operational discipline - deepwater horizon case study

Doing the right thing, the right way, every time!Case Study: Creating a Culture of Operational Discipline

2Wilson Perumal & Company, Inc.

What we will cover in this case study

• What is Operational Discipline?

• What are the core values, or “pillars”, that define a culture of Operational Discipline?

• Why is Operational Discipline necessary?

• Case Study: Deepwater Horizon and Operational Discipline

• How do I create a culture of Operational Discipline?


Operational Discipline starts with a clear and concise definition

Operational Discipline is composed of 3 simple requirements:

Operational Discipline

Do the right thing

the right way

every time

1

2

3

Wilson Perumal & Company, Inc. 4

The definition of Operational Discipline implies the necessary core values

Operational Discipline

Doing the right thing,

The necessary Core Values or “Pillars”

Level of Knowledge. Understand not just what you do, but why you do it. Continually seek greater knowledge about the systems, processes, and hazards in and around your workplace.

the right way,

Formality. Treat your workplace and your role with respect, recognizing the seriousness of what you do and your role as a part of something bigger. Follow authorized procedures and expect the same from others. If you think of a better way, follow authorized processes to review and improve the procedures.

every time.

Questioning Attitude. Constantly ask yourself what could go wrong. Check for out-of-the-ordinary and learn to anticipate potential problems. Don’t assume things are okay—verify.

Forceful Watch Team Backup. Backup your co-workers by looking out for what they may have missed, and expect the same in return. Have the courage to care, intervening even when it makes you uncomfortable. If you see an issue, own it.

Integrity. Be reliable. Do what you say you are going to do, completing every task the right way, every time, even if no one is watching.

Wilson Perumal & Company, Inc.

The Pillars of Operational Discipline are Self-Reinforcing

Integrity Level of Knowledge

Questioning Attitude

Formality

Forceful Watch Team

Backup

Level of Knowledge allows ID of out-of-

the-ordinary conditions

Questioning Attitude supports process

improvement, not work arounds

Questioning Attitude helps you spot what others may have missed

Level of Knowledge

allows you to back up others

Integrity means you can be relied upon to support

your team

Questioning Attitude enhances

Level of Knowledge

Backup drives

procedural complianceFormality ensures

backup is professional &

productive

The Pillars of OD are self-reinforcing and interdependent – OD cannot be achieved by adhering only to one or some of the Fundamentals.


Robust processes and procedures alone will not lead to Operational Excellence

Effective Processes

and Procedures

Culture of Operational

Discipline

Operational Excellence

Processes and procedures, without a culture that embraces the Pillars of Operational Discipline, will not result in Operational Excellence. To demonstrate this, consider the following case study.

Sound Strategy

Operational Excellence

Leading Performance

Wilson Perumal & Company, Inc.1) BP: ‘An accident waiting to happen’, Fortune Features, Jan 24, 2011 7

Case Study: Leadership activities and Operational Discipline aboard Deepwater Horizon

• On April 20, 2010, an explosion on BP’s drilling rig “Deepwater Horizon” in the Gulf of Mexico was the largest marine oil spill in the history of the petroleum industry1

• The explosion killed 11 platform workers, injured several others, and released approximately 4.9 million barrels of crude oil

Deepwater Horizon Facts


1) Management Walk-Arounds: Lessons from the Gulf of Mexico Oilwell Blowout, Andrew Hopkins, Feb 2011 8

Case Study: Leadership activities and Operational Discipline aboard Deepwater Horizon

• VIP team lands on rig and attends Safety Orientation • The VIP’s proceed with a safety tour.

One VIP inspects safety harnesses. Another looks for a slip/trip hazard.

• Tour continues to Driller’s Control Room where one VIP notices “confusion” . He asks the Rig Manager to stay behind and help out

• VIPs conduct “light-hearted” meeting w/ personnel in galley

• Discuss safety goals, emphasizing “hand safety” and “dropped objects” campaigns

• VIP follows up with Rig Manager and asks "Everything all right up on the rig floor there? Get everything sorted out?“ The Rig Manager responds with thumbs up

3 PM

4 PM

6 PM

8 PM

9 PM

Most people don’t know that a group of four BP and Transocean VIPs were onboard the vessel and conducting a safety focused “management visibility tour” when the explosion occurred. Let’s look at the events of the day.

7 PM

5 PM


Robust processes and procedures alone will not lead to Operational Excellence

• Safety meetings• Leadership

visibility tours• Share Lessons

Learned

No culture of Operational Discipline

Activity driven behavior without the intended results

• From 2008-2010, BP implemented an Operations Management System (OMS) to ensure that the processes and procedures necessary to ensure safe and environmentally compliant performance were in place.

• The OMS required that management ensure operating procedures are in place, operators are competent to perform work, and leaders are active and visible.

• We would all agree that the activities or processes that the VIPs participated in were the right ones…..yet the result was not what was intended.

• Why? Because the Pillars of Operational Discipline were not in place.

Effective Processes and Procedures

Culture of OperationalDiscipline Operational Excellence


Deepwater Horizon: In their own words….

• We will now view several video clips of the VIPs testifying to their activities and behaviors on that fateful day.

• While watching, keep in mind the following:– They were following the processes and procedures that were

expected of them.– We would all agree that the activities they participated in (safety

orientation, safety tour, award ceremony, etc.) were all activities in which we would expect good leaders to participate.

– All of these men thought they were doing the right and good thing that day. None of them woke up that morning anticipating this disaster would happen.


In their own words……

While viewing the clip on the next slide, consider the following questions.

• Why did these leaders go on the Leadership Visit?

• What was their goal?

• How did they prepare for the visit?

• Did they demonstrate the Fundamentals of Operational Discipline?


Deepwater Horizon Revisited

Questions to consider while viewing the clip on the next slide

• What was the purpose of his Safety Tour? To learn? To find new problems?

• Why did he want to discuss dropped objects?

• Why did he inspect harnesses?

• Were the Fundamentals of Operational Discipline exercised?




• Why was he in the driller’s shack? Was he there to surface problems?

• What did he do when he noticed the confusion?

• Did he ask the right questions?

• Were the Fundamentals of Operational Discipline exercised?




• How do these leaders deal with employees that don’t follow procedures?

• How do they make sure that their employees have adequate knowledge? How do they interact with them?

• Were the Pillars of Operational Discipline exercised?


Questions to consider

1. Level of Knowledge—Did these leaders demonstrate a desire to learn about and understand the operations they were responsible for?

2. Formality—Did these leaders demonstrate a commitment to following procedures and ensuring that others do as well?

3. Questioning Attitude—Did they follow up on things that seemed out of the ordinary and seek to surface problems?

4. Forceful Watch Team Backup—Did they hold others accountable and expect them to do the same for them?

5. Integrity—When things became uncomfortable, did they do the right thing anyway?

What if they had?


Complex operating environments require a different approach to Leadership

• In complex operations, situational inventories are impossible.

• We cannot create comprehensive rules / tasks to cover every situation.

• The Pillars of Operational Discipline create a framework for thinking about the right behaviors.

• This framework is useful for helping leaders understand how they demonstrate the Pillars of Operational Discipline in their daily activities.

Let’s review examples of how the Pillars of Operational Discipline apply to daily activities using a simple “Right/Wrong” framework


The Pillars of OD enable employees to determine the right behaviors for any activity

Leadership Visits

OD Pillar Fundamentally Right Fundamentally Wrong

Level of Knowledge Leaders view visits as an opportunity to learn about the business

Not preparing or being knowledgeable about the site and its risks prior to visit

Formality Observe high risk procedures and verify steps are followed

Not asking to see procedures to verify compliance


Review past audits prior to visiting and verify completion of corrective actions

Primary goal is to be “visible”, not to identify problems

Forceful Watch Team Backup

Ask other leaders to tour your area and point out issues

Don’t want to make a big deal or interfere

IntegrityWhen you find problems, share them with others even if they might be embarrassing

Visit conducted just because “there is a schedule”



Safety Tours


Level of Knowledge View the tour as an opportunity to learn about the operation

Not using the tour to learn about the operation and to surface high consequence, low probability risks

Formality Inspect procedures people are following and verify steps

Not inspecting procedures during the tour


Question employees to verify their level of knowledge

Only looking for pre-determined issues, not looking for new issues


Ask other leaders to conduct safety tours in your area

Focus on easily observable, easily correctable risks so as not to make people uncomfortable

Integrity Investigate the out of the ordinary, no matter where it may lead

Looking for specific risks just because they are the “focus” area



Audits


Level of Knowledge Periodically accompany auditors to understand process

Used as a weapon for compliance—noncompliance is responded to with punishment rather than desire to understand root cause

Formality Enforce adherence to the audit schedule

Auditors focus on what they know and are not thorough

Questioning Attitude Expect and want to find deficiencies Focus of audit is on the score/grade,

not how to resolve deficiencies


All repeats audit findings are reviewed by senior leaders to determine root cause for not correcting them

Audit findings and resolutions are not shared

Integrity All deficiencies are reported accurately

Sites acknowledge findings, but do nothing to resolve them


4 Steps for creating a culture of Operational Discipline

• Need for Pillars• Definition of

Pillars• Approach for

implementation

Align Leadership on the Pillars

Create the Case for Change

Internalize the Pillars

Embed in Management

System Processes

• Use case study like Deepwater Horizon to make case for change

• Create a sense of discomfort

• One-on-one conversations between leaders and employees using right/wrong framework to discuss behaviors

• Leader interactions on the shop floor

• New hire selection• Orientation /

training• Incident

investigation• Performance

Management

Creating a culture of Operational Discipline must start at the very top of the organization!

Contact Information:On the Web: www.wilsonperumal.com

Email: [email protected]

Twitter: @Wilson_Perumal

LinkedIn: http://linkd.in/10BnH1i

United States: (972) 716-3930

Europe: +44(0)203 206 1496

Contact us for more information about our approach to Operational Discipline and to schedule a workshop for your Leadership Team

We will customize a workshop to provide your team with a strong foundation for implementing Operational Discipline:

• Alignment on the Pillars of Operational Discipline and approaches for implementation

• Creating the “Case for Change” within your Leadership Team

• Utilizing the “right/wrong” framework for helping employees internalize the fundamentals

• Step-by-step, practical guidance on creating a culture of Operational Discipline

Learn more by following our Operational Excellence Blog at www.wilsonperumal.com/blog

http://www.wilsonperumal.com/

mailto:[email protected]?subject=Operational%20Excellence%20Introduction%20Deck

http://linkd.in/10BnH1i

http://wilsonperumal.com/blog/


Our team has deep, hands-on operational experience

Andrei Perumal, Managing Partner • Thought leader on complex systems and integrating strategy, operations, and organization• Formerly with George Group Consulting (Engagement Director of the Year) and Bain & Company

(winner of Best of Bain Award); co-author of Waging War on Complexity Costs• Developed the Joint Munitions Command Integrated Logistics Strategy for the US Army• Aerospace, nuclear, and chemical engineer; prior aerospace industry experience• BS Aeronautical & Astronautical Engineering, Massachusetts Institute of Technology

Brian Flis, Manager• Expertise in manufacturing, operational excellence, and LEAN implementation• Developed complexity reduction plan for a U.S. manufacturer; identified cost savings of $140 million• Supplier Quality Manager, Eaton Corp. - Handpicked by Senior VP of Supply Chain, Operational

Excellence and Quality to launch urgent business performance initiatives across the business• Acquisitions Officer, U.S. Air Force - Led process improvement team that successfully increased ballistic

missile booster production from 1 booster a month to 8 boosters a month• MBA, Ohio State University; MS Mech. Engineering; BS Mech. Engineering, U.S. Air Force Academy

Chris Seifert, Case Team Leader• Expertise in manufacturing, operational excellence, and management system design and

implementation• Former Operations Leader, Owens Corning (increased plant productivity by 25% in just 9 months)• Former Plant Manager and Manager of Business Strategy & Analysis, Georgia Pacific (Koch Industries)• Top-ranked submarine officer, US Navy (ranked #1 of 9 submarine junior officers)• MBA, Summa Cum Laude, University of Georgia; BS Business Administration, St. Louis University

operational discipline - deepwater horizon case study

Business

operational discipline1do

right way

right thing

procedures necessary

timewilson perumal company

safety tour

rig manager

authorized procedures