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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 ?