Terry Wireman's Blog

Are You Boring? Maybe you should be…

I just read an interesting article from Harvard Business Review (5/18/12) by Joel Stein titled “Boringness: The Secret to Great Leadership”.  Joel is the author of a new book “Man Made: A Stupid Quest for Masculinity”.  During his research for the book, he found that most leaders he interviewed were quiet listeners who let other people make most of the decisions.  He said most leaders he interviewed were not particularly charismatic – or funny-or they were not the toughest guys in the pack – they were in fact, a little boring.

 He discussed one fire fighter Captain who had his way of doing things and he believed it was right.  He always followed this way and never wavered.  This was reflected though his organization, so they always knew that they were doing things exactly right – the way the Captain wanted them done.  This made his employees both proud and assured.  They would do anything for him – not because he was motivational or charismatic, but due to his deep belief in his mission – which also made them believe in that mission.

 So what does that say about our maintenance organizations today?  How many of them are running around the plant or facility like it is on fire?  How many maintenance organizations reward heroes – those individuals who seem to break more rules than they follow?  Or is it that in many organizations we don’t even have rules? Or goals? Or maintenance business processes? Or business objectives?

 Do we really have the leadership that is necessary to run maintenance departments like a business?  What if we executed activities in the maintenance organization like proactive fire-fighters?  You see, they only have to fight fires when their proactive methodologies are disregarded by the very individuals they are hired to protect.  What if we only occasionally had to fight fires when our preventive measures broke down?  Would we gain more organizational respect for our maintenance leadership?  Or would that just be boring?

 Maybe we could use more boring maintenance leadership…

Do You Really Want a Self-Directed Workforce?

When discussing roles and responsibilities for maintenance and reliability organizations, I often get push-back from companies that want their people to be “self directed”.  Often comments such as “They don’t want us telling them what to do” or “They know their jobs without us telling them what to do” are heard when discussing organizational alignment.  However are these statements really true?

 An interesting article by Tammy Erickson in Harvard Business Review (HBR Now 04/04/2012) made this observation:

“Collaboration improves when the roles of individual team members are clearly well defined and well understood… Without such clarity, team members are likely to waste energy negotiating roles or protecting turf, rather than focusing on the task.”

Additionally she said:

“The leader’s role… is to insure the roles and responsibilities of the team members are clearly defined for the specific project at hand.”

 So in maintenance, reliability, and asset management, are our organizational roles and responsibilities clearly defined or do we leave it to the organization to figure out what it is going to do or not do?  How many critical decisions are not made or made by the wrong individual?  How many critical pieces of information “fall through the cracks” because there is no one assigned to record and audit the information?  How much financial damage is incurred by the company by not having clearly defined roles and responsibilities?

 The truthful answers to these questions could lead us to re-think the current way we manage the maintenance, reliability, and asset management functions in companies today.

Value Creation

In the article, 10 Amazing Life Lessons You Can Learn From Albert Einstein, one of the lessons is “Strive not to be a success, but rather to be of value".  The article comments “Don’t waste your time trying to be successful, spend your time creating value”. One might wonder how reflecting on this lesson would impact a maintenance and reliability professional?  Perhaps focusing too much on achieving a number, like a specific KPI, would distract someone from looking at the big picture, such as the value a maintenance and reliability business function can create for an organization. 

 Consider one common KPI - “maintenance cost as a percentage of production output”.  Some companies focus this on a cost per unit, cost per ton, cost per case, etc. type of output.  So if this is an organization’s performance focus, what will the maintenance and reliability professionals focus on?  COST!! 

 They will take this focus and lose sight of the potential value creation of increased availability of their assets.  They also lose focus of the potential value creation of increased asset efficiency.  The value creation of these two factors always far exceeds any value that is momentarily derived from cost cutting.  As often as it is discussed, we are still failing to develop KPI’s that focus on the value that the maintenance and reliability professionals can provide to their organizations.

 The life lessons from Albert Einstein concluded with the comments: “If you’re valuable, then you will attract success.  So strive to be valuable and success will chase you down.”  As maintenance and reliability professionals, wouldn’t it be great to see success chasing you as you look at the big picture of value creation and not just the Costs?

The Empire Strikes Out

I ran across an interesting article on the internet this week that has great application to most organizations.  It was titled “Management Lessons to be learned from Star Wars”.  It can be found at http://www.msnbc.msn.com/id/46482731/ns/business-careers/#.T0ZYJHmibng

The author made some humorous, but insightful observations about the Galactic Empire and business today.  I would like to comment on the first.  It seems that the Emperor and Darth Vader did not have a succession plan in place for their organization.  When they both died, the whole empire fell apart.  They did not structure their organization for ongoing continuity in the case of departure/ retirement of any key personnel.

We see this all too often in companies today.  Instead of building an organization to achieve business goals and then staffing it with the right people, and then mentoring the existing personnel, they try to divide up the roles and responsibilities, based on the existing talent in their organization.  There is no opportunity for advancement, so key people, who want to progress in their careers, leave.  So we end up with supervisors that cannot supervise planners that cannot plan, and managers that cannot manage. All are dead ended in their jobs and are not trained for any further advancement.  So their companies compensate by structuring the organization to the people instead on the business.   The roles and responsibilities are divided and assigned (or not) in a manner that perpetrates confusion and prevents focusing on achieving the necessary business functions.  Instead of a united organization, we have a silo’d organization with everyone focusing on their own department and the final customer (the shareholders) achieve a far lesser return on their investment.

What if companies would take the following steps?

1. Identify their business mission/ visions, their goals/objectives and strategies and tactics
2. Develop the proper roles and responsibilities  that must be executed
3. Develop (or acquire) the right people for the roles
4. Determine the proper staffing levels and resources
5. Determine the proper KPI’s
6. Continuously improve the business

While this simplified, isn’t this what companies are supposed to be achieving the maximum return on investment for their investors?  If companies do not focus on executing the basics of management, they will end up like the Empire: Leaderless, broke, and their greatest competitive advantage destroyed.

Can We Even Spell “Asset Management”?

The current draft of the ISO-55000 standard is being reviewed in South Africa by the world-wide TAGs (Technical Advisory Groups) next week.  While I am not making this trip, I couldn’t help but reflect on the topics that will be included in the discussions.  I also wonder who is really qualified to set an “asset management” standard? 

 Consider the definition of asset management as it currently exists in the draft of the ISO-55000 standard: “Asset management involves a disciplined approach which enables an organization to maximise value (or minimise liabilities) from the portfolio of assets for which it has a responsibility in delivering its strategic objectives.”

 Let’s focus on the “maximizing value” part of the statement.  If we were to actually maximize the value of an asset, we would first have to know why we acquired the asset.  Consider:

• Why was the asset purchased/ built/ modified?
• What business need was it purchased/ built/ modified to address?
• When it was installed and commissioned, did it actually meet the business need?
• As it has aged, has the assets ability to meet the business need diminished?
• Is the asset being operated according to design specifications?
• Is the asset being maintained according to the engineering requirements?
• Is a major overhaul required to restore it to baseline design specifications for it to continue to meet its designed business needs?
• How many companies actually have accurate data to answer these questions?

Can most companies answer these questions about their critical assets?  The answer would have to be a resounding NO!  Consider this quote:

     “The true capacity of companies that make the Business Process Improvements are as if they have invisible factories (hidden capacity).  It is estimated that there is $2 Trillion in additional productive capacity in the United States, which does not show up in GDP statistics or on the balance sheets of companies.” - Professor Brynjolfsson – MIT Sloan School of Management

A second source said the following:

“ARC estimates the global process industries lose $20 billion, or 5 percent of annual production as the result of unscheduled downtime. Drilling down into this number, we estimate that nearly 80 percent of these losses are preventable.” - Passing the Insurance Acid Test with APM  by Steve Clouther, Paula Hollywood and Wil Chin

 If we are currently mismanaging assets to this great of a degree ($2 Trillion in the US and $16 Billion in Global Process Businesses), can we actually expect a group with very diverse perspectives to produce a standard that actually improves how we manage assets?  What organizations can the assembled group of TAGS use as “Best Practice” examples?  Have the TAGS ever seen a true example of a company that is the “Best” at asset management?  Can the TAGS actually produce guidelines that are prescriptive enough to help companies achieve asset management?  Will the ISO-55000 standard be nothing more than a few general statements about the TAGS view of asset management without a roadmap to achieve it?  Will the standard help international and domestic companies reduce the amount of asset related losses we see world-wide? Will there be a “Line of Sight” that connects the standard to true business benefits?  Will the standard make a true business difference?

 These questions along with many others will be answered as the proposed ISO-5000 standard progresses through the development process.  It is only hoped that the TAGs focus on the necessary business reasons for an asset management standard and maintain a clear “line of sight” and connect the proposed standard to the business (financial) impact of asset management.

How Reliable is YOUR “Bungee Cord”?

I just caught this on the news about the young lady from Australia that had her bungee cord break while jumping off a bridge in Africa.  I wouldn’t have chosen this subject, but she survived the fall and the news report said that she would fully recover. 

 The background was interesting, since in the follow-on information, it was revealed that this business has been operating for over 10 years.  In fact, 150,000 jumps without an incident.  So how closely are the design parameters of the bungee cords tracked?  Is there a MTBF for the cord?  How closely is it tracked?  Is there a preventive maintenance inspection periodically conducted?  Is there a work order history of each PM or repair/ replacement?  How do they manage the life cycle of a bungee cord?

 As the bungee cord gets close to the end of it’s life cycle, do they increase the number of inspections?  As it gets close to the end of it’s life cycle, does someone say “we know if needs to be replaced, but we are in the middle of tourist season and can’t afford the downtime to change the cord”?  or even worse “we decided to change to a run to failure policy on the bungee cords this year”. 

 You may feel that this is a ridiculous line of reasoning; however, decisions are made in facilities and plants every day that can also have life or death consequences.  We constantly read in the United States (and around the world) of incidents with food processing, oil and gas plants, or even light manufacturing where poor asset/equipment related decisions are made and someone (even the end consumer) is severely injured or killed.  The typical responses?  “We can’t afford the downtime to do that.  We can’t afford to maintain that asset/ equipment – we run it to failure.”

 The irresponsible decisions that are being made in many facilities and plants today are typically being made by those with little or no technical knowledge of the equipment/ assets.  Even when the technical personnel in the facility or plant are involved in the decision, it is often overridden by the operational or financial decision makers.  Maybe some of them should take up bungee jumping…

 One final note, if they do take up bungee jumping, make sure they try the bridge in Africa.  The river below the bridge is also crocodile infested…

Objective or Subjective - ???

In my last blog, I referenced an ASTN article on the value of standards.  In this blog, I want to discuss whether or not a standard has merit.  Merit is defined as “worth or excellence”.  Unfortunately, a standard does not have worth unless it has been applied to a business and produces some benefit; then it has merit. 

 One of the criteria in evaluating standards is whether or not it will deliver reproducible results.  This is the reason that standard cannot be vague or obscure.  If they are, then they become subjective – based on the company’s or consultant’s perspective on the standard.  This is the main reason why any standard must be prescriptive enough to avoid a “rubber stamp” approach.  This would allow anyone who wants to be certified under a certain standard to be certified whether they met the “intent” of the standard or not.

 One can consider some of the variances within the inspections performed under the OSHA standards.  If the particular part of an OSHA standard is open to interpretation, one inspector will write a citation, where another will simply pass over an infraction. This has been common experience in many companies and is particularly evident when the OSHA inspectors have different backgrounds.

How does this apply to the proposed ISO-55000 standard?  If this proposed standard is to be of any value to the maintenance and reliability community, it must be prescriptive enough to eliminate most of the subjectivity.  One can only imagine the variances in certification if a registrar had a TPM background vs. a RCM background.  How much subjectivity would there be if the proposed standard was vague or obscure? 

 It is only hoped that the proposed ISO-55000 has sufficient detail to make it useful to the asset management community; especially the maintenance and reliability organizations.  

Regulatory Agencies and Standards

There was an interesting article written recently titled “Choosing Standards Based on Merit”. Some of the points made in the article (which is available at http://www.astm.org/ABOUT/images/Choosing_Standards.pdf ). The article focused on why certain standards may or may not be adopted and how government agencies can adopt standards.

In Box 1, in the middle of the article, the author wrote that an agency can simply adopt a standard by incorporating it by referencing it. The example of OSHA adopting the National Electrical code was used.

Another point was made under the section “deference in lieu of developing a mandatory standard”.. It was that “An agency may decide that it does not need to issue a mandatory regulation because voluntary compliance with either an existing standard or one developed for the purpose will suffice for meeting the needs of the agency.”

If ISO-55000 (The proposed standard still under development) is completed, how will it impact regulatory agencies? How will OSHA, EPA, FDA, etc. view the proposed ISO-55000 standard? What if OSHA, the EPA, the FDA decides to reference the proposed standard? What if they, as part of their inspections, begin to ask if your organization is voluntarily complying with the proposed ISO-55000?

Does your organization currently have asset management policies and procedures in place? Does your organization currently track the life cycle history (including costs) on assets that are core to it doing business?

There are a lot more questions than answers in this blog. However, they are all questions that any maintenance/ reliability/ asset manager might want to start asking…

-Next blog – from the same article – What is Merit?

Did We Pay Attention in History Class?

I was just re-reading some material before the TAG Meeting for the proposed ISO 55000 meeting in Washington in a few weeks. One of the books I was reading was Systems Engineering Management by Benjamin Blanchard. One of his statements caught my attention.

It was a comment he made about Total Productive Maintenance. He said "TPM is an integrated, top down,system oriented, life cycle approach to maintenance with the objective of maximizing productivity." This is interesting, since in most companies, TPM is viewed as operators doing maintenance.

While this will be a component of TPM, it is interesting in this text and many from Japan, it is not the primary focus of TPM. Many of the texts on TPM are decades old...

Did we pay attention in history class? Apparently Not...

What if Maintenance treated Operations the way Airlines treat their Passengers?

Having just completed a week of travel, I encountered several “hiccups” during the week.  These events caused me to think about maintenance and operations in a plant or facility.  What if maintenance treated operations the way that the airlines treat their customers?  Let’s consider a couple examples.

 Suppose that operations wanted to exceed the capacity of their equipment?  Well, maintenance could then do what the airlines do when a passenger checks a bag with an excessive weight – charge them.  For example, one airline has the following rules:

• 51-70 lbs  $100 each
• 71-99.9 lbs $200 each
• Depending on the route up to $400

So let’s propose this – If operations wants to run:

• 10% above the asset’s design capacity –
  • 10% of the value of the hourly production for the time capacity is exceeded
• 20% above the asset’s design capacity –
  • 20% of the value of the hourly production for the time capacity is exceeded
• Over 20% above the asset’s design capacity
  • 50% of the value of the hourly production for the time capacity is exceeded

We could then take the total amount and deposit it a special capital equipment fund to purchase the new assets that are going to be required to replace the assets operations just wore out.

 Let’s suppose operations wanted to make their equipment easier to operate or more ergonomically correct.  We could follow the airlines example for “special seating” (or actually seats with the proper amount of seat space).  The airlines charge from $5.00 to $75.00 for the extra seating space.  So to make the equipment more “operable” maintenance could charge the same $5.00 to move an indicator light and up to $75.00 to move a switch.  The funds could be collected from each operator and the maintenance department could purchase special tools and equipment to make their jobs easier.

 I probably shouldn’t cover the topic of installing pay toilets…

 This might work with the airlines – but I don’t think it will “fly” in our plants.  But then, maybe it should…