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Leadership and Culture
John Hardwick
Ausgrid –
Asset Management Council
2013
Living Asset Management
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Agenda
1. Asset Management
2. Principles of AM
3. Capability delivery model
4. Why Focus on Culture
5. Understanding Culture & Behaviour
6. Leadership
7. Asset Management Culture
8. Operational Excellence
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Asset Management
• A new paradigm now framed by ISO 55000
• Focused on delivering the organizations objectives
• Make informed decisions based on risk
• Integrated and interrelated effort of the various functions of
the organization
• Managing the functions of assets considering life cycle
implications
• Assists maintenance and operations to communicate with
accountants and senior leaders
• Enabling stakeholders to understand options available
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Asset Management - Principles
• Value
• Alignment
• Leadership
• Assurance
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Total Business Business objectives,
Performance requirements,
Regulations,
Risk Management Financial
Assets Capital
investment,
lifecycle costs,
operating costs
Human Assets Competence, experience,
roles, teamwork,
leadership
Information
Assets Performance,
activities,
costs,
opportunities
Intangible
Assets Reputation, morale,
image, social impact
Physical
Assets
PAS 55-1
ISO/IEC 15288 Systems engineering –
Systems life cycle processes
Asset Types
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LEADERSHIIP
PEOPLE
(Culture &
Behaviour)
MANAGEMENT
SYSTEM
PHYSICAL
ASSETS
AM
EXCELLENCE
AM Challenges:
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Four Key Principles
Output
Focus
Capabilities
Level of
Assurance
Learning
Organisation
2. Capabilities:
Inherent functions of
an organisation or
physical asset 3. Level of Assurance:
Quantifiable level of
confidence of a capability
4. Learning Organisation:
An organisation that actively
seeks change in environment
or domain knowledge &
adapts to improve its products
or services
1. Output Focus:
A commitment to
measurable outputs
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Plan Do Check Act - Process Plan and identify a
suite of actions
necessary to create
and sustain a
physical system to
achieve a defined
need
Do the planned
actions in
accordance with
the plan
Check that we
achieved the stated
intent of the plan and
that we did exactly
what was required
by the plan
Act on any variances
discovered while
checking
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Assuring Capability
PROCESS
LEADERSHIP CULTURE
GOOD AM
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Asset Capability Concept Model
Four Principles
PDCA
Processes
Culture &
Leadership
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• Leadership = leader + led. The leadership does not belong only
to the leader. Leadership does not exist if adhesion to the leader
does not exist.
• The leadership is a function/process.
• Leadership = to get results + through relationships.
• The leader is a person.
• A person cannot be responsable for the success of the whole
organization.
• Leadership requires to give up the notion of the heroic leader - the
person who has all the answers.
Leadership
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AM – Leadership Accountability
Is the single largest factor for success
• Accountable for running AMMS
• Enabling and delivering AM performance
• Through personal example and actions, leaders cascade, manage
and drive execution
• Reinforce the AM Culture
• Instill Operational Discipline
• Ensure that the workforce comply with AM
• Demonstrate that 100% performance is attainable
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The Leadership Model
Lack of visiable leadership
Mixed & unclear messages
Short Term vs Long Term
Poor support for the line
No continous improvement
Reward / Recognition Values
Role Model Rites/Rituals
Acts as one team with the same
Vision & Values
Leadership is the magnet that
aligns the driving force for
developing the reliability culture
Increased profitability
Decreased risk taking
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Bases of Organisational Maturity
Assets
Assets
Process and
Systems
Governance
Control
Culture and
Leadership
Structuring
Elements
Assurance
Structured
Elements
Value
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Basic Asset Life Cycle
Plan Acquire Operate
& Maintain
Dispose
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Planning Acquisition
Continuous Improvement
AM Council Delivery Model
Demand Analysis
asset solution
non asset solution
Need Solution
Concept Exploration
Needs Analysis
Concept Validation
Operations & Maintenance
Process Monitoring
Specification Design Support Analysis
Integrated Support
Create and Dispose
Operations
Maintenance
Process Audit
Support Change
Engineering Change
Requirements Change
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CEO
Organisational Design
Finance Human
Resources Operations Maintenance Engineering
Products
Services
Divisional Outcomes
….. but do the outcomes meet the customers needs?
Strategic
Outcomes
Functional
Divisional
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What is culture? Culture is an extremely complex phenomena, which can be
understood from several different angles.
In general, it’s everything that separates human beings from
animals in terms of our capacity to understand the world and
transform it.
You do not manage culture! You manage through culture!
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The Mental Model
Hardware Software
Brain Culture and Mind
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The Dual Role of Leadership
CHAOS
Command & Control
Planning
Management
System
DIFFICULT TO
CHANGE
Communication
Vision
Strategies
Innovations
Culture
NOT SUSTAINABLE
CHNAGES
PERMANENT
CHANGES AND
SUSTAINABLE
LE
AD
ER
SH
IP
MANAGEMENT
YE
S
NO
YES NO
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Case study
Gladstone Power Station
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Hard Side – Tangible initiatives we implement to improve our
performance...
Planning & scheduling, operator care, preventive maintenance,
predictive maintenance, and others
AM
“Hard Side” Tools
“Hard Side” AM
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“Soft Side” AM
Soft Side – Intangible behaviours and practices that support
hard side change...
Leadership, Work Process, Structure, Group Learning,
Technology, Communication, Interrelationships and Rewards
“Soft Side” Foundations
AM
“Hard Side” Tools
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Below the Foundation???
Invisible – “Culture”
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Below the Foundation???
Invisible – “Leadership”
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In the end......
Outcome
Outcome Outcome
Outcome
People
CULTURE and MENTAL MAPS
Leadership
Management System
Physical Asset
“Outcomes”
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Vivendo Gestão de Ativos
Living Asset Management
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www.livingassetmanagement.com
Reference
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Asset Management Culture Journey
Individual
commitment
Commitment of
leadership
Effective physical
assets
Commitment of
management
Visible commitment
Line accountability
Defect & incident
management
Continuous learning
Focus on people and
culture
Reward and penalty
Mindfulness
Taking of cautious and
rigorous action
Partnership
Good installations and
equipment
Defences against
accidents and failures
Explicit management
systems
Management structures
Resources / delegations
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Questions ?