Any Change Management initiative requires the right “management process” where leadership and management are not reactive. In the article below, Mark Broussard talks about the most common types of cultures found in business today, and the import of the C-Suite having an engaged and proactive management approach.
The Spectrum of Industrial Cultures
by Mark Broussard
As we have engaged organizations around the world in performance improvement initiatives, we have encountered an entire spectrum of industrial cultures, representing a range of performance levels and asset life cycle costs.
We have defined this spectrum as ranging from Reactive to the Performance Culture™.
The most common culture we have encountered is some variation of a reactive culture. So how do reactive cultures form and embed themselves in an organization? Well, this culture forms most typically as a reaction to market conditions!
As industries go through their cyclical peaks and valleys, some organizations are ill prepared to face the economic pressures of declining revenues and elect to take the tactical approach of reducing operating expense to minimum levels.
As a result, (for example), maintenance expenditures are restricted to only “what is necessary to keep the place running”. This dictate allows the establishment of a pattern of behaviors which transform the culture and can have long term negative impacts on the performance of the organization.
The behaviors are typically reinforced and embedded by the following thoughts and characteristics:
- “We are saving the company money”- While there may be some short term reduction in expense levels with invisible impact on the reliability of the assets, the longer term impact is an increase in overall life cycle costs. As required asset healthcare activities are neglected during this period of focus on expense reduction, the material condition of the assets erodes and over time chronic failures will drive excessive repair expense and lost production volumes.
- Less discipline and rigor is required – Humans, as with most elements of nature, seek their lowest energy level. In a reactive state, much less time and effort is expended on planning and scheduling of work. The discipline to organize, plan, and measure activities gives way to complacency due to the financial constraints placed on the organization.
- Individual recognition – Staff get recognized for “saving the day” and restoring production. The individual recognition reinforces self-worth over contribution to teamwork. The organization increasingly relies on individual effort to sustain operations.
- Adrenaline bursts – We all love the burst of energy we get from having a clear, focused, and urgent task. In the short term, these adrenaline bursts feel good to the organization and allow them to sustain the reactive behaviors. However, as assets continue to decline, the bursts become too frequent and the organization becomes weary and overwhelmed.
Some industry downturn durations exceed 18 months, which is plenty of time for these behaviors to embed a reactive culture in the organization. The behaviors may even continue as the industry economics improve, however, at some point the organization will recognize that the reactive culture is unsustainable because performance levels will lag. The tactical focus on operating expense reduction creates the inverse effect of increasing operating expenses and increasing production losses as the assets are required to perform at higher levels.
Another increasingly common industrial culture further along the spectrum is identified as the compliance culture. This industrial culture has evolved mostly in response to recent high profile safety and environmental events. The culture is focused on demonstrating the ability to comply with regulatory, industry, and internal standards to avoid any liabilities or negative publicity.
- Work processes – Clearly defined and documented work processes which contain many best practices
- Key Performance Indicators – Metrics for functional performance are defined and routinely reported. All metrics are either meeting targets or trending toward target levels
- Performance improvement initiatives – Many prioritized, defined, resourced and cost justified initiatives are in place to support the operational strategic plans
- Audit function – A robust audit capability that frequently engages assets to document compliance
Despite these characteristics being in place, overall performance levels are declining! All personnel involved can demonstrate and document compliance.
However, achieving the targeted numbers becomes the focus, rather than focusing on the sustainability of improvements.
As a result, the behaviors that support sustainable performance and a Performance Culture are not embedded. Additionally, the various initiatives are often viewed as independent of each other, rather than being part of a cohesive plan for business performance improvement.
These initiatives end up competing with each other, and some are eventually viewed as optional. The compliance culture has many worthy attributes, but, it will not result in high levels of sustainable performance.
Industrial organizations typically move up or down on the culture spectrum over time due to behavioral changes endorsed by leadership.
To achieve the high levels of sustainable performance over strategic horizons and optimize life cycle costs, the organization needs to embed the behaviors defined by the Performance Culture!
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