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A s in business or sports, improvingturnaround performance involves
using metrics and keeping score. In busi-ness, we keep score by measuring dollarsof profit as a percent of revenue earned.The metrics that drive the profits may beinventory turns, asset utilization, lead con-version, cash flow and etc. Better metricstranslate into more profit.
In baseball for offense, on base per-centage, RBI’s, number of walks, hitting
percentage and other factors may apply.Better metrics in team offense translate intobetter scores, and, hopefully, more wins.Turnarounds are no different. If we want toget better, we must keep score.
What measures should we keep thatbecome the telltale yardstick of our perfor-mance? The answer is twofold. On the onehand, we have measures we should keepon each event — performance measure of a single turnaround project. The purposeis to benchmark against baseline measures,such as cost, schedule, safety performance,discovery work and etc.
On the other hand, we have measureswe keep to benchmark ourselves against our
peers. The purpose, in this case, is to makesure we are not one of the weak sisters inthe bottom quartile because when hardtimes come the weak sisters are squeezedthe most.
The key is to focus on the drivers of thegoals. The great law of nature is the lawof cause and effect, “As ye sow, so shallye reap.” No one expects to put apples anddough in an oven and pull out a pumpkinpie. In that vein, tracking cost is a means
not an end. We cannot expect that trackingthe cost will control the cost. Measuringcost may tell us what we want to know yetstill not tell us what we need to know to fixthe cost overrun. As author Steven Coveywould urge, “Check and make sure wehave our ladder on the right wall before weexpend the effort to get to the top.”
We should always question the functionof each metric. Is it linking to the key indica-tors? In other words, is the performance (theeffect) the metric denotes a related one (theroot cause) of the key performance indica-tors? If the metrics don’t align with the per-formance expected, then they cannot possiblytell us anything we really need to know.
We often begin collecting data eventhough the reason we started using the met-ric has been long ago satisfied. As an orga-nization we keep collecting and reportingthem when they have outlived their useful-ness. We should constantly challenge stan-dard conventions by asking: Why do wemeasure this? Why do we measure it thisway? What does this measurement mean?Why is this measurement important? Arethese measures root causes of and aligned
with the performance we expect?OK, so now we know how to keep score.But do we get better? Our scorecards shouldbe balanced between financial measures,operations measures, HS&E measures, reli-ability measures and more. I advocate keep-ing two scorecards — an event scorecard andan organization scorecard.
Each turnaround will have its own chal-lenges. Goals unique to that event shouldbe reflected on the event scorecard alongwith the perennial measures. The organi-zation scorecard is a collection of histori-cal measures benchmarked for improvinginternal performance and of measures of peer groups benchmarked for improving
performance versus our peers.To get better, we target a benchmark
or benchmarks that need improvement.Then quantify the amount of improvementwanted or expected, in measurable terms,to realize the goals (shorter duration, lowerspend, fewer environmental excursions,fewer accidents and etc.). Next, determinethe turnaround systems that control the rootcause or drive that measure then optimizethe processes, procedures or standards until
the inputs and outputs of the system pro-duce the desired result.This sounds simple, but it is not neces-
sarily easy. It requires us to take a differentperspective … thinking outside of the box.Remember the phrase, “If you keep doingwhat you’ve always done, the same wayyou’ve always done it, you’ll keep gettingwhat you’ve always got.” Or, in the case of turnarounds, you could ask the same thingthe Capital One TV ads ask, “What’s inyour wallet?”
For more information, contactDavid Frinsco at (281) 461-9340,e-mail [email protected] orvisit www.tamanagement.com. •
How do we get better?
By: MICHAEL D. JEANSONNE, CEOThe Turnaround Management Company/TTMC Personnel
TURNAROUND MANAGEMENT KNOWLEDGE UPDATE
