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HighReliabilityOrganiza1onsManagingRiskinComplexOpera4ngEnvironments
Presenta4onattheAFPMAnnualMee4ngMarch17,2016
Complexity is stretching the capabilities of most organizations
TECHNOLOGYPRODUCTS&SERVICES
PROCESSES
ORGANIZATIONS
REGULATIONS
MARKETS
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X X
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X COMMUNICATIONS
Complexity grows exponentially
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Complexity
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Characteristics of complex systems
1. Non-linear reactions
3. Unknown interactions
2. Feedback loops
4. Emerging properties
Many companies are passing a complexity threshold
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VALUE(diminishingreturns)
COST&RISK(exponen4algrowth)
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Complexity
Fewcompaniesares.llhere
Manycompaniesarehere
Anincreasingnumberofcompaniesarehere
Increased complexity
Poor execution
Loss of process control
Poor performance
Added processes Vicious
Complexity Cycle
The typical response to complexity is to add even more complexity
Catastrophic incidents are becoming more frequent and more severe
1979–Three-MileIslandcoremeltdown1988–PiperAlphaexplosion2005–TexasCityRefineryexplosion2010–SanBrunoPipelineexplosion2010–BPDeepwaterHorizonoilspill2011–FukushimaDaiichidisaster2013–WestFer1lizerplantexplosion
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Traditional risk management doesn’t address these “normal accidents” well
Too complex to anticipate
Too fast to address
Too infrequent to understand
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The Pessimist’s View
“Regardlessoftheeffec4venessofmanagementandopera4ons,accidentsinsystemsthatare
characterizedby4ghtcouplingandinterac4vecomplexitywillbe
normalorinevitableastheyoTencannotbeforeseenorprevented.”
WilsonPerumal&Company,Inc. 10
Yet a few High Reliability Organizations seem to defy the Pessimistic View!
The Nuclear Navy has never had a reactor accident over its
50+yearhistory
150mobilenuclearreactors
6,000+yearsofreactorplantopera4on
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Three Lessons from the Nuclear Navy
#1 Safety should not be a GOAL!
#2 Simplify your management system
#3 Culture is critical
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Lesson #1
Achieving zero incidents should not
be a
It should be an
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This has important implications for what we reward
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Lesson #2: Simplify your management system
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The Nuclear Navy simplifies with one management system for all outcomes
PeopleProcess
EquipmentChange
KeyControls
Safety
PeopleProcess
EquipmentChange
KeyControls
Environ-mental
PeopleProcess
EquipmentChange
KeyControls
Quality
PeopleProcess
EquipmentChange
KeyControls
Reliability
PeopleProcess
EquipmentChange
KeyControls
Cost
CommonManagementSystemApproach
NuclearNavyManagementSystem
PeopleProcess
EquipmentChange
IncreasedperformanceAcceleratedlearning
Reducedcostandoverhead
SafetyQuality
Environmental
Reliability
Compliance
Cost
KeyControls
WilsonPerumal&Company,Inc. 17
Havingoverlycomplexmanagementsystemscanbeveryexpensive
“If[theQEMS]hashadanimpact,it’sprobablyanega1veimpact.”–EngineeringMgr.
Thecostofmee1ngQEMSrequirements… doesnottranslatetohighperformance
taskexecu4onishighlyvariableamongdivisions(~50%variabilityinrework/revisions)
highlevelofrework(17%)andrevision(4%)whileexternalfindings/auditareincreasing
majorityofreports(44-72%)past6daytargetwhencompe4torsdeliverin1-3days
repe44veauditfindingsindicatelackofprocessimprovement
adequatetomaintaincompliancewithISO&OHSASü
û
û
û
û Improvement
Efficiency
Accuracy
Consistency
ComplianceCostEs1matesforQEMS Range
FulfillingQEMSRequirements
Operators $26–67M
Engineers $17–31M
Con1nuousImprovement
CARProcessing1 $200K–2M
InternalAuditProgram1 $100K–700K
QEMSMaintenance1 $200K–800K
Governance QEMSGroup2 $3M
TOTAL ~$50M–100M
Lesson #3: Culture is critical
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Culture is the Nuclear Navy’s last layer of defense
Rob
ust E
quip
men
t
Rig
orou
s P
roce
dure
s
Cul
ture
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The culture required was a vast departure from traditional military culture
Tradi1onalMilitaryCulture
Followorders
Dowhatyouaretold
Don’taskques4ons
Neverques4onyoursuperiors
Rickover’sCulturalPillars
Haveahigherlevelofunderstanding
Followprocedures
Ques4onprocedureswhenthingsdon’tseemright
Backeachotherup
Doitallwithintegrity
LevelofKnowledge
Formality
Ques1oningAktude
ForcefulWatchTeamBackup
Integrity
LEVE
LOFKN
OWLEDG
E
FORM
ALITY
QUESTIONINGATTITUDE
FORC
EFULBA
CKUP
INTEGRITY
CONTINUITYOFPOWERREACTORSAFETY
Safety and reliability depend on specific operator behaviors
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The“PillarsoftheProgram”
WP&C has worked with the Nuclear Navy to benchmark its culture
1.00 2.00 3.00 4.00 5.00 6.00 7.00
Seekthecompany'ssuccessBeresultsorientedWalkthetalkFollowproceduresCon4nuallyseekgreaterknowledgeAlwayscollaborate
Confi
den4
al
Payalen4ontohierarchyandstatusDowhatyouraretoldCompetewithpeersWorklonghoursCoverthemistakesofothersPunishfailure/mistakesShortcutsaretolerated
ChangeCurrentvs.Target=32%
40Characteris1cs
TargetCultureCurrentCulture
AveragerankingforCurrentvs.TargetCultures
MostLikeUsNotLikeUs
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Ques4oningAotude Formality Integrity ForcefulWatchTeamBackup
LevelofKnowledge
Current
The Navy describes itself consistently with the Five Pillars
MostLikeUs
NotLikeUs
RangeClient
RangeNavy NavyAverage
ClientAverage
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Three Lessons from the Nuclear Navy
#1 Safety should not be a GOAL!
#2 Simplify your management system
#3 Culture is critical
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ThankYou
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ChrisSeifertPartner,[email protected](972)800-3618www.wilsonperumal.com
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