First published by Ultimate World Publishing 2020
Copyright © 2021 Howard Thomas
ISBN
Paperback: 978-1-922714-09-1
Ebook: 978-1-922714-10-7
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Patents Act 1988 to be identified as the author of this work. The information
in this book is based on the author’s experiences and opinions. The
publisher specifically disclaims responsibility for any adverse consequences
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Testimonials
Working with Howard was an inspiration. His enthusiasm and
forward thinking helped to position our business for long-term
growth. He understands the need for strong relationships
and building trust. I hope we’ll get to work together again.
Reilly Montgomery, General Manager, Wood.
Howard is a proactive, strategic thinker with a real cando attitude. I like the way Howard views the world and his
straightforward, honest approach. Howard thinks ‘big picture’
and has a unique ability to differentiate real opportunities
from ‘pipe dreams’ and make them happen.
Trish Hawkey, Director, Aspire Performance Training
Howard has an enviable grasp of what it takes to get the most
out of large-scale assets. He is visionary in his approach,
being able to quickly cut through the noise to get to the core
of a problem. Unusually, his abilities extend beyond physical
assets to the more esoteric domain of human productivity
and strategy.
Paul Peterson, Maintenance and Reliability Specialist
iii
Howard is a unique individual with many attributes that
enable him to quickly gain people’s respect across a broad
range of technical and commercial areas. Howard has
passion, drive and enthusiasm to add value in everything
he does from the front line right up to board level.
Steve Wright, Chairman ARC Marine Ltd
Howard is a superb facilitator, combining in-depth
technical, operations and strategy knowledge with inclusive
communication skills and a frank and open approach to
participant engagement.
Steve Ciccone, Regional Director, Wood.
iv
Contents
Testimonials ...........................................................................iii
Foreword...............................................................................vii
Introduction ............................................................................ix
Chapter 1: The Golden Rules ................................................ 1
Chapter 2: Professionalism ...................................................11
Chapter 3: Complexity ......................................................... 19
Chapter 4: Jumping to Conclusions ..................................... 27
Chapter 5: The Dinner Party ................................................ 31
Chapter 6: The Report ......................................................... 39
Chapter 7: The Introspection ............................................... 47
Chapter 8: The Interview ..................................................... 53
Chapter 9: The Law of Diminishing Returns ........................ 59
Chapter 10: Mastery ............................................................ 69
Chapter 11: Planning ............................................................ 75
Chapter 12: Value ................................................................ 83
Chapter 13: Illusion .............................................................. 87
Chapter 14: Poor Ralph ....................................................... 91
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SIMPLICITY FROM COMPLEXITY
Chapter 15: The Problem of Compliance ............................. 95
Chapter 16: Future Thinking .............................................. 101
Chapter 17: Digital ..............................................................113
Chapter 18: Using Technology Wisely ............................... 121
Chapter 19: Ready ............................................................. 129
Chapter 20: Operational Readiness................................... 145
Chapter 21: Repeatable ......................................................151
Chapter 22: The Game ...................................................... 159
Chapter 23: Learning ......................................................... 173
Chapter 24: Moving Forward ............................................. 181
Chapter 25: Positive Developments ................................... 185
Chapter 26: Reliability........................................................ 193
Chapter 27: Sustainable .................................................... 201
Chapter 28: Opportunity .................................................... 209
Chapter 29: Clarity ............................................................. 219
The Moral .......................................................................... 225
About the Author................................................................ 231
Appendix............................................................................ 233
Definitions & Diagrams ...................................................... 233
The Game.......................................................................... 239
References .........................................................................241
vi
Foreword
Due to the world’s obsession with growth, we have forgotten about
efficiency and productivity. Technology makes it so easy to add
more to our systems and processes, we have caught the disease
of addition.
The biggest growth industry of the last few decades is not only
technology, but also, running alongside this growth, the growth in
management. As we add to our systems, we increase the need for the
management of these systems. The governance and administration
of these systems is enabled by the addition of more technology, and
we have created a contagion, a contagion of complexity.
Stephen Hawking said, ‘The 21st Century will be the century of
complexity, and how we handle it will define us.’
This book aims to explain what can be done right now to unravel the
self-inflicted complexity of the knowledge age. The book provides
examples of how the principles of simplicity can be applied in
each aspect of a large company. The principles are illustrated in
the form of a fable about an oil and gas company that caught the
complexity bug and what they did about it.
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SIMPLICITY FROM COMPLEXITY
Simplicity is the key to productivity. While we are unquestionably
achieving more than we ever have, we cannot continue to achieve
more by consuming more time and resources and expect our
lifestyles to remain sustainable.
At every turn, we must consider how to achieve the outcomes we
desire as simply and efficiently as possible. Not only is this more
sustainable; it is just good business. Achieving more by doing
less is the very definition of efficiency. Every improvement and
self-development credo in the world is based on the principles of
simplicity.
viii
Introduction
This is a fictional tale about a wonderful young lady who takes part
in a journey from complexity towards simplicity.
She is guided by principles she was lucky enough to learn at early
stages in her life.
Along the way she encounters many characters that anybody who
has worked in industry will recognise. Hopefully, such readers will
relate to the difficulties of dealing with these people.
Readers may also relate to the unintended complexity that results
from the well-meaning but misguided cognitive biases that grip
today’s industry.
Once upon a time…
ix
Chapter 1
The Golden Rules
‘I’d like to acknowledge the Traditional Custodians of the Land on
which we are meeting today as Australia’s First People. I respect
Elders past and present for their connection to land, sea and
community and extend that respect to all First Nation people.’
Karri was surprised to hear an Acknowledgement to Country at the
start of a tutorial during a normal university day. As she was studying
Chemical Engineering, it made it even more surreal. Nonetheless,
she was pleased someone was indicating their awareness of the
true history of Australia.
Now that Karri was in her second year, she was settled into the
routine of classes, study, sport, work and party, like any other student.
Most lectures blurred together, and last year’s tutorials had been of
little use—but now, straight off the bat, she was paying attention.
Her tutor for the year called his tutorials The Golden Rules. The
name stood out to Karri as being very different from ‘Reactor
Engineering’, ‘Fluid Flow’ or ‘Mass Transfer’, and it had certainly
started differently.
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SIMPLICITY FROM COMPLEXITY
Her professor had continued, ‘Any professional sports team will
tell you that doing the basics well is the bedrock of success. We
must not forget to do the basics well.’
Karri, like many of the First Nation Nyungar community from
Western Australia, was passionate about Australian Rules Football
(AFL). Several Nyungar men and now women played in the AFL,
and apart from run-ins with some people in the crowd, it was a
part of Australian life where First Nation people were increasingly
represented and had high profiles.
Karri wanted to achieve the same in industry.
The lecturer definitely had her attention.
Karri’s tutor continued, ‘In engineering terms, the basics can be
expressed as The Golden Rules:
Check, check and check again.
If you can measure, measure.
If you can’t measure, calculate.
If you can’t calculate, don’t guess.
Get the facts, gather the data.
Draw the data.
Do your research.
Compare the research to the data.’
2
THE GOLDEN RULES
The tutor was writing on a tablet as he spoke. The rules appeared
on the large video screen on the wall behind him as he wrote
them so Karri and some of the other keener students were
able to write them down as he went. Their notes looked like
the image below:
The instructor stopped writing on the tablet, put it down, and looked
out at his students.
‘Write the rules down. I won’t be giving you a link or a copy of a
presentation. This is not something you read and remember. These
rules are something you need to live and breathe. If you write them
down, there is a chance what went in through your eyes and ears
and out through your hand may stick in your brain in-between.’ The
3
SIMPLICITY FROM COMPLEXITY
tutor smiled as he said it, and Karri got the sense that he clearly
believed what he was saying.
In her experience—which as a First Nation female was hard
won—some teachers were just going through the motions. She
could tell this guy was different; he was all energy and passion
for the subject.
‘My name is Quentin, everybody calls me ‘Q’. I worked in industry
for over thirty years before I started working with the University,
and these rules summarise what it takes to get it right as an
engineer. I suspect they summarise what it takes to make good
decisions in any field.’ Q stopped and looked around the room as
if he expected discussion.
Sure enough, several hands went up. Q invited Hilary, one of the
other women in the group, to ask the first question. Hilary asked,
‘Will we be examined on this?’
Q smiled again, ‘No, not in the exam room, but if you choose a
career in engineering, you’ll need to know how to approach real
problems rather than exam questions.’
Paul, that type of pedantic guy who appears in every academic
situation, asked next, ‘Are you saying exam questions don’t
represent the real world?’
‘Yes, I am,’ said Q. ‘The aim of your education is to equip you to
think, to reason, not merely to calculate. You need to know how
to calculate, which is what examination tends to test. Calculations
are needed to inform your reasoning, but the application of your
thinking in industry is to help with good decision making.’
Karri was getting excited. This guy was making the most sense of
anyone she’d heard since she arrived at university. Two years in, and
4
THE GOLDEN RULES
finally somebody was talking about the real world. She needed to
concentrate because Q was elaborating on his answer.
‘Ultimately, good decisions are based on wisdom, on the
understanding of principles.’ He started drawing on his tablet
again, so they could see a diagram. ‘This is captured in Roley’s
DIKW (Data, Information, Knowledge, Wisdom) continuum.’
‘In theory, if you are wise, and if you understand principles, you
can make good decisions.’ Q didn’t seem to give short answers,
and he kept going. ‘Industry assigns decision making responsibility
based on authority. The assumption seems to be that the people
who rise in authority levels are wise.’
As Q paused for breath, Karri found her enthusiasm carrying her
forward and blurted out, ‘But that’s not true!’
5
SIMPLICITY FROM COMPLEXITY
Q looked at her, clearly expecting her to say more.
Embarrassed, Karri added, ‘If those in authority made wise
decisions, the world would be a better place.’
‘Isn’t it?’ asked Q. ‘Our standard of living has increased over the
years. We’re a lot better off than previous generations.’
‘At what cost?’ retorted Karri. ‘Climate change threatens to make
us pay a huge price!’
‘Hindsight is a luxury we don’t always have,’ said Q. ‘It’s our use
of energy that has provided the heating, cooling, lighting and
mobility that has enabled the developed world’s lifestyles to this
point. It’s up to us—particularly you people, the next generation
of engineers—to transition us to cleaner fuels, renewables, and
above all to make us more efficient.’
Q looked round the room, ‘It’s a big task; the world’s energy bill
is about 55 trillion US dollars a year and growing with the world’s
population. Not something you can change overnight. Are you
up for that task?’ The students looked suitably dumbstruck, but
gradually heads started to nod around the room, and Q saw Karri’s
head nodding vigorously.
He found that inspirational. What more encouragement could an
educator need than the prospect of a young first nation woman taking
on the challenge of changing the world’s consumption conundrum?
‘OK then, let’s start by considering where we are on the DIKW
spectrum with climate change. Where are we? Do we have data?’
again he looked round the room.
Hilary went for the easy answer, ‘Yes!’
6
THE GOLDEN RULES
Q just looked at her, and once again, Hilary now felt compelled
to add more. ‘We have temperature data over recent decades, if
not centuries, and we have emissions data from the more recent
decades.’
‘Do we agree?’ Q asked the room. Most heads nodded, but he
could see a minority were frowning. That was up to them. If they
didn’t want to pitch in, he didn’t need to drag in the issue of denial
yet. He knew where the discussion was going anyway, but he
wanted it to take its course.
‘Next step, do we understand the relationships between the data?’
Q knew this would get things going.
A more mature student who until now had said very little raised his
hand but didn’t wait to speak. ‘Not completely; Fourier and Tyndall
formulated greenhouse gas theory, and the ERBE was able to
measure the effect at work in our atmosphere.’
Karri turned to look at who was speaking, as did everyone else.
Looking uneasy, the mature student put his hand down.
‘So why ‘not completely’ and what is ‘ERBE’?’ asked Q.
‘There are too many variables to allow us to accurately reproduce
the relationships using mathematical models,’ said the older
student, ‘and ERBE is the Earth Radiation Budget Experiment.
Three satellites study the exchange of energy between the sun,
earth and space.’
Karri realised she didn’t know this student’s name. He turned up
at lectures, but she’d never seen him outside of a classroom.
‘You’re saying we’re stuck at ‘I’ on the spectrum then?’ prompted Q.
7
SIMPLICITY FROM COMPLEXITY
‘Not stuck entirely,’ replied the guy.
Karri again endeared herself to Q by raising her hand and
asking ’What’s your name? I’m sorry I don’t know you as well
as I should.’
‘Robert,’ he answered. ‘But I know you’re Karri.’
‘Robert, you’d better explain how you know this topic so well,’ said Q.
‘Sorry,’ said Robert, who was clearly a shy individual. ‘I’m a
researcher with the Department of the Environment. I’m taking this
degree to better understand the other side of the story as it were.
What causes emissions and why.’
Karri was suitably impressed, and a little chastened. She was broad
minded enough to realise her earlier statement was at odds with
what she had just heard. Here was someone from the government
actively pursuing wisdom.
‘So, are we stuck at ‘I’? You haven’t answered yet Robert,’ Q
resumed the discussion.
‘Not entirely, as I said,’ Robert responded. ‘We have deep
understanding of the effect of some variables, such as various
greenhouse gases, but we don’t understand the interactions with
other variables such as El Nino and other ocean temperature and
current effects. So, our understanding is not complete.’
‘How can we make projections about temperature change then?’
asked Cryssie, one of Hilary’s friends.
Q picked up the reins. ‘They use models based on what they do
know and estimate the other effects based on regression. The
challenge is then extrapolating. If we were interpolating, the results
8
THE GOLDEN RULES
would be accurate, but we’re not; we’re predicting. Once we do so,
our confidence in the results will reduce accordingly.’
As they were second year engineers, everybody knew, or should
have known by now, the mathematics behind Q’s explanation. Karri
was excited to be combining the endless hours of maths that had
got her this far into a discussion about real world problem solving.
‘But we never hear anything about confidence intervals when people
are making statements about climate change,’ observed Cryssie.
‘Well, whose interests are served by the statements?’ asked Paul.
‘What do you mean?’ said Hilary, who really didn’t like Paul and
his cynicism.
‘When you qualify a statement, you leave yourself open to attack
or criticism, don’t you?’ said Paul. ‘Anybody who doesn’t agree will
exploit the uncertainty to cast doubt over your argument.’
‘Doesn’t that happen anyway?’ asked Karri.
‘Which would just make it worse if the argument appeared weak,
wouldn’t it?’ Paul responded.
Q called a halt to discussion since class was ending. ‘We’ll pick
this up in our next session later this week. Keep your ears open
between now and then. Listen for examples of people making
statements, decide how factual the statements are, where they
are on the DIKW spectrum, and therefore how much credence
we can give them.’
The next session couldn’t come fast enough for Karri, but she went
at the rest of her studies with renewed enthusiasm for increasing
her toolset as a future engineer.
9
Chapter 2
Professionalism
Three days later, it was time for the next session on The Golden
Rules. Despite it being the first slot on a Friday, the room was full.
‘Where were we?’ asked Q.
Karri was straight off the mark, ‘We were discussing the problem
with not stating confidence limits when quoting results from
modelling.’
‘Not just modelling,’ said Paul. ‘All calculations are based on
assumptions that limit the accuracy if those assumptions are not
true.’
‘We can say all calculations are models, and subject to the same
limits of confidence,’ offered Q.
That resonated with the room. As young people studying the
sciences, almost all had been brought up to assume that calculations
gave right answers. This was the first time they had been forced
to consider that this might not be the case.
11
SIMPLICITY FROM COMPLEXITY
Robert also felt he could contribute, ‘Consider also, that if
instrumentation provides your input data, then the accuracy of
the instrumentation also limits the accuracy of the result. These
measurements span many years, major distances and come from
many sources. How much control is there over the quality of the
data?’
It hadn’t taken long for Karri’s head to start spinning. Did this mean
that no calculation or model could ever be 100 per cent accurate?
Why then did so many people talk in absolutes all the time? Could
they really be so certain?
Q seemed to be reading her—and everyone else’s—minds. ‘Human
beings embrace the absolute. It is easier to comprehend. This is our
preferred state of mind; it allows us to feel assured and in control.’
Q then followed up with their unofficial assignment from last time.
‘Did anyone observe anybody making statements since our last
session? Any comments?’
Derek, who until now had been happy to sit quietly, contributed,
‘You see it every single day in the media. People make definitive
statements but offer no support for them.’
‘Too true,’ said Karen. This topic seemed to be engaging different
members of the class. ‘Even if it is a written piece, where supporting
arguments are offered, I’ve only ever seen references to the number
of studies, as if the quantity of information justifies the statement.
I’ve never seen anyone offering a level of confidence.’
Q let that hang, and then ploughed on. ‘If your agenda is political,
then you seek advantage in absolutes. As I said, people like to
feel assured. You then highlight uncertainty to make someone
look weak in comparison to your polar opposite position, but you
never express doubt.
12
PROFESSIONALISM
‘In our world of science and engineering, just like the rest of life,
nothing is absolute. The complications of life are like encountering
fractions for the first time in school. Suddenly, counting is not as
simple as it was. As we advance in our education, we constantly
encounter the next level of complication. We must therefore resist
the temptation to think and talk in absolutes. Hence, the importance
of stating confidence intervals.
Q continued, ‘Yes, other people may attempt to exploit the wriggle
room for their advantage, but that brings us to the reality of the
world. What is your agenda? If your agenda is principle, then you
must be professional, you must tell the truth, and the truth means
you state your level of confidence.’
‘What does this have to do with engineering?’ asked Cryssie.
‘You’ll find out as soon as you start work,’ Q responded. ‘Very few
organisations are free of politics.’
‘You should try working for the government,’ said Robert, causing
a lot of people to laugh.
‘It will be your choice,’ said Q, ‘whether you want to climb the
management ladder or pursue mastery of your profession is up to
you. I’m not saying all managers are political, and all engineers are
free from politics. I am saying that a true professional concentrates
on the mastery of their subject and, if more of us do that, we might
just help the world make some better decisions.’
Karri felt like applauding, but like most engineers she wasn’t that
outgoing. It didn’t matter because Q could see she was grinning
from ear to ear, which made him smile.
Q continued, ‘The Golden Rules are about getting it right consistently
and about the fulfilment that comes from high performance.
13
SIMPLICITY FROM COMPLEXITY
Sustainable change is best produced by simply being good at
what you do.
‘If you are good at what you do, then you can relax and be yourself.
If you know where you are headed and what your values are, you
don’t need to worry about anything. You don’t need to get involved
in politics. If your face doesn’t fit, then get another job. Why would
you want to work for an organisation that doesn’t value the pursuit
of mastery?’
‘You keep using the word ‘Mastery’,’ said Hilary. ‘What do you
mean?’
‘Competence is the basic requirement to get a job,’ Q explained.
‘It is a starting point, however, not a goal. We need to go beyond
competency to the understanding of first principles. Similarly,
we must not confuse experience with understanding. We often
mistakenly believe experience produces excellence when in truth,
experience without critical analysis only produces repetition.
‘We want to drive our knowledge up the DIKW spectrum so that we
can help people make good decisions when they have to deal with
the complications of the real world. That is mastery of your subject.’
‘Isn’t that why companies provide training programmes? You make it
sound as if it is a struggle to pursue mastery,’ said Paul, consistent
as ever in his adversarial style.
‘Training and education are not the same thing,’ said Karri, surprising
everyone. ‘Training teaches skills and habits, enabling people to
deal with the simple.’
Karri caught herself and apologised. ‘I’m sorry. You should be
giving the answers, not me.’
14
PROFESSIONALISM
‘Far from it, young lady; I prefer discussion. You go for it.’ Q was
encouraging as always.
‘My Mum’s a teacher,’ said Karri, giving everyone a glimpse of her
background. She was proud of her Mum and liked to let people
know that First Nation people could make their way in Australia
given the chance.
‘Mum says, education increases knowledge, enabling people to
deal with the complicated. This is really important for us, as the
modern world is far different from the simple, natural life many
First Nation prefer.’
‘I know this may not be the place,’ she said, looking towards Q, but
he only waved her on. Karri continued, ‘Offering training courses
will only perpetuate our cycle, and we’ll be stuck in blue collar
jobs. If we want our people to be able to make their own choices,
we must educate them so they can make good decisions not only
about what to do, but just as importantly what not to do.’
Q steered the discussion back to the technical. ‘Training is in
the motor neurone domain, which determines how we react, and
teaches skills and habits. Education is the cognitive domain, which
determines what we can understand, increasing the ability to
reason. In a complicated world, if cognitive load exceeds cognitive
capacity, we cannot rely on a human to make the right decision or
correctly complete a course of action. They will act without prior
analysis and thought.’
Q brought up a diagram on his tablet so they could all see it
on the screen. ‘This is Ralph Stacey’s Complexity Matrix. A
physicist named Neil Johnson describes complexity in his book
Simply Complexity as ‘too many agents competing for too little
resource.’
15
SIMPLICITY FROM COMPLEXITY
Q went on. ‘Compare this diagram to the DIKW spectrum. What
do you observe?’
Robert was the first with his hand up, ‘The comparison would
suggest the more understanding we have, the more likely we are
to cope with complexity.’
‘What else?’ asked Q.
Karri offered, ‘The x axis shows certainty, or you could say
confidence, so the low confidence relates to high complexity or a
lack of understanding.’
‘Both are good, but I need you to combine them,’ said Q.
Karri and Robert looked at each other, but it was Paul who tried his
hand – lacking confidence and saying as a question, ‘The simpler
we make things, the more likely we are to understand?’
Q chose this point to bring things to a close, as time had again
caught up with them. ‘A good start, but rather than guess, I’d like you
16
PROFESSIONALISM
to do some research on Stacey’s spectrum, DIKW and Johnson’s
definition of complexity. We’ll pick this up next time when you have
some more background.’
17
Chapter 3
Complexity
Tuesday rolled around again and with it the next session on The
Golden Rules. It wasn’t just Karri that was eager to get to the
session; all the students in the course had been talking about
little else.
This also increased their motivation with the other subjects. Even
though they wouldn’t be examined on the rules, it provided a context
for their studies that had been missing before.
Previously, Karri had thought in terms of school. She appreciated
that living away and being responsible for herself would help her
to mature, but going to lectures had been just like going to school.
You were studying for exams that you needed to pass to get a
qualification. What had helped Karri and all her classmates was
the realisation that they were on the road to being professionals,
to assuming responsibility that they needed to be prepared for.
This time, Q opened with their assignment straight away, ‘What
connects complexity and understanding?’
19
SIMPLICITY FROM COMPLEXITY
‘Cognition,’ said Hilary. She continued, knowing one-word answers
didn’t get them anywhere in this session. ‘Cognition is the knowledge
and understanding acquired through thought and the senses.’
That wasn’t enough for Q, ‘You’re right, cognition is a major factor,
and you’ve given me a textbook definition, but you haven’t explained
how it connects complexity and understanding.’
Hilary was never one to take anything lying down, so she fired
back, ‘If complexity involves too many agents competing for too
few resources, and we only have so much cognition, when the
understanding required is greater than our cognition the situation
has become too complex for us.’
‘Very good, Hilary. Does anyone else have a different explanation?’
Q asked the room.
Karri summoned up the courage to give her version, ‘Looking at the
complexity matrix and DIKW spectrum together, you can see they
connect understanding. If you push up the knowledge spectrum
and you try and push down the complexity matrix, there must be a
crossover point when understanding meets the level of complexity.’
Q was impressed with both women. He needed to find a constructive
way of blending the two answers to get the full message across,
‘Karri, you’ve given us the means of improvement, and Hilary,
you’ve given the explanation.’
‘If the level of complication exceeds our level of knowledge, then
the situation has become complex—and we no longer have control.
Hence, we pursue mastery, which we can define as understanding
equal to the level of complication in our role.
‘As we discussed last time, this means thinking in terms of
education, not training. Education increases understanding and
20
COMPLEXITY
cognitive capacity. Your education won’t end with your formal
education. It should go on through your career. When you are
advanced in your career, then The Golden Rules are there to help
you develop understanding where there was none. They bring
professional discipline to problem solving.’
He continued, ‘Cognitive capacity is finite—so the greater the
number of factors in play, the greater the demand on cognitive
capacity. Hence, the need for simplification activities to reduce
cognitive load.’
To break up the lecture and emphasise his points, he returned to
the time-honoured Socratic method of asking questions.
‘What was the real root cause of Piper Alpha? Was it really the
failure of numerous barriers? Or did the barrier failures mean the
incident escalated?’
Everyone in the room had heard of Piper Alpha. 167 lives were
lost when the Piper Alpha platform caught fire in the UK North Sea
in 1988. Not only was the loss of life high; it had also led to major
changes around the world in government regulation of safety in
the oil and gas industry.
As Q expected, most of the answers parroted what students had
been taught. One by one they ticked off the numerous barriers
that had failed during the incident, but nobody was coming close
to the real root cause.
Q shared the image below to help them along. ‘We have this data
from the Institute of Oil and Gas Producers (IOGP), and the work
of Trevor Kletz before them, suggesting that five of the top ten
root causes of major incidents—and hence fatalities—around the
world have been the same for over 30 years. All five relate to poor
decision-making.’
21
SIMPLICITY FROM COMPLEXITY
It was Robert that helped him out. ‘In that case, the real root
cause was a decision to go for a start on a pump that was out for
maintenance. That was not a reasonable decision.’
Q let the silence fill the room. They had also been taught that
blaming operators was not acceptable. Operator mistakes were the
result of a lack of training. In this case, you were almost speaking
ill of the dead.
Given her earlier input, it was perhaps no surprise it was Karri
who made the next comment. ‘That’s the point here, isn’t it? The
situation had so many complications it was beyond the operators’
understanding. The situation had become complex.’
‘That’s excellent, Karri.’ Surprisingly, it was Paul who provided
praise.
‘It’s not like people didn’t know this was an accident waiting to
happen. Several reports had highlighted problems with the various
barriers that would lead to escalation in the event of an incident.
It was just waiting for the wrong decision to start the sequence of
events,’ said Q.
22
COMPLEXITY
‘If management dismisses or overlooks technical input, a domino
effect can build up that isn’t immediately obvious. But look at
the IOGP data. It shows a communication challenge in terms of
technical and management language. This is not surprising, as
there is considerable difference in management and technical
education and development.’
‘How so?’ asked Robert, who was especially interested in
understanding why his technical input often didn’t land with his
audience in government.
‘Management deals with the bigger picture, and engineering deals
with specifics. Management counts the cost and engineering worries
about the consequence. Costs are measurable; the consequences
engineers worry about most are remote,’ explained Q, warming
to the interest.
‘The effect isn’t purely technical, either. It also creates cultural
problems. When an individual feels they have been ignored,
resentment builds. Rather than express this resentment openly and
risk loss of employment, technical people who are often naturally
reticent become passive defensive.’
‘What does passive defensive mean?’ asked Cryssie.
‘When people protect themselves by avoiding conflict,’ answered Q.
He went on with his theme, ‘Without challenge from technical
people, management tends to rely on process to avoid unwanted
outcomes rather than eliminating root causes. It’s cheaper and it
seems like they’re taking positive action, but sometimes it’s simply
kicking a can down the road. Sooner or later, someone will make
a mistake or take a shortcut. This is what the IOGP data and the
work of Trevor Kletz show us.’
23
SIMPLICITY FROM COMPLEXITY
Hilary chimed in, ‘And each addition of a new process just makes
things more complicated. I get this. It’s like the stickers on the
handrails around the university. Somebody has acted, but the
stairs are still there. Sooner or later, someone will still trip and fall.’
‘That’s a good example,’ said Q. ‘We’ve taken action, but the
complexity keeps increasing. The more people are required to
comply with a process they don’t believe to be correct, passive
defensive becomes passive aggressive.
‘The overall culture in mature industries often becomes passive
aggressive. There is a tendency to maintain the status quo and it is
a struggle to bring about constructive change. Rules become more
important than ideas; there is an aversion to risk-taking and difficult
problems are often avoided. This only results in management’s
perception of negativity and lacking technical co-operation they
look outside the organisation for help to instigate improvement.’
That was a lot for a young group to appreciate. Q worried he might
have gone over their heads.
‘The outside parties tend to be a solution looking for a problem,’
said Robert with distaste.
Q was surprised by this reaction and called him out on it. ‘Sorry
Robert; you can’t make a cynical statement like that without an
explanation.’
‘Think about it,’ said Robert. ‘If you are a service company that
sells the time of the people you employ, your offering to the
market is predetermined. You must sell the skill set of the people
you employ.’
‘That’s true,’ said Q, ‘but if that is what the client is buying, everybody’s
happy, aren’t they?’
24
COMPLEXITY
‘So, how do you know it is the right answer? Who has done the
analysis?’ replied Robert, ‘Or in your words, who is applying The
Golden Rules?’
Q couldn’t have made the point quite that well, so he just let it be.
It was once again the end of a productive session, so he sent them
on their way with Robert’s questions hanging in the air.
25
Chapter 4
Jumping to
Conclusions
Q started their next session exactly where they had left off. ‘If
nobody has done any analysis, how do we know the chosen
solution is the correct answer to the problem?’
‘Doesn’t the company that’s won the work do an analysis of what’s
needed?’ asked Karri.
‘If that’s what the client asked for. But to Robert’s point, if they only
have certain skills to offer, won’t they just look for confirmation
those skills are needed?’ said Q.
‘Let’s do an exercise,’ he announced.
Q split the group into two teams and gave each person a piece of
paper with a debate topic and ten related facts. One team was to
propose the motion and the other team was to oppose it. Each team
had to choose three people to speak on their behalf: a captain to
propose or oppose the motion and two support speakers.
27
SIMPLICITY FROM COMPLEXITY
The debate topic was, ‘Confirmation bias is the most dangerous
form of cognitive bias.’
Much to her surprise, Karri was chosen as the team captain to
propose the motion. To no one’s surprise, Paul was chosen as
team captain to oppose the motion.
Robert and Hilary were to support Karri, while Cryssie and Derek
got to support Paul. The teams huddled for 15 minutes before
Robert took his turn as the first affirmative speaker.
‘All cognitive biases are dangerous because they are irrational.
They are a construct, a subjective interpretation of reality. Tversky
and Kahneman proved with the Linda Experiment that cognitive
biases lead to problematic outcomes.’ Robert continued in this
vein for his allotted three minutes and sat down.
Cryssie stood up as the first negative speaker, ‘Cognitive biases
are examples of heuristics. Heuristics are rules of thumb that allow
us to cope with an uncertain world. Unlike our opponents, we don’t
agree that the world is completely certain. There is no ‘Theory of
Everything’. Uncertainty exists, and we require rapid mental shortcuts
to allow us to respond in a timely fashion when necessary to protect
our interests quickly.’ Cryssie packed a lot more of the same theme
into her remaining minutes, and she too sat down.
The debate proceeded along these lines with each speaker giving
as good as they got. It was a fine debate performance by everyone,
but the group got a big surprise.
Q asked, ‘What was the exercise about?’
Everybody looked non-plussed, clearly all thinking the same thing,
‘Was confirmation bias the most dangerous form of cognitive bias?’
It was Hilary who stated what seemed to be obvious.
28
JUMPING TO CONCLUSIONS
‘No, that is what the debate was about,’ said Q. ‘What was the
exercise about?’
After another couple of minutes of everyone looking everywhere but
at Q, he put them out of their misery. ‘Take a look at your sheets
of paper I gave you at the beginning. Look at the ten facts on your
sheet. Which facts did you use in the debate?’
Karri, in her willingness to learn, walked into what would be an
important life lesson, ‘We used the two facts from each sheet that
supported our argument. Between us, because each sheet was
different, that added up to a lot of positives for the motion.’
Paul agreed that this was what his team had done as well. They had
identified the two facts from each sheet that helped their negative
argument and brought them together to form their argument against
the motion.
Q said, ‘If I were to score you on the debate, in terms of content, style
and strategy, you would both score highly. It would be hard to separate
the teams. As an engineer, I see confirmation bias as dangerous, but
even so I might just award the debate to Paul’s team because it was
so close. His closing style may just have won the day.’
Q continued, ‘The exercise is not about the debate; it’s about the
fact that each of you had ten facts on each sheet. Every one of you
chose the two facts that helped you and ignored the other eight
facts. Look again at the other eight facts. What do you observe?’
‘None of them support the argument,’ said an embarrassed Robert.
This was really hurting Robert, as he prided himself on being impartial
as a researcher. Yet he’d walked into this just like everybody else.
Derek, from Paul’s team, was equally uncomfortable, but he could
see what Q had done. ‘Our sheets appear to be the opposite, there
29
SIMPLICITY FROM COMPLEXITY
are two negatives and eight positives, but we’ve done the same
and just selected the facts that disproved the argument.’
‘That’s right,’ said Q, ‘You have collectively proved how dangerous
confirmation bias is. Not one of you said you couldn’t support
your team’s argument because the facts seemed to indicate the
opposite, or did you?’
Nobody could say they had.
‘Can you see how easy it is to look for the facts you need rather
than look at all the facts? So back to the original issue. If an outside
company does an analysis of a situation they have been hired to
help solve, how likely are they to identify aspects of the situation
as symptoms that can be fixed by their services?’ Q, as always,
was phrasing his points as questions.
‘I’m not saying the symptoms aren’t there. I’m not accusing anyone
of being dishonest or unethical. I am saying that there may be a
bigger picture. The situation might be more complicated and may
not be solved by the provision of their services.
‘The danger is that any recommendations they then make or help
to implement may cure the symptoms, but likely not the disease.’
The session wasn’t finished yet. Q wrapped things up by sharing,
‘Applying The Golden Rules to simple, everyday decisions may
seem unnecessary, and repetition of the basics can be boring. But
the risk of creating complexity is worse. Missing an anomaly that
leads to poor productivity, and perhaps serious consequences, is
more than enough to justify the application of The Golden Rules
to ensure good analysis and decision making.’
In the years to come, Karri would remember Q’s tutorials.
30
Chapter 5
The Dinner Party
Stephanie, the CEO of a moderately-sized energy company was
tearing her hair out. It didn’t matter what she tried, which guru or
which initiative was in play, and they had tried them all; nothing
was helping improve her organization’s performance.
Productivity was stuck and possibly even spiralling downward,
albeit very slowly and not necessarily noticeably to the markets.
She knew that announcements of acquisition activity always
counted more with the markets than the limited organic growth
and overall lack of efficiency. But while acquisitions might satisfy
the markets for now, they seemed to contribute to the overall
decline in productivity.
Every time the company made a new acquisition, a pattern
seemed to repeat itself. Synergies were identified, plans were
made, branding was rolled out, information technology systems
were integrated, staff were inducted. Management personnel were
introduced into relevant groups to interact with their peers, but the
business seemed to get incrementally more reactive every time.
31
SIMPLICITY FROM COMPLEXITY
Furthermore, Stephanie was out on a limb as it was. Not only was
she a very rare entity as a female CEO in oil and gas—or ‘energy
companies’ as they liked to call themselves these days—she was
well known for pushing her agenda of transition to cleaner energy.
Many of her peers amongst energy executives liked to call her
the ‘Green Queen’, although they would never admit it on record.
Stephanie had not been quiet about her stance that merely
rebadging the industry as the ‘energy industry’ was inadequate.
She knew, and she shared, that the public wasn’t stupid enough
to fall for it. She had made it clear she intended to lead the way
and transition her company away from oil, towards gas and beyond
that towards as diverse a range of energy sources as it took to
secure a cleaner future.
They had made their acquisitions with this goal in mind. Each
acquisition didn’t just grow the company; it also directionally moved
them further into the clean energy sector. For the overall company
productivity to then decline was not a good look. The markets may
not care in the short term, but lack of performance would not go
unremarked by her critics.
And it was not only her critics that were a source of irritation.
She had been able to make great progress with forming a solid
leadership team, but the biggest barrier to improvement seemed
to be their staff members’ resistance to change. She was aware
that they had to make a breakthrough with their own people, or
she was going to get nowhere.
Much as Stephanie might wish to keep her concerns about the
business away from friends and family, it was inevitable that
glimpses of the problems that occupied most of her waking
moments would be seen every now and again. Her partner Marie’s
closest friend went way back to university days. When Marie
had studied chemical engineering, Donovan had been studying
32
THE DINNER PARTY
medicine, and went on to become a respected infectious disease
specialist. It was Donovan that noticed when Stephanie, Steph to
her friends, was preoccupied and mentally distant at their regular
dinner parties.
Marie loved to cook, and Steph always felt it was unfair that her
own thoughts drifted away when she should be trying to make
these evenings as special for Marie as they were for her. When
Donovan finally asked what was troubling her, Steph felt she should
be honest, since she was doing a poor job of hiding her distraction.
So, she explained the situation to Donovan. He was immediately
intrigued; in fact, he laughed out loud, ‘You’re describing the
symptoms of an infectious disease!’
Confused, Steph asked what he meant. He explained that a general
feeling of malaise often indicated the incubation of a virus, and that
the malaise would pass itself from victim to victim with nothing more
than the same general feeling of something being ‘off’. Mutation
would then cause a significant disease and eventually contagion.
Steph was appalled but at the same time surprised that she had
found an analogy for her description of the situation at work. She
quite naturally asked how Donovan would go about identifying the
virus that was the source of the malaise. He explained that there
were seven steps in identifying the cause: Confirmation, verification,
definition, location, description, hypothesis, analysis.
That rang a bell for Steph, so she called Marie’s niece Karri over,
saying, ‘Karri darling, remind me, what were The Golden Rules you
learnt from that eccentric guy you had for your tutorials last year?’
Karri rebutted that characterisation. ‘Q wasn’t eccentric, Steph.
He was different. He was the only lecturer that shared practical
insights, not just theory.’
33
SIMPLICITY FROM COMPLEXITY
Suitably chastised, Steph rephrased the question, ‘Sorry; what
were The Golden Rules of engineering?’
‘Check, check and check again. If you can measure, measure. If
you can’t measure, calculate. If you can’t calculate, don’t guess.
Gather the data. Describe (visualise) the data. Do your research.
Model the data based on the research. Check, check and check
again…’
Forgetting to be polite in her enthusiasm, Steph spoke across her,
‘Yes, I thought so, that’s just about the same isn’t it, Donovan?’
‘The same as what?’ asked a puzzled Karri.
‘Donovan was explaining to me how to investigate an infectious
disease,’ Steph explained.
Karri still looked puzzled, so Donovan explained, ‘Steph was
describing the issues she’s facing in trying to improve company
performance, and I said that they sound like the symptoms of an
infectious disease.’
Karri fell about laughing. Steph and Donovan looked at each other
and when she finally finished, asked her what was so funny. ‘Aunty
Marie will tell you every engineer she knows will give you a different
opinion about the ailments of the companies they work for, but they
will all agree their organisations are not healthy,’ laughed Karri.
‘Unfortunately, opinions are death in my line,’ said Donovan. ‘As
doctors, we have to prioritize fact and evidence-based diagnosis
and treatment.’
‘They are death in our line as well,’ said Marie, who had wandered
over when she heard her name being used. ‘Unfortunately, we don’t
do enough to guard against it. In fact, we attend so many meetings
34
THE DINNER PARTY
these days, it feels like all anybody ever wants is an opinion and
there is no time for analysis.’
‘So, when are you going in to see Steph?’ Karri asked Donovan.
Both Steph and Donovan were now suspecting Karri had been
overdoing the wine, as she was making no sense. But Marie caught
on and explained, ‘If Steph’s business has an infectious disease,
who better to provide a diagnosis?’
Donovan was now convinced they had both been drinking, but
Steph got the idea. ‘Marie’s right, Donovan. We get outside
consultants in all the time, but all they ever suggest is whatever
barrow they are pushing. I can’t remember the last time anybody
suggested actually forensically trying to identify the root cause of
a problem instead of suggesting their solution.’
Donovan was bemused, ‘Those of us in healthcare are always
envious of the corporate world and the funds available to pursue
excellence; but now you’re telling me that isn’t the case. It sounds
like the various improvement methodologies we hear about don’t
actually make that much difference.’
Steph agreed, but not completely, ‘Various initiatives have some
success, but it tends to be localised. We do well with a small project
or a certain division, but we can never seem to spread the benefit.
The enthusiasm seems to catch and then to die out quickly. As I
say, it is almost as if there is a condition that saps the energy out
of most everything we do.’
Donovan was now interested. He had some long overdue leave
coming up but did not actually have a lot to do with it. Having
recently divorced, he was lacking enthusiasm for travelling on his
own and did not have any family to spend time with. ‘Let me think
some more about it, and I’ll let you know if I think I can help.’
35
SIMPLICITY FROM COMPLEXITY
‘Don’t think too long,’ said Marie. ‘Steph gets awful busy, awful fast.
So act fast or she’ll be consumed by another crisis or acquisition
whatever comes first.’
The following Monday morning, Steph’s secretary put his head
around the office door with a strange look on his face. Steph looked
up and caught the concern, ‘What’s wrong, Matt?’ she asked.
‘Are you OK, Steph?’ he asked.
‘I’m fine, why do you ask?’
‘There’s a Doctor Matthews left a message for you to call him. I
checked him out and he’s an infectious disease specialist.’ Steph
had to laugh and explained Donovan was a friend and she would
give him a call.
‘Doctor Matthews office, hold please,’ said a rather brusque voice.
Steph was taken aback; not many people put her on hold and
certainly not without an explanation. Thankfully, the voice came
back on the line almost immediately, and asked just as sharply,
‘How can we help you?’
‘Can you please tell Doctor Stephens that Stephanie Rudqvist
CEO of Rudqvist Oil is returning his call?’
The receptionist sounded instantly contrite saying ‘Certainly Ma’am,
one moment please.’
A laughing Donovan came on to the phone, ‘Not many people can
make Sylvia nervous, Steph. What did you say to her?’
‘I simply responded politely but firmly. I might have mentioned my
role as well. Can I take it from you trying to call me that you are
interested in helping us over here?’
36
THE DINNER PARTY
‘Certainly am,’ said Donovan. ‘I think it will be interesting to test out
medical diagnostic protocols on a corporate entity. We can see if
what we believe to be good procedure stands up to a test outside
the bounds of the models we used to develop the protocols.’
Steph now felt how Sylvia, the receptionist must have felt a few
seconds earlier, and for the first time (and it wasn’t to be the last)
was forced to reset her mental picture of Donovan. No longer the
smiling, genial dinner party guest, he was all business and raring
to go. She managed, ‘Great, when can we begin?’ and sensed
that she needed to steel herself for this.
She was right. What was about to happen would prove to be one
of the most challenging episodes of her career.
37
Chapter 6
The Report
Several weeks later, Ralph, Steph’s Health and Safety Director,
was given the job of presenting Donovan’s report, Donovan called
it his diagnosis, to Steph’s executive team.
‘Our hypothesis is that as your organisation has grown and
advanced technologically, you’ve faced situations where the
complications of the task at hand create a cognitive load. This
cognitive load exceeds the cognitive capacity of the individual or
individuals concerned. As a result, outcomes have become random.
‘The clearest example of this trend in the oil and gas industry occurs
in safety, where the root cause of major incidents has remained
unchanged for decades— despite statistical evidence that suggests
your industry has safety under control. In short, you’ve created a
culture of compliance that has successfully reduced the number
of slips, trips and falls, the easy things, but at a significant cost
in terms of productivity. However, this culture has done nothing
to prevent the unlikely but severe outcomes, the hard things, the
possible emergencies that actually pose a far greater risk to your
organisation.’
39
SIMPLICITY FROM COMPLEXITY
Ralph was clearly apoplectic while reading these assertions.
However, she had good reason for getting Ralph to do this, so
Steph took a deep breath and requested that he continue sharing
with the assembled leadership team of Rudqvist Oil.
Ralph continued, ‘Your attempts to control outcomes by imposing
additional systems, without ever considering the balance between
complexity and cognitive capacity, result in these systems creating
only an illusion of control.
‘Low consequence, high frequency events reduce in frequency
because their prevention is simple and within cognitive capacity
once targeted.
‘The additional work required also has the effect of increasing the
overall hours worked. An illusion is created because the frequency
of undesirable outcomes has indeed decreased and appears to
have decreased even further when expressed as a function of
hours worked.
Ralph wasn’t having it. ‘This isn’t an illusion, Steph. Passionate
people have put thousands of hours of work into preventing these
issues. They can’t be dismissed like this.’
‘I’ll grant you that the report isn’t written in the most subtle fashion,
but it does acknowledge the improvement,’ retorted Steph. ‘You’re
reading the Executive Summary, but doesn’t it go on to say that
overall safety performance has improved as measured by our
industry? The many small things that may someday produce an
individual fatality have been reduced.’
Having defused Ralph’s defensiveness, Steph still wanted to drive
home the main point, ‘Yet the problem is that the measurement
and the overall approach is illusory. The bigger, almost one-off
events haven’t been affected by our efforts.’
40
THE R EPORT
‘I haven’t read the whole report yet,’ Ralph admitted ‘After reading
this summary, why would I waste my time?’
This annoyed Steph, though she tried not to show it. She knew
that making someone look foolish in front of their peers wasn’t the
approach to take here. Because Ralph was relatively new to the
role, she tried tact instead. ‘I should have gotten this team on board
with Doctor Matthews’ consultation before going ahead. That was
my error. However, we now have the report, and it is highlighting
that our traditional, industry standard methods may be flawed. If
we can’t be open minded about this, aren’t we just exhibiting the
behaviours the report goes on to highlight?’
Ralph might be a blowhard, but he wasn’t stupid. Faced with a cleft
stick, he agreed to go on reading. ‘Whilst this is beneficial to the
organisation, the question must be asked whether the continued
addition of compliance requirements is sustainable. Furthermore,
if the low frequency, high consequence outcomes that should
really concern the business will still occur, there is a justification
for a change in approach.’ He may not have been stupid, but he
was stubborn.
‘Steph, our approach is industry standard. Anybody from any other
company would recognise it and be comfortable. All we have here
is an outsider who doesn’t recognise the approach, questioning
something he doesn’t know anything about.’
Bulls may be colour blind, but they still respond to the movement
of a red flag when it is waved vigorously—and the bull in Steph
was no exception. Having tried tact, this audience was experienced
enough to face hard truths.
‘Look, folks, we are once again proving the very point this report is
trying to make, if we can ever get through the Exec Summary,’ she
said with a withering look at the hapless Ralph. ‘Cognitive bias is
41
SIMPLICITY FROM COMPLEXITY
very dangerous. Just because ‘Group Think’ says everything is OK,
shouldn’t we still listen to a different perspective from outside the
industry—a specialist in the highest risk scenarios, who is telling
us we have a problem?
‘Let me continue,’ said Steph. ‘I was trying to make this easier for
all of us by providing the report as pre-reading and giving you the
opportunity to read out your highlights. However, if you haven’t
read it in full,’ making Ralph squirm noticeably, ‘then I’ll read the
highlights for you.’
Steph went ahead, ‘The change in approach must ensure the root
causes of all issues, but particularly the high consequence events,
have been addressed.
‘Safety is used to provide an analogy for the overall organisation.
The same observations were made for quality, information
technology, development, operations and maintenance. Your
organisation suffers in all areas from the same malaise.
‘The central finding of this report is that your organisation is too
complex; that is, cognitive load is more than cognitive capacity
in almost all aspects of your operation. This may be the result of
complicated tasks being performed without enough knowledge.
This may be because cognitive load is increased by difficulty in
accessing the appropriate knowledge, or because cognitive capacity
may be decreased by distraction. Alternatively, it may be due to
an unchecked increase in cognitive load.
‘Donovan goes on,’ said the now remorseless Steph, ‘given that
industry has all the knowledge needed to design and reliably
operate process plant, the first aspect, the need for knowledge,
is not an issue of supply. Engineering enshrines the knowledge
gained from experiment with many small data sets over centuries.’
42
THE R EPORT
Steph reflected to herself that Marie would love that line. She
continued, ‘This is foremost an issue of cognitive load. There is a
need to reduce the load being imposed on your organisation.’ She
diverged from the report to emphasise the point by saying, ‘If we
as a leadership team don’t have the time to read reports like this,
doesn’t it tell us something?’
The report went on, ‘The majority of your management activity
results in the addition of workload. Very little management activity
is focused on reducing workload, making increased cognitive load
inevitable.
‘Your organisation is structured as separate processes run by
separate teams. With a prevailing compliance mindset, typical
of passive aggressive cultures, each team sets zero deviance
targets and consequently reacts to each deviance no matter how
insignificant compared to bigger issues.
Steph stopped reading and looked round the room, letting the pause
provide time for the points to sink in. ‘Let me summarise so far,’
said Steph, ‘We are not operating as one team, we are operating
as individual departments and each department is generating an
ever increasing work load in pursuit of the easier small stuff instead
of addressing the harder big ticket items.’
The silence in the room was now palpable, the leadership team
was realising they were all in the dock, not just Ralph.
Driving the point home, Steph went on, ’We’re doing this to
ourselves. The constant addition of actions and systems is now
beyond our ability to handle them, we have overloaded our people.
However, our belief in the systems has by this time become ‘too
big to fail’ and our time is spent reactively propping up systems
rather than adding value to the business.
43
SIMPLICITY FROM COMPLEXITY
‘Let me read this next bit from the report again,’ said Steph, ‘Senior
managers make this situation worse if they continually demand
the wrong behaviour. Asking for faster responses only encourages
reactivity; it does not promote proactivity.
‘And this bit as well, this probably hit home with me the most,
your cost reduction efforts during market downcycles exacerbate
the effect by cutting head count, but not reducing workload. This
further increases cognitive load.
‘The perpetually increasing cognitive load manifests in the longer
term as complexity.
‘My diagnosis is therefore, that your organisation is indeed suffering
from a contagion. That contagion is complexity…’
‘… and so, outcomes become random.’ Finished Josie, the Head
of Operations.
Surprised, Steph could now sense her colleagues had caught up
with her, but it wasn’t unusual. She knew they had a good team,
and she knew when to encourage them. Andy, the Chief Financial
Officer, got there first: ‘Keep going Josie, but remember, some of
us don’t have your IQ.’
Josie explained, ‘The report is accurately describing how reactive
we are. Random outcomes drive reactive behaviour. Remember
the fuss last year when I received the text message warning of a
fire in the storage area on one of our sites? We had mobilised an
entire emergency response before the site manager called to say a
well-meaning passer-by had mistaken steam from a vent for smoke.
We hadn’t even checked with the site manager before we reacted.’
It was clear that some of the team had read the report thoroughly.
Steph calmed down a bit.
44
THE R EPORT
‘The random outcomes are because we aren’t eliminating root
causes. Our cognitive bias leads us to repeat the same technique
regardless of the issue: We have a meeting or an investigation,
we add requirements as a result, and we expect people to comply
with the requirements,’ finished Josie.
Andy just looked lost now, so Josie helped him along. ‘Think of it
like this. You have a bucket with a hole in it. But you don’t know the
bucket has a hole. So, you set up a means of putting more water
into the bucket so that the level in the bucket doesn’t fall. Now
you need more water and more people or equipment to keep the
water going into the bucket. Then you must look after the people
or maintain the equipment. The requirements keep increasing to
make sure the level in the bucket stays where you want it, or you
might say to make sure the level complies.’
‘Why didn’t you just fix the hole in the bucket?’ asked Andy.
‘Because you didn’t look for the root cause,’ said Paul, the Head
of Learning and Development. ‘You don’t even know the hole is
there. Imagine a more complicated situation where you needed to
get production online in a certain timeframe. You find a way to get
things online, you may have missed the root cause, but everything
is up and working. You move on to the next problem, never realising
you’ve now created a procedure or change that would never have
been necessary if you had eliminated the root cause.’
‘But you would have to be a fool not to eliminate the root cause,’
said Andy.
‘Really?’ said Steph, ‘I think this is what the report is trying to tell us.
We are making things more complicated than they need to be. We
are adding requirements rather than eliminating root causes. Every
time we do so, we add to the load on our teams. We eventually make
things so complicated that our productivity slows instead of improving.’
45
SIMPLICITY FROM COMPLEXITY
The whole room went silent. It was one of those moments when
you realise birds have been chirping away in the background all
the time.
Andy’s next sentence demonstrated that he had gotten the point,
‘I think the medical language was confusing me. All this cognitive
capacity and cognitive bias stuff. What we’re saying is that the more
we add, we will inevitably exceed our capacity to do everything
and hence our performance gets worse instead of better.’
‘It’s worse than that,’ said Steph. ‘As we add more, it means there
is a danger that the things we were doing right don’t get done, or
worse still—people start taking short cuts to get everything done.
That drop off in performance will eventually get worse, to the point
that the major incidents we must prevent become increasingly likely.’
46
Chapter 7
The Introspection
The leadership team agreed that they needed to act on the report’s
findings. They also agreed that the challenge would be to overcome
their own bias and to identify what they shouldn’t be doing instead
of their previous approach of adding to their processes.
Martin, their Head of Technical, hadn’t been at the review of
Donovan’s report. He had read it, however, and agreed whole
heartedly. Like so many technical people, he hadn’t been able to
resist an ‘I told you so’ moment at the subsequent meeting.
Privately, Steph thought he hadn’t told them so. Yes, he had made
the point on several occasions that they hadn’t done enough
analysis before implementing solutions. However, he had been just
as guilty of pressing for the latest technology when the business
case was marginal and based on supposition, or when the business
case was to add more technology to support technology that hadn’t
delivered on the supposition.
Nonetheless, Steph was wise enough to let it go, and harnessed
the enthusiasm by putting Martin together with Josie to take the
47
SIMPLICITY FROM COMPLEXITY
lead on reducing complexity as the Leadership Team’s Thematic
Goal for the next two quarters.
Steph was a big fan of management author Patrick Lencioni. Her
Leadership Team had all read Lencioni’s Silos, Politics and Turf
Wars and were used to the idea of Thematic Goals. Consequently,
the implementation of the report was the main agenda item for the
team meeting the next month.
Josie opened the discussion with a summary of their various offline
discussions and research. Everyone had been involved, and not
just the leaders; different work teams had all had the opportunity
to input ideas.
‘Our findings to date are quite succinct. We are confusing meetings
with analysis and experience with insight.’
Steph noticed that Martin appeared unusually shame faced, and
invited him to contribute, ‘What does that mean, Martin?’
Martin sighed, sat up straight, and said, ‘Administration is a
necessary function within a business, much as I might not like
it personally. As a business grows, administration begins to
encompass large budgets, requiring strict financial and regulatory
controls—as Andy will doubtless be glad to hear.’ Andy smiled at
the acknowledgement.
‘However, depending on the nature of the business, many decisions
are technical in nature and beyond the technical capability of the
budget holder. A wise budget holder should therefore seek good
advice.’ Martin paused to make sure everyone was following; he
had always been very good at pacing his contributions. He was
very aware that he spoke a technical language not everyone
understood, and he was about to make that point clear.
48
THE INTROSPECTION
‘To support the budget holder in making technical decisions, we
typically convene meetings to consult with technically knowledgeable
people. This introduces the problem of communication in two
different languages: management and technical. It introduces the
additional problem of dependency on technical individuals whose
knowledge is assumed, not verified.’
Ralph, who still hadn’t given up his defence of the status quo,
jumped on the last part, ‘I’m sorry, Martin, are you saying our
technical people are not properly qualified?’
‘I’m saying we can’t be sure their contributions will be correct, and
I’m not feeling good about it,’ Martin sounded uncomfortable. At
least Steph knew why he was looking downcast at the start of the
meeting; he had known what was coming. She was impressed he
had the courage to deliver it himself.
Martin went on doggedly, ‘Experience is a measure fraught with
danger. Too many people simply repeat the same experience again
and again rather than contributing new knowledge.’
Paul helped Martin out, ‘You’re saying we hire based on
experience so we shouldn’t be surprised if people repeat that
experience.’
Martin interpreted the clarification as a form of support and
gave support in return. ‘Yes Paul, this is where we haven’t been
emphasising learning and development enough.’
Steph said, ‘It sounds to me like we’ve forgotten how to do technical
interviews.’ They all looked at each other. It was only Andy that
looked at all smug. He was known as a fanatic on testing peoples
actual financial know-how before hiring. The rest of them all knew
technical interviews had become a thing of the past.
49
SIMPLICITY FROM COMPLEXITY
Martin forged on, ‘I have to admit, this has all been amplified by
the misuse of information technology. Instead of using digital to
change the way we do things, we’ve been using technology to do
more of the same.’
It was Andy’s turn to get defensive since he’d been the one pushing
Enterprise systems. He responded strongly, ‘We have to have
structure; introducing ERP into industry and automating workflow
has been hugely beneficial.’
Ralph saw his opportunity and piled on, ‘As I’ve been saying from
the beginning, we’ve had to add systems to prevent accidents.
Our permit software and other HSE programmes are invaluable.’
‘But where’s the balance?’ asked Josie. ‘The working groups tell us
they’re spending too much time interacting with and responding to
the technology. They spend less time on the tools, and find sourcing
parts and organising work gets harder, not easier.’
Steph interrupted, ‘Let’s not work the issues here; let’s hear more
of the feedback.’
Josie relieved Martin of some of the focus, by picking up the
narrative, ‘Funnily enough Steph, that’s exactly the next point. Our
struggles are exacerbated by our poor meeting practice. We’re
not establishing facts before we begin debating an issue. In fact,
we’re debating during meetings rather than analysing outside
the meeting. We’re working the problem by discussion instead of
analysis. We’re relying on individuals’ experience, or should I say
opinions, rather than working out the answer properly.
‘We won’t find the root cause without analysis; and meetings invite
opinions, not analysis. It is not just us as management that are repeating
the same approach. Our technical people also appear to be wedded to
a set way of doing things. They also suffer from cognitive bias.’
50
THE INTROSPECTION
Martin picked the ball up again, ‘No surprise we’re missing root
causes then, because people believe what worked for them
previously will work again. This is what Donovan means: decisions
are made based on our cognitive bias. We’re suffering badly from
confirmation bias. We tend to favour information that supports our
prior beliefs and desired outcome, the repetition of what worked
for us before. We also suffer from group think, particularly in the
case of IT; we’re doing what everyone does.’
Josie summarised, ‘In effect, we end up with a never-ending
series of meetings for investigations, or strategies to handle an
acquisition. Whatever the topic may be, we have a meeting. Each
meeting generates actions, but very few of those actions result in
eliminating work. Nearly all the actions add work. No wonder our
productivity is suffering.’
‘So, if I summarise what I’m hearing, as we’ve been busy growing
the business through acquisition, we’ve also been repeating
the same approach to any given issue, steadily accumulating
inefficiencies as we go,’ said Steph.
Sobering as the report and the subsequent introspection had
been, the leadership team managed to keep their sense of
humour. They decided that it they were suffering from a contagion
they needed a cure; and so their thematic goal gained a new
name.
Clearly, they needed solutions to the experience issue, the IT issue,
and the overuse of meetings rather than analysis. Steph was again
reminded of Karri and her ‘not eccentric’ tutor.
Karri had done vacation work with them, so she was known to
people in the company, and she seemed to have been well received.
Because she was about to graduate, a job offer would be useful
to her; but Steph was aware that would border on nepotism. Her
51
SIMPLICITY FROM COMPLEXITY
solution was to give the suggestion to the leadership team, recuse
herself and see what they did with it.
The leadership team decided there was nothing to lose by giving
Karri an interview. They knew she was bright, she had been
popular, and they were keen to perpetuate the diversity that they
had collectively driven within the organisation. Karri ticked a lot
of boxes.
The Cure—as the leadership team had come to call their desire
to improve—needed a co-ordinator, and they believed someone
young, from outside the organisation might be ideal. And so, they
arranged for Karri to interview.
52
Chapter 8
The Interview
Karri, fresh from completing her final exams, had stayed with Steph
and Marie the night before her interview.
‘Please understand, Karri, that I can’t take part in the interview,
and I will not be participating in any decisions relating to the role
we are hiring for,’ said Steph as they relaxed after dinner.
‘Kongk already explained that to me, Steph,’ said Karri. Marie
smiled at the use of the Nyungar word for ‘aunty’.
‘I understand what a conflict of interest is, and I wouldn’t want to
start off that way anyway. I’ll have enough to deal with as it is. If
I do get the job, some people will assume it’s because I’m being
favoured — if not for a relationship with you, then because I’m
First Nation, and if not because I’m First Nation, then because
I’m a woman.
‘It’s just where we are in the world. People talk diversity, but deep
down everyone holds on to their instinctive self-interest. It’s always
been that way for me,’ Karri’s upbringing made her more mature
53
SIMPLICITY FROM COMPLEXITY
than her years. ‘I’m just grateful for the opportunity and want to
take it one step at a time.’
Marie had always had a soft spot for her niece and was increasingly
proud of the person she was becoming. She said nothing, since
it was not the traditional First Nation way to give too much praise
and she was conscious Karri was far more in touch with her roots
than she was.
Steph, however, could not resist trying to coach Karri; but that was
what made Steph good with people. She was intrinsically kind. It
wouldn’t have mattered whether Karri was a relative or not; Steph
would have helped her.
By the time Marie got them to go to bed, Karri had received a
detailed rundown on Steph’s company and the issues it faced.
She was also a convert to Steph’s mission to decarbonise energy
from the inside.
‘Our elder has an old dog. The dog likes to lay on the porch,
always in the same place. When you are visiting with the elder and
listening to stories from the Dreamtime, the dog will sometimes
move in its sleep and howl. I asked Manyoowa why the dog howls.
Manyoowa said there is a nail in the porch that sticks in the dog
when he moves. I asked her why the dog didn’t lay in a different
place, and she said, ‘I don’t think it hurts him enough.’
A surprised silence settled on the room. Nobody was sure what
Manyoowa meant, but in the context, it seemed to be the title of
the elder Karri had referred to in her story. But that wasn’t the
reason for the silence.
Karri had been asked why people found change so hard and she
had replied with a story. More than that, the story was profound in
its insight. Nobody quite knew how to respond.
54
THE INTERVIEW
To express surprise at the inherent wisdom of the story would be
tantamount to expressing surprise at First Nation wisdom. For the
males in the room there was the fear of being caught expressing
surprise at female wisdom. And for anyone in the room, fear of
expressing surprise that a younger person had wisdom.
Martin braved the silence saying, ‘Good answer, Karri. Does that
tell us there is nothing new in the world?’
‘Perhaps not much new in dealing with people,’ said Karri, ‘but
surely other things move along all the time.’ The matter-of-fact way
in which this young lady gave her answers was fascinating to the
panel. Josie, Martin and Andy had offered to interview Karri, and the
rest of the leadership team thought that gave a good cross section:
male, female, operations, technical and financial. Josie, Martin and
Andy were thinking the other team members had missed out.
Josie expressed their collective thoughts, ‘Karri, we weren’t
expecting this quality of answers from our youngest candidate for
this role. Where have you learnt so much about people?’
Karri paused, seemingly unconcerned about taking her time before
responding—another sign of confidence—and said, ‘Perhaps
some of us face more challenges early in life. The truth is I’m stuck
between cultures. I get adverse reaction from my own people and
from white Australia, and to top it all off, I’m female. I’m not sure I
had any choice other than to sink or swim. I’ve had to swim with
a lot of different people already.’
The technical part of the interview had gone well. Even though they
weren’t hiring for a directly technical role, Martin was determined
that they should make it policy to test technical ability, as a lesson
from the report and their introspection. As the role would involve
interfacing with a lot of technical staff, they wanted to make sure the
candidates properly understood these aspects of their business.
55
SIMPLICITY FROM COMPLEXITY
With the softer skills and EQ aspects going equally well, they were
realising why Steph had thought Karri might be a good fit for the
role. They moved on to describing the role as the interview began
to wind down.
‘We’ve had a number of improvement initiatives over the years,
but we don’t seem to be able to make the big breakthroughs that
we’ve wanted,’ said Andy. ‘After having a non-industry person look
at how we do things, we think we’ve discovered why.’
‘You’re talking about Donovan, aren’t you?’ said Karri.
‘That’s right,’ Andy shook his head, ‘I forgot you knew Donovan.’
‘Not very well,’ said Karri, ‘but Steph spent hours last night
talking about his report and the idea that things were getting too
complicated as you grew. I hope you don’t mind or get the wrong
idea; I just wanted to save you time with explanations if that helps.’
‘That’s appreciated Karri,’ said Andy. ‘Don’t worry, so far as I’m
concerned, we’ve seen enough to understand why Steph would
think you were suited to the role.’ Josie and Martin nodded, and
Karri visibly relaxed.
‘So, to save time, what do you think you can offer to the role?’
Andy abruptly put the ball back in Karri’s court. If she wanted to
save time and she had been briefed, then they might as well cut
to the chase.
Karri’s response was equally short, but it rocked them back on
their heels: ‘It’s not me you need; you should be speaking to my
second-year tutor from University.’
Their faces spoke a thousand words, so Karri continued, ‘Quentin,
or Q, as we all called him, could tell you all about the situation
56
THE INTERVIEW
Steph described to me. I don’t think it is unique to your company;
he told us to expect in industry exactly what Steph described to
me last night.’
The relatively small population in Western Australia is mostly
concentrated into Perth, where the company was located. Add to
that the correspondingly small subsets that go to university and
study engineering—let alone chemical engineering— followed by
many people heading to the same industry. This often means that
people in that field know each other. While it was surprising to Karri,
it didn’t surprise Martin when Josie said, ‘I know Q! How is he?’
‘Last time I saw him he was in full flow, carrying on about The
Golden Rules and the lack of good analysis prior to decisions,’
said Karri. Josie smiled, while Martin looked interested. ‘I don’t
think we can have Q though, can we?’ said Josie, ‘He chose to
leave consultancy because he couldn’t get his message through
if I remember right.’
‘This guy Q, he’s the one behind The Golden Rules, isn’t he?’
asked Martin.
‘That’s right,’ said Josie, ‘I didn’t know you knew about them.’
‘It’s my job, isn’t it?’ said Martin. ‘There was a paper out about
The Golden Rules a couple of years back. I’m sure I circulated it;
didn’t you see it?’
Josie paused, musing for a moment, ‘Shouldn’t the question be:
what did we do with it?’
Both realised this had gone full circle. They were back where
they started with their introspection. They knew about the need
for analysis, and in this case a technique for analysis, but they
weren’t using it.
57
SIMPLICITY FROM COMPLEXITY
As the CFO, Andy had found this revelation about lack of analysis
interesting the first time. He initially thought it was just the technical
side of the business being so reactive they didn’t have time for
analysis. As a former accountant, he’d thought that things weren’t
so bad on the financial side. But when he started gathering input
from his team, he’d realised the same could be said for their side of
the business. People were busy making sure everything complied
to the chart of accounts, the ERP structure, competition guidelines
and generating all the associated reports. But there was very little
forensic analysis of their numbers.
As a result of his research, Andy had a good idea where he wanted
to start with The Cure. So, he asked Karri another question, ‘Did
you learn enough from this guy that you think you could help us if
we can’t have the man himself?’
‘I’d be willing to try,’ and with that, Karri had secured her first job.
58
Chapter 9
The Law of
Diminishing Returns
Andy had lobbied hard to continue to work with Josie and Martin on
their Thematic Goal of The Cure. With Karri as their coordinator—
or as she jokingly put it, research assistant—Andy wanted the
group to follow up his internal research and Karri’s comments
during her interview about complexity not being unique to their
organisation.
Consequently, Karri had been spending the first few months since
she started the job researching the subject of complexity. She had
been kept very busy summarising findings and preparing synopses
for the senior leaders.
It hadn’t required much intelligence to see that a call to Q would
be a good place to start her research. Q had duly pointed her in
the direction of various works about complexity. One book had led
to another, and it hadn’t taken long before they realised there was
no end of work going into the subject of complexity. In fact, there
had been for years. One of the first books Q had told Karri to read
59
SIMPLICITY FROM COMPLEXITY
was The Wealth of Nations by Adam Smith. Karri was shocked to
find it dated back to 1776.
There seemed to be a growing body of people in academia
and economics investigating the causes and consequences of
complexity, whilst their own business and the rest of the world
were busy generating complexity. Similarly, there was a striking
dichotomy between economic practice and theory.
One of the main beliefs behind Steph’s acquisition strategy was the
benefits in economies of scale, yet here was economic literature
from the 18th century describing diminishing returns as the limit to
the economies of scale. They were not alone; free market capitalism
in general had gained so much momentum it was seemingly
unconcerned about theoretical limits.
It was very confronting for a relatively young person not long out of
university to discover that nobody in the business world seemed to
be paying attention to decades of research and its conclusions. Of
course, Karri could accept there was a difference between theory,
which is ideal, and practice, which is real. But what was the point
of theory if it was not being used as a guide?
Andy was aware of the economic theory, as economics had formed a
large part of his MBA. His take on the situation was more sanguine: the
difference between the short term and the long term. He understood
shareholders wanted short term results, so he was not employed to
worry about long-term concerns. But he felt uncomfortable about
where the boundary between long term and short term lay.
As an operations person, Josie was used to working in the business.
The day-to-day details consumed most of her working hours. She
spent less than 20 per cent of her time with the leadership team,
which is the time she considered ‘working on the business.’ It was
clear to her that her primary focus was also the short term.
60
THE L AW OF DIMINISHING R ETUR NS
Martin shared Andy’s discomfort with the difference between
long term and short term. He found his time was less consumed
with the short term, since only 30 per cent of his team’s time was
spent in support of operations. Most of their time was spent on
what Martin considered the medium term: the projects that would
make a difference to the business next year or the year after. As
the supposed intellectual of the group, he was acutely aware that
he spent very little time on the long term. Even his time with the
leadership team tended to be focused on projects’ progress and
cost reporting. This participation in the thematic goal was providing
a sanity check that seemed somewhat overdue.
Martin was looking forward to the next session with the leadership
team. It would be interesting to get their perspective on the truths
their research was unearthing. The trick would be to see how to
apply it to their business.
Steph had arranged a full day for the next session on The Cure.
She realised that they had overrun the duration of a thematic goal,
and it was clear The Cure was a bigger issue than a single goal.
She intended to break it down into different parts.
The leadership team duly assembled in the board room with a
very nervous Karri along as the working group’s coordinator. Andy,
Martin and Josie introduced her to the wider team, and Steph was
pleased to see that they had an almost parental pride in their young
colleague. Most of the leadership team had already met Karri as
she had been sitting in on various meetings, but this was the first
time Karri had been alone with the leaders of the organisation.
To add to the pressure, Karri had been asked to open with a
presentation on the background research she had been assigned.
When coffees had been sorted and breakfast rolls secured, the
room settled, and Steph asked Karri to begin.
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SIMPLICITY FROM COMPLEXITY
‘Adam Smith in The Wealth of Nations described a limit to the
economy of scale called ‘The Law of Diminishing Returns.’ Karri
brought up a PowerPoint slide illustrating the theory.
‘This was taken from Joseph Tainter’s Collapse of Complex
Societies. Tainter uses Smith’s Law of Diminishing Returns to
explain the collapse of empires. You can see that the x axis is
complexity,’ Karri looked round the room. There didn’t seem to be
much reaction to her point, so she continued. ‘The constant addition
of work because of a reactive culture increases the complications
of an organisation beyond the point where the benefit justifies the
addition.’
Karri had borrowed the next slide from her tutorial notes from
university.
62
THE L AW OF DIMINISHING R ETUR NS
Karri narrated the slide as it appeared on screen: ‘The comparison
between Stacey’s matrix, which dates from 2005, and Smith’s Law
of Diminishing Returns is striking. If we were to overlay Smith’s
curve on Stacey’s matrix, we’d see a clear illustration of not only
the consequences of complexity; we also have a reason for the
consequences. As we enter the region of complexity, which Stacey
describes as ‘Unknown Unknowns’, requirements are not agreed
and the means to deliver those requirements are not clear. This
is when results start to decline.’
Martin had given Karri a lot of help to prepare this argument, and
Karri felt she had to acknowledge the help. Martin waved it away,
saying ’Karri, you’re presenting on behalf of the team; let’s take it
as read that we all contributed.’
Karri was not sure if that was support or criticism and moved
on hurriedly, ‘In his book, Simply Complexity, Neil Johnson
defines complexity as too many agents competing for too little
resource, with the level of complication exceeding the overall
capability of an organisation. Or in my terms, I can only juggle
so much; eventually I’m going to drop something. When that
63
SIMPLICITY FROM COMPLEXITY
point is reached depends on juggling ability or the number of
things I am trying to juggle.’
Warming to her theme, Karri said, ’You’ve heard all of this from
Donovan’s report, only he expressed it in medical terms: cognition
and complexity. Our message here is that what Donovan told you
in his report was already out there. There is a wealth of literature
on the causes and consequences of complexity, while we are busy
generating complexity.’
‘Donovan’s final point about the human reaction to complexity is
also out there.’
‘Human beings will naturally try to overcome complexity by working
around perceived constraints whether or not those constraints
are there to protect them. Diane Vaughan analysed the culture of
NASA in 1996 and coined the phrase ‘normalisation of deviance’,
which represents the collapse of a culture, increase in failures and
decrease in profitability.’ Again, Karri looked round the room and
believed the message had landed.
She summarised, ‘We have corroborated Donovan’s observations.
In the process of confirming his theories, we have also identified
solutions. I’ll hand over to Josie to take things from here.’
Karri sat down with relief, as Josie came forward to pick up the
presentation, ‘Thanks Karri, great job,’ heads all nodded and smiles
around the room made Karri finally relax.
Josie opened, ‘It isn’t sheer size that is the issue. Size will make
things harder since there is simply more to do, but it doesn’t make
complexity inevitable. Nor are we saying that we must increase
head count to avoid complexity. We believe there are two main
themes we need to follow from here.’
64
THE L AW OF DIMINISHING R ETUR NS
This was what Steph wanted to hear; that would fit nicely with
breaking the task down into smaller manageable chunks.
‘The first theme is the refrain of a friend of mine, and would you
believe, Karri’s tutor from university. That theme is the pursuit of
mastery. The second theme may seem obvious, because it is
simplification; but I was surprised when I realised that I have been
doing the wrong thing for most of my career in management.’ Josie
was about to go on, but Andy chipped in, ‘I’m afraid to say I can
say the same. Josie is being tactful; we will probably all be able
to say the same.’
Josie resumed, ‘Simplification should not be about dumbing things
down; it is quite the opposite. Rather, it’s about fundamentally
understanding what is happening when we get a deviation from
plan so that we can eliminate the root cause. This is where I believe
we have collectively been going wrong. Our standard response to
deviation is to add corrective and preventative actions.’
Josie brought up a slide, and Karri distributed hard copies of the
chart and table around the room.
65
SIMPLICITY FROM COMPLEXITY
Corrective Actions
Year
Total
Signed off
Complete
Due > year
2011
530
420
397
22
2012
605
486
464
24
2013
498
397
377
20
2014
553
448
421
21
2015
587
461
438
25
2016
436
353
336
17
2017
541
427
403
23
2018
512
409
390
21
2019
601
474
447
25
2020
527
423
405
21
’I had Karri compile the data from our various action registers
across the company, identify corrective actions and analyse what
percentages get completed. Where possible, I also had Karri check
that the action described in the register and shown as completed
had actually been carried out.’
Steph broke in this time, ‘Are you saying we have an honesty issue?
Surely not, we’re better than that.’
‘No,’ replied Josie, ‘I’m saying that the action isn’t closed until the
physical work has been completed. We may have decided what
the answer is, done the reviews and raised the paperwork; but that
doesn’t mean a work order has been completed.’
Martin chimed in, ‘Think about it. So far as one department—let’s
say my department—is concerned, they have completed their
action. But my department doesn’t carry out the work orders. We
therefore can’t know if the action has truly been completed.’
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THE L AW OF DIMINISHING R ETUR NS
Andy finished off the argument, ‘We had Karri correct the data
when she found an open work order or some other evidence the
actual correction or improvement had not been completed. This
showed us all sorts of interesting things.
‘Firstly, 5 per cent of all actions are not actually completed, even
though they’ve been signed off as complete. There is a pending
activity in virtually all cases, and we corrected the only two cases
where there was nothing in the system.
’However, the analysis showed us that the number of outstanding
actions around the company was relatively constant year on year.
So, while we are at least completing our actions, we constantly have
20 per cent of actions outstanding. This means we are constantly
catching up.’
Andy continued in this vein, ‘Perhaps the most troubling aspect
of this is that 20 per cent of those actions have been outstanding
for over a year. In other words, 4 per cent of all actions are not
completed within a year. We consider this a measure of the ‘too
hard’ bracket.
‘Most concerning of all, we found that 50 per cent of all actions relate
to recurring issues. Year on year variations of the same incidents
occur. Some of the associated actions are repeated year on year
and some are different attempts to solve the same problem, but
we aren’t eliminating the root causes.’
Steph was astounded, ‘You’re telling me that 75 per cent of all the
actions we register are making no difference, 5 per cent aren’t actually
done but we think they are, 20 per cent aren’t done at all—and 50
per cent haven’t solved the same recurring problems?’
Martin had to correct the maths, ‘Almost, but you’ve assumed there
is no overlap between the three categories of action, and there
67
SIMPLICITY FROM COMPLEXITY
is in some cases. We can say upwards of 50 per cent of actions
make no difference, and it is closer to 75 per cent than 50 per cent.’
Even Ralph couldn’t really argue with data. He wanted to, since
what he was hearing challenged his belief in the compliance,
investigation, and remedial action cycle in which he had been
heavily involved for most of his career. But the numbers didn’t lie.
Andy summarised, ‘Our analysis suggests that not only are most
actions we undertake not making a difference; they are adding
complexity. If an action that makes no difference is assigned a
higher priority than base load work, the impact is not just a waste
of time; it is detrimental to performance. We could not have a better
illustration of why the addition of work should be avoided.’
Paul suggested they had a break. His background in learning and
development allowed him to realise the people assembled needed
to internalise this challenging point before they could build on it.
68
Chapter 10
Mastery
It was clear that this news hit a nerve because nobody was leaving
the room during the break. Everybody engaged in ongoing, informal
discussion as they grabbed some refreshments.
‘I didn’t realise the action count was quite so high,’ said Ralph as
he joined the group where Steph was congratulating Karri and
Josie on their work.
‘We knew productivity was suffering; perhaps we have our first
hard indication of why,’ said Steph.
Josie had never particularly liked Ralph. Like most operations
leaders, she felt operations suffered the most at the hands of the
Health and Safety (HSE) fraternity and the unwinnable battle with
zero harm. So, Josie couldn’t help herself and asked, ’What do
you suggest we do about the action count, Ralph?’
Ralph surprised them all when he replied, ‘Productivity won’t improve
if we add head count, and the problem isn’t getting the actions done;
we need to take the right actions. So, I suppose we must get better
at understanding why things go wrong in the first place.’
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When they resumed after the break, Steph got Ralph to open with
his piece of wisdom. Josie still had to talk about the first part of
their recommendations—the pursuit of mastery—and Ralph had
inadvertently provided the perfect segue.
Given that Karri had most recently had the benefit of interacting with
Q, they left it to her to effectively go over notes from her tutorials.
Karri’s rendition of the various stories from her time in class had
everyone telling tales from their university days; but nobody could
say they had met somebody quite like Q.
Karri closed her summary of how to pursue mastery with the
image of The Golden Rules and the summary she had made of
the tutorials: ‘The failure to pursue mastery as part of business
is one of the biggest oversights in industry and leads to massive
inefficiency due to the propagation of custom and practice. Or as
Q would have put it, ‘The amateur jumps to a conclusion and tries
to prove they are right; the professional works it out!
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MASTERY
‘Applying The Golden Rules to simple everyday decisions may
seem unnecessary, and repetition of the basics is boring; but the
risk of creating complexity is worse. Missing an anomaly that leads
to poor productivity and perhaps serious consequences is more
than enough to justify using The Golden Rules to ensure good
analysis and decision making.
‘To improve, we must pursue mastery: encourage education—not
merely provide training—aimed at increasing the understanding
of why we do the things we do. This education is aimed in turn at
generating ideas about simplifying our processes as far as possible.
‘We must encourage at least some of our people to aspire to
mastery instead of aspiring to management. We want them to
continually learn and develop and apply The Golden Rules. In this
way, even if they do end up in a leadership position, they’ll be well
equipped to make good decisions.’
Paul was so excited he didn’t even thank Karri. He looked straight
at Steph and said, ‘This is perfect, Steph; this is just what we need
to get through to our teams. It’s a win-win. We get better analyses
to inform our decisions and our people are encouraged to develop
their own interests and professions.’
Paul rolled straight on in his enthusiasm, ‘It has never sat well
with me that we’ve been aspiring to merely competency. I agree
you shouldn’t have the job if you’re not competent; but that is
the bare minimum requirement, and we’ve done that. We must
look for what lies beyond competency now.’ Paul was known for
his sense of humour and couldn’t resist adding, ’Since we’ve
mastered that.’
Martin indulged Paul with the obligatory mime of hitting a high-hat
cymbal and making the associated sibilant ‘tch’.
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Smiling, Paul continued, ‘Our blue-collar staff have resisted
initiatives to align their ongoing development with qualifications.
And we haven’t had better luck letting our white-collar workers
choose their own training. Encouraging good analysis and the
pursuit of mastery in their trade or profession sounds like a way
forward to me.’
Steph was also optimistic; she needed a way to get through to the
business’s general population. She was aware that it would be
necessary to temper resistance to change, otherwise all their good
ideas would inevitably, and had, foundered. Her proposed transition
of the organisation to date was floundering in the environment of
passive aggressive resistance.
However, Steph wanted to test their collective will to change by
summarising her thoughts out loud. ‘I’m hearing that we have
to make a fairly fundamental change to the way we work daily.
Instead of meetings, brainstorming, gathering opinions from the
experienced, and adding compliance requirements, we’ve got to
emphasise the development of mastery amongst our people. Then
we must trust their analysis of facts and data, and follow through
by understanding and eliminating root causes.’
Ralph didn’t disagree, but it was his nature to point out the
roadblocks, ‘Wouldn’t experienced people argue that they already
are the masters of their subjects?’
It was Martin, very appropriately, who responded, ‘That is the issue,
isn’t it? We know how dangerous cognitive bias is. We can’t then
shortcut a process of establishing facts and analysis by relying on
opinions. It’s just a question of discipline instead of expedience,
or dare I say habit—even laziness. We are not saying people are
not the masters of their subject, only that if they are, then they
should have no problem embracing fact-based decision making
and carrying out the analysis.’
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‘What if they can’t carry out the analysis?’ asked Ralph. He quickly
realised that wasn’t the smartest time to think out loud and answered
himself, ‘Then they aren’t the masters of the subject,’ but he couldn’t
help himself and said, ‘Would they have to go?’
Paul spared him, saying, ‘No, they’d have the opportunity to master
their subject. If they resist, they will have to go.’
Bald statements of obvious truths can be uncomfortable, particularly
in this context coming from a people person like Paul. There was
a silence as they all looked at each other around the boardroom
table, but there was no dissent. Steph knew they’d reached a
milestone. She also knew it was time for lunch, so she called an
end to a very productive morning of data, analysis, understanding,
and informed decision making.
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Chapter 11
Planning
The group took lunch in the canteen just like everybody else.
Steph’s ideas on equality meant nobody would have dreamed
of having lunch brought into the board room when there was the
opportunity to mingle with their teams.
Karri loved this aspect of the company. Everybody was used to
their most senior leadership being present and accessible. There
didn’t seem to be any form of segregation, even down to people
randomly sitting at tables in the canteen. She may have been a
minority, but there were many races represented in the company
and she felt less isolated for once in her life. This outfit seemed to
truly live equality rather than merely talk about it.
When asked, the leadership team seemed to speak quite openly
about what they had discussed that morning. Employees expressed
a lot of interest in the ideas of less meetings and more fact finding
and understanding.
After lunch, Steph opened with a more concise summary of their
morning, ‘We’ve established that we have to make a fundamental
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change to the way we work daily. Instead of meetings, opinions,
and adding compliance, we must emphasise Mastery, and trust
the analysis of facts and data to understand and eliminate root
causes.’
This was another habit they were used to from Steph’s strong
belief in Patrick Lencioni’s approach. You must provide clarity
and reinforce that clarity. Steph was clearly honing the message
as she went.
‘Where next?’ asked Steph.
Andy picked up, ’We all know Edward Demming for ‘What isn’t
measured won’t be improved.’ We believe our next problem is
that the quality of our planning isn’t good enough to provide a
reliable baseline for measurement. What we see as deviations
in performance aren’t deviations at all; they were never properly
planned in the first place.’
Steph was surprised. She hadn’t expected another issue. Josie
had said there were two aspects: Mastery and Simplification. Now
Andy was introducing a third: Planning.
Predictably, it was Ralph that reacted first. ‘I thought we’d agreed
on the way forward; now we’re criticising planning as well. Is there
anything we do correctly?’
‘Let me finish, Ralph,’ said Andy. It was becoming increasingly
clear to Andy what part of the cure might be. Ralph was in danger
of being replaced by someone who had an open mind or at least
a bit more patience.
Josie could sense Andy’s annoyance, and intervened. ‘We’ve
defined the situation but not all its complications, so our solution
is only partially complete. The answers will be a whole lot easier
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PL ANNING
if we properly understand the complications. That is what Mastery
is all about: understanding.’
Unfortunately, Ralph who knew full well he wasn’t Josie’s favourite
colleague and saw the final comment as patronising rather than
helpful and reacted badly, saying ‘Thanks for that Josie, we don’t
all have your intelligence and understanding.’
This was the first time Karri had observed conflict within the
leadership group. While it felt uncomfortable to her, those in
the room seemed to take it in their stride. Nonetheless, it was
interesting to see the resistance Q had mentioned during their
tutorials manifest itself.
Ralph clearly didn’t understand the message yet or was overly
defensive. But like every good politician, he knew it was better to
say nothing than to indict oneself any further—so he asked Andy
to continue.
‘Military history teaches us that planning is essential preparation.
Yet the military also says, ‘No plan survives contact with the enemy.’
Andy loved grandiose quotes and used them whenever he could.
He pushed the military angle a bit further, ‘It is not that we expect
the plan to be perfect, but we must have a baseline against which
to measure progress and deviation. This allows us to adjust
proactively and not become merely reactive.’
As Andy paused, Paul couldn’t resist poking fun at the military
references—and asking a genuine question. ‘I’m confused, Andy.
Firstly, I wasn’t aware I had been conscripted; and secondly, I know
Josie does have weekly planning meetings in operations.’
Josie again had to admit where she had gone wrong. It seemed
as though the whole session was turning into a confessional for
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her. As head of operations, the reactivity that so badly affected
their productivity was most obvious in her area.
Josie replied, ‘Well, Paul, our work so far has provided two insights
on the subject of planning. Firstly, planning and scheduling are
two different things: planning is the what and the how, scheduling
is the who and the when. Secondly, as we have become more
overloaded, we increasingly accept that we can no longer plan.
We don’t seem to realise that we are overloaded because of the
lack of planning.’
It was Steph who queried the first part of the answer, ‘Clearly,
planning and scheduling are two different things. But I’d never
thought of it as you described, Josie: the what and the how and
the who and the when. I like that. Why is that significant for us?’
Martin tried to help, ‘Information technology has made it easy to
draw pretty pictures on Gantt charts, which are schedules and not
plans. But if they are not based on real planning networks, and the
associated critical path analysis or project evaluation and review,
they will never succeed.’
‘Is that what are you trying to tell us?’ asked Ralph, who wasn’t
following. ‘We’ll never achieve our schedules?’
Andy, growing increasingly frustrated with Ralph, was a bit too
sharp with this answer, ‘Yes, Ralph, that’s exactly what we are
saying. Josie is admitting that we don’t have real control over our
activities. Our operations are predominantly reactive because we
never had a sound schedule in the first place. We’ve been too busy
scheduling and not properly planning.’
Josie wasn’t pleased with this phrasing. While Andy may have been
trying to support her team, it sounded like he was laying the blame
squarely on operations. Her agitated reply came, ‘Thank you Andy,
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PL ANNING
but it’s not just operations. As Martin was trying to say, everybody
thinks they can plan these days. Writing a list of activities on a
Gantt chart in planning software, guessing durations, and linking
the bars on the chart into a nice waterfall pattern is not planning,
it’s not even scheduling; it’s just illustrating.
‘This is our basic problem with information technology. Making it
easy for people to use doesn’t get rid of the requirement for people
to know what they are doing in the first place. It’s the Mastery
argument all over again. If you don’t know how to plan, no software
will do it for you.’
‘We have to consider how software has been introduced over
the years. If we’re honest, most of us are happy when one of our
people can use the technology to produce a result. If it looks right,
that person becomes the go-to. But how did we validate that the
software was being used correctly and giving us a proper result?
If it aligned with what we wanted, we accepted it; that’s cognitive
bias, isn’t it? Confirmation bias, I think it is.’ Josie’s rant ran out of
steam just as she ran out of breath.
To Karri’s amazement, Steph seemed pleased that things were
getting a bit heated. She noticed that the CEO made no effort to
intervene; in fact, she seemed to think the conflict was positive.
All Karri had ever seen was people avoiding conflict; this was
entirely new to her.
Paul was equally as confused as Ralph, but for different reasons,
‘Don’t we have specialist planners who produce our plans?’ he
asked.
‘They produce what they are asked for,’ answered Karri, to
everyone’s surprise (not least her own if she was honest). She had
become so engaged in the discussion she had voiced her thoughts
out loud. But she wasn’t one to back down, so she explained, ‘As
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we developed this line of thought, I spoke with the planners. They
know full well they are not preparing plans, just pretty pictures.
They retrospectively adjust the schedule based on progress; so
while everything always appears to be scheduled, everything will
always be behind.’
Now Martin was annoyed, ‘Why didn’t you say anything before,
Karri?’
‘I didn’t know it was a problem,’ Karri said. ‘Our Asset Management
policy asks for schedules; it doesn’t ask for plans. It doesn’t draw
a difference between the two, and I didn’t know there was a
difference until today. We used planning software in university in
just the same way: we produced Gantt charts and nothing else.
What the planners were doing seemed fine to me.’
Steph protected Karri by acknowledging, ‘It seemed fine to
everyone else as well. We appear to be collectively guilty of not
differentiating between plans and schedules. I didn’t realise it had
gotten this out of hand.’
Ralph sealed his fate at this point by failing to realise when a
mistake needed to be collectively acknowledged. Even though his
CEO had led him down the right path, he managed to step off it.
‘In HSE, we’ve always said that proper preparation would prevent
a lot of incidents. It sounds like this work has made the same point
we’ve been trying to make all along.’
‘If that’s the case, Ralph, then how come none of our incident
investigations has identified poor planning as the root cause of
incidents?’ Andy delivered what should have been the Coup De
Grace, but it seemed Ralph was determined to dig himself in
deeper. ‘I thought we’d established we weren’t supposed to be
adding so many actions. Are you suggesting we now go back and
query every aspect of the way we do things?’
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PL ANNING
Andy showed remarkable patience, ‘We agreed we would identify
root causes, not add actions. If the root cause is poor planning,
then planning needs to improve.’
‘But that’s exactly what we’ve been saying,’ repeated Ralph.
‘So why haven’t you done anything about it?’ asked Paul, in a
final attempt to get through to him. Ralph finally obliged, albeit
unknowingly, ‘That’s not my department; it’s Josie’s department.’
Karri, along with everyone else who had long suspected it, could
see that Ralph saw his role as compliance policing. He didn’t
envision himself as part of a team that was trying to find the real
root causes of their problems.
There was no point stating the obvious, so Steph moved things
along, ‘OK, we’ve highlighted another issue: a lack of planning.
What do we do about it? Is Josie right—is it a Mastery issue or is
it something else?’
‘It’s both, isn’t it?’ answered Paul. ‘We need people to understand
how to plan properly, in fact, we need people to understand that
planning is not for amateurs at all and use our planners properly,
making sure they are developed as masters of planning. We also
appear to have been setting the wrong parameters. We’ve failed to
ask for proper planning and have accidentally slipped into accepting
schedules instead.’
Paul’s best feature was that he didn’t believe in blame. He saw
underperformance as an opportunity for growth and development.
It was no wonder he was enthusiastic about the concept of Mastery.
Steph attempted a new clarification, ‘So, now we’re saying: We
have to make a fundamental change to the way we work daily.
Instead of meetings, opinions, and the addition of compliance, we
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must emphasise Mastery, trust the analysis of facts and data to
develop good plans, so we can identify and understand deviations
from plan and eliminate root causes.’
Steph knew that people will always follow a clear vision, and she’d
just demonstrated one of the main requisites to leadership. You
do not need to have all the ideas yourself, that was why you had
a team around you. You do need to demonstrate you can listen,
learn and provide the clarity that compels people to act.
‘We’re nearly there,’ said Andy, ‘but I think there’s an aspect of
simplicity that we haven’t captured.’
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Chapter 12
Value
Andy paused, thinking carefully before continuing, ‘We know from
the actions data that too much of what we do doesn’t add value
or produce a benefit. Worse, it’s producing a negative result by
consuming resources we need to do other things.’
Andy was warming to his theme, ‘This pattern fits with the theory
we’ve been studying and Donovan’s findings. So, we need to make
sure we have a measure of value for everything we do so we can
compare one task’s benefit with another.’
‘I see where you’re going,’ said Martin. ‘Any additional activity must
be compared with existing activities for priority. This will also allow
us to check for duplication of activity or benefit to avoid double
dipping.’
‘That’s right,’ Andy was on a roll. It was coming together for him.
‘We clearly avoid any negative result, and we can create a threshold
in line with our desired rate of return on capital to further filter out
activity that doesn’t create enough benefit.’
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‘Effectively, we will have created our own protection against
diminishing returns,’ said Steph.
‘Better,’ Andy replied, ‘We’ll be able to maximise return by making
sure we don’t go beyond the point where return starts to diminish.
We don’t want to go into the realm of complexity. There’s an
optimum point we need to get each asset to, then that’s the trigger
for the next acquisition to keep growing and keep productivity high.’
Martin brought up the earlier slide to help make this point, ‘We
make sure we’re operating at the point on the left, and we stop
pursuing the lower rates of return beyond that.’
‘Can I make a suggestion?’ asked Paul, who wasn’t really asking
for permission. ‘We should apply these same rules for reducing
cognitive load.’
‘You’ve lost me now,’ Andy looked and sounded puzzled.
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VALUE
‘Think about it,’ Paul smiled. ‘We don’t just have financial budgets;
we have to budget for all resources. If complexity is trying to do
too much with too little resources, that might be money; it might
be time, which is money; but it is also brains, or cognitive capacity.
‘If we exceed our cognitive capacity, we won’t do things well. It
will be another source of poor performance. We’ve agreed we’ll try
to improve our cognitive capacity through the pursuit of Mastery.’
Steph didn’t know they had agreed to increase cognitive capacity,
but when Paul put it that way, she realised that they had. She had
no doubt about Paul’s cognitive capacity.
Paul went on, ‘The other way to maximise our return on this
investment in people is to reduce demands on cognitive capacity.
This is what simplicity really is, isn’t it? Reducing cognitive load.
We’ve agreed to keep demands on time down by not pushing too
far up the curve. We also need to remove things that are distracting
and don’t add value.’
‘I’m still not following,’ said Andy.
‘We’ve added countless initiatives over the years because we’ve
been advised or because it’s become industry practice, but what
value have they produced for us? We’ve been told we’re doing
the right things; but can we demonstrate a positive benefit? If we
applied the rules you are suggesting, would they pass?’
‘Some would, some wouldn’t, I suppose,’ said Martin.
‘So, we’re agreed we’ve done things that have distracted our
organisation but produced no benefit?’ asked Paul. Heads nodded
around the table. He continued, ‘Then we should look to strip out
anything we have in place that is taking up our time or our cognitive
capacity if it is adding no value.’
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‘I get you.’ The penny had finally dropped for Andy. ‘We need to
eliminate anything that is affecting our ability to perform, removing
things that we already have in place, and you want us to treat this
as positive because it allows us to do other things.’
‘That’s right; some of the things we do are illusory. They’re not
adding any benefit at all.’
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Chapter 13
Illusion
After a very productive afternoon session, everyone needed the
break. It was fair to say a few heads were hurting from the level of
concentration required to keep up with the discussion.
Yet once again, nobody was rushing out of the room. Karri was
thinking these people must have bladders the size of watermelons.
Paul was engaged with Steph and Andy, which Karri thought would
be the most interesting conversation, so she listened in. Steph was
building on Paul’s ideas and taking them to a whole different level,
‘Most people’s days are now consumed by answering emails and
attending meetings; but we are paid to produce. What can we do
to reduce the number of meetings and the volume of email?’
‘Won’t our emphasis on facts, data and analysis rather than
meetings and opinions help with that?’ asked Andy.
‘It’s a perfect fit with the theme of Mastery,’ Paul as always was
like a dog with a bone. ‘We’re telling people we want good, factbased analysis, rather than meetings, and they’d better work hard
on their speciality to be able to do the analysis. I’m sure people
will respond positively to less meetings and more interesting work.’
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‘If they don’t, then do we really want them?’ Steph was never afraid
of asking the hard questions.
‘What about email?’ asked Karri. Nobody had seemed to mind her
interventions so far, so she saw no harm in asking.
‘You tell me,’ said Paul. ‘You’re the digital generation. We’ve used
email to replace memos; you may not even know what those
were! Unfortunately, we’ve also used email to replace phone
conversations. It became easier to copy people in to email rather
than have several phone conversations. We know email is full of
problems, but what’s the modern alternative?’
‘Nobody really uses email outside of work anymore,’ replied Karri.
That statement had made them feel old, since they did use email
outside of work. But Karri continued, ‘Social media lets us have
shorter, sharper interactions, even with businesses, and nearly
every social media platform now provides multi party video chat
as well as messages.’
‘So, we’ve gone full circle back to phone conversations, but
enhanced it with video and conferencing,’ said Andy.
‘Pretty much,’ Karri replied. ‘We use Microsoft Teams here; hasn’t
it become normal to conference people in from other locations
and use chat?’
‘It has,’ answered Paul, ‘but it still doesn’t cover the memo aspect.’
Karri was forced to admit she didn’t know what a memo was.
Steph laughed and explained, ‘A memo is short for memorandum.
It was a written message or notice, an internal letter if you like. The
only place I see them these days is in legal practice.’
‘Like a record of what was said or decided?’ asked Karri.
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‘Not quite,’ said Steph, ‘We would call that ‘minutes’ of the meeting.
A memo is more a record of a decision or policy that people need
to know about.’
‘Isn’t that what the intranet is for? That’s where I got my information
from as I was introduced to the company,’ said Karri.
‘Good point,’ Paul thought hard for a moment. He was beginning to
realise a lot of what they did was duplicated, like they were trying
to cater to different generations of users. Rather than push the
development of their people and the use of digital tools, this was
another area where they had been adding, indeed duplicating—
which meant there was huge potential to remove some of the
non-value adding noise he had been talking about. ‘So, you’re
saying, if we use Teams or whatever platform properly, we get
much more people interaction and less email. Anything we want to
be communicated generally we post on the intranet. Nothing new
for us; we just haven’t changed our habits to suit the technology
we now have, and we’ve ended up duplicating communications.’
‘Exactly, but surely that’s part of the whole Mastery push, isn’t it?
The tools change as well as the understanding. Staying current
is a necessary part of keeping up with what’s happening. If you’re
not digital, you’re going to lag behind in a digital world.’ Steph was
thinking out loud, but it provided a nice summary and echoed
Paul’s thoughts.
They realised with a start that everyone else had resumed their
seats and were waiting to resume. Hurriedly taking the nearest
seats, they prepared to begin again. Steph opened with yet another
attempt to clarify where they had got to, ‘We have to make a
fundamental change to the way we work daily. Instead of meetings,
opinions, and the addition of compliance, we must emphasise
Mastery, trust the analysis of facts and data to understand and
eliminate root causes. Instead of reactivity, everything we do must
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be pre-planned and prioritised based on value that meets our return
criteria. Anything we already do that doesn’t meet that threshold
or duplicates activity will also be eliminated.’
Once again, Steph demonstrated her focus, the ability to make a
complicated discussion simple for others and a consistent approach.
She was easy to follow, and hopefully their work today would make
it that much easier for the general population to realise that as well.
Steph asked Karri to begin with a summary of the conversation
the four of them had during the break. Taken by surprise, Karri
nonetheless gave a very concise summary of their conversation,
‘We talked about emails and meetings as examples of nonproductive time. An emphasis on fact-based analysis should reduce
the number of meetings. If we use Teams properly, we get much
more people interaction and less email. Once we add the intranet
to properly using Teams, we don’t need email at all. Digital tools
change fast and if we don’t change with them, we will lag behind
in a digital world. Email is just an example of that lag.’ Although
not related by blood, both women seemed to share the same trait
for being succinct.
Martin was taken aback. In his role, he was responsible for
information technology. He was confronted with a synopsis that
challenged their approach to date. In an effort to meet everyone’s
needs, their policy had been to provide tools when there was a
business case, not dictate the use of the tools. However, he had
already recognised their overall IT architecture was becoming
unwieldy and could only agree there was potential to strip out
redundancies and better integrate their systems. Here was his
opportunity, ‘Well, I guess we need an action item to look at stripping
inefficiency from our use of digital.’
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Chapter 14
Poor Ralph
Ralph was aware his contributions over the day hadn’t been well
received. There was that moment when he had talked about
identifying the right actions, but nothing else had been appreciated.
Unfortunately, Ralph was incapable of introspection and truly
believed that he was making a good contribution by pointing out
problems. He had to yet to realise that to be helpful, he needed to
also share a potential solution. Consequently, Ralph said, ‘That’s
fine so long as we aren’t getting rid of any of the HSE software.
We need all of it for compliance purposes; the regulator wouldn’t
accept anything less.’
Karri felt the room grind to a halt. It was like somebody had slammed
the brakes on their progress over the day.
Martin had less interaction with Ralph than the other leaders, since
Technical Safety was often treated as separate from HSE. This was
the first time he had encountered such resistance from Ralph. His
experience of good regulators was that they didn’t mind how you
achieved the goal so long as it was effective. They were looking
for best practice just like anyone else.
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Like many technical people, Martin was very task-oriented. He went
right at the matter at hand—which at this juncture was the need to
convert Ralph away from the dark side. ‘We’ve spent months now
establishing that our degeneration in productivity is the inevitable
outcome of allowing a culture of compliance to spread amongst
management. This is the contagion we were warned about. What
proof do you have that our HSE compliance criteria improve
performance? Is it possible that some criteria are erroneous, that
we only have an illusion of control?’
‘We have all sorts of proof that the use of permits, job hazard
assessments, near miss reporting and incident investigations has
contributed to a reduction in injuries, even fatalities,’ Ralph fired
right back.
‘Granted,’ said Martin, ‘However, where is the limit in terms of the
law of diminishing returns?’
Ralph didn’t follow, so Martin tried again, ‘Have we now created the
situation where our organisation cannot take any more complexity?
I think, despite your resistance to the report, you agreed we had
a complexity problem.’
‘Yes, I did,’ Ralph replied cautiously. He really didn’t see where this
was going, and he couldn’t conceive that safety would be subject
to the same efficiencies as the rest of the business.
‘Great, now think about this,’ Martin had taken the rest of the team
through this line of thought before. When safety case legislation
had been enacted, Martin had been careful to make sure their
approach was practical, so the rest of the team knew what was
coming, ‘Zero deviance is not achievable. Do you agree?’
‘Not at all,’ said Ralph, ‘Zero harm is our policy. Are you seriously
saying you don’t believe we can do it? You’re supposed to be a
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leader! You can’t say things like that.’ Ralph was completely lost
now.
Martin continued without mercy, ‘Firstly, it would be completely
uneconomic to achieve zero error. We set a level of acceptability
for error in safety cases because it is uneconomic to do otherwise.
We accept As Low As Reasonably Practicable (ALARP) when
economically necessary. We can’t then run safety initiatives that
target zero harm; the two are not consistent.’
‘But we are promoting zero harm,’ insisted Ralph. Martin and the
rest of the team knew he had a point.
Steph realised what they had previously agreed to do in the field
of technical safety was inconsistent with their approach to HSE
and the rest of the business. She was faced with another reality:
Donovan’s report was really telling them they were doing to the
rest of the business what Martin had made them careful to avoid
in the safety case.
‘You’re right, Ralph,’ said Martin. Martin too had realised the
inconsistency. ‘We went through this with our safety case before
you joined, but I’ve missed the inconsistency with zero harm.’
Ralph unfortunately, still had hold of the wrong end of the stick,
but he tried to respond positively. ‘I’ll be happy to help you with
technical safety; we can correct the inconsistency by aligning the
safety case with our HSE approach to zero harm.’
Even Josie felt sorry for Ralph at this point, but there was no way
any of them could help him out of his hole if he was going to keep
digging.
Martin tried to explain, ‘Ralph, perhaps we should think of this as
the difference between an aspiration and a target. We would love
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to achieve zero harm, but we shouldn’t be setting it as a target.
Zero deviation is unachievable.’
‘But I believe it is,’ said Ralph, ‘Furthermore, we can’t tell people
that we don’t expect to keep them safe. I won’t work for a company
that can’t keep me safe.’ The look on Ralph’s face after he made
the statement made Karri think he immediately wanted to take
back the last words.
Josie tried to help this time, ‘Ralph, of course we want to keep
people as safe as possible. But all the data across industry
suggests there will eventually be an incident. I’m not aware of any
company in our industry that has sustained zero harm for a really
long period. Hopefully, it is a minor incident, but what matters is
that we successfully prevent more serious issues. So, zero harm
should be aspirational. Our communication is inconsistent. Like
Martin says, we can’t have a probability of failure in our safety case
and set zero harm targets. The two are incompatible.’
Paul chimed in, ‘Perhaps that explains a lot of the pushback we
get on safety initiatives. People aren’t stupid. I’m sure they realise
what is realistic and unrealistic. Perhaps they won’t go against the
party line on a topic like safety. But even if it is subconscious, they
passively resent and even resist the additional work in pursuit of
an unachievable objective.’
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The Problem of
Compliance
Despite the uncomfortable position Ralph was putting himself in,
Steph felt they were getting somewhere again. She was strongly
reminded of the work Martin had done at the time of the safety
case and asked if he still had the summary presentation they had
used with the board. She knew full well he had never been known
to throw anything away. One glance at his office would let anyone
reach that conclusion.
Martin duly got out his tablet and went online, picking up the screen
in the room wirelessly and opened the presentation.
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Martin began, ‘This is data taken from the IOGPA Safety report
of 2010. While industry measures such as Total Recordable
Injury Rate and Lost Time Injury Rate show all the good progress
we have made in HSE, there is a worrying development in the
Fatality Rate. The relationship between the trends seems to
be weakening.
‘The industry interpreted this as evidence that fatalities due to
HSE issues had been much reduced. However, the fatalities due
to major accidents were not reducing.’ Martin brought up the next
slide. Karri was excited to recognise the data from her tutorials at
university. Q really had been advising them wisely.
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‘The industry collected data on the cause of fatalities from major
incidents. Taking the data from the appendices of the following
IOGPA safety report in 2013 report provides further insight.’ Martin
was in his element lecturing and Karri (along with Ralph) was getting
some excellent education. The difference was that one was keen
to learn and the other was increasingly defensive.
The lecture continued, ’Worryingly, we found that these five causes
from the top ten causes of fatalities are common to the top ten in
each year of data. More concerning is that there is no trend at all
in the data. We have a complete scatter; in other words, no control
over these root causes. It should come as little surprise then that
the trend in related fatalities shows no sign of improvement.’
Karri was reminded of the related work by Trevor Kletz, Lessons
from Disasters, they had also studied at university. She had a quick
look at her notes using her phone, and quoted out loud, ‘The typical
infringement or combination of infringements arises rather through
carelessness, oversight, lack of knowledge or means, inadequate
supervision or sheer inefficiency.’ They all turned to look at her, ‘I’m
quoting from Trevor Kletz’s 1993 book. The root causes in Martin’s
table all relate to these same issues. Does that mean we conclude
the root causes have remained the same for all this time?’
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Like any knowledgeable person in the field of process safety,
Martin was a fan of Trevor Kletz. He was once again impressed
with Karri and responded, ‘So it would appear. What it tells us is
that we have created an illusion of safety. HSE has done good
work and our technical safety knowledge has made leaps and
bounds, thanks to the work of people like Kletz. However, we do
not have control of major accident fatalities. The only reason we
haven’t had an accident here is because the base case probability
is low; but we can’t pretend we can eliminate the possibility if we
don’t have control.’
Even Ralph was suitably sobered by the data. For once, he wisely
kept his mouth shut.
Josie picked up the narrative, ‘We combined this insight with
findings from the Baker report, the review of the Texas City
Refinery disaster, and set our targets on leading indicators that
we can influence, not the lagging aspiration of zero fatalities. We
communicate the aspiration in the safety case, but we work the
targets.’
Steph brought the argument full circle in her own mind, but thought
out loud as she did so, ‘Even then we don’t set zero targets for the
leading indicators. A zero target means every error is actionable, so
we would end up constantly adding to the load on the organisation.’
Steph seized the opportunity to steer things away from HSE, ‘I’m
learning as we go here as well. This gives us a clue as to why
our various initiatives have failed to produce overall company
productivity improvement. The IOGPA data showed there is no
control over major accident fatalities, and Martin’s explained how
we reacted. Each similar initiative’s intent is also to deliver excellent
outcomes. What I’m realising is that we tend to labour under the
misapprehension that compliance and performance are the same
thing, and they’re not.’
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Andy, the oldest person in the room, helped, ‘I’m reminded of the
‘80s. I used to quote Sun Tzu and The Art of War: ‘Tactics without
strategy is the noise before defeat’. I see compliance requirements
and the associated improvement initiatives as tactics, not strategy.
These tactics are likely to clash for resources decreasing chances
of success.’
‘Interesting Andy, if viewed or measured individually, each
requirement or initiative seems to be beneficial and working and
trending well. But taken together, overall productivity has not
improved or even declined. We’re back to the need for real plans
for outcomes, with practical targets not wishful thinking. Properly
baselined for value and time, as well as cognitive capacity.’ Steph
looked at Paul when she said this. ‘Not the illusion that is created
by a collection of random compliance tactics.’ Steph felt that was
a good synopsis of their issue with what she was rapidly realising
was an illusion created by a focus on compliance rather than
performance. Clearly compliance should be an outcome of good
performance, but what made them think the reverse was true?
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Future Thinking
Andy decided they needed to define the problem they had identified,
‘If we think about the law of diminishing return and the illusion of
compliance, it is no wonder our productivity is poor. We’ve been
pursuing scale rather than efficiency. With the margins we enjoy
in oil and gas, we’ve been able to get away with reactivity and
inefficiency behind the smoke screen of growth, elevated prices
and regulatory compliance.’
Steph could work with that, ‘It goes without comment because
it is the ‘norm’. We’re not really a competitive market. I’ve never
struggled to sell oil. Why run the risk of doing anything differently?
It would certainly explain the negative reaction to our message of
change and transition in the wider industry.’
‘They can resist all they want,’ said Andy, ‘The world is changing.
Every analysis shows oil is an increasingly mature market, and
worse—it is becoming oversupplied in the short term. US Shale
has completely changed the market. With the Middle East, OPEC
in general, and Russia all fighting for market share, prices are lower
and will stay that way for some time.’
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‘What about climate change?’ asked Karri. ‘Isn’t the pressure to
reduce fossil fuel use a factor?’
‘It is,’ replied Andy, ‘We’ve been gradually building our gas reserves
rather than oil. That has been a factor in our acquisition strategy.
We can’t eliminate fossil fuels due to demand, and demand will
continue to grow with the world’s population. But we anticipate filling
that demand with more gas, and as much clean and renewable
energy as we can. So, the oil share of the market won’t grow, and
market share should eventually decline, but the actual demand
for oil consumption should remain stable if not slightly increasing.
This is another factor which should keep the oil price stable at
these lower levels.’
Karri loved the fact that she was gaining knowledge at every turn in
the discussion. She was oblivious to the contribution her questions
and input were having. She decided to push her luck, ‘What about
electric vehicles then? How will they impact oil demand?’
Martin replied, ‘They will have a major impact on oil as a source
of fuel for mobility. This is the main factor which will prevent the
demand for oil growing and may even cause decline, but it will take
a long time without government intervention.’
Andy resumed the explanation of their strategy. ‘Oil price stability
is at lower levels than we’ve ever seen before. This eventual
transition in the way we generate and consume energy is why
we have been promoting our intention to transition the company
away from oil, towards gas and beyond that. The only bit we
haven’t publicised is whether we want to push into generation
ourselves. We may not want to compete with established largescale generators, but we may want to get in on providing local
microgrids and hence further into renewables and battery storage
and vehicle charging.’
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This got Karri very excited. She realised there was more to this
opportunity than the short-term role as the co-ordinator of The
Cure. She didn’t yet know that the leadership team had her future
mapped out for her if she wanted it. Karri was a dream recruit:
diverse life experience at a young age, common sense, and
smarts all in one package. She was the future the whole world
would like to see.
Steph was conscious that Ralph would likely not be part of the
leadership team for much longer. As such, she didn’t want to push
too far down the future strategy discussion. They needed to inform
and educate Karri with her future in mind; but they didn’t need to
share sensitive information with someone who may be leaving them.
Instead, Steph wanted to build on Andy’s efforts to turn the
conversation to the future. This would let them determine
how to solve this issue of compliance generating load on the
organisation while perhaps offering only illusory benefits. ‘We’re
close to something here. Compliance should be the product of
our performance; it should not dictate our activity. How do we
achieve safety and overall performance without overloading the
organisation? It’s clear we need to take the same approach to each
aspect of our business that we’ve taken to our safety case. But
that means we need to communicate and encourage a different
ethic with an organisation that typically exhibits passive aggressive
resistance to change.’
As the ‘people person’ of the group, Paul made the first attempt.
‘You’ve captured much of what we’ve discussed in your clarifications:
Change the way we work daily. Emphasise Mastery. Eliminate root
causes. Plan and prioritise based on value. Eliminate duplication
and non-value adding. We can add ‘change focus from compliance
to performance’, although that is really part of a description of the
change to the way we work daily.’
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‘Don’t forget we also have our digital goals,’ said Martin, ‘I’m thinking
better integration, which should remove duplication and strip out
inefficiencies. I’m also thinking about ‘apps’ and making full use of
modern digital technology to automate analysis so that we move
on from mere information technology.’
Josie was the pragmatist of the group, ‘I think we can group these
things. Martin’s described a digital initiative. To me, education—or
Mastery, as we’ve called it—analysis or prediction and planning,
and our ability to measure performance are all things we need to
do to get ready to perform.’
‘I like that approach,’ said Steph, ‘What about being more
Sustainable? In the sense of eliminating the unsustainable, the
duplication and the non-value adding, overall efficiency.’
‘Then the other aspect should be Repeatable,’ said Ralph, ‘Eliminating
root cause and adjusting planning accordingly.’ Ralph proved once
again why they had hired him; he was clearly intelligent, but it
remained a mystery why he couldn’t think out of the box in this way
when it came to his own field. It was ironic that he was talking about
eliminating root causes but insisting on the status quo for his group.
‘Has that covered everything?’ asked Andy.
‘I think it has, Karri have we missed anything?’ Karri was happy
that they had covered all the aspects they had discussed so far and
summarised, ‘We haven’t missed anything as far as I can tell. We’ve
got four groups: Digital, Ready, Sustainable and Repeatable.’ She
gave Ralph a smile with the last word to let him know the group
appreciated his positive contribution.
Martin had an idea for the next step, ‘If we know what we need to
work on, then we need to make sure we are consistent in the way
we work in each area. If we are agreed on the fact that we want
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to bring the technical safety approach to each area, we should
capture the method.’
‘We’re agreed,’ said Steph; she didn’t want to repeat a mistake
more than once.
Ralph was now on the spot. Did he say nothing and by his silence
agree to a change of approach in HSE? Or would he stand his
ground and insist that regulatory compliance meant they should
persist with zero harm as a target?
The silence hung in the air as they waited for Ralph. There was no
point moving on if the only dissenter so far had not expressed his
opinion. Steph felt the need to push him, ‘Ralph, are we agreed?’
Mark Twain described courage not as the absence of fear, but as
the mastery of fear. Was it courage if Ralph stood his ground and
lost his job? Or was it courage when you admitted you were unsure
but wanted to give the new approach a go?
Ralph decided that he just was not cut out for the role. He had been
happy implementing policy, or what he had believed was the policy;
but he was out of his depth forming policy. He decided the truth
was the best way forward in this instance, ‘I’m sorry, but I’m just
not comfortable; maybe I’m not brave enough. I can intellectually
understand what Martin has said, but I don’t want to accept the
responsibility of changing what I believe is the standard approach
to HSE. I realise that means I’m not cut out for the leadership team.’
With that, Ralph got up, shook Steph’s hand, gathered his things,
and left the boardroom. Karri didn’t know where to put herself.
That was the most uncomfortable situation she had witnessed at
work. She certainly couldn’t make up her mind if that was brave
or weak. She waited to hear what the others had to say. She was
amazed when they said nothing.
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Steph broke the silence. ‘Something had to happen to break
that deadlock and it has. Martin, can I ask you to take temporary
charge of the HSE team please? I’ll meet with Ralph and discuss
next steps for him.’
‘Of course, Steph,’ Martin accepted, ‘Introducing the idea of leading
indicators and changing HSE targets and messaging to align with
process safety will be a whole lot easier that way.’
‘Moving on, Martin do you have a method in mind for us?’ Andy
was getting straight back to business.
Karri experienced a lesson in integrity in this moment. Integrity on
Ralph’s part in acknowledging his limitations, and the integrity of
the team in not talking about someone behind their back.
Martin said his idea for a method wasn’t fully formed, ‘I have half an
idea, but it seems very intertwined with being Ready, Repeatable
and Sustainable.’
‘Isn’t that as it should be?’ asked Josie, ‘How we do things and
why we do things are surely closely related.’
‘OK,’ Martin could see that point, ‘Then for me it begins with a
baseline. We need a clear picture of what ‘right’ or ‘correct’ looks
like. If we get our Digital approach right, that should provide us
with an accurate record of our assets. If we can integrate that
information, that should give us a starting point for our baseline.’
‘Why only a starting point?’ asked Karri. She had finally accepted
nobody minded if she asked questions. In fact, she was beginning
to realise having an ‘inexperienced’ colleague in the room helped
everyone. Asking simple questions seemed to be something they
had forgotten how to do.
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Martin replied, ‘We outsource the design and build of our assets.
By doing so, we end up accepting many compromises that are not
ideal from an operations point of view. So long as we continue to
use that model, there will always be a ‘learn as we go’ element to
optimising our operations.’
Josie was quick to get in on this subject. The impractical and
often incomplete operations and maintenance plans furnished by
the engineering contractors caused her plenty of headaches in
her role. ‘We have to learn how to look after the assets correctly.
Unfortunately, it isn’t just carrying out the maintenance. To start
with, we must make sure we have a workable CMMS record for
each piece of equipment. This tells us what the equipment is, where
it sits within the hierarchy of an asset register, what component
parts we need to look after it, and how we look after it. After that,
we need to constantly update that record with what we did, what
we found—and as a result, improve how we look after it, if we can.’
‘What’s a CMMS?’ asked Karri.
‘A computerised maintenance management system,’ answered
Martin. ‘Built properly, a CMMS gives us a comprehensive database
of our assets and their history.’
‘Hmm… then what does the Enterprise Resource Planning system
do?’ asked Karri. It seemed to her there was an element of duplication
in what she had seen in the ERP system and this CMMS.
‘Good question,’ said Andy. ‘Duplication was our biggest issue when
we introduced ERP. In the end, we decided to use a CMMS module
that the ERP vendor gave us to try and eliminate the duplication.
However, that meant a change of interface for the operations
people—which is an issue we’ve been battling ever since. ERP
is designed by software people for financial people. Adding on a
CMMS module rather than using a purpose-built CMMS tool means
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we’re constantly tinkering with the functionality to keep everybody
happy. Not one of our happiest experiences.’
‘Couldn’t you integrate..?’ Karri was interrupted by Steph, ‘Karri I’m
sorry, I don’t want to repeat this discussion now. We’ve all been
aged by these issues already. As we have a digital component in
our plans going forward, let’s leave that issue for that forum.’
‘The point as I hear it is that we have to make sure we are looking
after the assets properly,’ Steph continued. ‘Let’s take that as
agreed and move on.’
‘No, it’s more than that,’ said Karri, surprising herself and everyone
else as she seemed to challenge Steph. ‘There is the data element
as well. We do need to look after things correctly, but we need to
capture the records so that we can get better. That’s right isn’t it,
Martin?’
Martin agreed, with a smile, that this was the complete requirement.
Karri duly wrote that in her notes, oblivious to the amusement
around her.
You could almost see Karri’s brain at work, ‘If we get a good
baseline, find the right approach and keep good records, we should
then be able to develop a good plan, shouldn’t we?’
‘That’s the idea,’ said Josie. ‘The records should also help us to
identify when we get a deviation from plan, or performance if you
like, and highlight these opportunities to improve.’ Karri was again
head down scribbling in her notes.
‘Bringing our discussion full circle, we would then try to eliminate
the root causes of the deviations,’ Karri was thinking out loud, still
head down and not looking at anyone.
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Martin responded cautiously, very intrigued to see where Karri was
going with this, ‘We’d like to eliminate the root cause, but that is
not always possible.’
‘Oh agreed,’ said Karri, still lost in her thoughts, and without pause said,
‘but where you can’t eliminate, you substitute, minimise or simplify.’
‘I’m sorry,’ said Andy, ‘Karri, look at me—you’re going too fast for
me, where did you get that from?’
Josie answered instead to Andy’s surprise, ‘Karri’s quoting Trevor
Kletz again. She’s taking the rules of inherent safety and applying
them laterally. I get that; there’s no reason why they can’t be applied
to any situation.’
Martin chimed in, ‘Probably not the substitute, but certainly
eliminate, minimise and simplify.’
The engineers present had managed to lose the rest of the room.
That was not unusual. They were all used to their engineering
colleagues disappearing into a realm that was impenetrable to
those who did not share the task-oriented reserve that seemed
to define this role.
As the learning and development specialist, Paul felt it necessary
to bridge the communication gap and intervened. ‘I heard you say,
‘full circle’ Karri; can you help us with a diagram?’
‘I think so,’ Karri looked to Martin and Josie for help, who both
nodded to encourage her. Karri got up and went to the whiteboard.
She picked up the whiteboard marker and began with a hexagon,
saying, ‘My circles are rubbish.’
In the first hexagon she wrote ‘Build It Right’ and drew another
hexagon lower and to the right. She paused, clearly looking for the
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words, Josie helped, ‘Look After it Right’. Karri looked uncertain,
but noted it down in another hexagon, and Martin couldn’t resist,
‘How about ‘Visualise the Data’?’
The three of them were so engaged in the task they didn’t care
about the huge grins on the faces of Andy, Steph, and Paul.
Karri drew more hexagons to make a bigger hexagon out of six
smaller hexagons, and wrote ‘Plan Everything’ to connect ‘Visualise
the Data’ with ‘Look After It Right’.
Martin and Josie were itching to take over, but gave their younger
colleague the opportunity to shine as brightly as possible. Karri
completed the diagram writing in ‘Visualise Deviations’, followed
by ‘Eliminate, Minimise and Simplify.’
Karri stood back and contemplated the diagram. Paul was conscious
of the big space in the middle of the cycle. The educator in him
knew it needed a title. Like a good facilitator, he chose to ask
questions to dig out what was needed. ‘What would the three of
you say was a one-word summary of your cycle?’
They looked at each other, ‘Simplify?’ suggested Karri.
‘Improve?’ said Martin.
‘Do less,’ said Josie emphatically.
Steph liked that, and picked up on Josie’s thinking, ‘Absolutely
Josie. We’re looking for the answer to complexity. We have half of
it with Mastery: We need to be able to analyse what to eliminate,
minimise and simplify. The other half is Do Less. We’ve talked
about measuring value and stripping out what isn’t valuable and
not adding anything else. What you’ve put together up there is the
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mechanism for doing less. Achieving more by doing less; that is
the very definition of productivity.’
Karri duly wrote ‘Do Less’ in the middle of the cycle and even gave
it a hexagon of its own for completeness. It was good to see the
OCD tendencies in engineers extending to the next generation.
They all contemplated the result as Karri sat down.
Paul summarised, ‘Instead of the illusion created by adding
compliance requirements, you’ve generated a performance cycle
that emphasises the removal of what doesn’t work.’
‘We’ve generated,’ said Steph. She was really pleased with what
they had accomplished, and particularly proud of her young niece’s
role in it all.
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Digital
Steph ended the day after they had defined their simplicity cycle.
She felt they had achieved what they needed for the time being.
They had their four focus areas: Digital, Ready, Repeatable and
Sustainable; and they had their means of working in all four areas:
the simplicity cycle.
Furthermore, they had the vehicle they were going to use to
work with the wider organisation: the pursuit of Mastery. They
needed to develop the insight to identify opportunities to do less
and determine which things didn’t add value. How better to get
it than by developing their own people? That should mean there
was something in it for everyone. Simplicity and Mastery certainly
seemed like a winning combination.
Karri would continue in her role, shifting from coordinating the
design of The Cure to implementing The Cure, by concentrating on
each of the four focus areas. Not only would it allow her to identify
any commonalities between the four areas; it would continue what
was proving to be an excellent education in the realities of modern
industry.
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Martin was to run with the Digital area, with permission to restructure
their Digital approach if they had to. Martin would only take the
role with that condition. They had agreed Digital was more than a
focus area, and was more like Mastery in that both were vehicles
for the wider organisation. If Mastery provided the wisdom and
insight, Digital provided the data for consideration and automated
the analysis for ongoing insight. Digital not only freed their people
from the repetitious; it did a better job of repetition than humans.
Although originally a chemical engineer, Martin had spent a lot
of time during his career working with and developing automatic
control systems. He had puzzled for a long time about the difference
between automatic control and information technology. Automatic
control did a good job of capturing knowledge and automating its
use. On the other hand, information technology automated the
workflow but didn’t seem to capture the knowledge from the data
that flowed through the applications. It was only the recent advent
of ‘digital’ that seemed to place much more emphasis on capturing
the knowledge. Martin therefore believed automatic control was
able to provide a good precedent for how this might be done.
Josie was to sponsor the team working on being Repeatable, since
she felt operations and maintenance was all about being consistent
and predictable. Paul had taken ownership of being Ready, but also
the overall theme of Mastery. They all felt the two aspects were
closely related, and Mastery was clearly within Paul’s remit anyway.
Steph had taken on Sustainable—primarily because it was so close
to her heart, and to the mission she had originally set out with of
positioning the company for a cleaner, electrified future.
That left Andy as a steady hand on the tiller of the day-to-day
business. He heartily approved of this more functional arrangement;
with people he considered to be the most able team with whom
he had ever worked focussing on improving the company’s
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performance, rather than managing compliance. He was happy to
hold course and call for support when needed, instead of having
smart people doing nothing more than business as usual.
Although no longer a member of the management team, Ralph had
chosen to stay with the company. Despite his discomfort, he had
a sense that he would learn more for the future with this company
than he would anywhere else.
Martin had been key to his decision by suggesting that he and
Ralph ‘swap’ some of their responsibilities for a while. Ralph would
look after process safety, and report into Martin who had overall
responsibility for safety, including HSE. Martin wanted Ralph to
gain experience of leading rather than managing—of providing
clarity for others to follow, instead of enforcing compliance. He
also wanted Ralph to broaden his knowledge to include process
safety, particularly using leading indicators rather than compliance
criteria. Martin’s goal was to show Ralph that compliance was an
outcome of performance and demonstrate why things didn’t work
well the other way around.
As Martin was already dealing with Digital matters, he didn’t need
to form a new team; he just needed to change the direction they
had previously been headed. So, this formed the theme of his next
group session on the subject that was scheduled for the following
week.
‘Firms that fail to embrace—or if necessary, create—platforms and
don’t learn the new rules of strategy in today’s digital world will be
unable to compete for long.’ Martin opened with a quote from an
April 2016 Harvard Business Review article.
He followed it up with their agreed summary from the leadership
team’s work, ‘You know we want to change the way we work daily.
We’re now emphasizing Mastery, increasing our ability to perform
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intelligent analysis. This should help us eliminate root causes rather
than add barriers. We want to plan and prioritise properly based
on value, not cost or schedule. Most of all, we want to eliminate
duplication, non-value adding activity, and make things as simple as
possible. We want to change focus from compliance to performance,
and that is how we came up with our simplicity cycle.’
Martin wanted to emphasise this group’s role, ‘We need to create
a digital environment that encourages all this change to happen.
This is more than information technology. The idea is to use
apps, making full use of modern digital technology to automate
analysis where we can so that we move on from mere information
technology. We need to strip the inefficiencies out of our current
IT environment and build an additional analysis capability. Better
integration should remove duplication and facilitate data analysis.’
The whole group was taken aback, except for Karri who was
increasingly used to the members of the leadership team. They
had never seen Martin express such passion before. They were
used to quite a shy, very clever person who was always willing to
help and support. Clearly, something had Martin fired up.
He went on, ‘There is power in analysis. We learn by modelling
problems and testing hypotheses, and today’s increased processing
power allows us to test bigger data sets with more experiments.
This is the analytical side I want us to build. Equally, there is
power in capturing, organising, and protecting data. There is no
performance without measurement and information. This is the
best of information technology that I want us to preserve but make
more efficient.
‘Overall, the value of technology in Asset Management lies in making
decisions simpler with the aim of reducing costs. It should not create
yet more ‘churn’ in the processing and analysis of the data. I’ve come
to realise we’ve been deluding ourselves. By automating workflow,
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we’ve unconsciously assumed that our status quo already produces
the right decisions. This is the ultimate example of cognitive bias
or perhaps self-interest, because this churn keeps us busy, doesn’t
it?’ Martin was really laying a challenge down to his group, and he
finally got the response he wanted.
‘Nobody has asked us what’s possible, have they?’ said Ian, one of
the younger but very insightful members of the IT team. ‘We keep
getting instructed to add more capacity to the system or install new
software for people to use, but we are never asked to look at the
problem—only to install a pre-selected solution. Who is deciding
what software and technology we should be using?’
Bruce, an older and much more cynical IT team member, chipped
in, ‘Get used to it. Software vendors don’t sell to us; they sell to the
end user. They deliberately target the people who will be sold on the
features and benefits. They don’t want to talk about compatibilities
and practicalities or be compared to alternatives. They want the
end users to build a business case based on their products, not
the functionality they are providing, which could be sourced from
other providers or even programmed in house. The only time they
want to talk about compatibility is when they already have their
products installed and want to keep other companies out.’
Martin let the discussion run and Karri listened with interest.
Brad, the IT manager, felt the need to rein his team in a bit, ‘We’re
standardised on SAP, and we’re gradually following their upgrade
path. Bruce, you make it sound like we have no control at all.’
Martin didn’t want the discussion to be bridled, so he challenged
Brad himself, ‘Who selected SAP, Brad?’
They all knew, apart from Karri, that it had been a ‘corporate’
decision and IT had no choice in the matter. Bruce was sufficiently
cheeky to challenge Martin in return, ‘You did, didn’t you Martin?’
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Martin didn’t get annoyed. He was used to Bruce, who had a point.
Martin had been part of the leadership team that had made the
decision. The truth was he had fought against it. He understood
the value of a comprehensive enterprise framework, and SAP
was by far and away the most developed framework. He also
knew the implementation of SAP was a minefield, and they had
subsequently managed to step on a lot of the mines: unrealistic
deadlines, insufficient budgets, and a lack of appreciation of the
complicated user experience without custom modification.
Consequently, Martin smiled and said, ‘We all make mistakes Bruce;
maybe not SAP as a choice, but certainly with our implementation
of it. Overall, you are right. I’m not an IT specialist; I’m an engineer.
I’ve approved the addition of various software over the years based
on the business case for its use without fully appreciating the pitfalls
of integration and implementation.’
‘Then Ian seems to have a point,’ said Karri, which made Ian’s
day. ‘We’ve ended up with a collection of software rather than a
digital strategy.’
‘Let’s start there then,’ said Martin, ‘Ian, what is possible? Were
we to start again, what should we be thinking about?’
‘Hang on Martin,’ said Ian, ‘The first thing is to determine what the
problem is. What is the situation and what are its complexities? To
use the language of that training we did.’
‘We also want to use an approach called The Golden Rules, that
will be part of our Mastery theme,’ said Karri. ‘I don’t know if you’ve
all seen it before.’
‘Bruce and Brad have,’ offered Martin, ‘Since they were around
when I came across it the first time, but I don’t think you have,
Ian—is that right?’
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‘Never heard of it,’ confirmed Ian.
Karri brought up the diagram on the screen in the room.
‘We can start anywhere in the cycle, but I think it makes most sense
to start with gathering the data,’ Karri couldn’t resist adding, ‘This
is a Digital discussion, after all.’
She got the eye-rolling responses to her pun she was looking for.
Martin emphasised The Golden Rules, ‘In many ways, our job with
Digital is to facilitate if not automate the application of The Golden
Rules. They are data driven. We have slipped into the bad habit
of substiting meetings and opinions for facts and analysis. If we
can ease access to the facts, the data, and capture the analysis
in models, we can automate the repetition of the analysis.’
Interestingly, Brad reacted strongly, ‘Don’t get Bruce started on this.
If I hear another monologue from him on Big Data, I’ll throw up.’
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Karri assumed Bruce was pro Big Data. She had only ever heard
people speak positively about the potential of solving the problems
of data lakes and discovering what could be learned through
regression. Assuming this was the case, she asked, ‘I think
everyone understands the benefits of considering all the data; are
we able to gather it all together?’ but she was about to find out
none of them were believers in Big Data as applied to their industry.
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Chapter 18
Using Technology
Wisely
Much to Brad’s dismay, Bruce seized his opportunity and brought
up another image from his tablet on the second screen in the room.
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‘This is my favourite cartoon on Big Data from a guy called Timo
Elliot, who, funnily enough, works for SAP,’ began Bruce. ‘I think
the message is self-explanatory. Information technology is a selffulfilling prophecy, and the big data push is simply the latest example
of this. If information technology is a good thing, then more of it
must be even better.’
Brad decided that if you can’t beat them, you might as well join
them, ‘It’s a good sales message, but we can’t fall for it. The
psychology of the situation is fascinating. Cognitive dissonance
theory tells us that people who believe in something, even when
presented with contradictory evidence, will go to great lengths to
justify their position. I’ve tried to explain to vendors that Big Data
is not applicable to this industry, but it doesn’t stop them trying.’
Karri was struck by the term ‘cognitive dissonance’ and realised
it related to ‘cognitive bias’. Faced with contradicting information
people would choose the course of action they were most familiar
with. She inadvertently said so out loud.
Brad and Bruce were encouraged by her attention, but it was Martin
who continued with a line of thought they had clearly discussed as
a team before, ‘As organisations get bigger, managing many small
initiatives becomes increasingly difficult, and there is a tendency
to look for big solutions. Enterprise Resource Planning (ERP)—in
our case, SAP—is a classic example of this. Hence, the appeal of
‘Big Data’s’ promise that if we can capture and analyse all available
data, the insights yielded will solve our problems. But based on
what evidence?’
Martin continued, ‘ERP has provided us with a financial reporting
structure, but it has also impacted operations negatively. The sheer
size of the project puts it into the ‘too big to fail’ category, and we’ve
been justifying ever increasing expenditure to keep it going. In truth
we underestimated the cost in the first place.’
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Karri’s customary common sense led her to ask, ‘Surely anything
that is too big to fail is just too big? Wouldn’t risk management
suggest that risk should be reduced by breaking the big entity up?’
‘Risk is the issue,’ said Brad, ‘but it would take a brave person to
question the value we’ve gained, or to point out that the promised
return might not be worth the continued expenditure. The system is
modular, so the risk is not technical; it is perhaps cultural. I agree
we’ve negatively impacted people, since the user experience makes
their lives more complex. But we meet the financial compliance
requirements. Is that a gain, a loss or a wash?’
Martin and Karri looked at each other. Brad and Bruce had defined
another example that supported Donovan’s theory of a contagion
of complexity. Brad had made it clear that each example may or
may not provide a benefit on its own; but taking everything together,
they couldn’t deny that their overall productivity had declined.
Bruce, in his own inimitable fashion, concluded, ‘It seems that the
same people who sold us ERP are now trying to sell us Big Data
with the same claims. If you buy that, I have a second-hand car
I’d like to sell you.’
Karri laughed. Bruce may be a cynic, but he was a colourful one.
‘OK, so we’re not fans of Big Data. But isn’t there any value to be
gained?’
‘Maybe if we were selling thousands of products to thousands of
customers and we wanted to understand buying habits, but we’re not.
We work in an industry producing one or two products being sold to
one or two clients. Furthermore, everything we do is based on the laws
of physics.’ Martin made it clear that he agreed with Brad and Bruce.
Ian spoke up to challenge this perspective, ‘We know our problem
is that we have managed to over complicate everything, including
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information technology. We never stop adding things, we are poor
at deleting things, and we are inconsistent in collecting and using
our metadata. But there is good reason to access this data. To
benefit, we either have to retroactively correct it, which would be
huge and unworkable. Or we can use an advanced search engine
to cope with the lack of structure, easing analysis and visualisation
of the data. We may or may not learn something, but we would
avoid rework and ease access to data as a minimum.’
There was no dissent from anyone else, so Karri noted down the
problem summary and the suggested solution.
‘I agree we lose nothing and potentially gain from good access
to our existing data,’ said Martin, ‘We also need to capture the
analysis our engineers already do of small, structured data sets.
They may even be spreadsheets. Where we can, we already build
good models based on first principles within the limits of both
the principles and the data. If you think about it, any equation or
algorithm is a model that captures knowledge.
‘We don’t need regression or further analysis here. What we need
is to use the algorithms and fine-tune other models continuously as
we learn. This is what we do with our automatic control systems,
and the same applies for the wider business. The difference with
the company overall is we don’t have algorithms to start with, but
we can develop starting models from statistical analysis.’
‘I’m sorry Martin, you’re going too fast for me,’ said Karri.
‘Think of it this way,’ said Martin, ‘We want the organisation to
learn and improve using Digital, not just do more of the same. For
the organisation to learn, we need to help Digital learn. Have you
heard of Gary Kasparov and Deep Blue?’
‘I haven’t I’m afraid,’ Karri said apologetically.
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‘Neither have I,’ said Ian. The age gap was apparent.
Martin explained, ‘Gary Kasparov was a Russian Chess
Grandmaster; Deep Blue was an IBM supercomputer. Kasparov
played the computer twice; each was a match of six games.
Kasparov won the first match; Deep Blue won the second. But
Kasparov didn’t lose to Deep Blue; he lost to the humans that
adjusted Deep Blue’s algorithms. The initial ‘opening’ library—
the rules, knowledge, models if you like—was provided by Chess
grandmasters. They ran experiments using massive parallel
processing before playing Kasparov the first time. Another
grandmaster then fine-tuned between the matches before Deep
Blue won.’
‘That’s a good story,’ said Ian, ‘I like the way it demonstrates how
a machine learns but needs guidance by human subject experts.
I’ve always thought artificial intelligence is a bit of a misnomer.
Computers aren’t intelligent, per se, but they can learn quickly if
fed the right data and knowledge.’
‘I see,’ mused Karri, ‘We’re pursuing Mastery for people but also
capturing and helping advance that Mastery if we use Digital
intelligently, it’s not so much artificial intelligence as automated
knowledge.’
‘And I like that,’ said Martin, ‘Let me summarise,’ he had clearly
learnt from Steph. ‘We’re not throwing the baby out with the bath
water; we want to use an advanced platform to access and learn
from our structured and unstructured information to date. But we
need to take a more structured approach with data in the future,
metadata as Ian calls it. We want to automate that knowledge, and
integrate and automate what we glean from the numerous small
data models we already have. Then we should be well placed to
optimise ongoing performance and keep learning based on analysis
of the metadata going forward.’
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Martin’s summary had nearly everybody nodding in agreement. Yet
once again, Ian wasn’t completely satisfied. ‘We haven’t discussed
integration. I agree we need a common data source—let’s call it a
warehouse, like most people do today. However, that still leaves the
apps. If we use your automatic control analogy Martin, we need an
architecture that makes app integration easy. Modern Distributed
Control Systems allow all the different controllers and devices to
be easily integrated with a single user interface. They are all using
common protocols and are part of an architecture connected by
common highways. We need the equivalent for the wider business.’
‘That would be the cloud then, wouldn’t it,’ said Brad, which Martin
picked up on immediately. ‘The cloud had to come in somewhere,
didn’t it? We can’t really look to a digital future if we aren’t willing
to consider the virtual.’
‘If the cloud solves the integration problem,’ said Karri, ‘We would
have successfully captured the knowledge that we already have,
to bring wisdom to operations in the form of good decisions.’
‘We’d be able to do the whole Pareto thing,’ said Martin. ‘If 80
per cent of the reward comes from 20 per cent of the effort, we’d
be able to see where we get the most reward. I’ve been battling
for years to point out that we may only need to walk, we don’t
necessarily have to run.’
‘I understand Pareto, but I’m not understanding walking and
running,’ said the ever-honest Karri.
‘We’ve been trying to optimise before we do the basics well.
Optimisation is getting the final 20 per cent, and therefore is likely
to take 80 per cent of the effort. Production at the margin has high
potential returns, which provides the apparent justification for the
80 per cent effort. All looks great on paper, but seldom is when
compared to the credits that we can achieve by simply improving
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the basics. Things like better management of the operation, which
requires maintenance and production teams to work in harmony,
are very basic,’ explained Martin.
‘Maintenance is often seen as a cost and therefore an inconvenience,
rather than as an investment. This way we’ll be able to show the
return by getting maintenance right—rather than doing it blind.
We’ll avoid repetitive activities that cause inconvenience to daily
operation with no short-term benefit, and will be able to monitor
and do the right maintenance at the right time.
Martin continued, ‘Similarly, we tend to prioritize fixing breakdowns
rather than preventing these issues in the first place—because
we can see the impact of the breakdown, but the whole point of
prevention is that there is no breakdown to see. Now we will be
able to show the longer-term benefit of prevention.
‘The bottom line is that the maintenance budget can be defended
and focused. Valuable engineering resources can be concentrated
on what matters—not what is urgent.’ Martin stopped for breath
as he realised he had been getting carried away.
However, there wasn’t a lot left to be said. His rush of thoughts was
just evidence of the power in creating a single virtual interface to
all their back-end systems, whether cloud based or not. The cloud
just made the whole proposition that much easier.
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Chapter 19
Ready
The following week, Paul’s team kicked off their first session on
Ready. Along with Karri, Josie and some of her managers, Paul had
convened his Learning and Development Team, which consisted of
Sarah, Steve, and Siobhan. However, they assured everyone a name
starting with ‘S’ was not a key criterion for joining the team. Josie’s team
was made up of Mike, one of their Maintenance Managers, Jennifer,
one of their Plant Managers, and Ruben, who was Head of Projects.
This was the most diverse group of people these sessions had
gathered, with the wide range of different job roles, and Karri
was looking forward to observing the relationship dynamics. Her
experiences with operations to date lead her to believe that reactivity
was the name of the game, where Learning and Development were
the opposite. This should be fun.
‘Our CFO, Andy, quoted Sun Tzu and The Art of War to Josie
and I,’ began Paul. ‘Tactics without strategy is the noise before
defeat. Andy sees compliance requirements and the associated
improvement initiatives as tactics, not strategy. These tactics are
likely to compete for resources, decreasing chances of success.’
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Josie followed up, ‘Steph, who you all know, had this to say. If
viewed or measured individually, each requirement or initiative
we undertake seems to be beneficial; but taken together, overall
productivity has not improved or even declined. We need real
plans for outcomes, with practical targets not wishful thinking.
These must be properly baselined for value, time, and cognitive
capacity—not the illusion that is created by a collection of random
compliance tactics.’
Paul summarised, ‘Neither of our senior executives believes
compliance produces performance; they believe performance will
naturally deliver compliance.’
Paul and Josie had decided beforehand that they needed to join
forces if they were to avoid the inter-departmental silos and politics
that would otherwise derail the day.
Josie went again, ‘Most of our policies are the result of compliance
requirements and a collection of tactics, rather than the result of
strategy. What we want to do from here is follow a strategy for
performance. As you know, we’ve identified four focus areas:
Ready, Repeatable, Sustainable and Digital. We want all staff to
aspire to Mastery of their role.’
‘Not just role,’ said Paul, ‘but their profession, or trade, call it what
you like. They should be able to raise the bar for their role by
understanding what makes for high performance in their profession.’
Josie realised she had slipped back into the language of competency,
focussing on the role instead of enhancing the potential in the
individual through education. It was a hard habit to break after
many years of competency and compliance thinking.
Karri contributed, ‘Hi, I’m Karri. I’ve not met all of you before, but I’m
helping co-ordinate all these aspects.’ They had been introduced
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at the start of the session, but Karri’s innate humility didn’t let her
assume people had recalled what her role would be. She continued,
‘I just want to emphasise that none of this is intended to be in
addition to any other initiative or anything that’s been done in the
past. We want to capture anything worth preserving but get rid of
anything that isn’t adding value. The intent is that these four focus
areas and the pursuit of Mastery drives a much more productive
approach.’
Like a lot of the maintenance managers, Mike had many years’
experience and unfortunately also possessed the least useful trait
of his breed: he didn’t believe anyone else knew what they were
doing. So far as he was concerned, the business only kept running
because of the efforts of people like him to keep the lights on. Mike
tended to put people off every time he opened his mouth—even
when he said something useful. Today was no exception.
‘It sounds to me like you’re reinventing the wheel. If you read the new
ISO55000 suite of standards, you’ll find all the answers in there.’
Karri was beginning to realise her questions were a good tactic to
defuse confrontation and get useful information from people for
the group, so she asked, ‘What are those standards about Mike?
I’ve not heard of them.’
Sure enough, Mike couldn’t resist the opportunity to teach, ‘ISO55000
is all about Asset Management. We’ve taken maintenance principles
and applied them to the whole of a business.’
Josie wasn’t sure that was entirely true, but wanted to see where the
discussion would go, so she was encouraging, ‘Sort of a bottomup approach to Enterprise Management as compared to the topdown approach from ERP, Karri.’
‘Do they meet in the middle?’ asked Karri.
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‘Not at all.’ Mike unfortunately took Josie’s encouragement as
permission to be even more opinionated, ‘Finance types don’t know
anything about equipment. The maintenance module in SAP, SAP
PM, is nothing like as good as a purpose-built CMMS.’
Karri went with the flow. Her work with Martin had introduced her to
CMMS, as well as the problems with SAP tending to be the result
of the implementation, not the framework. She said, ‘Putting aside
IT, how do the two frameworks match up?’
Mike was caught off guard. Someone he saw as a little girl was
asking him a question he didn’t understand, but it wasn’t within
him to admit ignorance. Nobody liked him enough to save him, so
there was a long pause before he attempted to brush the question
aside, ‘ERP isn’t the way; we need EAM. Bottom up is always
better than top down.’
Karri was relentless in her quest to understand, ‘What is EAM?’
‘Enterprise Asset Management,’ explained Josie, taking the
opportunity to shut Mike down. ‘My understanding is that automation
vendors like the big German companies are trying to get into the
IT and Digital space by developing or buying layers to put on top
of their control system technology to provide CMMS and financial
functionality.’
This was beginning to make sense to Karri, since she had learnt
about digital layers in her work with Martin’s team. Whether you
built from the hardware up or from the visualisation down wouldn’t
make any difference, so long as the people designing the software
and populating the data followed the conventions and protocols to
allow interconnection. Her question hadn’t been that stupid then,
she thought; it was valid to ask if ERP and EAM met in the middle.
She began to suspect Mike wasn’t as up to speed as he liked to
appear, and perhaps not as open minded as a leader should be.
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Emboldened, Karri decided to make a statement rather than
ask a question, ‘The Digital focus area will be proposing a way
forward that will allow us to integrate our systems properly. We can
integrate EAM software with ERP software if we want and have
the best of both worlds. Let’s not worry about the digital aspects;
let’s concentrate on the topic of being Ready. How does Asset
Management help us to be ready?’
If Mike had felt awkward before, he was now completely out of
his comfort zone. This young woman seemed to be running the
session, and Josie and Paul seemed quite prepared to let her do
so. Mike’s world was being shaken.
Jennifer (and Josie too, though she would never admit it) was
enjoying herself. She wasn’t a fan of Mike’s old-fashioned attitudes,
and she appreciated Karri’s guileless pursuit of an understanding.
Jennifer pitched in for the first time, ‘ISO55000 can be broken down
into seven principles: strategy, policy, plan, people, performance,
measurement and improvement. I think the latest version talks
about four fundamentals, which are value, alignment, leadership
and assurance.’ Jennifer was aware she would also be rocking
Mike’s world that she even knew about ISO55000, but that was
his problem.
She continued, ‘It’s another framework for generating value from
a business, like ERP. The difference is ERP is more focussed on
information and data because it is a product of IT thinking. By
combining both, we can get the best of both. Each emphasises
value, alignment, and assurance. Both must be led by strategy,
policy, and plan. ERP tends to assume strategy, policy and plan
are givens, where ISO55000 recognises they are not as common
as you might think. You really don’t need to subscribe to either
view of the world; you just need to understand the features and
benefits and combine the best of them.’
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Jennifer’s input demonstrated that the level of Mastery in the
company might be higher than they thought. Karri began to think
that Mastery would become more about who didn’t want to learn
versus who did. And it seemed that those who wanted to learn
already had—a great deal.
‘Very interesting,’ said Paul, ‘Let’s say we have the strategy now.
Our four focus areas are our policies, people we cover with our
plans for Mastery. The big change for us is having the focus areas
and not compliance as policies. We’re using compliance as some
of the measurements of performance, that we may or may not
need to improve. Digital and Mastery are all about the ability to
improve. The only gap we appear to have to meet the ISO55000
framework is planning.’
‘That’s not true,’ Mike immediately reacted, ‘We have planning
meetings every week. Everything maintenance does is planned;
it’s just that operations prevents us following our plans.’
Ruben got in before either Josie or Jennifer could speak, ‘I think
we might have different definitions of planning, Mike.’
Karri, Paul and Josie knew where this was going, but it was
important to let it play out.
‘Are you telling me I don’t know what planning is?’ asked an
outraged Mike.
Ruben replied evenly, not rising to Mike’s ire, ‘Our work in Projects
exposes us to planning in operations to get various kinds of work
done. It appears to me that the difference between planning and
scheduling is not properly understood. Your maintenance planners
are not preparing ‘plans’, just schedules. And they adjust those
schedules based on progress.’
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Josie backed Ruben up on this one, since the leadership team
had already covered this, ‘Mike, the review work we did last month
confirms what Ruben is saying.’
Mike wasn’t having it. ‘Maintenance planning is not like project
planning. We have work routines for everything we do. All we have
to do is schedule the work routines.’
Ruben’s look bordered on disgusted, ‘How do you know about
interactions between jobs if you don’t have a network diagram that
maps the interaction between activities?’
‘Our maintenance planners are experienced guys; they’ve done
all these jobs between them, and the CMMS groups the jobs by
functional location.’ Mike wasn’t backing down on this one, so
Paul intervened, ‘Actually, the data tells us that most jobs aren’t
completed to schedule, Mike.’
‘That’s what I said,’ Mike looked just as disgusted as Ruben had
been. ‘Operations prevents us following our schedule.’ Karri noted
the subtle change in language from plan to schedule.
Jennifer managed to get in first this time, ‘It seems to me that our
plan is nothing more than a constantly changing schedule of work
that never quite seems to get done. We don’t deliberately frustrate
you, but when things fail, we must fix them—and what can we do
if that throws the schedule off? If the maintenance was right in the
first place, things wouldn’t break. Or have I misunderstood how
preventative maintenance works?’
Rather than accept any responsibility, Mike tried to spread the
blame, ‘If it’s not just operations; it’s procurement. If we don’t get
the parts and tools on time, we can’t do our work to schedule.’
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Ruben went back at it, ‘Don’t your work routines define the parts
and the tools?’
‘Our so-called CMMS isn’t properly populated with Bills of Materials
because the build was never finished properly during the SAP
implementation,’ Mike shot back.
Karri was learning what everybody else in operations already
knew—it was everybody’s fault except Mike’s.
‘So your plans are not complete then,’ said Ruben, ‘And as we
said, the schedules therefore can’t work.’
As Mike had shot himself in the foot, Josie finished the tale, ‘If we
are honest, not all the work routines are in place either, or they
haven’t been updated because of change. The data tells us we
are not planning properly.’
Mike said nothing; the effect of good grace was spoilt by his body
language of crossed arms and legs. Because Paul knew Steph
believed that people were a vital part of the CEO’s responsibilities,
he made a mental note to discuss Mike with Josie and Steph.
However well Mike understood the mechanical aspects of
maintenance, Paul didn’t think they could afford his attitude.
Josie could see there was no coming back from this downward
spiral of argument, so she called a halt, ‘Please, let’s remember
another one of our focus areas is Repeatable. That focus area
should address the topic of reliability and predictability, so I want
us to concentrate on this issue of planning. Planning must be a
major component of being ready.’
‘I totally agree,’ said Ruben, ‘Our capacity to perform work well
and at the right time is more than just available man hours. Most
of the complications I’ve seen come from trying to do too much
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with too little. Not too little time, or even too little money—although
that is often the case. We simply don’t properly understand what
is required or what is likely to happen. Along with time and money,
we need the knowledge as well: the how and the what. A good
plan captures this knowledge.’
‘Mastery should help us with the knowledge aspect, shouldn’t it?’
asked Paul.
‘In theory,’ said Ruben.
‘What about too little money?’ Paul wanted to know.
Ruben explained, ‘The too little money aspect trips us up because
we budget independently of our plans, or we don’t have proper
plans for the reasons I just described. My budgets are often set
before we’ve costed the plan, and they’re based on what we can
afford rather than what it will actually take.’
Josie and Paul silently agreed. They went through the budget
cycle every year, and every year they effectively incremented the
prior year’s budget: they’d increase if the economic climate was
positive, decrease if it was negative. But it certainly wasn’t based
on a detailed plan.
Once again, Karri’s seeming naivety provided insight, ‘We’re
describing a downward cycle here, aren’t we? We budget too little
for what we have to do. Therefore, we can’t do everything. Inevitably
we miss something, and problems follow. The problems prevent
us from doing what we should be doing, we miss more things, and
more problems follow.’
‘Nicely put, Karri,’ said Paul, and as his ever-positive self he offered,
‘We have to reverse the cycle if we are to improve. We need a
complete costed plan to achieve our targets. If we can’t afford it,
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we must change our targets. But either way, the targets must be
balanced with resources.’
‘That’ll be the day,’ said Mike. Even he realised that was asinine.
‘I’m sorry, in Asset Management language, we call that an Asset
Reference Plan. Without one, we are simply making up the budget
distribution as we go along.’
Despite Mike’s initial tone, the mood lifted a bit, allowing the black
cloud in the room to reveal some sunshine.
‘Tell us more about an Asset Reference Plan,’ said Josie, keen to
encourage Mike to define a solution instead of problems.
Mike responded well, ‘To avoid our complicated industries becoming
more complex than our personnel can handle, everything we do
must be as pre-planned and transparent as possible.’
Karri was blown away to hear Mike using the language of complexity
from Donovan’s report. She didn’t know if Mike had read the report
or heard about it, but if the stars were aligning, who cared? In
reality, Mike was quoting from Asset Management seminars he
had attended. If Q had been around, he would just have said that
was the pursuit of Mastery in action.
‘What Asset Management requires most of all is putting good
plans in place, at the asset level, and at the operational level
via maintenance—but not in that order. We need to get a good
baseline with a properly populated CMMS in place first that then
yields our operational plan, and we can build the Asset Reference
Plan around that.
‘We can capture what we learn and adjust the plan and process
as we go. We’ll get ever more efficient by eliminating root causes
of problems and unnecessary activities, minimising maintenance,
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and simplifying process and procedure.’ Mike finished and was
pleased to see the smiles on people’s faces.
Paul was also encouraging, ‘That fits nicely with our desire to
measure value. If value is our performance metric, we can then
use the Asset Reference Plan to connect every dollar we invest
to the value it generates.’
‘Better than that,’ said Josie, ‘If we can measure value accurately,
we won’t add work unless we know that the item we’re adding
will generate value. Better still, we can remove work that doesn’t
generate the return we are after—just as you said the other week,
Paul.’
Karri finished for them, ‘We can also measure the return on work
we perform to avoid diminishing return.’
Paul wasn’t finished, ‘You’re right, but better still, we will be able to
compare loss prevention to expansion options, it will be interesting
to see which generates the greater returns. Which is the 20 per
cent of a Pareto that generates the 80 per cent of return, and which
80 per cent of effort is not worth the 20 per cent gain.’
As usual, Karri had been trying to capture the conversation with
a diagram in her notes. She was trying to combine the Asset
Management principles with continuous improvement principles.
The epiphany came when she thought of it as two different time
frames: an annual cycle, and a continuous cycle. She jumped up
and drew the diagram on the whiteboard while the others were
taking a break.
Mike came back in the room first and helped her with some of
the words they commonly used fitting them in the boxes Karri
was creating. Karri had once again created a convert, this time
from the most unlikely clay possible. Josie and Paul were highly
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amused to find the pair of them engrossed at the whiteboard when
they returned.
Karri allowed Mike to explain. She thought of herself as the coordinator; so long as the group produced the result, her job was done.
Mike explained about the two cycles, the classic plan, do, check,
adjust (Karri had changed the word to portray an idea of making
small adjustments), lying within the annual cycle of business
planning. He also showed how the ISO55000 cascade from strategy
to improvement meshed with the process.
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Siobhan had an interesting question, ‘How do we make it real time?
Can we create a real time application that measures the losses
due to equipment performance? It could help show how investing
in loss prevention produces a high investment return.’
Karri took that question, ‘I think what we have planned for Digital
will allow us to automate this process. Martin shared last week that
he’d been put off Big Data. He didn’t like the idea that the regression
of large volumes of unstructured data is given such prominence,
but we can’t seem to find the funds to simulate our existing assets
or perform dynamic simulations to inform design decisions.
‘Part of Digital will be to use our simulations of plant to provide many
benefits: Quantifying design changes, predicting production and
reliability, guiding operators, and quantifying losses. That should
allow us to automate the measurement aspect of the inner cycle.’
‘I can see that,’ said Ruben, ‘We’ll be able to simulate a new
project or change, plug the module into the model, and quantify
the consequences of the change. If the change is justified, the
module is then available for addition to the plant model when the
change is installed without additional effort.’
‘Same here,’ said Jennifer, ‘We’ve used offline models for loss
reporting on environmental impacts, but we haven’t been measuring
the potential for increased production because running them daily
would be tiresome. If we can automate that, it would be a very
profitable use of a plant simulation. Once we have the model running
in real time, we can identify the unavailability of equipment by the
status of operating data from one of our systems. Virtually any
indication can be used to monitor equipment availability. That would
allow closed loop operation of the model, tracking losses in real time.’
Ruben also had a contribution to make, ‘Once we’ve set up active
online tracking of potential for more production from the existing
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asset, we can do a better job prioritizing both daily and project
activities. For example, we could prioritise troubleshooting resources
based on the worst performing pieces of equipment, instead of
the problem du jour.’
Mike joined in, ‘We could also prioritise Maintenance work orders
by prevention of the biggest losses rather than minimum disruption
to operation. The maintenance budget could be allocated based
on work to eliminate the major losses. Change orders could be
prioritised on the same basis.’
Karri had been given a long answer to a simple question, but she
was very excited. Jennifer, Ruben and Mike had just described the
method to achieve the vision Martin had described in the session
on Digital. ’That fits well with Martin’s vision for the use of Digital.
He’ll love that you already have a method for them to automate.
I think you’ll all be on board with the ideas he has for a universal
interface to all this information and analysis, based on video gamestyle visualisation of the assets.’
Josie shared a thought, ‘Integrating the real time analysis with
maintenance management systems and planning tools would
allow us to schedule instantly, solving that problem. As we would
be actively measuring value, along with the effort involved as per
the plan, we could plot our actual position and our planned position
against the law of diminishing returns. How cool would that be?’
She continued, ‘Here’s one for you Mike: we won’t just be able to
defend the maintenance budget. We can optimise it, along with the
entire asset budget. This will help achieve our goal of a continuous
improvement cycle driven by planning and analysis. We will finally
have broken the cycle of reactivity that plagues us.’
Paul was up in the clouds with his thinking, ‘The ultimate result
will be to free cash through reduced operational expenditure that
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we can then use to drive growth through capital investment. We’ll
then have healthy organic growth, provided we continue to follow
the same principles, and a framework to introduce acquisitions.
The added competition for resources won’t stress the organisation,
because we’ll be able to see where we get the greatest returns
across the whole organisation.’
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Chapter 20
Operational Readiness
Ruben was also thinking ahead, ‘If we create models that we can
use in this way, we can apply the same approach to projects.
We’d design virtually, comparing options using digital models and
visualisation from concept and select right through detailed design.
I’ve been looking for ways to apply Agile methods to engineering
and this is one possibility.’
They could all rely on Karri to seek clarity at all times, ‘What’s
Agile? I never really understood it at university.’
‘Agile comes from software development. It refers to rapid change in
approaches, testing as you go, involving every discipline much more
fluidly than traditional project methods,’ answered Ruben. ‘It’s much
easier for the virtual realm than the physical, which is why it’s a struggle
for engineering projects. Truth is, we do more of our engineering
using models and computing now, but they are not integrated. If we
integrate them as you propose, then Agile can work for us. We can
test our concepts and design ideas virtually, allowing us to prototype
quickly and discard if we need. The key concepts are granularity and
fidelity, or detail and accuracy, before you ask, Karri.’
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‘We don’t need much granularity or fidelity at the early concept
stages, which means we can avoid wasting effort on the options
we don’t select. We’d have less and less options as we get closer
to the final design, which needs high levels of granularity and
fidelity. However, fewer options also mean less high detail and
accuracy work.
‘Most of our engineering data can be captured in technology now,
using smart programmes that relate databases and drawings. For
instance, we can pre-populate the CMMS from our engineering
data software.
‘Better still, once we have finished our design and begin to build,
we’ll already have the model with the required granularity and
fidelity. We can then integrate with the interface and operations
software as Jennifer described.’
It was Josie’s turn to be excited, ‘We really would increase our
chances of operational readiness by testing and proving all the
requirements with the model before the physical build.’
Josie also anticipated Karri’s next question. ‘The goal of every
new build or renovation project is to produce a physical asset
that is ready for use. This is what ‘operational readiness’ means.
Unfortunately, the modularisation of design and build over recent
years creates so many interfaces there is little continuity though
the phases of an asset lifecycle.’
Ruben admitted this was true, ‘The goals of the team looking after
the analyse phase are not necessarily aligned with the concept
and select, define, execute, operate and decommission phases.
To make matters worse, the teams accountable for each phase
tend to ‘disappear’ after the handover to the next phase, which
makes it even more important to align goals across the lifecycle.
When we don’t maintain the lifecycle mindset, we fall into short
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term decision making to the detriment of the asset and its owner.
Operational readiness methods have been successfully developed
to address this.’
Josie followed up, ‘Given that we spend most capital during the
define and execute phases, short term decision making with the
aim of reducing capital expenditure can have significant impact on
the operate phase. This frequently gives us teething and ongoing
operational troubles that we need to analyse and solve. Otherwise,
we simply live with them.’
Ruben again gave the projects view, ‘We’ve learned over the
years that we can avoid these challenges if the define and execute
teams cooperate closely with the operator. Clearly, co-operation
requires a clear benefit to all the teams, since very few businesses
are altruistic in nature. Each team or business exists to optimise
the return on their activities. Unfortunately, many parties interpret
the word optimise to mean maximise, as sustainability or life cycle
costing does not often enter a company’s mind when it is driven
exclusively by its own profit margins.’
Josie summarised, ‘Co-operation also requires agreement of
a common goal. Operational readiness should be the common
goal of a mature approach to the asset lifecycle. Ruben provided
a good solution in a digital approach to the project, since this
allows us to represent the effects of our demands on projects,
and project decisions on operations. We must interact to share
knowledge and awareness of the issues. Ruben is describing
a great vehicle for interaction. This is the heart of the issue for
operational readiness: determining where O&M knowledge comes
from. The project team may not have the knowledge to head off
the flaws without assistance from operations, not that they always
admit it. Therefore, we need a mutual effort between project and
operations to mitigate the risks.’
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Steve spoke for the first time. He had been wondering why his
team had been invited until now, ‘That is where the Mastery push
will benefit us then, isn’t it?’
‘That’s right,’ confirmed Paul, ‘We need to ensure people in critical
roles for both project and operation truly understand what they are
doing. Creating a mechanism to involve the requisite O&M, that’s
Operations and Maintenance, knowledge is one thing. However,
we need to trust the people who have engineered and had input
on the project. All the operational readiness in the world will not
compensate for errors in design or execution.’
‘We’ll need to weave Mastery through project and operation,’ said
Sarah, wondering, ‘Who tests the engineers’ level of Mastery?
We have competency systems for O&M technicians who will
work on the asset in place. However, we’re poor at verifying
the knowledge of engineers, as we don’t often get to control it.
Contracting organisations often recruit workers who they neither
train nor test. When we employ EPC contractors, we only further
open up the project to the potential for handle turning instead of
real understanding.’
Paul chipped in again, ‘I admit this is a bug bear of mine. After
qualification, when do we next assess engineers’ ability? Currently,
this is the role of chartership. But we know 37 per cent of currently
chartered engineers in Australia are over the age of 60. There is no
formal national registration system for engineers in Australia, and
membership of Engineers Australia and the National Engineering
Register is voluntary. This picture is further muddied by our massive
skilled migration, which makes up 52 per cent of the engineering
workforce in Australia. To my knowledge, nobody asks if the
engineers on a project are chartered—and if so, what are they
chartered for? Design? O&M? A purely design experience does
not equip an engineer for operations readiness, even if they’re
chartered.’
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Josie chose this moment to re-enter the discussion. ‘Didn’t we
recently discuss a proposal to change the way we introduce new
initiatives to upskill people?’
Paul responded, ‘We did indeed; we discussed the use of games
and the option of virtual technology now that Digital is advancing so
rapidly. Immersive, interactive learning experiences of this nature
are much higher up Edgar Dale’s Learning Pyramid than the usual
classroom lecture and reading.’
‘So, couldn’t we use the visualisations and the models we’re talking
about in the same way? Use them in game play to help people
learn—but also use the knowledge of subject matter experts to
test the completeness of the models?’ asked Josie.
Paul was entranced; you could see him thinking at ninety miles an
hour, ‘That’s genius Josie, but you’d need a really good facilitator
to make that work.’
Karri smiled broadly; she knew just the person. ‘I know the very
man; my tutor from university would be ideal for that. Wouldn’t
he, Josie?’
Josie was all smiles as well, ‘Q would be perfect, Karri. Don’t
forget Martin rates him as well. Q is the person who developed
The Golden Rules, Paul.’
‘I remember,’ said Paul, ‘Great, that’s an excellent proposal on
the Mastery front, at least for operational readiness. Win, win, all
around. Not just Mastery really, we’d really be putting Digital to full
use as well. It’s crazy how the focus areas, Mastery and Digital
keep blending together.’
‘Is it?’ mused Karri, ‘Or is it just that we are entering a different era?’
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‘What do you mean?’ asked Steve.
‘Well, Ian from the Technology group explained that Digital is all
about virtualisation. Even I can see it’s becoming a bigger part of
our daily lives. If Digital is doing more of the mundane stuff, then
humans are free to do more interesting stuff. That means we must
get better at Mastery, or we’ll be out of work. The better we get
at Mastery, the better we’ll get at everything, and we’ll be able to
test for Ready, Repeatable, Sustainable, in the virtual world as
Ruben described. We’ll just be more efficient overall because of
virtualisation.’
It was quite a long speech for Karri. She was even surprised herself
at how much she had absorbed from their discussions.
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Chapter 21
Repeatable
The Leadership team had agreed that they’d hold one focus area
session a week to minimise the impact on base business. After the
sessions on Digital and Ready, it was Repeatable’s turn.
Josie was leading this session because it was very heavily
dependent on Operations; more accurately, it was the other way
round. The lack of repeatability was the major factor in the reactivity
that bedevilled Operations.
Josie had decided to keep the team from Operations they’d had in
the Ready session, given the progress they’d made. She hoped to
capitalise on Karri’s philosophical insight at the end of the previous
session. She could see the potential in virtualisation and Mastery.
She had always been a fan of models. She knew if they could
create and run them in real time to help with decision making—
even eventually automate some decisions—their efficiency would
improve considerably. If Digital was doing more of the mundane
stuff, then they could concentrate on improving repeatability.
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The only concern she had was Mike. He had been there the week
before, and had seen and heard what happened. He had even helped
Karri with the flow diagram for asset reference planning. Josie hoped
Mike was on board but was worried that this time to think would cause
him to feel increasingly threatened. They were about to find out.
However, they had a meeting lined up with Q before the session
on Repeatability. Paul had rapidly advanced their ideas about
increasing the level of employee education to the rest of the
Leadership team. They were equally excited by using the models
they intended to create, or integrate, as part of the Digital initiative
to provide the exercises for immersive learning. Paul had contacted
Q and found out that it was the University’s winter break, and so
he was available to meet with them.
Karri was delighted to see Q again. She didn’t think it was
inappropriate to give him a hug, because Josie had already done
so. Q had always been so approachable, and his ideas had served
her well in her new job. He was surprised but very pleased to get
such a warm welcome from his former student.
Martin and Paul were also there, so Q felt as if he was about to
be interviewed by a panel. Not that he needed to worry. He knew
Josie well; Martin was a fan (even if Q didn’t know that yet), and
Paul had a positive impression from Karri and Josie’s input.
Almost inevitably then, it was a real meeting of minds from the
very beginning. Karri explained the background in her role as coordinator, and Q couldn’t help but be infected by her enthusiasm.
Despite his usually jaded attitude to corporate improvement
initiatives, he felt it would be churlish to rain on her parade, so he
reserved his judgement for the other members of the group.
Paul outlined what they wanted to do with the pursuit of Mastery
and Q couldn’t really believe his ears. His own views were being
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shared with him by this stranger. Paul had the good grace to explain
that Karri had introduced Q’s ideas at the start of this process, and
it was good to finally meet him in person.
Q was still in a state of surprise when Martin explained they were
adopting The Golden Rules as part of their push towards good, factbased decision making. He also declared that it was a pleasure to
meet the author of the rules that he had first encountered a number
of years ago. Q was becoming slightly embarrassed at the reception
he was receiving. He realised that he wasn’t about to be interviewed
and that he had been brought in share his knowledge. He relaxed
and listened as Josie explained their desire to use games based
on digital models to create an immersive learning environment.
To everyone’s delight, Q explained that he had spent the previous
summer break in the Middle East introducing a reliability programme
to a refinery there. Q had used a board game to introduce the toolset
that refinery employees would use to identify, analyse, implement,
and evaluate the changes necessary to improve reliability. He even
produced a playing board from his briefcase.
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‘This isn’t the same game board, since the original board is
considered to be proprietary to that client,’ explained Q, ‘But when I
saw how well the game was received, I realised I had found a more
effective vehicle than lecture to get my ideas across in industry. I
created a generic version of the game to help explain simplicity in
the context of any subject area.’
‘How does that work?’ asked Martin, ‘I recognise your Golden
Rules here; how are they applied?’
Q described the principle, ‘There are twelve squares on this board
because it is designed for a one-day course, whereas I’d use
sixteen squares for a two-day course. This game is themed to the
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Burke and Wills expedition; the one in the Middle East was themed
to a Middle Eastern fable. You need an element of fun to get and
keep people engaged. In both cases, there are four teams of four
people competing for the overall highest score. We used poker
chips to represent the score so there was a physical reward. We
even used playing pieces like you would on a Monopoly board.
This version of the game uses a koala, a kangaroo, a horse and a
camel to keep in line with the Australian outback expedition theme.’
‘Why a Camel?’ asked Karri, who had never heard of Burke and
Wills.
Martin answered for Q, ‘Burke and Wills used Camels because they
assumed they’d be suited to the desert interior that they anticipated.’
Karri laughed, ‘I suppose they didn’t think to ask our people what
it was like in the interior, did they?’
‘No Karri, they didn’t,’ smiled Q, ‘They weren’t that enlightened,
I’m afraid.’
‘That’s crazy,’ said Karri, ‘Where were they trying to get to? They
could have been guided from start to finish. Our people have been
wandering in Australia for millennia.’
‘Burke and Wills were trying to get from Melbourne to the North
Coast,’ Josie offered. ‘It was a race with Adelaide to find a route for
the telegraph line to connect with Darwin, and of course to claim
any ‘undiscovered’ land.’ Josie did the inverted commas with her
fingers and pulled a face to show Karri that she understood the
First Australian people had discovered the land many centuries
before colonisation.
Q picked up his explanation again, ‘Karri, that’s a perfect example
of a simplification that may well have saved the expedition. If you
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notice, the start square on the board is a map of the First Nations
in Australia to make that very point. John King, the only survivor,
lived because he was looked after by First Australians.
‘Six of the twelve exercises are designed to investigate the
expedition: gathering the facts from the course manual and
performing straightforward mathematical analysis. The exercises
demonstrate how much simpler the expedition could have been
and how much higher their chances of survival would have been
as a result.’
‘What about the other six?’ asked Paul.
Q answered, ‘Those exercises carry the message the client wants
to communicate. The message for my client in Middle East was
reliability, so we introduced the techniques of reliability analysis.
It doesn’t really matter what the subject is; those exercises would
be used to introduce the relevant analytical techniques. A lot of the
analytical techniques cross over in industry. For instance, the basis
of Process Safety is also reliability science, so a Process Safety
version could also use some of the same exercises, and so forth.
Q continued, ‘Personally, I think it better to introduce the principle
of fact-based decision making in the particular company or
organisation’s subject area. It helps employees to realise that they
have accidentally slipped into meetings and opinions, instead of
facts and analysis, because it reminds them what they haven’t been
doing. We are gently showing them what they should be doing
without direct criticism. It’s not their fault, after all, is it?’
‘No, it’s not,’ agreed Martin, ‘We’ve accepted that we are the ones
who have imposed so much complexity. We’ve resorted to the
expeditious nature of meetings, opinions and compliance to make
decisions and guide behaviours instead of the rigour of Mastery
and analysis.’
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‘We’ll have to introduce you to Donovan,’ said Karri. ‘Donovan is
the doctor that initially introduced these guys to the dangers of
complexity.’
‘Interesting,’ Q was intrigued, ‘I assume you meant a medical
doctor? After all, it makes sense complexity would cause problems
for the medical professions.’ They all nodded.
It was Josie’s turn to latch on to an idea, ‘Q, as Karri explained, one
of the four focus areas is Repeatability. I’ve said before, I think of
Repeatability as applied to Operations as reliability. Couldn’t we
just take your reliability themed exercises and use them with this
version of the game to introduce Repeatability to our organisation?’
‘You could. The exercises are my intellectual property, so there
would be no issue,’ Q replied.
‘Excellent,’ said Josie, ‘We have our first session on Repeatability
in two days’ time. Would it be possible to use the game for that
session? Can you come back?’
‘I’d be glad to,’ said Q, ‘No better way to see what you would be
buying than to try it.’
‘Is there anything else we need to know about the game?’ asked
Paul.
Q thought about it, ‘The only principle we haven’t touched on is
the learning twice aspect. One of the rules is that once a team
has landed on a square, no other team can do that exercise again.
At the end of each round, each team must explain what they did
and what they learned from doing their exercise. In this way, the
teams learn twice: once from completing the exercise and once
from explaining it. I then critique their debrief of the exercise to give
them their score and the appropriate number of chips. In explaining
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the scoring, I get to point out what they might have missed or not
understood.’
Q went on, ‘This is what I mean when I say I replace lecture with a
better vehicle. Adults much prefer to learn by doing. The learning
of principles therefore just becomes part of the immersive process;
there is no obvious teaching, and you’re learning first principles on
the job or as close as we can get in a condensed time.’
Paul was beaming. He didn’t need to hear anymore; he could see Q
knew exactly what he was doing when it came to adult education.
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Chapter 22
The Game
When the Repeatability session came around, it didn’t take the form
that anyone expected. Josie invited Paul’s team from the Ready
session: Sarah, Steve, Siobhan and Paul himself. Paul was keen
to see if non-technical people would grasp the ideas. Josie got
Mike and Jennifer to join and bring along three people from their
own teams, and she brought along Steph, Andy, and Martin, so
the Leadership team could see for themselves. It was probably the
most mixed group they ever had working together, and certainly
the most mixed group Q ever had to teach.
The teams were set: Operations versus Maintenance versus
Learning and Development versus Leadership.
Q introduced himself briefly, and then the topic by saying, ‘If we
want to keep things simple, we need to ensure repeatability. We
use procedures to increase the chances that we do things the
same way every time. We also need to maximise the chances that
assets behave in a repeatable fashion.
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‘We use the term ‘reliability’ for assets. Like every other aspect
of high performance, high reliability is driven by simplicity. It’s the
same never-ending cycle you have already identified of build it right,
look after it right, use data to improve, plan everything, identify
opportunities to eliminate, minimise or simplify.
‘Karri provided me with the simplicity cycle you have developed,
and I like it so much I have incorporated it into your game.’ With
that Q brought the cycle up on his screen.
Q continued, ’This cycle allows us to do less, which is critically
important from a reliability perspective as the less we disturb our
assets, the more repeatably they will perform.’
Q got no further before Mike interrupted, saying, ‘That’s all very
well in theory; but the reality is that we have to periodically overhaul
equipment to prevent failure.’
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Q sighed; he knew Mike’s type. They’d been there, seen that,
and got the t-shirt, but they hadn’t really travelled. They had a
lot of experience, but it wasn’t thirty years’ experience; it was the
same two years’ experience repeated fifteen times. They enjoyed
a high regard amongst their peers because they did know their
local environment so well, were intimately familiar with the asset,
probably highly skilled and had detailed knowledge of procedure.
Their word was sacred in this small world.
Unfortunately, their knowledge did not extend outside that small
world, and skill and knowledge were not the same as wisdom.
They were unlikely to be pleased when challenged in front of their
acolytes.
Nevertheless, Q knew what he had to do, and it gave him the segue
he needed to get on with the course, ‘Mike, can I tell you a story
I heard during my recent trip to the Middle East?’
Mike nodded, so Q told the story of a Journey from Re to Pro, as
he called it.
‘Many years ago, in ancient Arabia, there was a young man by the
name of Ahmed, who was looking to make his way in the world.
An opportunity soon arose due to a lack of oil for use in lamps and
cooking in the neighbouring city of Pro. Lamp oil was plentiful where
they lived in the city of Re, and some rich merchants were looking
for cart drivers to carry the oil to Pro for a handsome commission.
‘Ahmed was given an advance of one hundred silver coins to buy a
wagon and horses to carry the oil and was to be paid up to another
one hundred silver coins on delivering the oil. Other merchants
were also looking to sell their oil in Pro, and so the amount Ahmed
was to be paid depended not only on how quickly, but also how
much oil, he could deliver.
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‘Ahmed bought what he thought were fine horses and a wagon,
with plenty of room for oil amphoras, and set off on his journey.
He only spent fifty of his one hundred coins and was confident
he would soon arrive in Pro and pocket 150 silver coins in profit.
However, he experienced several difficulties along the way, both
due to cart breakdowns and his own inexperience. Ahmed was a
resourceful young man, keen to learn, and from every problem he
tried to improve on how he managed his cart.’ Q paused to bring
up a slide on his tablet, which automatically shared with the screen
in the room as he had set it up to do.
Mike already looked disinterested, but Q could see his team were
following, so he continued with the story.
‘Partway through Ahmed’s journey, he was struggling under the
weight of all the processes he was implementing to improve his
journey. His cart was overloaded with spare parts, and he was
trailed by junior assistants he had taken on board to monitor the
cart, and with other employees to analyse the data and enter it into
The Journal. He was exhausted with the overwhelming backlog
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of maintenance work he was intending to do, but never seemed
to have the time to get it all done.’
Jennifer and her team were now catching on and smiling broadly.
Q kept going at the same even pace, ‘As Ahmed’s cart creaked and
groaned to the inn where he was planning to stop for the evening,
they passed an old man. The man looked at his poor overloaded
wagon and laughed at Ahmed.
“Why have you loaded all of that onto your cart?” asked the old man.
‘Ahmed was offended, but answered politely, “I have travelled far,
and learnt much. The cart keeps failing, and this is what I need to
deliver this oil to the city of Pro.”
“Has it occurred to you that your cart is failing because you have
so much in it?” asked the old man.
“You’re not listening,” retorted Ahmed. “I need all these parts and
people to deliver the oil.”
‘The old man paused, then asked him, “And how is the journey
going now, with all that loaded up onto your wagon?”
‘Ahmed confessed, “Not as well as it should be. I seem to be
spending so much time looking after my wagon that I’m hardly
making any progress.”
‘The man shook his head, and said to Ahmed, “My name is Faheem.
For many years I was a cart driver like you and have been in the
same position you are in now. I am too old to drive wagons now,
but if you buy me dinner in the tavern, I would be happy to share
what I have learnt with you.”
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Mike interrupted again, ‘Is there a point to this story?’
Q smiled and assured him there was, and once again picked up
the tale, ‘Ahmed needed to eat, so he agreed. They went into
the inn and Ahmed continued the tale of his troubles to Faheem.
“At first I was making excellent progress,” began Ahmed, “and I
was sure I would arrive ahead of schedule. However, after only
a short time, one of my cart’s wheels failed! While it looked
fancy, it was only made of thin wood, and could not stand up
to the rough road.
“I was in the middle of nowhere, many miles from the nearest village,
and it was only good luck that another traveller passed by shortly
after. He took my message to a local repairman, who returned
shortly with a spare wheel. I was furious when they charged me
five silver pieces for the spare – four times the price I could have
bought one myself, and as much again to do the work! However,
I did not have any choice, so paid him the price. What is more,
we arrived late at our caravanserai that night, and so I missed my
dinner, as did my horse!” Ahmed had learnt that unplanned failures
are not only costly to repair, but also cause disruption to schedule.
‘Ahmed still wasn’t finished, “That would not have been so bad if
it only happened once. But a few days later, a second wheel also
failed, with similar disruption and cost!”
“I see,” said Faheem, “and so what did you do to stop this happening
again?”
“Well,” said Ahmed proudly, “I bought a spare for every part of the
cart! And I also hired a repair person to ride on the cart with me,
so I would not be stuck if something failed again!”
“Was that a good solution?” asked a sceptical sounding Faheem.
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“Well, it did cost a lot to buy all the spares, not to mention paying
the repairman,” said Ahmed “and carrying them all is slowing me
down.”
“Do you think that there is a better solution?” asked Faheem.
“I probably don’t need to carry all those spares,” admitted Ahmed.
“I have only used the spare wheels, and an axle, and all the rest
have sat in the back of my wagon for the whole journey. Maybe I
should only carry spares for those bits that will force me to stop if
they fail, and only the ones that fail frequently?”
‘The old man smiled, “Yes, decorative fittings on the cart are not
really required at all, are they? So why repair them? In fact, get rid
of them. The axle is obviously essential, but how frequently does
it break? The wheels are also essential; they take all the impact
and wear on the road and are likely to fail, but there are four of
them so how many spare wheels do you need? Any part of the
cart can fail, but not every failure will be the same. It is likely some
of these parts may fail more frequently than others. This is what I
mean about thinking and learning. I do hope you are taking notes
about what happens on your journeys.”
Mike started. He thought Q might be speaking to him, then he
realised it was part of the story. However, was surprised to see the
Leadership Team was taking notes. In fact, he noticed everybody
was taking notes apart from him. He began to feel uncomfortable.
Meanwhile Q was continuing with the story. He was enjoying himself
and Mike’s discomfort, so he elaborated a bit more, “I’m writing as fast
as I can, and I promise to take notes during future journeys,” said a
very focussed Ahmed. “Shall I continue with the tale of my journey?”
“Please do,” Faheem said and signalled for another plate of food.
Ahmed could see some of his precious silver coins disappearing
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before his eyes, but he was beginning to suspect the knowledge
he was gaining would earn him more coins than it was costing.
‘Ahmed continued, “Then I came up with the idea of doing
maintenance work on my wagon before components failed. By
sending a message ahead to the next stop, I could arrange for
spare parts and labour to be provided at much more reasonable
rates, and work could get done while I was eating and resting at
inn, rather than unplanned failures disrupting my journey!”
“Did this save you a lot of money?” asked Faheem.
“No,” sighed Ahmed, “while I got the work done much more cheaply,
I was doing so much more of it that I ended up spending just as
much money. I was able to figure out how long some wagon parts
would last for, but it was very hard for most. I would be replacing
almost new looking wheels but extending the use would result in
unplanned failures again!
“I also had many failures I had not had before, due to the work.”
complained Ahmed. “Often a pin holding a new wheel in place
would come loose, or they would have forgotten to put all the parts
back on! I need a better way to do maintenance.”
Several people in the room laughed out loud, but it still looked
like Mike had not gotten the point, so Q declared they would start
their first exercise. It wasn’t yet part of the game, but all part of the
introduction. In truth, he was winging it, using material from the
course he’d run in the Middle East, but he figured everyone that
mattered would know what he was up to. He brought up another
slide, split the group into their four teams, and asked them to come
up with an answer to the question on the slide.
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Karri though hard about the answer and discussed it with the
leadership team. Replacing wheels when they were 300 km old
would remove half of the unplanned failures, but wheel failures
were critical to the journey, so that would not be an acceptable
outcome. Replacement at 200km or less would be required to
remove most unplanned failures. However, replacing wheels at
200km meant that on average they have 100km or even up to
200km of life remaining. How could they answer the question?
Then the message struck home for the Leadership Team. They
had data but not enough to do the analysis, so they sat back and
watched with anticipation.
Mike’s team was not discussing anything. They were also waiting.
Paul’s team was in animated debate and laughing as they talked.
Jennifer’s team finished up their discussion and sat back. Q called
a halt, ‘I’m sorry to spoil Learning and Development’s fun, but we
have a game to play so let’s get this exercise out of the way. What
do we think the answer is?’
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Mike was straight out of the blocks, ‘If it is a critical failure like this
one, you have to replace the wheel before it fails so the answer is
just before 200km.’
‘Any other answers?’ asked Q.
Martin responded for the Leadership Team, ‘I’m not sure it’s as
simple as that. It’s a normal distribution, so this is not an age-related
failure. Distance is not the right metric to make the decision either,
so we need more information.’
‘What sort of information?’ asked Q. Karri noted that Q hadn’t
changed his method of teaching by asking questions.
Jennifer suggested, ‘We compared it to the wheels on our cars.
You need to know about its condition before deciding to replace it.
Warning signs like tread depth, vibration, or cracking in the rubber
are better indications than distance travelled.’ Paul’s team high
fived each other, they agreed apparently. Q laughed.
Mike wasn’t for turning, or perhaps he just wasn’t listening, ‘No,
you’re all missing the point. If the criticality is high, we cannot afford
failure; the wheel must be replaced before failure.’
Q knew that people like Mike would always isolate themselves
with their strong opinions and inability to listen. They may hear the
words, but they never listened to the message. Even Mike’s own
teammates were looking less than convinced now.
Q asked another question, ‘If the criticality is very high, don’t we
normally build in redundancy?’
‘Of course, we do,’ answered Mike, ‘But we are talking about the
wheels on a cart; they wouldn’t have been that advanced.’
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As per usual, Mike’s opiniated style and ready dismissal of
other’s ideas were digging him a hole. Sarah from Learning and
Development spoke up, ‘We can’t assume like that. Why wouldn’t
they have learned as they went just as we do? Isn’t that the whole
point of the exercise—to reason out the right answer?’
‘Criticality is what matters,’ insisted Mike.
‘But you just said we install redundancy to deal with high criticality,’
responded Sarah. Mike just threw his hands up and appealed to
Q, ‘Have we heard enough? Can we move on?’
Steph took the opportunity to respond. ‘No, we can’t move on,
Mike; you can’t just dismiss an answer because you don’t like it.
It appears clear to me that monitoring the wheels’ condition is a
valid answer, and if the criticality is high enough, we would install
redundancy. Can you at least admit the validity in those arguments
even if you would still choose a different course?’ The room went
quiet.
Mike didn’t know where to put himself. He couldn’t very well
disagree with the CEO when presented with pure logic, but he
still believed changing the wheel early was the better answer. His
efforts to avoid the issue and move on had been hampered. He
had nowhere to go.
Q, however, had been here before, so he knew it was time to call
a coffee break. While still very early, the point was clear to those
who wanted to hear it, and further pressure wouldn’t increase the
chances of Mike’s further participation.
Inevitably, there was no other topic of conversation at the break,
and poor Mike was left to occupy himself with his phone on his own.
Q sat with him and had a few quiet words. When they restarted
a few minutes later, Q summarised the message in the exercise.
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‘Time-based intrusive work—also known as scheduled restore/
discard—can lower reliability and increase maintenance costs
if carried out on the wrong equipment. This is an important fact
about scheduled restoration/discard of equipment that Ahmed
and everyone needs to know. Even if you accurately know the
failure distribution for a component, you will often be throwing
away something with significant remaining life to reduce the risk
of a failure if you base the intervention on time. In other words, as
Ahmed learnt from Faheem you replace on condition not on time.
‘Time based preventative maintenance is much less widely used
than it was forty years ago. But even today, many people still believe
that the best way to optimize plant availability is to do intrusive
equipment maintenance on a routine basis. Studies on the types
of failures seen in industry suggest that this is not the case. They
support a newer type of maintenance based on equipment condition
rather than age, known as Predictive Maintenance.
‘Theories on how items of equipment fail have matured over the
years, and centuries since Ahmed’s time. Maintenance plans dating
back a century were often developed on the premise that most
equipment failures were the result of equipment simply wearing
out. This idea of relating equipment reliability to age is intuitive,
and still a commonly held belief.
‘As reliability evolved, people noticed that many components
failed early in their lives—not due to age but instead to
manufacturing defects, installation issues, or incorrect operation.
Essentially, there was early infant mortality failure. These are
the failures that Ahmed described as “failures I had not had
before, due to the work”.
‘The impact of manufacturing defects and faulty installation is why
quality control is so important both on and off site. You’ll see that
this ‘infant mortality’ is the biggest single contribution to failure.
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Both reliability and integrity are therefore heavily dependent on
quality control.
‘There is a third type of failure, whose time to fail is impossible to
predict. These random failures were equally likely to occur at any
time for any age of equipment.
‘Combining these three failure modes generates the classic ‘bathtub
curve’, the basis of second-generation maintenance planning.’ Q
paused and brought up another slide.
‘Studies undertaken on civil aircraft by John Moubray lead the
way in improving our understanding of equipment failure types.
His books on Reliability Centred Maintenance are great reading if
you want to know more.
‘You can see failures grouped according to the six failure patterns
in this image. These findings prompted experts to revisit previous
maintenance strategies and beliefs. Look at the middle and bottom
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left: wear out failures, the cause of first-generation time-based
maintenance, occurred in only 2 per cent of cases! From this, only
a very small proportion of a well thought out maintenance plan
should be based on time-based replacement.
‘Even where an item follows a wear out pattern, such as worn truck
tyres, we can still determine the best timing for replacement using
condition-based rather than time-based replacement. The wear is
not necessarily constant.
‘Fatigue, which relates to the number of stress cycles, is more
common; but this still only accounts for 5 per cent of the failures.
The general adage ‘if it isn’t broke, don’t fix it’ holds true for both
modern equipment and Ahmed’s wagon.
‘The bathtub curve, the basis of second-generation maintenance
planning, only occurred in 4 per cent of cases. If we think of this as
a more general representation of failures across a broader system
or asset, the idea of the bathtub curve is reasonable. However,
planning based on the bathtub places equal emphasis on age
related failures—which are only 7 per cent—and not enough on
infant mortality, which accounts for 68 per cent of failures.’ Q finally
paused to see the group’s reactions.
Poor Mike: careful consideration and analysis of data wasn’t helping
his case. But Q wasn’t interested in whether Mike changed his
mind or not. His job was to influence the other people in the room,
not waste too much trying to convert a dinosaur. It was up to Mike
whether he wanted to evolve or die out.
As such, Q was ready to move on, ‘The game will help us to
understand how we put this information to use; so let’s start playing,
shall we?’
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Learning
Playing the game occupied much of the day. Each team took turns
rolling the dice and moving their playing pieces to squares around
the board. As the game progressed, it was taking more and more
dice throws to find an unoccupied square. The tension rose as
intended, as some teams were underway with an exercise while
others were trying to find a free square on the board.
Each time all four teams had completed an exercise—and therefore
a full round—Q had them debrief so the other teams could learn.
The Leadership Team were blown away. They had never seen such
a level of engagement in a classroom course. Except for Mike’s
team, the teams were laughing and having a great time as they
went, while getting involved in technical analysis.
The Leadership Team members themselves were learning quite
a bit. As they progressed through each exercise the message
became very clear. To get a good result, they had to gather the
data and perform the appropriate analysis to establish facts that
allowed them to decide.
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There were no shortcuts to take. It was a hard habit to break; Q had
to sit down with them a couple of times and point out when they had
jumped into discussing solutions before they had established the
facts. Q came out with an expression that they found particularly
hard, ‘If you work in an industry based on the laws of physics and
you are dealing with major hazards, why would you ever guess an
answer?’ This was reflected in his Golden Rules.
The second time Q sat down with them, he emphasised the point
even more firmly, ‘If we can analyse data and establish facts,
everything you do can be pre-planned. So what can’t be preplanned? The reactivity you are used to is self-inflicted. Stop
guessing and start analysing.’
This was to be the topic of a lot of debate.
Mike’s team were having the hardest time of it. Q had to intervene in
each round to move them forward. As luck would have it, they had
only landed on one of the Burke and Wills exercises. Their other
two exercises had been maintenance strategy and performance
monitoring.
It was an effort for Q to get Mike to simply take part. He would have
been quite happy to let the other three members of his team gather
the facts from the notes and do the mathematics. Mike didn’t see why
the Burke and Wills exercise was relevant. Q gently explained the
message: good decisions required data analysis to establish facts,
generate understanding, and then guide those decisions. Even so, it
was noticeable Mike didn’t take part in the debrief for the other teams.
The team had the opposite problem with the Maintenance
Strategy and Performance Monitoring exercises. Mike immediately
dominated, jumping to the answer his experience told him was
right. While he was correct in both cases, it left his team with
no encouragement to perform the analysis as requested by the
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exercise. Q again sat down with them on each occasion, started
them on the analysis and encouraged them to complete it if only
to confirm that Mike was right.
Mike tried to deliver the debrief in both cases, jumping straight to
the conclusion. This was useless from a learning point of view,
as it gave the other teams no guidance on how to reach these
conclusions. Q got Mike’s team members to talk, and encouraged
them to explain how to do the analysis and how the analysis proved
Mike’s conclusions.
Mike was furious when Q didn’t give the team the full score for
the exercises, even though they arrived at the correct answers. Q
explained that the exercise was based on an analysis with which
he’d had to help them, so it wasn’t fair to give them credit for what
they hadn’t done themselves in a competitive situation. Mike could
not get his head around this. Surely, they should score higher for
being able to get the answer so quickly.
The Leadership Team and Karri were fascinated as they watched
a fundamental issue that they were grappling with play out before
their eyes.
Q responded by taking a time out from the game to explain
the pitfalls of cognitive bias in a different way. ‘Performance
improvement is all about making the right decisions, and correctly
implementing the chosen course of action. Simple as this may
seem, this is right where most organisations fail.
‘Firstly, a good decision requires an understanding of the situation
and its complications based on facts. Unfortunately, too many
decisions are driven by experience, meetings and committees.
This is the approach you have taken Mike, and why I haven’t given
you the full score.’
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‘That doesn’t help me,’ responded the ever-argumentative Mike.
‘Then let me keep explaining,’ Q was hanging in there, ‘Under
time or budget pressure, an organisation or individual faced with
complication that exceeds their cognitive capacity finds ways to
shortcut good analysis and fact-based decision making. We know
these shortcuts as cognitive biases.
‘Cognitive bias is commonly introduced as experience, or as
common industry practice, also known as group think. But in most
cases, a fact based or first principles understanding has not been
achieved before deciding to act or do nothing.
‘Secondly, implementing a chosen course of action, even if correct,
all too commonly fails because the organisation is unnecessarily
complicated, again as the result of cognitive bias.
‘Most organisation structures are created based on industry practice
and populated with experienced hires before an individual asset
strategy is developed. In other words, we have introduced the two
main cognitive biases before we have even begun.’ This finally hit
home with Mike, who for once said nothing.
Q continued, ‘This brings about the most dangerous outcome of
cognitive bias: the normalisation of deviance. Instead of following
plans and procedure in implementation, complication that exceeds
our understanding leads us to use shortcuts that expedite the
outcome.
Q continued, ‘We tend not to notice that we have accidentally
increased the chances of outcomes we’re trying to prevent, because
the steps we’ve avoided are there to prevent low probability
outcomes. The steps may seem to be a waste of time under
normal circumstances, but they are there specifically for the rare,
high-risk issues.
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LEAR NING
‘Given that high consequences are usually rare, this deviance
becomes normalised due to the lack of cognitive capacity or
understanding to challenge the deviance. In some cases, the
deviance even becomes accepted procedure; for example, the
use of a risk matrix to evaluate an individual risk, instead of the
intended use of risk matrices to merely compare several risks.’
Mike knew full well he was probably guilty of this normalisation of
deviance Q was describing. He didn’t know how to handle it, and
his unease and frustration showed on his face and in his body
language.
Q, on the other hand, had created this moment deliberately. He had
tried taking a break and having a word with the problem person
offline. He had tried a lengthy aphorism, stories, questions, and
help with the exercises. He had done everything he could to leave
Mike with some dignity, but Mike’s behaviour had forced him to
address the issue directly in public.
Q began, ‘OK, Mike, let’s get right to the bottom line here. What
are you feeling right now?’
Mike seemed completely confused, ‘We’re not talking about feelings.
This is not a soft issue; this is about right and wrong. We have the
answer, we got there quickly, and there is nothing more to it than
that. You don’t like the way I got there because it disproves your
theories, and you are penalising us as a result.’
Everybody could feel the tension in the room. Many of them were
very uncomfortable with what seemed like a full-on argument, and
Mike’s voice was rising more and more. Yet Q seemed untroubled;
he had been here before and stayed in the heat of the moment.
‘It is about feelings, Mike. Whenever emotion is high, cognitive
function is low. Nobody learns in an agitated state; all our
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self-preservation instincts kick in and habitual behaviours come
to the fore. So, I ask again: what are you feeling right now?’
Mike’s agitation was physically apparent. His face was suffused
and his body language screamed aggression and tension. But he
was struggling to speak. You could see him grappling with himself.
Q patiently awaited his response.
Mike visibly deflated and the tension went out of him as he
expressed his emotions, ‘Frustrated, angry, fed up.’ Q paused,
letting Mike absorb the recognition of his emotional state, before
asking, ‘What else are you feeling, Mike?’
‘Tired, tired of fighting.’
‘What else, Mike?’ Q was being careful to use Mike’s name as he
stayed directly focussed on him and bottomed out the issue.
‘Nothing else,’ sighed Mike.
Paul was fascinated at this public exhibition of handling emotion
and navigating confrontation. It was uncomfortable but clearly
cathartic, and it seemed like the whole room—not just Mike—
was benefitting.
‘Fighting for what, Mike?’ after a significant pause to let the heat
of the emotion dissipate, Q started to help Mike understand his
feelings.
‘To be heard, to get things done properly, to stop all this messing
about and just get the work done right.’
In the rawness of the moment, everybody got to see what motivated
Mike. He was trying to do the right thing and his behaviours were
not ill intentioned, just misguided.
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‘And why is it Mike, that your way is the right way, and any other
way is wrong?’ Q held his breath. This was the moment of truth,
whether Mike had sufficiently let go of the emotion enough to think
about an answer.
A long pause let Q know that Mike was thinking. He started to
breathe again.
Mike said, ‘Other ways take too long. We need to fix the problems
immediately to stop things from getting worse. It doesn’t matter
what caused the problem before we fix it; we can worry about
what caused it later. But now, we have to keep the plant running.’
‘Do you worry about what caused it later, Mike?’ Q asked, again
holding his breath.
Again, Mike took his time. This was the most contemplative anybody
had ever seen him. With a sigh, he said ‘I’d like to, but usually we’re
on to the next thing, there’s always something needs doing now.’
‘Is there a better way, Mike?’ Q had relaxed. He knew Mike was
now wide open and would let go of the anxiety that was really
behind his emotions and behaviour.
‘There must be. I’ll have heart attack if I go on like this much longer.’
With that Q called a break. Everyone, most of all him, needed to
relax after such an intensely emotional episode.
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Moving Forward
After the break, Q thanked Mike for his honesty. He didn’t want
to use the word vulnerability because he feared that would be
a trigger word for Mike, and his likely attitude towards modern
social psychology. The rest of the room wanted to express their
appreciation, but didn’t really know how, so there was a mix of
mumbled words and some gentle knocking on tables.
Q continued, ‘If we are open to a better way, then that’s what we are
here for. Look at the Simplicity Cycle in the middle of the game board.’
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‘The key here is elimination of root causes. We want the right things
to repeat, and we want to eliminate the wrong things.’ Q paused
to let everyone absorb his message.
‘Now look at The Golden Rules.
‘The two cycles work together. Each step in the Simplicity Cycle
benefits from the application of The Golden Rules. The Golden
Rules help us master our specialisation so that we can perform
as efficiently as possible.
‘The danger is in confusing experience with Mastery, since we
know that experience risks cognitive bias. You’ve all experienced
the huge temptation to shortcut the process of analysis through
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MOVING FORWAR D
cognitive bias during the game. We don’t recognise our cognitive
biases because they are habitual. We only break habits by enforced
discipline. The Golden Rules are the professional discipline that
is required to avoid cognitive bias.
‘Not only do the rules guard against cognitive bias; they are also the
key to eliminating root causes. We must analyse and understand
the root cause. We must gather the data, draw the data, research
the issues, establish a model of our understanding, so that we can
eliminate instead of adding on controls and barriers.
‘Mike, we know from what you shared earlier that you have the fixes
for most problems, due to your experience. But fixing it hasn’t been
enough, has it? We need to analyse so that we don’t just fix the
problem; we eliminate it. The more we eliminate, the more time we
create for analysis, and the less reactive we become. That is Mastery.
‘In Ahmed’s story, the villages of Re and Pro are just metaphors
for reactivity and proactivity. The journey is from a reactive to a
proactive culture. The most important lesson in the story is the use
of knowledge to empty the cart, as opposed to the accumulation
of fixes and improvement initiatives that fill the cart. This is also
the message from the analysis of the Burke and Wills expedition
you carried out during the game.
‘If all you do is repair breakdowns, you will never have enough parts.
If, on the other hand, you do too much preventative maintenance,
you will never have enough time. We empty the cart by doing as
much predictive maintenance as possible. Predictive maintenance
is analysis driven.
‘If you think carefully about these statements, you realise they are
analogies for all aspects of business. All the technical exercises you
did in the game were introductions to different analysis techniques,
or reminders about the techniques you should be using.’
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Steph spoke up, ‘That’s true. We found it embarrassing that we didn’t
even read the exercise instructions properly before we were discussing
possible answers. And even when we did read the instructions, we still
looked for shortcuts. We’ve spent the past couple of months learning
how our cognitive bias is causing us problems, but as soon as we are
faced with a problem we try and fix it as quickly as possible instead
of following a simple process to identify and eliminate the root cause.
Steph then confessed, ‘I was wondering where the time pressure
came from, and then it dawned on me; it comes from me. When I
demand results, fixes and prevention instead of root cause analysis,
elimination and efficiency, I am pressuring you all to do more,
instead of giving you the space to master the issues.’
Q provided an off the wall aphorism, ‘I put instant coffee in the
microwave, and I went backwards in time.’
Karri laughed, and explained for anybody that didn’t get it, ‘It is
not just Steph’s problem; it is society’s problem. We all want ever
faster results. Instant coffee isn’t enough for us, so we microwave
it. If we keep going like that, we end up chasing our own tail.’
‘The crazy thing is,’ said Jennifer, ‘The results are rubbish anyway.
Nobody likes instant coffee, and the microwave just makes it taste
worse. In our rush for results we just make the results worse.’
‘Which is the very definition of the productivity problem we started
out trying to solve,’ said Andy. ‘We’ve confirmed the need for
emphasis on Mastery to allow us to be Ready, Repeatable and
Sustainable, all using Digital to enable root cause analysis and
elimination among other analyses.’
Q just let the moment hang in the air. The art of facilitation is to
have people come up with their own answers, so there was nothing
for him to say.
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Positive Developments
Paul recognised the moment, and sought to capitalise on what
they’d learned with further development, ‘Using Repeatability—
or, in this context, reliability—as our analogy for other aspects of
the business, how do we implement the lessons?’
‘Can I try?’ asked Mike. Josie was stunned; she had never known
Mike ask for permission to speak in nearly eight years of working
with him. So far as she was concerned, this was a development
itself. Q smiled and nodded, ‘Go ahead Mike.’
‘Predictive maintenance is the analogy for real time analysis,
correct?’ Q confirmed that was correct. Mike continued, ‘The aim
of the real time analysis may either be to avoid production loss
through critical failures, like the axle failure in Ahmed’s journey, or
to optimise the cost involved in non-production critical functions
like tyre replacement. Agreed?’ Q confirmed. Mike was clearly
trying to take people with him in his reasoning.
Mike kept going, ‘There are two types of predictive maintenance
techniques: condition monitoring, and monitoring equipment
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performance for signs of deterioration. Condition monitoring
may involve oil sampling, monitoring of temperature, pressure
difference, vibration, or flow rate. It may be carried out manually
or automatically. All the necessary information for performance
monitoring is available from modern automated control systems;
we just need to use it more. Predictive Maintenance requires a
lot of effort to set up, which is why we haven’t done more of it.
But it potentially provides the greatest improvement in reliability
and savings in life cycle operational expenditure, if properly
thought out.
‘We actually do most all of this and have installed separate software
to help us. We just haven’t joined the dots; in other words, we
haven’t integrated. We have the technology but we’re not doing
the analysis, and certainly not in real time. Would the analogy still
work for the rest of the business?’
‘Very much so,’ said Martin, ‘This is very similar to the discussion
we had in our session on Digital.’
Mike was relieved, and encouraged, ‘If we do connect the dots,
monitoring equipment would allow us to schedule maintenance
prior to an equipment failure. Can I use a slide?’ Q waved him on,
so Mike got one of his team to find and bring up a diagram on the
screen.
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‘The period between when the failure mode can first be predicted
(P), to when the item will fail (F), is known as the PF interval.
Understanding the PF interval is crucial for establishing the correct
response to system deviation. In the examples described in Q’s
story, Ahmed had two types of failure. For failures of the wagon
wheels, Ahmed had identified signs of wear that would alert him to
a degraded failure, with time to schedule maintenance in an orderly
fashion. This was a long PF interval. He had time to schedule a
repair and secure spares. Critical failures of the axle occurred
much more quickly—a short PF interval— and with more severe
consequences. Where critical failure modes are identified in modern
plant, online alarm and trip limits need to be put in place. Spares
need to be readily available due to the consequence. We can preplan the necessary work in both cases; it is only the scheduling of
the work that is driven by the prediction of failure.
‘So, I think the analogy provides a template of how we can deploy
Mastery and Digital to correctly time pre-planned work.’ Mike
finished talking and waited for a reaction.
Josie wanted to applaud. She knew Mike was an asset, which is
why she had put up with his nonsense for eight years. But this
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was the first time she had seen him put his knowledge to use
proactively.
She decided to capitalise on the opportunity, ‘Mike, you mentioned
criticality again. How do we determine which equipment is critical?’
‘Criticality is the measure of the value or the risk to the business,’
Mike started to reply, and Paul jumped in, ‘Excellent, we’re trying
to tie things together with an overall measure of value.’
Mike had no real idea what Paul was talking about, but he seldom
did; so, he didn’t worry and just kept going. ‘The likelihood of an
event, and the cost of it occurring or not occurring as the case may
be, should be used to determine which work we should do and
what spares should be carried like I said earlier.’ He unconsciously
added the ‘like I said earlier’; habits didn’t change that quickly.
‘Too many companies dumb this down by using a risk matrix like
we have. The use of such matrices just normalises deviance.
According to ISO31000, we should use the matrix only to compare,
not to evaluate the risk. The consequence and frequency should
be determined based on analysis wherever possible.’ Mike was
preaching again, but Q couldn’t argue with him. He agreed and
began to see Mike’s considerable depth of knowledge, even if he
hadn’t been applying it.
‘We carry out numerous studies to determine the capacity of
equipment and the consequence of failure as a normal and natural
part of our designs. We don’t need to guess consequence. As
we discussed all day, a professional organisation should not be
guessing an answer. We can’t be lazy; we must consult the relevant
studies to determine consequence.’ This did give Q a problem,
since Mike still didn’t seem to get that he guessed answers, even
if his guesses had been correct.
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Q intervened, ‘Mike, this is great stuff, but I can’t let you away with
that last one. You are correct in that we shouldn’t guess. Can you
see that when you rely on your experience rather than an analysis
to determine an answer you are indeed guessing? It may be an
educated or even an experienced guess, and it may be correct,
but you are running the danger of cognitive bias.’ The whole room
held its breath this time. Would Mike go off the deep end, or would
he think about it?
Q was counting on having developed a degree of rapport with
Mike. Thankfully, it seemed he had succeeded. Mike looked a bit
deflated, but he didn’t bite Q’s head off. ‘I can’t call it guessing,
but I can accept what you say about cognitive bias. I agree that I
must encourage analysis and elimination to break this reactivity
deadlock. Will that do?’
‘It will, Mike,’ said Josie, ‘We’re not asking for any more than
that. We want your knowledge, and not your opinions, if that
makes sense to you?’ She didn’t want another moment, so
she encouraged him to keep going, ‘If we’re not to guess
consequence, can I assume we should also be getting
frequencies and probabilities from the reliability studies we do
to select the equipment for our design?’
‘You assume correctly, Josie,’ said Mike with a smile. Josie had
frustrated him before, but he liked her and knew she cared deeply
about her reports.
Mike had more to add, ‘The only other thing I’d like to say is
that we can’t talk about reliability and criticality without covering
integrity. We can’t sacrifi ce integrity for reliability. I agree there
is a large opportunity to intelligently reduce the maintenance we
do and improve our assets’ reliability. However, we must confirm
integrity at some point, and that means carrying out inspections
that we would prefer not to do from a reliability perspective.
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This effectively dictates the lower limit on the maintenance we
do. It’s a different form of criticality if you like because it keeps
the hydrocarbon in the plant. We can use RBI to optimise the
frequency of inspection.’
‘What’s RBI?’ asked Karri.
‘It stands for Risk-Based Inspection. It’s a methodology that involves
quantitative assessment of the probability and consequence of
failure associated with each equipment item. RBI is a systematic
and integrated use of expertise from the different disciplines that
impact plant integrity.
‘We’ve talked about performance monitoring; this completes the
data set that informs RBI decisions. Real time operations data
allows us to track operation within integrity limits. We call these
Integrity Operating Windows, and we can monitor them within
automated control systems allowing us to monitor performance
from an integrity perspective.’
‘I accept that Mike,’ Josie had no problems with prioritising integrity,
‘Taking integrity as our minimum requirements, can we then build
a maintenance strategy on top by adding our requirements for
reliability?’
‘That would work,’ acknowledged Mike.
‘Great,’ said Josie, ‘Mike, the bad news is you won’t be Maintenance
Manager anymore.’ Everybody looked shocked, including Q, but
Josie continued, ‘You’ve fought hard enough, for long enough, let’s
give you a chance to get things right. You’ll be working with Karri
to map our Repeatability process flow for operations, and Karri,
you can then use the same approach to map similar processes
for the other departments.’
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‘That fits well with Asset Reference Planning,’ stated Paul as the
owner of the Ready focus area, ‘We’ll have taken care of the inner
improvement cycle for each department.’
‘The Digital applications that are required will also be clearer as
well,’ Martin was supportive of this move.
Josie asked Q if he had anything to add. Predictably, he didn’t; he
considered this session well and truly facilitated. Josie closed the
day out by thanking everyone for their time.
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Reliability
Karri met with Mike several times in the following weeks, and
together they developed a reliability process for operations. Karri
was happy there was no point being semantic and insisting on
the generic repeatability when reliability was in common use in
operations and maintenance.
Karri knew the importance of planning to avoid the Law of
Diminishing Returns. Mike was happy to get a chance to apply
the Asset Management principles of cascading from strategy
and policy to planning, people, performance, measurement, and
improvement. Truth be told, he was also happy to get out of the
day to day of maintenance; he wasn’t as young as he had been. As
Josie said, he’d been fighting for too long, it was tiring. Not having
to fight (even if he still didn’t realise the conflict was self-inflicted)
was doing him a world of good.
The first thing Mike wanted to do was shift from the generic
maintenance strategies they’d developed for broad equipment
categories and move to guidelines for maintenance activities,
durations and frequencies. To improve on this generic approach,
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Mike developed a list of questions to ask:
•
•
•
•
•
What are the equipment functions and associated
performance standards?
What functional failure modes exist for the equipment?
What are the consequences of each failure mode?
What can be done to prevent or mitigate based on failure
type?
What should be done if a suitable proactive task cannot
be found?
For the more critical pieces of equipment, he proposed a detailed
analysis be undertaken. For less critical equipment items, he
proposed and tabulated the use of a streamlined approach based
on the criticality of each equipment item, its failure modes and the
failure patterns.
The maintenance strategies produced for each equipment item
defined the actions required for the equipment based on its
functions, criticality, and common failure modes. The results were
then loaded into the CMMS as the maintenance build.
Karri completed her action by summarising the process with a
flow diagram.
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The most difficult part was getting Mike to agree on her diagram.
She had to convince him to accept that the current planning wasn’t
working, because they were developing schedules instead of plans.
Their weekly ‘planning’ meetings were in fact driving the reactivity
they were trying to avoid, because they’d never properly established
what they needed to do and how to do it.
Mike typically took it upon himself to identify and prepare the
scope of work, the procedures needed to do the work safely
and properly, the materials, any external (specialist) services,
and any special tools. Planning maintenance needed to be done
by someone with a trade background, someone with extensive
time served and sound technical knowledge; who better than
Mike? He didn’t consider it a demotion at all; he was like a kid
in a sweet shop committing his knowledge to paper, or in this
case bits and bytes.
Mike taught Karri another way to look at it: planning reduces delays
during jobs, whilst scheduling reduces delays between jobs. Mike
effectively told the planning team that they were now schedulers
and were to focus on what work gets done when and by whom.
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They were also to look at how work was grouped to minimise
waste, like equipment down time, travel time etc. then balance the
workload against available resources.
Interestingly, the team members didn’t resist as Mike and Karri
expected. They were relieved that they would no longer be subjected
to the disdain they received because the plans never worked out.
They were excited by the opportunity to concentrate on minimising
problems, and secure in the knowledge that Mike would provide them
with a level of detail to prepare the jobs they’d never had before.
Karri summarised Mike’s overall approach as ensuring everything
was pre-planned. Interestingly, this was where they encountered
push back. It seemed people had been working in a reactive
environment for so long they just couldn’t wrap their heads around
the idea that it was possible to plan everything.
It was here that Josie’s masterstroke with Mike really paid off.
Mike’s logic was brutal. He posed the same question every time
they encountered resistance, ‘How can we say we run our plants
safely if we are not in control of what happens?’ The question left
nowhere for people to go. Karri realised the question was inspired
by Q’s statement about working in an industry based on the laws
of physics. Mike had clearly got the message.
Karri was happy the process they had put in place reflected The
Golden Rules, but she didn’t believe they’d incorporated the
simplification aspect of doing less. Mike had a habit of adding
more detail. She felt they were missing the aspects of using data
to improve and identifying opportunities to eliminate, minimise and
simplify. After thinking hard about how to raise this with Mike, she
woke up one morning with the answer.
They had a catch up arranged before lunch that day, so Karri got
her chance that morning, ‘Mike, now that you’ve put the finishing
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touches to your reliability strategy, can I ask you a question?’ Even
Mike wasn’t so insensitive that he couldn’t see what was coming,
but he had grown to respect this young woman and her never
ending pursuit of knowledge and clarity of understanding. Mike
duly answered, ‘Fire away, Karri.’
‘If we learn how to do things more efficiently, should a manual
get thicker or thinner?’ asked Karri with an impish smile. It was a
beautifully phrased question. Mike loved procedure and he prided
himself on doing things well.
Mike thought hard about his answer (a compliment to Karri), realised
the wisdom in the question and answered, ‘Thinner.’
‘How will we build that into our process then, Mike?’ Karri asked
with an even more devilish grin.
Mike smiled back; this young woman rose even higher in his
estimation, ‘The inner cycle of our Asset Management process is
supposed to be an improvement cycle, so we have to make sure
our improvements make the manual thinner, I suppose.’
‘That’s a good answer Mike; I’m glad you came up with it. Do you
think the simplicity cycle will help us do that?’ Mike knew full well
he was being manipulated and they both laughed out loud. Despite
being the most unlikely pairing in the company, they had learned
how to work well together.
Mike responded, ‘Your process provides a solid baseline, with proper
plans in place and a working schedule we’ve committed and planned.
What we don’t have yet is that inner cycle of improvement—Do,
Check and Adjust. Do is self-evident; we execute the policies, plans
and procedures. Check is all about our performance monitoring and
the analysis of the data we collect as we do the work. Adjust is the
actual improvements we are looking for.’
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‘But what I’m really wanting,’ said Karri, happy to give the game
away now they were on the same page, ‘Is to build in the idea of
eliminating root causes, minimising the work scope where we can
and making the procedures, plans and policies ever simpler.’
‘Then let’s do that!’ said Mike. ‘One of our biggest problems to
date has been trying to do everything at once, instead of doing
things one at a time and doing them well. I’d like to get that in
there, and then I agree we make sure our approach concentrates
on the elimination of root causes, not the addition of barriers and
controls. It should go without saying the only acceptable solution
is a solution that eliminates the root cause.
‘What we’re talking about is a defect elimination programme. If
we can make it work, it should be an effective way to achieve
both quick improvements in reliability and long-term repeatable
performance. Complex plants like ours have tens of thousands of
tagged equipment items; so, the trick is to focus only on the bad
actors causing problems. Eliminating the root causes of these bad
actor issues delivers improvements in performance and avoids
the same problems continually causing down time in the future.
My old supervisor used to say, “Fix forever, rather than forever
fixing”. If I’m honest, I had forgotten that maxim; you and your Q
have reminded me of it.’
Karri blushed. She wasn’t used to compliments, and Q certainly
wasn’t hers. She hurriedly asked a question to cover her
embarrassment. ‘What else does a defect elimination programme
consist of?’
‘Simple steps, but they have to be separate and sequential with
no shortcuts:
•
•
Identifying problems
Understanding root causes
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•
•
•
•
Finding solutions to mitigate or eliminate the problem
Calculating cost benefit of solutions for prioritisation and
approval
Implementing solutions
Measuring outcomes and reiterating them if required.’
‘Who would do that? Are we talking about another group?’ asked
Karri.
‘Definitely not,’ Mike said quite forcefully, ‘Identification of issues is
the responsibility of everyone working in a plant. Repeat failures
may be noted by a maintenance engineer, discipline engineer,
operator, or even supply chain.’
Mike went on, ‘Identification and analysis need to be two different
steps. There must be a Pareto order of issues before proceeding to
analysis. We must focus our combined cognitive capacity on the issues
in order of value. Trying to work too many issues at once or having
different parties working different issues will only increase complexity.’
‘That’s good,’ said Karri, ‘If we put communication channels in
place to ensure that common equipment items used in different
parts of the plant or in other related plants are treated the same
way, we’ll improve even quicker.’
‘We will indeed,’ said Mike, ‘We should share information to properly
quantify issues and share data of the analysis and feedback
solutions. This is why we can’t handle everything at once if we
are to do it properly. Root cause analysis or RCA is undertaken to
determine why a failure has occurred.
‘Problems may be multi-layered, with several causes interrelating
in the failure. As such, a multidiscipline team should carry out the
RCA process to identify a wide range of possible causes before
identifying the main causal factors.
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‘Once we’ve identified the causes, we can clarify potential solutions
to eliminate the root cause in a similar manner. We have the
streamlined guide to help us, and I like to think there are six steps
to reliability—starting with the development of the plan, and then
identifying and analysing deviance from the plan:
1.
2.
3.
4.
5.
6.
How frequently does the equipment fail?
What type of failure is it?
What is the consequence of that failure?
Develop the plan based on the above.
Keep a record of what happened.
Analyse deviance, update frequency, type, consequence
and adjust the plan accordingly.’
Karri and Mike looked at each other and smiled again. It had been
quite a speech, but they both felt they had completed a long journey
and completed it well. They had a repeatable process for setting
up repeatable outcomes and a process for improving where there
was deviance from the planned outcomes. This was the mission
Josie had set them and they had got there, quickly, and effectively.
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Sustainable
Due to Steph’s availability, the session on Sustainable was the
last cab off the rank. That gave ample time for Karri to let the CEO
know what had transpired during the other sessions.
Steph was delighted with the progress, particularly how the
interrelationships between the focus areas, Mastery and Digital
had taken shape. Before arranging her session, Steph spent some
time with Karri to define what Sustainable meant in terms that might
resonate throughout the company.
Steph was mainly worried that to most people, ‘Sustainable’ only
equalled environmental concerns. She was keen to communicate
that it meant so much more than that. For Steph, sustainable was
all about responsibility—to the people in the business, to society
in general, and yes to the planet, but also to shareholders and to
herself. If she wasn’t true to her own values, how could she expect
to sustain her own energy and enthusiasm on an ongoing basis?
Steph believed it took a lot of energy to keep going because nothing
stood still anymore. This was why she was so concerned with
providing clarity to enrol other people’s energy and enthusiasm.
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For Steph, this was the real driver behind simplicity. A rapid pace
of change was draining enough without having to constantly
adapt overly complicated systems. If a business was to survive in
an ever-changing world and a rapidly increasing rate of change,
it had to be able to pivot just as rapidly. They might not need to
make a fundamental change, such as altering the business they
were in (although even that may be necessary at some point). But
they certainly needed to regularly alter the way they did business.
Steph felt strongly about being able to change small things rapidly
and being prepared to change everything. She knew it was also
necessary to apply an appropriate level of testing and evaluation
that increased given the magnitude of the change. To her, this was
key to finding a balance between wasting resources on what didn’t
matter and concentrating resources on what did.
Steph explained all of this to Karri, who was daunted by the enormity
of sustainability. It seemed to be so fundamental to business, and
it explained a lot about Steph’s passion for the subject. Karri had
some thinking to do. Karri asked Steph if they could delay arranging
the session a little bit longer so she could do some research and
get herself more up to speed.
Karri’s research didn’t reveal any better definition or explanation than
Steph had already given her. However, it did introduce her to the
idea of the Triple Bottom Line: people, profit, planet. She liked that;
it gave structure to her thinking about the relationship between the
three focus areas, and improving them through Mastery and Digital.
Karri was again struck by the thought that people, profit, and planet
were all outcomes of the focus areas, if driven by Mastery and
Digital. The more she was involved in all this work, the more she
came to realise that most of what they had previously legislated for
was the product of performance. The different systems, guidelines
and controls were prescribing a way to achieve the outcomes,
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but that was the problem—it was a single approach, without any
flexibility. Conditions would inevitably change; when they did, they
needed sufficient room for change in the process to cope with and
even benefit from these changes.
They had already found by using their prescribed system that
additions were made to incorporate a new learning, thereby
raising the level of complexity. Instead, they required agility, which
fitted nicely with the idea of Mastery—a sound understanding of
subject matter that allowed rapid adaptation without the need for
prescription because it was based on fundamental principles, not
learned techniques.
Karri’s research on agility led her to the latest trends in project
management from the technology industry. She learned about digital
technology’s ability to rapidly test (or prototype, as they called it)
new ideas with minimal cost, compared to physical construction.
She was intrigued by the ideas of Scrum to prototype multiple
possibilities in parallel sprints to compare different options.
She was equally amused at the amount of literature that
described Agile and Scrum. She was beginning to recognize how
industries and empires grew up around a concept and ended up
complicating the innovation that had been introduced to make
things simpler. Instead of becoming part of an overall toolset
that improved productivity, each tool seemed to be competing to
become the one technique that would solve the world’s problems.
But all this did was further complicate an increasingly complex
landscape of improvement methodologies that all claimed to
be the solution.
Each concept standalone had merits. She loved the history
of development from Henry Ford, through Toyota and Lean,
Shewhart, Time and Motion, Demming and TQM, SPC, Juran, and
Six Sigma. However, it was also apparent that each method had
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flaws, particularly when taken to an extreme or applied outside
its intended application, and most of all that there was a lot of
duplication between these apparently ‘different’ methods.
Karri realised that the current industry practice of haphazardly
applying these tactics was not sustainable. Anything that
increased complexity was the antithesis of sustainable. Efficiency
remained the goal: achieving more by doing less produced
sustainable outcomes. Being able to pivot and use the right
tool for the right job—not trying to use one tool for all jobs—
was the key. Karri thought of how she’d seen her many Uncles
prove this concept time and time again when attempting DIY. If
you didn’t have the right tool for the job, it took you far longer
than it should, and you usually had to spend money to put it
right afterwards.
Karri began to formulate an idea of how Mastery and Digital allowed
the rapid pivots that were needed to make sure you were Ready,
Repeatable and Sustainable. When she presented this summary of
her research to Steph, Steph felt it was the message they needed
to communicate in their session on Sustainable and asked Karri
to go ahead and schedule it.
Karri opened the session on Sustainable, which reflected her
growing confidence and the esteem that people held her in. The
group gathered for the session was basically the leadership
team, plus Ian, Ruben, and Mike, who had contributed the
most in their unique styles to the topics of Digital, Ready, and
Repeatable. Brad had initially been invited to represent Digital,
but he’d insisted Ian attend instead, as he better represented
a digital future.
Karri could not know how rare Brad’s behaviour was. It was not often
a manager promoted the profile of one of his reports over himself,
or even trusted them to represent the department better than they
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could. Karri knew it was an example that she wouldn’t forget—and
it made her even more determined to get this session right.
Inspired, Karri borrowed from Q’s hero, Trevor Kletz, to open the
session. Kletz had borrowed from Thucydides’ History of the
Peloponnesian War where he had found Pericles’ Funeral Oration,
and selected an extract, which Karri read out.
‘We Athenians, in our own persons, in taking our decisions on
policy submit them to proper discussions; for we do not think that
there is an incompatibility between words and deeds; the worst
thing is to rush into action before the consequences have been
properly debated. And this is another point where we differ from
other people. We are capable at the same time of taking risks and
of estimating them beforehand. Others are brave out of ignorance;
and, when they stop to think, they begin to fear. But the man who
can most truly be accounted brave is he who best knows the
meaning of what is sweet in life and of what is terrible, and then
goes out undeterred to meet what is to come.’
Karri explained her choice, ‘I make no apology for another
reference to Trevor Kletz, and the opening from one of his books
on Process Safety—because after attending all our sessions I’m
still stuck on the similarities between his principle of inherent safety
and our overall need to simplify. I’m also struck by the similarities
between Process Safety and Sustainable. Process Safety
protects workers and the public alike, where occupational safety
protects workers. Process Safety considers the consequences
of accidents at the human, environmental and business level.
The consequences of not implementing Process Safety can be
far reaching, affecting people living locally to the site or even
consumers.
‘We broaden the philosophy with our focus on Repeatable, the
need for plan, process, procedure: There is no room for error on
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major hazard facilities. We must plan everything we do, following
established processes and procedures.’
Karri continued, ‘Similarly, our session on Ready highlighted
the need to evaluate options to choose the best plan to achieve
our Asset Management goals. We need Mastery and Digital to
establish and evaluate these options, before committing the capital
to build an asset. All the results we produce will be outcomes of
this philosophy we are developing.
‘Safety, particularly process safety, environment, and social impacts
are all outcomes of implementing our philosophy effectively. If
we are to get our act together on Sustainable, we don’t just act
because it impacts our people, and our shareholders; we need to
act the same if it impacts society. We must do all of this so that
we can ‘go out undeterred to meet what is to come’. This is what
Sustainable is all about; our collective responsibility to each other,
our stakeholders, society and the planet.’
It was a microphone drop moment. A seemingly stunned silence
followed. Steph said with a smile, ‘So, what is there left for us to
workshop, Karri?’ Everybody, including Karri laughed.
Steph let the laughter die and took the helm, ‘In my experience,
most workforces believe production is the number one priority no
matter how much lip service is paid to safety as the number one
priority. Our people are not stupid, and it is almost inevitable our
own behaviours will tend to reflect our subconscious beliefs that
profits drive business. This is a problem, because it is not our
words or policies that drive behavior; it is our beliefs.’
That sobered the room up. Steph continued, ‘Our focus groups
have done great work to develop our approaches to Ready and
Repeatable. Choosing Mastery and Digital as engines of overall
simplification will work well to help deliver the intended results in
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Ready and Repeatable. However, we need people to believe in
what we are trying to do, not just respond to our efforts as the latest
improvement initiative in a long line of failed improvement initiatives.
‘The introduction Karri gave was designed to explain how our
plans interact to deliver Sustainable. As you know, I’ve set this as
the primary goal of my tenure. I therefore want us all to believe in
Sustainable as the primary responsibility in each of our roles. We
aren’t just working for profits; we’re working for society, for both
internal and external people, and for the planet.
‘That may seem strange for an oil and gas company, but we can’t
just call ourselves an energy company because there is a stigma
associated with hydrocarbons. We must embrace all forms of energy
to truly be an energy company. The future of energy is and has
been ever changing, but we haven’t noticed because the pace has
been slow. Current thinking and technology changes are driving
an increase in the pace of change, since we must address climate
issues alongside rapid population growth and an increasing demand
for energy. If we don’t get out ahead of this demand for change,
we will become a bit player and almost inevitably get swallowed
by another company for our reserves. Or we’ll gradually fade away
as we sell our assets to cheaper, more agile operators.
‘Look at how each of the main pillars in our lifestyles has become
electrified—heating, lighting, and cooling. Only mobility remains,
and the process has started there. Being an energy company in the
future therefore means delivering electrons not molecules, or we
become parts of the supply chain that powers energy companies
and stop pretending otherwise. Which do we want it to be?’
Nobody was unduly phased by what Steph was saying. They had
heard it before in many of her internal and external presentations;
however, they did detect a level of passion and excitement that
had been missing recently. Steph genuinely seemed to believe
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they could deliver her vision thanks to a focus on Mastery and
Digital. They were gripped by her level of belief. As they had all
taken part in at least some aspect of the work, they had reason
to believe in it. What remained was to convey that same belief to
the rest of the organisation.
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Chapter 28
Opportunity
‘You can’t change people; you can only give them the opportunity
to change.’ Paul recognized the truth of the statement but was as
surprised as everyone else when it came out of the mouth of the
youngest person in the room. Karri had once again drawn from
her elders’ teachings when she saw the relevance.
‘I told the story of the dog and the nail in the porch at my
interview,’ said Karri. Josie, Martin and Andy smiled at the
reminder; it seemed a long time since the interview, but it was
only months. ‘Manyoowa also shared this piece of wisdom
with me, and she’s right. People have to want to change, and
perceive a benefit in changing.’
Steph and Paul looked at each other. The only reason the company
had a human resources function was their need to meet legal
requirements. They didn’t truly believe you could manage people;
you could manage processes, but you could only lead people.
However, they recognised from the beginning that this was an
area where compliance did not generate performance. They had
therefore responded strongly to the concept of Mastery as an
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essential part of simplification. So, they naturally identified with
the wisdom Karri was sharing.
Paul tentatively said, ‘We’re offering the opportunity to be the Master
of your trade or profession; will that be enough? Will people see
that Mastery enables them to do what they want with the rest of
their lives, and that we are giving them control of their futures?’
‘What if they don’t respond to the opportunity?’ asked Ruben. He
knew large numbers of contract engineers who were quite happy
to repeat the same work for money and had no aspirations to
excellence.
‘Then they have to go,’ said Andy. Even Mike was shocked by that.
He didn’t suffer fools gladly, but he had grown used to the perceived
difficulties in recruitment and retention, and the resulting tendency
to try and work with the people you had versus finding new ones.
Andy doubled down, ‘Think about it: if we offer people the
opportunity to educate themselves in their chosen profession and
they don’t respond positively, why would we want them to stay?’
Paul was thoughtful in his response, ‘That goes with the adage
about “What if we train people and they leave?” The response is,
“What if we don’t train them and they stay?”, Andy, I think what
you’re saying is “What if they don’t want to learn and they stay?”.’
‘Exactly,’ said Andy, ‘We’re trying to raise the bar. We want to be a
sustainable proposition going forward in every sense of the word.
Why would we carry passengers if we are serious about Mastery
driving performance? If Sustainable, along with everything else,
is an outcome of our performance, then people who won’t learn
will hamper our performance and those outcomes. We know we
want to move away from having to build in compliance and the
associated complexity to prevent poor performance. Instead, we
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want to enable people to perform and want to perform. We can’t
have it both ways. The people who don’t want to learn will be the
same people who don’t believe we mean what we say, and spread
negativity in the organisation, rather than recognize that they are
the problem themselves.’
Mike shifted a little uncomfortably at this point, but he was sitting
next to Karri, and she patted him on the arm to reassure him. Her
smile said she believed he had changed his ways. Steph and Josie
saw the interaction and caught each other’s eye, both thinking that
this young lady had an instinctive talent for leadership.
‘If I may,’ said a very nervous Ian, ‘We do have to face one reality:
replacing our IT infrastructure with virtualisation and enabling the
automation of analysis and knowledge will lead to efficiencies—
reducing the need for employees. We want the people who used
their subject Mastery to be freed to move on to the next stage of
improvement; but doesn’t that also create the freedom to let go of
people who aren’t contributing as much as they should?’
If people had been surprised by Karri’s input, they were even more
surprised by Ian’s. Most of them didn’t know Ian that well, but here
was another relatively fresh face offering challenging thinking from
a new era. Some of the Leadership team began to realise that
they needed to stop generalizing about Millennial snowflakes, and
accept the latest generation were probably going to be a mix of
people, just as every generation produced.
‘Aren’t we straying from the topic of Sustainable?’ asked Josie,
trying to defuse the atmosphere.
‘I don’t think we are,’ answered Steph. ‘Andy and Ian are right.
Part of responsibility is making the hard decisions as well as the
easy ones. If we are to future proof and become Sustainable, we
must become efficient, and they’ve rightfully brought up the hard
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realities of becoming efficient. Producing more by doing less is
helped along by doing less with the right people, not carrying the
wrong people.’
Mike chose this moment to make his first contribution, ‘What hit me
hardest during our work on Repeatable was that I felt I was keeping
us on track by doing the same things. I was keeping abreast of
current thinking, but I was using the information as ammunition
to defend what we had always done, instead of determining
what we could do more efficiently. We need the outcomes to be
repeatable, but that doesn’t mean the method should be the same.
As knowledge and technology advances, so should our level of
efficiency; or the manual should get thinner, as Karri put it. That
also means doing less work and needing less people.’
Andy hadn’t been privy to the working sessions as he had been
running business as usual, but that rang a bell with him, ‘I’ve always
seen a problem with slash and burn cost cutting in a downturn:
removing people from inefficient processes saves money in the
short term, but just causes chaos in the medium term. I much prefer
the approach you have come up with of reducing resources after
evolving more efficient processes.’
Paul followed on, ‘I wouldn’t be too afraid of the people changes
we will need to make; it all comes down to common sense. So long
as we treat everyone with respect and take the time to understand
where they are coming from, we may find that they aren’t aligned
with the future we envisage. Then the best thing for them and us
will be to move somewhere else. We won’t help them by carrying
them.’
Martin, ever the academic, said, ‘This will be interesting. How much
turnover will we have? It will either prove to be a validation of our
recruitment to date or we will be handling a lot of uncertainty if our
good people see a lot of other people starting to go.’
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‘Think about this,’ said Steph, ‘What if people do respond well and
embrace Mastery, Digital and the idea of Simplicity behind the
focus areas, and Ian is right? We end up with more people than
we need. What do we do then?’
‘Jack Welch will be proud of us because we’ll be cutting the bottom ten
per cent of a highly performing organisation,’ said a determined Andy.
‘But is that fair?’ asked Josie. This conversation was challenging
her more than the others. Like a lot of operations people she felt the
blue collar staff in the field tended to bear the brunt of headcount
reductions rather than office staff.
Paul answered, ‘Our biggest currency is the value we produce. If we
let go of people who can add value in other organisations, perhaps
they’ll see it as an opportunity to make a difference elsewhere.’
‘It would be nice to think so,’ said Ruben, ‘but in my experience,
people are never happy when you start letting them go—no matter
how well a project went. They may be better off for the experience,
but it never seems like that at the time. Better not to kid ourselves;
it will never be pleasant.’
‘As much as I’m not a fan of wasting money with the change
management industry, we should honour the principles and the
depth of research on which change management is based. We
want this change to be sustainable, pun intended.’ stated Steph.
‘Communication will be all important, as always. Clarity and
consistency at all times, please. As per usual, I want to open each
meeting with a statement of clarity. Remember, clarity, consistency,
and courage are the ‘three Cs’ of leadership, and they are going
to be very important over the coming weeks and months.
‘I think using Mastery to enable our people to create the change
is sound. We want a constructive culture, but there will be pain
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in the rub between our people and shaping that culture. We can’t
hide from the inevitable emotion, so we must have courage and
not pretend otherwise. Our intention is to get simpler and more
efficient, and that plainly means we want to keep the people who
master their profession but not the people who want to be paid
for repeating their experience. The hard bit will be making it clear
that it is a meritocracy, and those people that try but don’t perform
as well by comparison will also be moved out. Josie, will you be
OK with that?’
Josie had to consider this, and she said so, ‘I need to think about
that, Steph. I’ve always believed I’d rather have hard workers on
my team than superstars. We’re suggesting I should be trying to
develop superstars from the hard workers and that means some
of the hard workers may not make it. I need time with that.’
‘I think that’s an extreme view, Josie,’ Paul replied, ‘Not necessarily
superstars; we want people who are trying to be the best they can
be, not just turning the same handle harder, that is the difference.’
Mike made another, surprising, contribution, ‘Josie, you of all people
will be best placed with this. There is nobody on your teams that
would question whether you cared for them.’
‘Thanks Mike,’ Josie appreciated what such a statement must have
cost Mike, ‘but the issue is that we are changing our expectations.
These people have not been employed based on a meritocracy;
they have been employed to perform a role. If they are performing
the role as described, I’m not sure we can dismiss them.’
‘That’s not right, Josie,’ said Steph, ‘It is clear in their employment
contracts that they are subject to performance appraisal and
comparison. I will double check that. I believe there is no fixed
standard of performance other than the criteria agreed in their
annual appraisal. We will have to be careful from here on to make
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sure we set those criteria on a comparative basis; you make a
good point there.’
Josie’s posture conveyed that she still wasn’t comfortable. They
were so deep into the issue now, Paul felt duty bound to point this
out, ‘If we don’t believe in this approach, what we say won’t make
any difference because our body language will give us away,’ he
smiled apologetically at Josie.
Josie didn’t take offence; she felt uncomfortable and so she was
sure she looked uncomfortable. Her beliefs were being challenged
and she needed to decide if she could change them accordingly
or follow the example Ralph had set early on.
Steph recognised they had taken that issue as far as they could
for now without making Josie feel cornered. Steph changed tack
accordingly. ‘As Karri explained, Sustainable is not just about
the environment, but I’m conscious we haven’t discussed the
environment directly. As an energy company in today’s world,
we must be clear on our approach because we will inevitably be
challenged internally and externally.
‘I stated my position at the outset of this initiative. Hopefully, we’re
all clear on that because it is unchanged. What we are discussing
is the means to achieve it. Simplicity, driven by Mastery of subject
and technology, particularly Digital, enables us to achieve efficiency
because we are Ready to produce Repeatable outcomes making us
Sustainable.’ As always, Steph continued to refine her statements
for clarity; but she had to admit that was pretty good, even by her
standards. She could see from the smiles and the light in the eyes
of the group that she had nailed that one.
She continued, ‘Energy efficiency is a natural outcome of overall
efficiency. This is the part of the climate change message that
most people don’t get, I think. They seem happy to protest
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and insist on change, but they drive to marches and fl y to
conferences. Until people walk their own talk, I struggle to take
them seriously and I’d rather we recognise energy efficiency as
essential in the face of growing populations and energy demand.
We will transition to the use of renewable energy sources to
provide energy wherever the energy efficiency equation makes
sense. That is our basic position, but now is your chance: are
we missing anything?’
For once, Steph was greeted by silence. Nobody could argue with
her forceful statements, and there was no need anyway because
they had already bought in to this overall goal.
Ruben did step in to make a critical point, ‘I believe one thing we
need to do is to look for opportunities to diversify vertically as well
as horizontally.’
‘You’ve completely lost me,’ said Karri, quite happy now that
expressing ignorance was no issue for anyone.
‘Sorry Karri; forgive an old man his jargon,’ apologized Ruben,
‘Horizontal means different sources of energy; vertical means
moving down the energy supply chain, building generation capacity
and even distribution and delivery capacity if necessary. The
beauty of renewables is that they are both horizontal and vertical
diversity because they are alternative energy sources and direct
generation of electricity.’
‘Pun not intended,’ laughed Martin.
‘I’m sorry,’ Ruben looked puzzled.
‘Solar and wind generate direct current, not alternating,’ explained
Mike. Andy and Paul groaned as the engineers were at it again.
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‘If you gentlemen are quite finished,’ Steph brought things back
on track. ‘To answer Ruben’s point, we are in the energy business
for real now: electrons are our product. How we generate them is
subject to the same investment criteria, the same approach: Mastery
and Digital and the same values we have been discussing: Ready,
Repeatable, Sustainable. Our shareholders should have no issue
that we put renewables up alongside gas plants or electric vehicle
charging. In fact, they should love it. It meets the demands some of
our activists have been making at AGMs. It makes us Sustainable.’
‘I’ll go further,’ Josie spoke up, ‘It also creates new and interesting
opportunities for some of those hard workers that may need
motivation to learn new things.’ Karri thought that was an excellent
point. Once again, she was taken with the education she was being
paid to get, and the diversity of people and viewpoints to which
she was being exposed.
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Chapter 29
Clarity
There was a palpable sense of excitement as the Leadership Team
got together with Karri to review the overall picture after completing
the sessions on Digital, Ready, Repeatable and Sustainable. They
still carried their enthusiasm from the Sustainable session, which
had made them confident in their shared vision of a sustainable
energy company.
Karri was seeking a sense of completion in her role as coordinator,
so she immediately called out the glaring omission from their
collective work to date, ‘We haven’t spent any time on Mastery, yet
we agreed Mastery was key to achieving our objectives.’
Paul, as the Learning and Development head felt driven to disagree,
‘It seemed from the sessions I attended Mastery was a common
theme throughout.’
‘Yes, we’ve talked about it, but we haven’t laid it out in the same
way we did for Digital, for instance,’ replied Karri. Gone was the
shy young woman they had first met. Karri now conducted herself
as an established member of the team, which they were all quite
happy she was.
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‘We already have competency programmes in place for all roles,’
said Paul, ‘We’ve all agreed that is just the starting point, and we
expect people to develop beyond competency and encourage
those people who respond to pursue Mastery. We’ll be seeking to
replace those who don’t respond over time.
‘The question is, can we create a constructive culture from this?
Can we define an approach to Mastery—or is our role to create
an environment in which individuals are responsible for seeking
Mastery themselves?’
‘How does that differ from the ‘find your own professional
development’ approach we already have in place for engineers
and other professions?’ asked Josie.
Paul persisted, ‘It has to. Have we ever really encouraged Mastery?
Or does our previous competency message detract from that?
How can we know what Mastery looks like in anything other than
our specialty—and only then if we are truly expert in our area?
As a person develops Mastery, they will become the leader in the
field, and it will only be their peers in that area that can help them.’
‘Isn’t that the aspect we’ve been missing?’ asked Martin, ‘Being
helped by their peers? If we leave it to individuals, they will
lack guidance. But if we try and dictate, how can we know the
right approach? Peer groups potentially create the constructive
environment we are looking for.’
Paul loved that, ‘That’s brilliant, Martin. Constructive cultures are
described as encouraging and cooperative. They empower individuals
to find their strengths and make their best contribution to teams.’
‘So, instead of formal hierarchy, we’re suggesting specialty networks
where members share knowledge and learning?’ Steph as always
sought clarity.
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‘That’s the idea,’ enthused Paul, ‘We already have guiding
models for the pursuit of Mastery, Q’s Golden Rules and the
DIKW spectrum. With that backdrop, networks would likely form
themselves. They should naturally support and stimulate each
other on their journey towards Mastery.’
‘Probably the ultimate use of Digital technology as well, being able
to share and access data and research and model outcomes,’
Martin continued to let his thinking run.
‘Not only that; we should get some interesting ideas arising out of
such groups,’ said Andy, ‘Can you imagine the likes of young Ian
in such an environment?’
‘You haven’t met Bruce,’ laughed Karri.
‘Oh, I have met Bruce,’ Andy replied, ‘We will never get on, he and
I, as I can’t stand his cynicism; but you’d hope a support group
might help with that. Give him an outlet for all that frustration, and
you never know.’
‘You make it sound like counselling,’ said Karri.
‘Sorry,’ Andy was mortified, ‘I didn’t mean it like that. People
like Bruce are smart but can easily become destructive. If we
can benefit from the smarts and avoid the negative, I’ll be more
than happy.’
That resonated with Josie, who was still struggling to reconcile
her values with the expectations they were developing. Josie said,
‘It might also help find some balance between levels of ability. I
still don’t believe everyone can be Masters, and that can’t be our
only criteria for performance. I’m happy everyone can learn and
improve within the right environment, but there must be a place for
those hard workers that provide the consistent performance that
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underpins our long-term productivity and repeatability. I’d hope
these networks would provide that environment.’
‘Me too,’ said Paul, ‘We keep coming back to this, Josie. Surely
you know we don’t only value brilliance. Ultimately, we’re talking
about minimising complexity and maximizing our collective cognitive
capacity. We can’t afford to carry people that won’t learn; but a
company full of boffins won’t produce anything efficiently, will
it? That would just create different complexities. We’re seeking
balance, and if we can help that balance by generating a feeling
of camaraderie through these networks, where people find their
own sweet spot—then that would be excellent.’
‘That helps, thanks Paul,’ Josie was grateful, ‘I can accept people
who won’t learn are a problem, but it is important to me that we
help good people that want to learn, even if they learn slowly.’
‘I don’t think worthwhile change will ever be quite that dynamic,
Josie,’ said Martin. ‘People always overestimate the nature of
change. I remember one of my early managers describing change
to me as a series of plateaus rather than a constant gradient.
You make small changes and let things settle if you want to be
successful. I’m hoping that our decision to let Mastery guide our
pace of change will naturally achieve a rhythm everybody can live
with, even if it may not be fast enough for the likes of us.’
Karri was diligently making notes as ever and had another epiphany
as she looked back over their discussion so far, ‘Clarity, Mastery,
Rhythm and Balance; that even sounds good.’
‘What a great summary, Karri,’ Steph liked it too. The rest of the
team were also appreciative. ‘What else do you have in your
summaries?’ Steph asked out of curiosity.
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‘Mastery and Simplicity: push up the knowledge spectrum and
down the complexity matrix?’ offered Karri.
‘You should be writing advertising copy,’ said Josie with a smile.
‘I tend to think in sound bites,’ said an embarrassed Karri, ‘Smart
phones and modern communications seem to be in headlines,
don’t they?’
‘What was the common-sense question you came out with for
Mike?’ prompted Josie.
‘Do you mean “As you become better at what you do, would the
manual become thicker or thinner”, is that the one?’ asked Karri.
The whole team were somewhat stunned that weeks and months
of workshops could be summarised so succinctly in a handful
of phrases. Steph had wanted clarity all along, and she was in
danger of getting it.
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The Moral
Every fable has a moral. We could express this one as ‘Any fool
can add.’
The modern cycle of compliance, emails and meetings seems
as if it is designed to generate a never-ending list of things to do.
Technical people come to identify their jobs as providing opinions
and input based on experience. Managerial personnel feel the
pressure to respond quickly. Meetings therefore produce solutions
based on little or no analysis of the facts.
People spend more time trying to prove they were right than
working out the correct answer in the first place. We’ve stopped
engineering or analysing and become doers instead of thinkers;
we comply and repeat instead of challenging mediocrity.
As a result, performance will inevitably spiral down. Opinions based
on repeated experience are fraught with danger. They may well be
correct under normal circumstances, but the sudden occurrence of
an abnormal circumstance or a poor decision initiates a collapse.
We must not add requirements in response to incidents or
deviations from target. We must find the root cause of any issue
and eliminate it.
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This is the biggest misunderstanding when it comes to the
introduction of simplicity. We are not talking about dumbing things
down to the lowest common denominator. We are in fact talking
about the opposite: raising the level of understanding such that we
can carry out good fact-based analysis and make well informed
decisions.
To optimise outcomes, leaders must introduce a necessary
discipline in the form of good decision making and planning. This
is where the journey should begin: not by establishing yet another
improvement initiative, but by simply making sure we do the basics
of gathering facts and analysing to inform decisions. We must
not substitute meetings, discussion, experience, the collation of
opinions for facts and analysis. We can’t make the complicated
environment of industry simple, but we can produce clarity by
making and implementing good decisions.
Firstly, a good decision requires an understanding of the situation
and its complications based on facts (cognitive capacity exceeds
complication). Unfortunately, too many decisions are driven by
cognitive bias. Under time or budget pressure, an organisation
or individual faced with complication that exceeds their cognitive
capacity finds ways to shortcut good analysis and fact-based
decision making. These shortcuts are known as cognitive biases,
and it is also where we have inadvertently introduced bad practice
as the normalisation of deviance.
The luxury goods and fashion industry exploit a common example
of cognitive bias: the more expensive the item, the more value we
believe the item has.
Cognitive bias is often camouflaged as experience (confirmation
bias) or common industry practice (group think). Most organisation
structures are created based on industry practice and populated
with experienced hires before an individual asset strategy is
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THE MOR AL
developed. In other words, we have introduced the two main
cognitive biases before we have even begun.
Secondly, implementing a chosen course of action, even if correct,
all too commonly fails because the organisation is overloaded.
Just as in decision making, where complication exceeds cognitive
capacity in implementation, we now get a further form of cognitive
bias called the normalisation of deviance. Instead of following
plans and procedure in implementation, complication that exceeds
cognitive capacity leads to the generation of shortcuts (deviance)
that expedite the outcome.
The most common example of normalisation of deviance is the
use of a risk matrix to evaluate a risk, usually based on estimation
rather than the time-consuming collation of facts and analysis
that underpins professional risk analysis. Risk matrices were only
originally intended to compare several risks.
This tendency towards deviance due to overload or insufficient
cognitive capacity in turn generates a management response that
tends towards control. Compliance becomes the watchword and
additional systems are introduced in pursuit of control.
Where complication already exceeded cognitive capacity, additional
systems can only increase the complexity that plagues most
organisations. Failure to recognise increasing complexity inevitably
leads to the prevailing state of reactivity.
The overall trend towards compliance by addition of systems
indicates that industry is not sufficiently sensitised to complexity.
Complexity is further compounded by the incorrect use of technology
to automate existing workflows that are already unnecessarily complex.
This will only add complication to a complex situation, not solve it.
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Quite simply, the problem is that we forget about the law of
diminishing returns.
Contrast this behaviour with the definition of leadership that Steph
embodied: keeping it simple, providing clarity, reinforcing that
clarity, and empowering the workforce to realise that simple vision
through a constant focus on their development.
A workforce motivated by the pursuit of Mastery will amaze you as
they easily achieve the goals you set. Their enthusiasm to master their
discipline and maximise their value will add to your organisation. In
other words, you’ll see how much can be achieved with so few people.
The value in developing specialists is their ability to analyse
situations and their complications, the problem. We don’t—truly,
we can’t—know the solution until we define the root cause.
Bottom line: we keep forgetting the fundamentals. Any effective
approach can be simply summarised as ‘doing the right things,
in the right way, in the right order to continuously improve agreed
performance measures.’
Most importantly, it is essential to recognise the cultural aspects that
underpin all improvement. The aim is to achieve a global transition
from a ‘compliance’ mindset to a ‘performance’ mindset—to move
from ‘passive’ culture to a ‘constructive’ culture.
For senior staff, this equates to a transition from a ‘management’
mindset to a ‘leadership’ mindset. For daily operations, this
represents a transition from the ‘reactive’ to the ‘proactive’. The
journeys of Ralph and Mike were designed to illustrate just how
uncomfortable this transition can be.
This is the main thrust of Simplicity from Complexity: keep it simple,
work smarter not harder, it’s all about people.
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THE MOR AL
Key to understanding efficiency is to understand that performance
is not improved by addition, it is improved by inherent change.
As the players in the previous pages discovered, the goal is to
eliminate root causes, simplify actions, and minimize energy and
effort required to produce results.
In short, we must resist the temptation to let compliance and
prescription lead the way. Instead, developing performance by
increasing the education and hence understanding of our talent
pool, will improve outcomes and reduce aberrations through the
evolution of ever better practice.
This is an uncomfortable shift for industries that routinely set
zero targets for safety outcomes. We saw how Ralph struggled
to understand this issue. People also used to believe that the sun
orbited the earth; hopefully, it won’t take as long for people to realise
that zero deviation is an unrealistic target unless we allow fanaticism
to get in the way of analysis. Zero harm may be desirable, but it
is unrealistic. This is the difference between an aspiration and a
target. Communicate an aspiration but set targets wisely.
Hopefully, if you’ve read this far, you can appreciate that workflow
must be free to evolve along with our level of understanding. Hence,
technology must assist the evolution, not resist the evolution by
investing too heavily in prescribed methodology.
The conversation with the colourful characters in the IT department
was introduced to explain how technology can be aligned with the
business instead of being added to the business.
This is one drawback of Enterprise Resource Planning. We needed
structure along with the increased freedom of PCs, LANs, and
WANs, but we didn’t need the restriction of mainframes from
which we had just broken free. It should be no wonder that ERP
has been perceived as constraining and resisted accordingly by
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users. Thankfully, cloud technology allows us to have the best of
both worlds: financial structure and rigour coupled with ease of
use and integration.
This balance of structure and ease is essential to progress—
specifically, ease of adaptation without the compromise of integrity.
The structure provides the integrity and ease provides the flexibility
to adapt. Without the structure we create Enron – an organisation
with stellar adaptation and innovation but no integrity. Without
the ease, we create Kodak: performance was excellent until the
companies collapsed.
230
About the Author
Howard is different.
He is a renowned speaker and
educator, but he is quite shy.
He started as an engineer, but he
doesn’t fit in with other engineers.
He has led several companies to
success, but he is not corporate.
His open and honest style is often
at odds with corporate norms of
careful control of the message.
Howard has no time for compliance thinking. Compliance is not the
goal; productivity is the goal. Compliance should be the consequence
of good practice; compliance should not determine practice.
Many companies talk about diversity but define diversity in terms
of race and gender. True diversity is about diversity of thought.
Different race and gender should produce diversity of thought and
experience, but not if you then require the individuals to comply
and control their message.
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We are all different and if we can embrace difference, particularly
different thinking, perhaps we can unravel the ever-increasing
complexities we inflict upon ourselves.
232
Appendix
Definitions & Diagrams
Complication versus Complexity
In closing, let us consider the definition of complexity.
Recall Ralph Stacey’s definition of complexity spectrum and
description of the difference between the complicated, known
unknowns, and the complex, unknown unknowns.
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We often wrongly describe what we do in industry as complex
when it shouldn’t be. While it is in fact complicated, we only make
it complex when we lose control of it. Complex and complicated
tend to be used interchangeably where they are not the same
term. A complicated situation may have several layers that make it
difficult for the uninitiated to understand, but the interaction between
variables is defined. A complex situation has interaction between
variables that are not clearly defined, and even those who know
the subject area accept uncertainty. Hence, most of the time we
are dealing with the complicated, the known unknowns, the yellow
in the image above.
However, we should know what we don’t know and as professionals,
use models to cope with uncertainty. We don’t deal in the chaotic,
where no structure or relationships exist. At worst, we deal in the
complex, where there are several unknown unknowns, but such
unknowns can be explored through experimentation. That, after
all, is the point of science, to explore and to understand.
The trick is to focus on the generation of value. Measure what
matters and measure the value. As Steph and her colleagues
figured out, a proactive culture strips away non-value adding
activities. To determine what these are, we must ask value related
questions: How do we know this solution will generate the maximum
value for the business? Have we taken the time to analyse the
value of this approach? Is this the highest value scope we should
be working on at this time? Have we done this work as efficiently
as possible? Is there another approach—even if it costs more or
takes more time—that will increase the value for the business?
Ultimately, it is an organisation’s culture that produces good
outcomes. If everyone pulls together instead of defending their own
interests, processes will naturally be improved—usually through
simplification and removal of duplication and complication.
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DEFINITIONS & DIAGR A MS
To achieve this kind of a culture change, it must be clear to the
population what is in it for them. Trying to motivate doesn’t work, as
motivation is temporary. Ordering change won’t work either since
people will tend to resist force. And penalising failure to change
won’t work, as punishment breeds resentment. Change must be
incentivised, but the incentive shouldn’t be monetary; the incentive
must be, in line with Maslow’s hierarchy of needs, self-actualisation.
If you want to help people make a cultural change do two things:
educate them, or better get them to educate each other, and
decrease the complexity of their working days.
Cognitive Capacity, Complexity and Clarity
Cognitive capacity: The total amount of information the brain can
understand at any given moment.
Complexity: complication in excess of cognitive capacity.
We achieve understanding by reducing the complex to a level of
complication within the cognitive capacity of the audience. We
achieve clarity by making that understanding uniform throughout
the organisation.
We can’t make the complicated environment of industry simple, but
we can produce clarity by making and implementing good decisions.
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SIMPLICITY FROM COMPLEXITY
Simplicity Cycle
Efficiency is achieving more by doing less. We wonder why our
productivity never improves and eventually begins to decline, when
we have forgotten this basic tenet.
Compliance thinking means that we constantly add load to our
organisations. We know this is unsustainable, and we have the
backlogs and incident records to prove it.
Addition should be avoided wherever possible. It is our enemy; it
is the easy way out. Any fool can add, but the genius eliminates,
minimises, or simplifies.
We are all familiar with the concept of inherent safety. We can and
should apply the same approach to efficiency, productivity, and
reliability: eliminate, minimise, and simplify. These principles do
not apply only to design; they apply to everything we do.
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DEFINITIONS & DIAGR A MS
When we do the analysis and build it right, we create not just the
simplest possible asset, but also a robust metadata structure. A
robust metadata structure makes it possible to integrate the records,
monitoring, control, analytics and all digital aspects behind a single
interface to create a digital asset alongside the physical asset.
In the digital age, we capture ‘Build it Right’ as our baseline digital
asset model and then visualise the deviation in real time data for
all to see.
We use the data to inform analysis to look after it right, utilising
the monitoring, control, and analytics to operate and the metadata
in a Computerised Maintenance Management System (CMMS) to
maintain.
We take the monitoring data, and we use the digital asset to analyse
and look for improvements.
Efficiency gains mean doing less: eliminate, minimise, simplify,
whilst making more.
If we have built it right, we can look after it right with a plan for
everything, which in turn allows us to use the plan as a datum, a
baseline to identify further opportunities to improve.
Improving may sometimes mean changing the build, modifying the
design, because our data has shown we didn’t build it right. In this
way, we create the never-ending cycle of continuous improvement
that we’ve sought for decades.
This book was designed to bring this cycle to life and provide themes
to inform a journey towards simplicity. Making good decisions in line
with a clear cascade from strategy to planning and implementation,
backed by accurate analysis of improvement opportunities will take
you a long way on the journey of simplification.
237
The Game
The game described in the story is real.
The game is available for use within your organisation.
The game can be customised to suit your organisation and the
changes that are required.
A range of exercises are available to choose from that illustrate the
benefits of gathering facts and analysis in any situation to inform
good decisions.
Contact the author via LinkedIn for more details.
https://www.linkedin.com/in/howardkthomas
Website:
www.tamconsult.com.au
239
References
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INTERNATIONAL ASSOCIATION OF OIL AND GAS PRODUCERS,
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Producers.
INTERNATIONAL ASSOCIATION OF OIL AND GAS PRODUCERS,
(2014)—Safety performance indicators – 2013 data. OGP data series,
report number 2013s, dated July 2014. London: International Association
of Oil and Gas Producers.
INTERNATIONAL ASSOCIATION OF OIL AND GAS PRODUCERS,
(2017)—Safety performance indicators – 2016 data. OGP data series,
report number 2016p, dated Sept 2017. London: International Association
of Oil and Gas Producers.
JOHNSON, N. (2007) - Simply Complexity: A clear guide to complexity
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ROWLEY, J. (2007). ‘The wisdom hierarchy: representations of the
DIKW hierarchy’. Journal of Information and Communication Science.
33 (2): 163–180.
STACEY, R.D. (2002). Strategic management and organisational
dynamics: the challenge of complexity. 3rd ed. Harlow: Prentice Hall.
MOUBRAY, J. (1997). RCM 2 reliability centred maintenance. Industrial
Press Inc. USA.
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Notes
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