How We Manage Our Companies

by | Apr 7, 2011 | Operations & Business Management, Safety | 0 comments

Dave Beckmann, a consultant, motivational speaker, and retired Emerson Process Management senior vice president, has a thought-provoking article on, The Future of Process Management.

His message is on the need to change the way we manage our organizations in the process industries to cope with the ever-growing complexity of:

…a whiplash economy, technological disruptions, global competitors, fractured markets, omnipotent customers, rebellious shareholders and idealistic employees who strive for significance over pay.

Dave cites an IBM study of the challenges of CEOs and business leaders:

  1. The world’s private and public sector leaders believe that a rapid escalation of ‘complexity’ is the biggest challenge confronting them.
  2. They are equally clear that their enterprises today are not equipped to cope effectively with this complexity.
  3. They identify ‘creativity’ as the single most important leadership competency for enterprises seeking a path through this complexity.

Dave references the Deepwater Horizon accident and the focus on personal safety rather than process safety. In an earlier post, Process Safety Lessons Learned, we highlight some quotes that distinguish the differences in personal and process safety.

Some of the problems on the Deepwater rig could be attributed to the top down, approval through multiple layers, approach. A problem was identified that could have possibly averted the disaster. Unfortunately, a work process was in place to “…kick it upstairs…” Decisions made by those not close enough to the situation were not as good as from those closest to the situation.

Decisions coming down the organization hierarchy don’t have:

…the visibility nor the understanding to manage the increasingly complex systems employed in the process industry.

A different approach where:

…employees are encouraged to think for themselves and are empowered to make decisions, disasters can be averted and opportunities opened.

The contrast to this command-and-control approach is a “social network management structure”. He notes the worries by senior management about the impact on employee motivation, loss of control and visibility, and the existing organizational structure.

The motivation part reminds me of an excellent presentation by Dan Pink, Drive: The surprising truth about what motivates us (RSA animated version). At the 5:15 mark in the video, he cites research that the three key factors to better performance and personal satisfaction are: autonomy, mastery, and a sense of purpose. When organizations instill these factors into their cultures, creativity and a sense of urgency to address the complexity is a likely outcome.

Dave shares several companies as examples of ones that pursue a culture around a social network management structure. Gore Industries has no organizational chart, few titles, ½ day per week “dabble time”, and compensation based on the success of inventions. Whole Foods is centered around teams rather than the traditional store manager. The respective teams have the responsibility for procurement, pricing, advertising, hiring, and compensation decisions. In both cases, the concepts of autonomy, mastery, and a sense of purpose are embedded in their cultures.

He also shares personal examples of his sons and their experiences in open source software and Apple, which embrace many of these ideas.

Dave believes that the process industries can adopt the lessons from these leading companies:

Perhaps by working together, we can bring a change to an industry which badly needs a new “process management” model. As we collaborate to invent new ways to engineer, construct and operate our industrial processes more safely and efficiently, perhaps we can strive to accomplish what Steve Jobs says to Apple employees: “We’re here to put a dent in the universe.”

Update: I shared with Dave that the post was live and he had some great comments in his email back to me. I asked if I could post them to share with you and he agreed. Here they are:

Over the past several months, I have been thinking a lot about the disasters that are befalling our industry. Many of the in-depth studies are pointing to both a managerial structural failure and a lack of visibility and understanding of the basics of process control. Rather than to address the true safety-related issues, companies are instead focusing on personal safety. The result, catastrophic failures that puts entire companies at risk.

For over a decade, I preached the message of getting your savings in the basement. We proved beyond doubt that tuning loops brought huge savings. It was difficult to try to get companies to invest in their infrastructure. Some would, but most were on the side of cutting maintenance spending. Now it appears that this mentality is not only costly in terms of missed profit opportunities, but has the potential to put the entire company at risk.

Therefore, I believe we need to continue to highlight the necessity of process control safety. This means looking at the way we design, train, and maintain the process.

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The opinions expressed here are the personal opinions of the authors. Content published here is not read or approved by Emerson before it is posted and does not necessarily represent the views and opinions of Emerson.

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