• Complete transparency to any external regulation and open invitation to external inspectors to participate in management meetings about quality and safety.

• Red-team reviews, objective and transparent evaluation of project performance on an annual basis, including active participation of senior NII personnel.

• Mutual trust and respect.

“A Learning Company” - NII

SafelyDelivering

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Capability

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)!!!!!

Nov08/MS292-08 9

QUESTIONS?