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
PHYSICAL ASSET MANAGEMENTSmartphones
& QR CodesAre Changing PhysicalAsset Management
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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
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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
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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
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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
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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.