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Rewarding a forever fixing culture


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  • Community Leader

Hi all,


For this week’s topic, we will be discussing the still quite common “forever fixing culture”.

Finding companies/plants that work in a run to failure culture is definitely not a hard task and I am pretty sure that we all have gone through this situation before at least once.

Basically, those sort of cultures are part of a vicious cycle composed by reactive maintenance actions, “quick solutions” and a vital thing that keeps it alive: rewarding the forever fixing culture.

Regarding such topic, nothing better than these paragraphs written by Ramesh Gulati on his book “Maintenance and Reliability Best Practices  - Second Edition”:

 

“For decades, we have had a system of reward that has created a misaligned culture. Design teams are rewarded for achieving functional capability at the lowest cost; they usually are not really concerned about the downstream problems for operations and maintenance and the true life-cycle cost of ownership of the asset. Production teams are rewarded when they beat a production number, regardless of any real demand for the product or without any concern for the effect their actions have had on the asset health.

Maintenance teams always have been rewarded for fixing asset failures and not improving reliability or availability. They get extra pay for coming in at inconvenient times when the asset is broken and get “attaboys” from the management to fix it. If we are rewarded for failures, why would we want reliability? Who would step up and volunteer for a 15–20% pay cut for reduced overtime?

People don’t pay as much attention to what their managers say with words as compared to what they actually do. If management says they want reliability — no failures or minimum failures — but they keep paying for failures, we will continue to get failures. This culture needs to be changed and improved.”  

 

Have you seen this sort of behavior from Maintenance Managers? How about Project and Production teams?

Have you been rewarded for failures?

 

Regards,
Raul Martins
 

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Raul,

I am quite sure that every maintenance manager have been “rewarded for failures” in the past. I have been rewarded for it as well. The truth is that quick intervention to repair a failed machine have always made a maintenance engineer or manager look like a hero. According to Ramesh, “this culture needs to be changed” if the managers really desire Reliability and reduced cost because if “we keep paying for failures, we will continue to get failures “.

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Raul said, "Finding companies/plants that work in a run to failure culture is definitely not a hard task and I am pretty sure that we all have gone through this situation before at least once." I'd go much further than to say it's not a hard task. It's downright easy to find them. As trainer and adviser who is often asked to help with cost reduction or to improve availability, it is that "break then fix" culture that I am frequently confronted with. To me it's endemic and it's usually a systemic problem as described by Ramesh. We do reward the wrong behavior and then enhance it by allowing those who don't really know how to get out of it, or even care about getting out of it, to run the circus.

Of course, when confronted with a solution which isn't going to be easy to implement, they end up changing nothing and living with the status quo. 

Every case is a bit different, but there are some similarities. If the situation described has persisted, and there is a maintenance manager who has been there for a while, then we have an ineffective manager who tolerates it all and fails to lead change. He may not really be strategically minded enough to see what's really going on or perhaps he cannot communicate the consequences of it effectively to his superiors at senior management and executive levels. Maybe he does all that but they don't listen. There's no shortage of incompetent managers in all disciplines either.

The smartest that I usually encounter tend to be either enlightened operations or financial folks. Once they understand what is going on, they become allies in solving the problem. Things do need to explained to them in terms they grasp. Our typically technical jargon laden talk with no apparent connection to output and costs and profits is not going to cut it.

How many of us truly understand what we need to do to increase return on assets? Hint to engineers: project ROI doesn't cut it. Hint to production: meeting your shift quota at the expense of the next shift doesn't cut it. Hint to maintenance: fixing it when it breaks doesn't cut it. The problem is more complex than a single fix. 

Rewards can work if they are crafted well, but that crafting is no small or simple task.

You must reward for the behavior you want. To begin with, you need to know what behavior (in all disciplines) will lead to the objectives you set (usually profitability). Overtime - not a reward, usually an entitlement. Cut it as your peril, unless you replace it with something else - increased wages for normal time, and let them have more time with family, etc.

What keeps most of us from speeding? Traffic tickets, points off our license and increased insurance premiums. The 15 or 30 minutes of downtime while the cop writes out the ticket isn't much of a penalty, so there's more to it than that. Downtime on a production line is like waiting for the copy.

So let's give our production managers speeding tickets. If every hour of overtime worked by maintenance were treated as an hour of lost production (e.g.: 1 hour overtime = 1 hour's worth of output that is subtracted from the actual total), and the production managers held accountable for it, they'd be less keen to achieve short-sighted shift targets. Imagine the impact of a 3 hour delay in production while 3 maintainers scramble for parts. That's 9 hours of production loss (on paper) for a 3 hour outage. Their quota's won't be met and they'll need to find ways to avoid the overtime. Oh, and by the way, running the plant to destruction in one shift then fixing  it on the next supervisor's shift won't work - measure this on a monthly basis and reward all production supervisors and managers equally. 

Hold maintenance and production and stores managers all equally responsible for availability. None of them gets a bonus unless they all achieve it together. Likewise, hold the three of them responsible for inventory turns and stock-outs, and for production output over a longer period (say a month), rather than shift by shift. They may not all know what to do to achieve all of those on their own, but together, they can. 

Want proactive behavior? Reward for PM's achieved on time (to the day first scheduled), not just within the month or week. Missed PMs = missed bonus for both production and maintenance managers as well as their supervisors. If they find the PMs aren't "working", then they can get some help from those who can identify why and fix it. There are plenty of us out there.

Of course that's not easily done and it requires shifts in how people are compensated and in how senior management chooses to lead. HR and Finance will need to think about rewards and they'll need help from those who understand maintenance, supply chain and production to get the mix right. Profit sharing and gain sharing on a wide-spread basis are entitlements, not rewards. In most cases the workers have no influence or control over profitability - market prices and overall operating costs dictate that. At best they influence tiny amounts around the fringes. 

There is much that can be said and done about this one. It requires some real fortitude to tackle it though. Let me ask you all a question: 

Does the leadership  in your company have what it takes to implement such a sweeping change to compensation, reward and measurement regime to actually get what they say they want?

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  • Community Leader

Hi @Kenny,

I agree with you. Fixing quickly have made many professionals look like a hero, while those who focus on avoiding the failures are not seen like that.

I find it important to have a mixed team, in which you have those who are more "reactive" but would fix quickly, working along with those who focus on a proactive approach. Having a diverse team can be highly beneficial for improving reliability. 

However, it has to be clear for everyone what has been chased: a "fix forever" culture, instead of a "forever fixing" one. For this, the manager's attitude is vital.

 

Regards,

Raul Martins

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  • Community Leader

Hi @UptimeJim,

I like the "same goals for different areas" approach. I have seen many companies in which areas, such as Maintenance, Production, HR, IT have different and many times, conflicting goals. Hence, instead of helping each other to build positive and better results, they work as different small companies inside of another company. Maintenance looking after availability, while Production looking after productivity or HR decreasing salaries or budgeting less money for training.

 

On 2/6/2020 at 10:34 PM, UptimeJim said:

how senior management chooses to lead

If senior management do not see the big picture of how to achieve solid results by eliminating those "small companies" and making areas working together, the staff members will keep struggling to improve any results.

 

Regards,
Raul Martins

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  • 1 month later...

Raul, it is indeed key for senior management to "get it" and, if they want results, to support the effort actively. It will be important to bridge the silos and collaborate - something that many companies are not all that good at (although they'd probably argue that they are). 

I've done a lot of work with senior management teams and leaders who want change and a lot more with managers (e.g.: Mtc Mgr) who also want change. The former can achieve it, the latter might, but not without a lot of struggle. Lately I've been helping maintenance managers get the right messaging to the right ears. Once we get the financial and operational leaders on board - it's pretty much a done deal. 

I've recently written a book aimed at those senior non-maintenance / non-technical managers to explain the value that we can add and how. It's near ready to publish and I'm hopeful that when it is on the street, it starts helping to get the message across so we can all make our operations more productive and more safe.

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  • Community Leader

Hi @UptimeJim,

Good point. If senior management don't notice what is going on and don't make any efforts to change the status quo, nothing will get better.

From your experience, how do you convince them that, although they argue they are bridging the silos, they are not?

Convincing people that things need to be changed, or improved is sometimes quite difficult. Using examples, data, financial scenarios could be a good step in order to do it?

 

Regards,

Raul Martins

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Greetings Raul,

Senior management (i.e.: those with true P&L responsibility and strategic decision making authority) need to be made aware of the business impact of NOT acting and the costs associated with taking action. If there is truly a valid business case (and there often is), and the costs do not exceed their ability to pay (the company must have money or be able to find money to pay for it), then they will want to take action. Their next questions will be about "how to" do it. 

This where it pays to have some outside help. Internal resources are often inexperienced at managing changes of this nature. In many cases, they've been in one environment for a long time and haven't had to lead a change. They are managers (keep the boat steady), not change agents (rock the boat). Outsiders or new managers in the roles are often brought in with a mandate to rock the boat.

In all likelihood, if the ones making the case are internal, they are in a difficult position to explain "how to". Consider that if they really knew "how to", then their bosses might ask, "why didn't you say so sooner?" or worse, "why didn't you do something about it sooner?" If the one raising the concerns is new, he has an opportunity. If it's someone who's been around awhile, then he may be fearful of making a career limiting move. This latter type is often in the way of change and is one of the reasons why the organization has a problem in the first instance. If I'm brought in by senior management (e.g.: executive branch, operations, finance types), then I often find this to be the case - the manager is part of the problem. If he can admit it to himself and get on-board, then there's some chance, but if not, he's probably not going to be around for long. Admitting one doesn't know and has now learned, is far superior to resisting change.

Silos are a problem and often a hidden one. Again, outside perspectives are often needed. Silos are hidden by the very reports and KPIs meant to reveal how we are doing. Problems within a silo are usually well known within the silo, but hidden from outside view. Hiding them are reports and indicators meant to reveal problems so they can be acted upon. But by revealing problems, one risks appearing to be doing a bad job. 

Even if there is knowledge in-house that communications are an issue, there is usually little real knowledge of the impacts. Performance reward schemes often exacerbate the situation here. It takes a dispassionate outside perspective to look into this and highlight the flaws. It's very challenging for one who receives a bonus based on a performance measure that is flawed, to want to change it, especially if it's been good to them. I've experienced HR departments staunchly defending their reward / bonus schemes, even if they know it's not really encouraging behaviors that are desirable. They often don't have the insight into behavior at the more granular level to consider any other options, and they rarely have help from those in the other departments and areas where behaviors need to change. 

Silos produce reports - often looking good inside, but hiding what's really doing on inside. One thing that many senior managers know exists, but struggle to see clearly, is the obfuscation of truth in what is being reported to them. Reports and KPIs often show a somewhat sanitized view and since they are allegedly based on data, they become believable (or at least provide for plausible deniability). Data is often flawed though and anything based on what's in databases that is not truly fit for purpose, will be likewise flawed. Again, it's often not in the best interest of many managers to point this out. Imagine telling your boss, "here's your report, oh and by the way, I'm pretty sure it's fictionally based on what we have in our flawed data base". Reports might be one manager's responsibility, data storage another's, data input yet another's. Everyone owns it, therefore no one really owns it. 

I'm all for making evidence based decisions, but the data better be rock solid - and sadly, it usually isn't. I could go on about this one.

Bottom line - unless you are brand new, have a mandate to rock the boat, have the cross-functional experience to see through all the elaborate smoke-screens, then get some help. I hope I've answered your question.

Edited by UptimeJim
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  • Community Leader

Hi @UptimeJim,

Great explanation!

 

23 hours ago, UptimeJim said:

It's very challenging for one who receives a bonus based on a performance measure that is flawed, to want to change it, especially if it's been good to them. I've experienced HR departments staunchly defending their reward / bonus schemes, even if they know it's not really encouraging behaviors that are desirable. They often don't have the insight into behavior at the more granular level to consider any other options, and they rarely have help from those in the other departments and areas where behaviors need to change. 

I totally agree with this paragraph. Many HR departments create their reward schemes and other processes as a perfect silo, not consulting other departments nor having insights of how is the daily routine of other departments. It is sad, and often supports this sort of issues.

 

Regards,

Raul Martins

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  • 2 weeks later...

Greeting Mr. Jim

Thank you very much for your share as you are definitely a seasoned professional who most likely has forgotten more than I will ever know. I like this statement "obfuscation of truth" . It reminds me of my daughter when she was young or dealing with one';s wife... lol!

From Scott Peck's books "The Road Less Travelled" and "Further Down The Road Last Travelled" ... "Life is difficult and complex" thus so are cultures. I could not agree more with you regarding efforts to make meaningful changes from within without soliciting outside sources.

My experiences have been that we will all become a brick in the wall at some point in time. With this said, this one of the first statements I have made from the inception of my position with my present employer.  If one realizes what I have stated and is strategic in thought they will use the leverage of outside resources to convey goals/objectives and needed resources with the audiences that can provide the support.

Again, thank you for the share!

Jim

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