Archive for the ‘Asset Management’ Category

Forethought & Investment Strategies

Friday, April 9th, 2010

One of the hurdles to reliability implementation or maintenance and business practice improvement is the cost to move forward.

The market pressure can be stated as “shareholders want dividends and they want them now”, but those same shareholders also require a viable and reliable future revenue stream. Of course, that describes the investor as opposed to the speculator, but if we must manage corporations to please that type of shareholder, we will run companies into the ground.

Securing plant and production reliability addresses the concern of stability: a steady, recurrent revenue stream, as opposed to one plagued by unpredictable hiccups. Obviously, other concerns also drive profitability, such as the price of the oil-barrel for petrochemical plants and refineries, but it becomes us to reduce chaos and to manage whatever factors or aspects of business that can be controlled.

When faced with cost considerations for implementation, ask yourself whether or not the current practices can largely guarantee an uncompromised delivery of product in the future, knowing that profitability and dividends tie in directly with that same production. Reliability’s foundation is forethought and confronting probable and possible events with a view to the desired outcome.

© 2010 by François Gagnon

Change Culture Club (1), or Consultancy and Consensus

Monday, February 15th, 2010

WARNING: the reader is forewarned that while revealing to some degree, this article may confront endemic attitudes and be difficult to accept. This being said, like many other issues, not talking about them doesn’t make them miraculously go away. So we hope you can enjoy this minor brainstorm in spite of the disturbances it may bring. Triggering the right questions or a little introspection may sometimes be helpful.

I was once told that the percentage of success of personal therapies lies close to 18%, although I’ll admit I have never sought the truth of the matter (I do recall conversations with a former “significant other” specialized in this area of endeavor, and the gist of these conversations seemed to concur with the appallingly low success rate). Apparently, tribal witch doctors embarked on a similar mission to help an individual seem to achieve a success rate of… 18%… Certain prescription drug assisted therapies are far more successful for specific conditions, but as a whole, the above seems to hold water.

It would be easy to conclude that there may be a repetitive pattern in this accomplishment: therapy seeks to trigger or support change, and in this respect, the therapist’s work parallels the approach of the business or engineering consultant.

How many psychiatrists does it take to change a light bulb? Only one, BUT… the light bulb REALLY, REALLY has to WANT to CHANGE!!! And with that relatively stale joke, we uncover one of the great secrets of reliability consultancy: your consultant(s) will not change anything, YOU will! Well, actually, you might! But ONLY if doggedly determined to achieve a continuous improvement loop and/or specific targeted goals.

It would be tempting to jump to the conclusion that the consulting firm therefore serves little or no purpose. Here, then, is another rule of consultancy: if you could, you would! The stern review of current activities, the guidelines to establish a road map for change, the assessment of best and quickest results to be obtained (also called low lying fruit), the benchmark for exemplary or best practices, the traps and pitfalls to avoid, the identification of the areas where MORE money should be spent (and conversely, areas where money can be saved because it is an ineffective or inefficient use of resources), all of those items pertain to the expertise of said consultant.

Many firms choose to sugar-coat everything. Here is another rule: if you HAVE to SUGAR COAT it, the organization likely has not attained the maturity that will allow it to break its previous bad habits!Some years back, one consulting firm’s VP put it succinctly when the author raised concerns in one project: “Doesn’t matter! We get out fat fee anyway, and may get to do it again at the same location in the future…” Perplexed? Dubious? I agree, because so was this wincing writer! We all need the money (the rent, the mortgage, the business expenses), but must we be so crass and uncaring about it? This being said, the blunt reality must be addressed, but doing so with good humor and a view to how best to promote change remains inherent to our mission.

A recent challenge to our consulting wisdom was issued abroad where management customarily relies on a consensus culture. The rule applies: if you could, you would! Therefore, if they had been able to promote needed changes, or had they been capable under the current hierarchy, organization, system and culture to deliver (product, improvement, KPI, other) on target, we would not have been involved.

And Consensus?
Too many cooks… Imagine if the purchase of a car were open to negotiation or discussion for each and every component of that car. The process would be laborious and tedious, and the end result would quite likely be a monstrosity.

Somewhere along the line, the “car” would surely become a “vehicle” and every possible function of that car within a family, business or industrial context would be considered by participants. The size and footprint of small cars is interesting and so is their energy efficiency, but that shovel on the payloader is “oh so very useful”… What do you mean by “the shovel is heavier than the car”. Never mind the hydraulics, we’ll just leave the shovel at ground level all the time. Or install hydraulic stabilizer legs on the car to stabilize it when we lift the shovel. This is the underlying cause to the “camel” joke: a horse designed by a committee. And perhaps this writer can raise a few smiles by latching on to one of the Hispanic definitions of camel: difficult, laborious, improbable to bring to term. Clearly not our target!

Consensus implies input from various parties, and discussion. Some people will lend tremendous ideas to the process and will definitely have an impact on the end result. Some participants around the table, or involved at arm’s length (teleconferencing, minutes of the meeting, email distribution) will lend a cursory opinion, and no more. And someone will have to choose a course of action and take a decision. Managing is not a democracy!

A brief parenthesis about democracies, since I mentioned cars earlier: one individual had several daughters and to cut short “consensus” issues on car color, each daughter in turn chose the color of the family car. That is how the poor man ended up in a lemon yellow car for a few years.

Back to our main topic:

Seeking consensus about change ignores some basic principles of human psychology. We tend to resist change. We tend to reject it if we can. There is strong criticism whenever change is proposed, and such may be brushed aside as an agent of resistance to change. Yet, change for the sake of change serves no purpose.

What do you seek to accomplish? As consultants, we have waltzed in so many places where metrics (KPI or otherwise) were weak, distorted or inexistent at the outset. Can we rely on bad data? Can we nail our targets down when the underpinning of information paints an inaccurate picture of what we want to change?

In fact, we can, but it also becomes part of the mission to get the numbers to truly reflect the reality of the situation. Often times, a client would like the current numbers to become the basis for payment. This is feasible, but rife with problems when the numbers have been manipulated.

To be continued…

© 2009 by François Gagnon

Resistance to Change (2)

Friday, October 2nd, 2009

Legitimate Concerns
Either some adjustments are needed to make the proposed changes function properly, or there are hurdles or barriers that have not been considered. Perhaps the product / change / project / system does not meet the objecter’s expectations of quality (or other, such as technical level), or there are known issues that the salesperson would not reveal.

Feedback from other parties (different location or facility within the corporation, friends, colleagues, or other) may point out severe problems.

Very often, some person voicing a legitimate concern may not be capable of fully expressing the reasons behind their reticence (oddly enough). The objecting party “feels” the proposed solution to be wrong for their environment.

If consensus must be achieved, develop a checklist and discuss the proposed goals with the vendor / service provider, and never forget to get the agreement in writing, detailing the issues, what the solution will address, and how it will achieve this.

© 2009 by François Gagnon

Resistance to Change (1)

Thursday, September 10th, 2009

The infamous “resistance” to any proposed change takes many forms.

There are legitimate concerns, there’s contrariness, there’s fear of change, there’s protectionism, there’s a confrontation with a history of failed or abandoned initiatives, and finally, refusal to execute the work involved in the implementation of change, which unfortunately amounts to plain laziness.

Arriving at a consensus within a group of people may well face every previously stated type of objection, making compliance and adoption of almost any novelty / improvement / project difficult or even impossible at the best of times, no matter the value of the proposed initiative or change.

Over the course of the next few days (we hope), the author will endeavor to write out a few thoughts on each of the above.

Contrariness
The contrarian takes two forms: he can be a naysayer to anything he does not himself initiate, and thus, becomes a negative influence and rarely a helping hand in any of the activities of the group, corporate or otherwise, or he can be a conscientious critic of unlikely, unpalatable, unreasonable, inefficient or ineffective practices, methods or proposed “advances”, seeking to ensure quality and thoughtful of achieving specific goals. Of course, whether or not the contrarian can deliver his message in palatable form remains a challenge, and the (often different or opposed) views tendered by said contrarian can clash with the majority or the view adopted by leadership. Both require considerable maturity to accept the opposing current and trigger intelligent discussions based on analyzing what that impopular person is saying to obtain the value or pointed correctives that his views may contain.

In the above, “unlikely, unpalatable, unreasonable, inefficient or ineffective practices, methods or proposed “advances”…” could merely signify that there may be room for better adjustments or they may be downright necessary: the person deemed a contrarian may merely seek a slightly better approach, or more bang for the (same) buck…

As examples… 
One anecdote I often use (and may even be found in another posting on this site) is the advent of the first Windows-based or Windows-compatible (the Microsoft registered brand used without permission, not the household-type) vibration condition-monitoring software. Given the current preponderance of that operational system or platform, the reader will understand a few years have gone by since the anecdotal incident.

That software’s main qualities were:
1) it was going to be first to market under the increasingly dominant Windows (see previous disclaimer),
2) it actually worked without crashing,
3) it simplified report printing and layouts, but only for what was now extremely basic (or entry-level) reporting.

The same software principal defects were:
1) It offered little except basic functions, made readily accessible not through any ingenious design, but merely through the Graphic-User Interface’s benefits,
2) the software did away with many of the useful application functions that were readily available under DOS (but of course, that was going to be rectified in the future, meaning probably never),
3) it cost a frightening amount of money

My attempts at making suggestions to achieve expansion from the foundation we previously had, as opposed to devolution in terms of application, were met with allusions to “resistance to change”, when in fact, the nature of my objections was “Nice eye-candy, where’s the meat?” or where was the substance to assist analysts in better doing their jobs.

Another valid example, when faced with various problems during a reliability audit done under another company’s auditing process (or lack thereof), was to ask whether the process had been the subject of an FMEA (Failure Modes & Effects Analysis). After all, if you sell the science, the execution and the mindset, you should be interested in applying all of the previous to your own product, whether physical or service oriented.

In the previous statement, my “or lack thereof” was unfair, and of the naysayer contrariness type: in all fairness, they did have a process, but the process should have been accompanied by clear directives and guidelines as to “do’s and dont’s”. The process should have benefitted from strong warnings against allowing corporate tag-alongs during execution. My suggestion that an FMEA would clearly have established problems with such a practice came from obvious hurdles such as the reluctance of audit interview participants to formulate their answers in the presence of a corporate representative.

Opposing views leads to (minor) confrontation, and people are increasingly uncomfortable with disagreement or argumentation. Yet, out of the clashes of ideas are born the better or even best solutions. HBR (Harvard Business Review) and other management article sources state that the increasing disappearance of differing opinion hurts business.

For the well-meaning contrarian, perhaps the road to Hell is paved with good intentions.

© 2009 by François Gagnon