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Operational Discipline - Deepwater Horizon Case Study

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Information about Operational Discipline - Deepwater Horizon Case Study
Business & Mgmt

Published on February 25, 2014

Author: Wilson_Perumal

Source: slideshare.net

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Doing the right thing, the right way, every time! Case Study: Creating a Culture of Operational Discipline

What we will cover in this case study • What is Operational Discipline? • What are the core values, or “pillars”, that define a culture of Operational Discipline? • Why is Operational Discipline necessary? • Case Study: Deepwater Horizon and Operational Discipline • How do I create a culture of Operational Discipline? Wilson Perumal & Company, Inc. 2

Operational Discipline starts with a clear and concise definition Operational Discipline is composed of 3 simple requirements: Operational Discipline 1 Do the right thing 2 the right way 3 every time Wilson Perumal & Company, Inc. 3

The definition of Operational Discipline implies the necessary core values Operational Discipline Doing the right thing, the right way, The necessary Core Values or “Pillars” Level of Knowledge. Understand not just what you do, but why you do it. Continually seek greater knowledge about the systems, processes, and hazards in and around your workplace. Formality. Treat your workplace and your role with respect, recognizing the seriousness of what you do and your role as a part of something bigger. Follow authorized procedures and expect the same from others. If you think of a better way, follow authorized processes to review and improve the procedures. Questioning Attitude. Constantly ask yourself what could go wrong. Check for out-of-the-ordinary and learn to anticipate potential problems. Don’t assume things are okay—verify. every time. Forceful Watch Team Backup. Backup your co-workers by looking out for what they may have missed, and expect the same in return. Have the courage to care, intervening even when it makes you uncomfortable. If you see an issue, own it. Integrity. Be reliable. Do what you say you are going to do, completing every task the right way, every time, even if no one is watching. Wilson Perumal & Company, Inc. 4

The Pillars of Operational Discipline are Self-Reinforcing Integrity Integrity means you can be relied upon to support your team Forceful Watch Team Backup Formality ensures backup is professional & productive Backup drives procedural compliance Level of Knowledge allows ID of out-ofthe-ordinary conditions Level of Knowledge Level of Knowledge allows you to back up others Questioning Attitude helps you spot what others may have missed Formality Questioning Attitude enhances Level of Knowledge Questioning Attitude Questioning Attitude supports process improvement, not work arounds The Pillars of OD are self-reinforcing and interdependent – OD cannot be achieved by adhering only to one or some of the Fundamentals. Wilson Perumal & Company, Inc.

Robust processes and procedures alone will not lead to Operational Excellence Sound Strategy Operational Excellence Leading Performance Effective Processes and Procedures Culture of Operational Discipline Operational Excellence Processes and procedures, without a culture that embraces the Pillars of Operational Discipline, will not result in Operational Excellence. To demonstrate this, consider the following case study. Wilson Perumal & Company, Inc.

Case Study: Leadership activities and Operational Discipline aboard Deepwater Horizon Deepwater Horizon Facts • On April 20, 2010, an explosion on BP’s drilling rig “Deepwater Horizon” in the Gulf of Mexico was the largest marine oil spill in the history of the petroleum industry1 • The explosion killed 11 platform workers, injured several others, and released approximately 4.9 million barrels of crude oil 1) BP: ‘An accident waiting to happen’, Fortune Features, Jan 24, 2011 Wilson Perumal & Company, Inc. 7

Case Study: Leadership activities and Operational Discipline aboard Deepwater Horizon Most people don’t know that a group of four BP and Transocean VIPs were onboard the vessel and conducting a safety focused “management visibility tour” when the explosion occurred. Let’s look at the events of the day. 3 PM • VIP team lands on rig and attends Safety Orientation • Tour continues to Driller’s Control Room where one VIP notices “confusion” . He asks the Rig Manager to stay behind and help out • VIPs conduct “light-hearted” meeting w/ personnel in galley • Discuss safety goals, emphasizing “hand safety” and “dropped objects” campaigns 4 PM • The VIP’s proceed with a safety tour. One VIP inspects safety harnesses. Another looks for a slip/trip hazard. 5 PM 6 PM 7 PM • VIP follows up with Rig Manager and asks "Everything all right up on the rig floor there? Get everything sorted out?“ The Rig Manager responds with thumbs up 8 PM 9 PM 1) Management Walk-Arounds: Lessons from the Gulf of Mexico Oilwell Blowout, Andrew Hopkins, Feb 2011 Wilson Perumal & Company, Inc. 8

Robust processes and procedures alone will not lead to Operational Excellence • From 2008-2010, BP implemented an Operations Management System (OMS) to ensure that the processes and procedures necessary to ensure safe and environmentally compliant performance were in place. • The OMS required that management ensure operating procedures are in place, operators are competent to perform work, and leaders are active and visible. • We would all agree that the activities or processes that the VIPs participated in were the right ones…..yet the result was not what was intended. • Why? Because the Pillars of Operational Discipline were not in place. Effective Processes and Procedures Culture of Operational Discipline Operational Excellence • Safety meetings • Leadership visibility tours • Share Lessons Learned No culture of Operational Discipline Activity driven behavior without the intended results Wilson Perumal & Company, Inc. 9

Deepwater Horizon: In their own words…. • We will now view several video clips of the VIPs testifying to their activities and behaviors on that fateful day. • While watching, keep in mind the following: – They were following the processes and procedures that were expected of them. – We would all agree that the activities they participated in (safety orientation, safety tour, award ceremony, etc.) were all activities in which we would expect good leaders to participate. – All of these men thought they were doing the right and good thing that day. None of them woke up that morning anticipating this disaster would happen. Wilson Perumal & Company, Inc. 10

In their own words…… While viewing the clip on the next slide, consider the following questions. • Why did these leaders go on the Leadership Visit? • What was their goal? • How did they prepare for the visit? • Did they demonstrate the Fundamentals of Operational Discipline? Wilson Perumal & Company, Inc.

Deepwater Horizon Revisited Questions to consider while viewing the clip on the next slide • What was the purpose of his Safety Tour? To learn? To find new problems? • Why did he want to discuss dropped objects? • Why did he inspect harnesses? • Were the Fundamentals of Operational Discipline exercised? Wilson Perumal & Company, Inc.

Deepwater Horizon Revisited Questions to consider while viewing the clip on the next slide • Why was he in the driller’s shack? Was he there to surface problems? • What did he do when he noticed the confusion? • Did he ask the right questions? • Were the Fundamentals of Operational Discipline exercised? Wilson Perumal & Company, Inc.

Deepwater Horizon Revisited Questions to consider while viewing the clip on the next slide • How do these leaders deal with employees that don’t follow procedures? • How do they make sure that their employees have adequate knowledge? How do they interact with them? • Were the Pillars of Operational Discipline exercised? Wilson Perumal & Company, Inc.

Questions to consider 1. Level of Knowledge—Did these leaders demonstrate a desire to learn about and understand the operations they were responsible for? 2. Formality—Did these leaders demonstrate a commitment to following procedures and ensuring that others do as well? 3. Questioning Attitude—Did they follow up on things that seemed out of the ordinary and seek to surface problems? 4. Forceful Watch Team Backup—Did they hold others accountable and expect them to do the same for them? 5. Integrity—When things became uncomfortable, did they do the right thing anyway? What if they had? Wilson Perumal & Company, Inc. 15

Complex operating environments require a different approach to Leadership • In complex operations, situational inventories are impossible. • We cannot create comprehensive rules / tasks to cover every situation. • The Pillars of Operational Discipline create a framework for thinking about the right behaviors. • This framework is useful for helping leaders understand how they demonstrate the Pillars of Operational Discipline in their daily activities. Let’s review examples of how the Pillars of Operational Discipline apply to daily activities using a simple “Right/Wrong” framework Wilson Perumal & Company, Inc. 16

The Pillars of OD enable employees to determine the right behaviors for any activity Leadership Visits OD Pillar Fundamentally Right Fundamentally Wrong Level of Knowledge Not preparing or being Leaders view visits as an opportunity knowledgeable about the site and to learn about the business its risks prior to visit Formality Observe high risk procedures and verify steps are followed Not asking to see procedures to verify compliance Questioning Attitude Review past audits prior to visiting and verify completion of corrective actions Primary goal is to be “visible”, not to identify problems Forceful Watch Team Backup Ask other leaders to tour your area and point out issues Don’t want to make a big deal or interfere Integrity When you find problems, share them with others even if they might be embarrassing Visit conducted just because “there is a schedule” Wilson Perumal & Company, Inc. 17

The Pillars of OD enable employees to determine the right behaviors for any activity Safety Tours OD Pillar Fundamentally Right Fundamentally Wrong Level of Knowledge View the tour as an opportunity to learn about the operation Not using the tour to learn about the operation and to surface high consequence, low probability risks Formality Inspect procedures people are following and verify steps Not inspecting procedures during the tour Questioning Attitude Question employees to verify their level of knowledge Only looking for pre-determined issues, not looking for new issues Forceful Watch Team Backup Ask other leaders to conduct safety tours in your area Focus on easily observable, easily correctable risks so as not to make people uncomfortable Integrity Investigate the out of the ordinary, no matter where it may lead Looking for specific risks just because they are the “focus” area Wilson Perumal & Company, Inc. 18

The Pillars of OD enable employees to determine the right behaviors for any activity Audits OD Pillar Fundamentally Right Fundamentally Wrong Level of Knowledge Periodically accompany auditors to understand process Used as a weapon for compliance— noncompliance is responded to with punishment rather than desire to understand root cause Formality Enforce adherence to the audit schedule Auditors focus on what they know and are not thorough Questioning Attitude Expect and want to find deficiencies Focus of audit is on the score/grade, not how to resolve deficiencies Forceful Watch Team Backup All repeats audit findings are reviewed by senior leaders to determine root cause for not correcting them Audit findings and resolutions are not shared Integrity All deficiencies are reported accurately Sites acknowledge findings, but do nothing to resolve them Wilson Perumal & Company, Inc. 19

4 Steps for creating a culture of Operational Discipline Align Leadership on the Pillars • Need for Pillars • Definition of Pillars • Approach for implementation Create the Case for Change Internalize the Pillars • Use case study like • One-on-one conversations Deepwater between leaders Horizon to make and employees case for change using right/wrong • Create a sense of framework to discomfort discuss behaviors • Leader interactions on the shop floor Embed in Management System Processes • New hire selection • Orientation / training • Incident investigation • Performance Management Creating a culture of Operational Discipline must start at the very top of the organization! Wilson Perumal & Company, Inc. 20

Contact us for more information about our approach to Operational Discipline and to schedule a workshop for your Leadership Team We will customize a workshop to provide your team with a strong foundation for implementing Operational Discipline: Contact Information: On the Web: www.wilsonperumal.com Email: contact@wilsonperumal.com • Alignment on the Pillars of Operational Discipline and approaches for implementation Twitter: @Wilson_Perumal • Creating the “Case for Change” within your Leadership Team United States: (972) 716-3930 • Utilizing the “right/wrong” framework for helping employees internalize the fundamentals LinkedIn: http://linkd.in/10BnH1i Europe: +44(0)203 206 1496 • Step-by-step, practical guidance on creating a culture of Operational Discipline Learn more by following our Operational Excellence Blog at www.wilsonperumal.com/blog

Our team has deep, hands-on operational experience Andrei Perumal, Managing Partner • Thought leader on complex systems and integrating strategy, operations, and organization • Formerly with George Group Consulting (Engagement Director of the Year) and Bain & Company (winner of Best of Bain Award); co-author of Waging War on Complexity Costs • Developed the Joint Munitions Command Integrated Logistics Strategy for the US Army • Aerospace, nuclear, and chemical engineer; prior aerospace industry experience • BS Aeronautical & Astronautical Engineering, Massachusetts Institute of Technology Brian Flis, Manager • Expertise in manufacturing, operational excellence, and LEAN implementation • Developed complexity reduction plan for a U.S. manufacturer; identified cost savings of $140 million • Supplier Quality Manager, Eaton Corp. - Handpicked by Senior VP of Supply Chain, Operational Excellence and Quality to launch urgent business performance initiatives across the business • Acquisitions Officer, U.S. Air Force - Led process improvement team that successfully increased ballistic missile booster production from 1 booster a month to 8 boosters a month • MBA, Ohio State University; MS Mech. Engineering; BS Mech. Engineering, U.S. Air Force Academy Chris Seifert, Case Team Leader • Expertise in manufacturing, operational excellence, and management system design and implementation • Former Operations Leader, Owens Corning (increased plant productivity by 25% in just 9 months) • Former Plant Manager and Manager of Business Strategy & Analysis, Georgia Pacific (Koch Industries) • Top-ranked submarine officer, US Navy (ranked #1 of 9 submarine junior officers) • MBA, Summa Cum Laude, University of Georgia; BS Business Administration, St. Louis University Wilson Perumal & Company, Inc. 22

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