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Use change management to build an operational excellence culture

One tree in field

I recently attended a superb conference (IQPC’s PEX for Oil and Gas) that focused exclusively on creating a culture that sustains operational excellence. It’s a vitally important topic. I suspect all companies would like to achieve superior operational excellence and/or push the bar higher for greater excellence. After all, that’s what delighting the customer is all about and that’s what net promoter, KPIs and other measurement tools try to assess.

But there was something special about this event. When the oil and gas speakers talked about operational excellence, it was in stark terms. When a customer service representative upsets a customer and the company loses his business, it’s a terrible shame and may be quite costly, but it isn’t the end of the world. But when a pipeline or engine isn’t properly maintained, it could quickly lead to a global disaster involving significant loss of life, major environmental damage and a huge public relations black eye.

Need examples? Perhaps you saw the recent Deepwater Horizon movie that depicted the real-life BP oil rig blowout in the Gulf of Mexico. That disaster left 11 workers dead and 17 non-fatal injuries. Or, going further back in time, the Piper Alpha explosion in 1988 killed 167 workers with only 61 survivors—resulting in the worst North Sea disaster ever. Poor operational excellence was the culprit. According to the Guardian, a report into the disaster by Lord Cullen judged that the operator Occidental Petroleum had used inadequate maintenance and safety procedures. He [Lord Cullen] made more than 100 recommendations about how safety should be improved in the North Sea.”

Piper Alpha Disaster

I share this background information to show how much operational excellence is THE main concern for oil and gas companies and other regulated industries that build and maintain complex products (like jet engines, or space shuttle parts, for example.)

Here are some important takeaways from discussions and presentations about using organizational change management to create and sustain a culture of operational excellence:

  • Measuring the organization’s culture is important if operational excellence is considered a problem. This involves identifying parts of the organization that are susceptible to failure and allowing people who see possible problems to be heard. (They are often suppressed.) Conventional wisdom says that old timers in the job are change management challenges. But often, it’s the old timers who know what hasn’t been working and why, and the new employees who like everything the way it currently works—that’s why they joined. So, be careful making assumptions about where the problems and resistance to change are coming from.
  • Communicating the reasons for change—and getting buy-in for change is critical. One speaker observed that the idea that people resist change is a myth (for example, people get married, have children, move, change jobs, etc. and these changes aren’t forced and resisted. People willingly change when they want to.)  The speaker then observed: people resist change if they don’t understand why they should do it.  (I’ll add my own belief that consistent communications over a long period of time is one of the most important secrets to successful change management.)
  • Consider using this model for success, which involves making people uncomfortable:
  1. People must first experience discomfort with where they are now
  2. Then, people must have a vision for what could happen
  3. Next, people must believe that the change will work
  4. If people continue to resist change, that means they aren’t uncomfortable, they don’t have a vision and they don’t believe anything will be better.
  • Create and communicate a simple vision. (This is a best practice.) The steps for doing this include:
  1. Define the vision in terms of behaviors
  2. Model the behaviors
  3. Measure the behaviors
  4. Reward/punish undesired behaviors
  5. Constantly assess the culture (both peer-to-peer and supervisor to employee)
  • Create a coalition for change if there is resistance at senior levels. In other words, it’s possible to drive change from the middle up. One speaker gave an example of a VP of Operational Excellence who thought something was wrong, but did not have much buy-in with five executive vice presidents. She literally built a coalition over time, and slowly picked the resistance off.  Then she used the results to convince senior executives that changes were warranted and high impact.
  • Implement competency management programs as way to keep excellence high. This involves periodically assessing the workforce’s skills by collecting data about employees’ competencies. The assessments should rate each employee on their awareness of where they fall on the scale, make it clear what mastery looks like and what the expectations are, and create an agreement and timeline for how the employee and organization will close the gaps. Ideally, these initiatives are driven by senior business leaders, potentially in collaboration with HR, but should not be driven exclusively by HR. Unfortunately, competency management is often one of the first initiatives to get cut when budgets are reduced. To overcome this problem, focus on the actual core competencies required to do the work, and don’t focus so much on fine tuning the competency management process.

Organizational change management is a persistent challenge for leaders and managers in every business, government agency and non-profit, but it’s also the key to excellence. It’s worth making the time and investment to focus on organizational change management, especially when the stakes are exceedingly high.

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