Category: Governance

  • Roadmap to Decision Making In the ‘Smart’ Era

    Roadmap to Decision Making In the ‘Smart’ Era

    “Nothing is more difficult, and therefore more precious, than to be able to decide.”

    Napoleon Bonaparte

    Volumes have been written on decision-making and this pundit has offered his share of insight and comment on the subject as well.  Some of our comments regard the appropriateness of the human intercession in electronic decision making.  Others raise questions regarding algorithm fallibility.  Moreover, Human Factors must be considered for any technology initiative which are becoming increasingly important.

    If one unpacks the previous paragraph a substantial level of complexity emerges.  As complexity increases so does risk and the need from proper governance.  However, many still see this potential transformation through the lens of just another IT initiative.

    Roadmap

    The oil and gas industry faced a similar dilemma at the dawn of the 21st Century.  At the time, referred to as DOFF or Digital Oilfield of the Future, a plethora of technologies became available.  The task was to transform 100 plus years of traditional operation to what is now referred to as the Digital Oilfield, aka Integrated Operations and a number or synonyms.  While this processes continues to evolve as new solutions emerge, i.e., Cloud, at the time much was trial and error.

    In conjunction with industry leadership, we released our Roadmap to Enterprise Optimization: A Guide to the Impact of Information Driven Field Operations on the Petroleum Corporation in the fall of 2004.  We believe it was the first industry (POSC) supported effort that was not simply research but a ‘bona fide’ action plan or roadmap to success based on industry/other knowledge, standards, economic value and best practices.

    Click for full size Integrated Operations Framework or graphic

    Since then, we have updated this roadmap into an Operational Excellence Platform.  Note that Integrated Operations is a key component.  The platform is a robust detailed solution that is available not just to the energy sector but all sectors identified by Homeland Security as Critical Infrastructure.  These sectors were recently identified as susceptible to hacking by the US government.

    Getting Smart

    Enormous corporate (shareholder) wealth has been destroyed implementing ‘game changing’ technology enabled transformation efforts.  Are we about to do that again, getting smart?  The easy answer is yes, but it does not have to be.

    Roadmap constructs are well understood and provide guidance.  In some models the step by step process provide practitioners with well defined models that can lead to success–defined as on time and under budget performance against Key Performance Indicators (KPIs).

    We are in the process of writing a book, to be released in 2022.  One chapter will define a roadmap for the transformation to ‘Smart’ for a major industrial segment.  As with earlier works, it will focus on the human element aligned with a technology assessment process.

    Get Smart was a comedic TV show spoofing the Cold War ‘spy’ environment of the 1960s.  Getting Smart today may not be a lot different.  The goal under a ‘Cone of Silence‘ was to attain and sustain competitive advantaged achieving superior stakeholder returns.

    Getting smart in 2021 will require a ‘Roadmap to Smart.’  A set of ‘to do’ processes that assures success.

    What is your Organization’s Plan to put Smart Decisioning Making Processes in Place?

     

    For More Information

    Please note, RRI does not endorse or advocate the links to any third-party materials.  They are provided for education and entertainment only.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game

    We presented, Should Cross Cultural Serious Games Be Included in Your Diversity Program: Best Practices and Lessons Learned at the Online Conference, New Diversity Summit 2020 the week of September 14, 2020.  Check Out this timely event and contact the organizer for access to the presentations!!

    You can contact this author as well.

  • Complicity or Write a Book?

    Complicity or Write a Book?

    I Need a Book Deal!

     

    With the change of the US federal administration, previous key individuals are now coming out and writing books regarding their former boss.  This all the while with plenty of video evidence where these individuals pontificated a position and even changed their position dramatically while in the employ and in seemingly in support of that administration’s policy.

    Now some of the very architects of the US response to the Coronavirus are claiming their innocence all the while blaming others for thousands of deaths.  The nerve.  If true, she is equally responsible and perhaps more since she is a medical doctor.  First do no harm.

    We all have a boss and most need a job; however, when does an individual’s moral compass come to play?  Senior officials who will be gainfully employed doing something else fail to come forward or even resign.  THEN they claim victimhood!  The LOVE of power is so intoxicating.

    Remember, ordinary Germans were widely condemned after World War II for much less personal involvement.

    Credibility?

    Many institutions lack any credulity today.  This is not news and is a widely held view.  Any wonder when so called responsible parties now claim they could have reduced deaths but failed to do so?

    Organizational maleficence often leads to criminal charges and many executives have gone to jail.  If many of the books written after every administration are true, should at least some authors be at least censured for the complicity they themselves are documenting?

    ESG

    We have addressed the issue of governance a number of times.  Most notably in 2011, as part of our Changing the Dialogue monographs, Asset/Equipment Integrity Governance: Operations–Enterprise Alignment (A Case for Board Oversight) addressed the role of operations including environmental and social issues as critical components of the role of organizations.

    As part of the Safety and Environmental Management System tenets, the right for individuals to express themselves without redress is sacrosanct.  Surely, this includes senior officials?  If they can’t or rather seek to write ‘tell all’ books later, governance models are at risk.

    The days of Yes Men (and Women) and Empty Suits are over.  Perhaps, organizations need to clean house.

    How Do You Know Y0ur Advisors are Being Honest with You?

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    Please note, RRI does not endorse or advocate the links to any third-party materials.  They are provided for education and entertainment only.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game

    We presented, Should Cross Cultural Serious Games Be Included in Your Diversity Program: Best Practices and Lessons Learned at the Online Conference, New Diversity Summit 2020 the week of September 14, 2020.  Check Out this timely event and contact the organizer for access to the presentations!!

    You can contact this author as well.

  • Open Sesame

    Open Sesame

    A Year of Leadership–Or Not!

    On March 2, 2021 the Governor of Texas announced its 100% reopening–effectively proclaiming an end of the Covid-19 crisis.  Needless to say in our hyper-partisan world, many widely decried the decision and even accused him or bringing physical death to the state population.

    Mississippi announced a similar rollback of virus driven constraints.  Likewise, Connecticut is rapidly easing similar restrictions.  These state join others with loose Covid-19 protocolsThis pundit expects this trend to gain speed quickly and worldwide.

    Meanwhile, the President of the United States accuses these decisions as being made by Neanderthals, while the Director of NIAID position has move from NO mask to wearing MUTIPLE masks.  The political divide regarding the path forward remains wide.

    Consent of the Governed

    “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time,” is attributed to Abraham Lincoln.  This oft quote is usually seen through a political lens.  More importantly, it is a position from a Leader!

    Driven by suspect data we were told that this virus had an Armageddon like quality.  At one point over 2 million Americans were projected to die and the hospital systems would be overwhelmed, perhaps irrevocably.  Hospital ships were mobilized and economies brought to their knees all to save lives.  Perhaps, even our own.

    To be clear, many did succumb and many lives were destroyed or at least changed forever.  We mourn those and recognize the serious of this pathogen.

     

    A few of my family and friends have been infected but fortunately with only minor symptoms and limited hospitalization.  In this we are very fortunate.

    Crises can happen at any time, hurricane, winter storms, hostilities are part of the human conditions.  How we respond it the difference between chaos and inconvenience.  Leadership determines the outcome!

    If you have lost someone to Covid-19, cancer, accident, fire (I lost two family members) or other tragedies, statistical arguments are meaningless as the probability is 100%.  However, for the overall population likelihood of recovering from the coronavirus has always been quite high.

    Many questions have been raised regarding the myriad of conflicting “authoritative” information and misinformation the public has endured for 12 months.  With no conclusive or definitive game plan put forth by authorities, we were left to fend for ourselves.

    A resident of the Houston metropolitan area, this writer has noted that traffic is almost back to normal.  This suggests that the governed no longer have faith in political or medical leadership demanding yet another year under their ‘knowledgeable’ thumb.

    Once that credibility is lost, game over for leaders pontificating that to be safe we must hunker down forever.  Not sure even the Londoners did that during the Blitz.

    The Future is Bright

    Rulers attempt to dictate through a never ending series of edicts.  Knowledgeable governed conduct reasonable due diligence and make there own risk adjusted behavioral decisions.

    Likely, recent events are driven by the political class learning that enough is enough.  After all, we are adults and capable of living our own lives.

    Agree that the pathogen is still with us and we must address it.  Vaccines have a long history of success and processes are in place for safe openings.

    Society is opening with or without the politicians.  Remember the Speakeasies during Prohibition of the 1920s?

    Expect more to run to a microphone and claim leadership.  Ultimately, this process is irrelevant.  Getting out ahead of a parade and claiming to be the Grand Marshal does not make it so.

    Regardless, 2020 is over and there is NO interest in repeating it in 2021.  Message from the governed–we will take our chances going forward!  Our  R B C Framework model at work.

    Covid-19 is not over but seems to be getting to remission thanks to the army of men an women who have risen to the challenge in less than a year and saved countless lives.

    How are you leading your organization to recapture Normal?

    For More Information

    Please note, RRI does not endorse or advocate the links to any third-party materials.  They are provided for education and entertainment only.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game

    We presented, Should Cross Cultural Serious Games Be Included in Your Diversity Program: Best Practices and Lessons Learned at the Online Conference, New Diversity Summit 2020 the week of September 14, 2020.  Check Out this timely event and contact the organizer for access to the presentations!!

    You can contact this author as well.

  • I Didn’t Do It, He Did — I Didn’t Do It Either, Someone Else Did

    I Didn’t Do It, He Did — I Didn’t Do It Either, Someone Else Did

    “When converted into productive thought and action, the energy it takes to blame, shame, and game is enough to launch anyone into heights of real success and happiness.”

     – Charles F Glassman

    Entrée

    It is not often that an entire geographically LARGE state loses power and water simultaneously.  Now we know it can happen!  Welcome to Texas (ERCOT) circa the dawn of the 21st Century.

    The finger pointing and claims, ‘not my responsibility’ surfaced immediately at all political levels.  As I sat in my power free, cold, waterless house, I was moved that political leadership was focused on saving their own hides.

    Benjamin Franklin’s words, “We must all hang together, or, most assuredly, we shall all hang separately” are lost on our hyper partisan world.  Earth to all polls, there is enough blame on this one to go around.  This society loves to Share and Like and is quick to find fault.

    The usual suspects will pontificate about blaming others and legal initiatives have already surfaced.  Good media, but who actually cares?

    This blog post is not about politics or the blame game.  It rather posits a solution that sees that this never happens again–anywhere.

    Operational Excellence Platform

    Excellent performance requires a conscious effort at all levels of an organization and its ecosystem.  We embodied a approach for heavy industry in our 2012 article, High Reliability Management in Process Industries: Sustained by Human Factors.  In that piece we put forth the argument that High Reliability Management is a strong methodology for management large complex systems such as the Texas Electric Power Grid.  HRM provides organizations with Agility, Resiliency and Sustainability in the face of large complex incidents.

    As we have previously put forth, Normal Accident Theory (NAT) posits, “that some accidents are inevitable because of system complexity.”  While logical, this model has its critics and lacks empirical evidence.

    The Texas electricity power grid got into process/technological/engineering trouble rather quickly.  Debate will rage for years as to what actually happened.  However, it seems practitioners at all levels practiced NAT.  Like Deepwater Horizon, this event did not have to happen.

    Safety Culture

    At the core of High Impact Performance is a strong safety culture.

    Systemic Safety Culture as the Core Set of Values and Behavioral Economics of ALL participants of the extended organization and its Enterprise Risk Management strategy that reflect a Strong Bond Governance commitment to behaving as a High Reliability Enterprise Ecosystem in a safe and environmentally responsible manner.

    Going Forward

    The over used phrase, ‘teachable moment’ suggests that we learn from our history so as not to repeat it.  Most likely oxen will be gored, witch hunts abound and the likelihood of little tangible progress will be made.

    Career losses will most like exceed the six board members who have already resigned.  All because the reactive NAT model was followed.  One is well advised not to follow this lead.

    How are you making sure that your operations processes are proactive?

    For More Information

    Please note, RRI does not endorse or advocate the links to any third-party materials.  They are provided for education and entertainment only.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game

    We presented, Should Cross Cultural Serious Games Be Included in Your Diversity Program: Best Practices and Lessons Learned at the Online Conference, New Diversity Summit 2020 the week of September 14, 2020.  Check Out this timely event and contact the organizer for access to the presentations!!

    You can contact this author as well.

     

  • Is Your Remote Team Aligned?

    Is Your Remote Team Aligned?

    Recently, my team and I were tasked with a delicate decision making process.  Due to its nature and signatory level, team members were only authorized to explore and present options.  The final decision was mine alone.  Our project governance model clearly defined this decision making process.

    One day I received a call from remote members explaining they were going to a vendor site to assess our options–I concurred.  Several hours later they let me know that they had made a decision and signed a contract.  When challenged about their actions they informed me that the vendor had demanded that they ‘act fast.’

    Twice in my career I was the C level executive responsible for global operations.  In one case, one of my direct reports was in a different office along with my boss, the CEO.  I received multiple calls from the CEO over a period that ‘so and so’ had stopped by to talk and decisions were made about my operations.  “Well you were not here was the excuse and it seemed like a good idea to me.”  Would it surprise anyone that ‘so and so’ was relieved shortly thereafter?

    In another, the software development operation was in a different part of town.  Development plans were agreed to and then in some cases materially changed with without authority or even informing management.  Needless to say, projects were late or not completed.  After a few weeks of this, the development lead was terminated.

    Remote Management Governance

    Based on the above paragraphs, some may argue that I am not a very good manager.  Perhaps, they are right; however, the point is remote management can be very difficult.  Empowered individuals and teams must have boundaries.

    Yes, hire smart people and get out of the way.  However, there are limits as even Steve Jobs, the micromanager would agree.

    Evidence suggests that working remotely has its challenges and not everyone is well suited for it.  Some individuals will need additional support.

    There is a great deal of information available about remote management.  Some is sound, but this Though Leader on the subject disagrees with much the advice.  It seems for many, this is their ‘first rodeo’ while remote management goes back to antiquity.  While not the first, the Roman Empire functioned well from a bureaucratic or management perspective.

    Inclusive Teams

    Currently, much of the discussion focuses on the Inclusion of team members.  We are recognizing that Diversity is not enough if not every one participates.

    Previously, we had put forth the construct that cross cultural teams have many of the same characteristics of diverse groups.  We can extend this model and success that Inclusive Teams include those individual who are not as well suite for remote teams as others.

    Managing diverse remote teams and assuring that all team members are valued contributors requires a level of managerial engagement that is constant, consistent and appropriately empowering.  ALL members must be encouraged to participate and their input must be acknowledged by the others.  Only then can Steve Jobs and Elon Musk like decisions be taken and not by those who tend to dominate groups unilaterally.

    D&I in a Post-Pandemic World

    Typically, D&I has been defined as a function of ethnicity and/or gender.  Last year we put forth the construct that Cross-Cultural and D&I are similar models of human behavior and best practices from both could add value to the other.

    Diversity must now include those are not well suited for new business models; however, flawed they may be–jury is still out regarding the effectiveness and efficiency of full time remote teamsInclusion means they must be actively involved.  Leaders at all levels must assure this model is successful.

    How Do You Assure the Reluctant Remote Team Members are Included?

    For More Information

    Please note, RRI does not endorse or advocate the links to any third-party materials.  They are provided for education and entertainment only.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game

    We presented, Should Cross Cultural Serious Games Be Included in Your Diversity Program: Best Practices and Lessons Learned at the Online Conference, New Diversity Summit 2020 the week of September 14, 2020.  Check Out this timely event and contact the organizer for access to the presentations!!

    You can contact this author as well.

     

     

  • Hanging App?

    Hanging App?

    By one measure, the US presidential primary season is off to a rough start.  In a small state, counting the ballots became a challenge.  Wasn’t technology supposed to solve the problems of past confusions?

    Yet the mechanism seemingly failed—again!  How is this different from the Boeing Max 8 disaster?  In one sense it isn’t.

    Disclaimer:  The only information this author has on the recent electoral IT problem is publicly available and he is not aware of anyone involved in that process that he may know personally.  This piece is only an opinion about a technology issue.

    Technology Adoption Process

    App developers strive to get to MVP as rapidly as possible.  Wikipedia defines a Minimum Viable Product as, “A version of a product with just enough features to satisfy early customers and provide feedback for future product development.  Gathering insights from an MVP is often less expensive than developing a product with more features, which increases costs and risk if the product fails, for example, due to incorrect assumptions.”

    Speed is of the essence in software development.  Yet, a rapid time to market should not sacrifice adequate analysis and assurance the software is robustly ‘stress tested.’

    Apps are moving from simple tools designed to call an independent driver of transport or order a burger.  They are now integral parts of enterprise solutions with broad implications if they fail.  This changes the fundamental project development process and benchmarks for release.  This is true for all App developers, even if their employee base is one or the development process is outsourced entirely.

    Release Maturity

    Most new technologies start is some’s ‘garage.’  Whether Steve Jobs’ or 3M, the processes are ad hoc and getting a so-called ‘Alpha’ product is the goal.  Those third parties who accept and test it know their risks and exposure.  Such customers would never use that release in a production environment.

    Other maturity models include Technology Readiness Levels (TRLs) by NASA and the European Association of Research and Technology Organisations.  At a minimum, testing must assure it is fit-for-purpose and that the product can ‘scale’ to meet the expected demand.

    Technology vendors to ‘critical infrastructure’ sectors such as oil and gas often express exasperation at the sometime slow take up of new solutions.  Individuals that take excessive risks deploying new technology may literally be putting their career at risk as well as their critical processes.  Therefore, they tend to be risk averse.

    There are many examples of what not to do rolling out new technology.  This month’s primary election is just the latest.  The adage, ‘no one wants to make the front page of The Wall Street Journal’ has a lot of truth to it.  Make sure you and your customer get media coverage for the right reasons.

    How Do You Know Technology is Ready for Enterprise Wide Deployment?

    For More Information

    Please note, RRI does not endorse or advocate the links to other third-party materials.  They are provided for education and entertainment only.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game

    You can contact the author as well.

    End Notes

      https://en.wikipedia.org/wiki/Technology_readiness_level

      https://therrinstitute.com/critical-infrastructure-sectors/

  • 10, 20, 30, 40, 50 or More!

    10, 20, 30, 40, 50 or More!

    The advent of 5 G so soon after 4 G—Humm.  What’s next?  How many G’s are there?

    In 1965, Gordon Moore put forth the construct that the density of transistors in integrated circuits doubled each year.  The so-called Moore’s Law has governed technology growth ever since.  However; over 50 years later, some argue that we may be far up that power curve.  One conjectures if the latter statement is correct.

    In 1899, Charles H. Duell then the Commissioner of US patent is purported to have said, “Everything that can be invented has been invented.”  Mr. Duell died in 1920 so he missed many of the ‘new’ things we now take for granted.

    Marketers tend to categorize in buckets; Boomers, Gen Xers, Millennials and so forth.  Do any of these labels matter?  Probably not.  The same is true for technology tags as well.

    Life, technology, knowledge et al marches on, just like it has throughout human history.  Will we see the advent of 50 G networks?  Most likely; with 100 G hot on its heels!

    Less we forget, the current version of the cell phone (iPhone and its equivalents) was first released in 2007.  Much has changed in the last 13 years and we can expect that arc to continue with disruptive new mobile technology crashing in at some point.

    Agility

    Most think of an ‘agile enterprise’ as information technology driven.  In this writer’s opinion, this is a narrow perspective.  The word ‘agility’ is defined in terms of power and thinking.  In other words, the ability to make good decisions with the capacity to implement them.

    In this hyper-technology environment, it is not the adoption of a particular rendition, but the capability to incorporate the appropriate new in an economic manner.  This is true whether the organization is an ‘early adopter’ or even a ‘laggard.’

    For decades, organizational strategy has been enabled by technology.  There is no reason to change that model with many G’s to follow!

    How Does Your Organization Ingest New Technologies?

     

    Enjoy this flash back to the 1960’s.

    For More Information

    Please note, RRI does not endorse or advocate the links to other third-party materials.  They are provided for education and entertainment only.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game

    You can contact the author as well.

    End Notes

      https://en.wikipedia.org/wiki/4G

      https://en.wikipedia.org/wiki/Moore%27s_law

      https://www.dictionary.com/browse/agility

      https://en.wikipedia.org/wiki/Technology_adoption_life_cycle

  • Reflection: Are We Near a Digital Tipping Point?

    Reflection: Are We Near a Digital Tipping Point?

    Generally, this time of year humans are wont to look back on the closing year and assess the good and the bad, and dare I say the ugly?  We celebrate successes, review the not so successes, and what is left undone.  This process prepares us for the New Year’s resolutions that are often then broken.

    Today, we will see lots of stories on the accomplishments of the year, notables that passed from this life and other celebrations and questions about the waning hours.  In this piece, let us ask another question.

    The subject of the Man—Machine relationship has long been the subject of comment and speculation.  It remains so.  Where are we along this path?

    But as the march on a continuum towards the future, it is time to assess the level of Maturity of our Operational Excellence as a function of IT-OT.

    Challenges remain.  Recently, the Boeing’s Starliner space vehicle failed to reach its planned orbit.  The glitch is apparently in the capsule’s clock where a programming error misinterpreted the stage of the mission.

    News media reporting suggests that if astronauts had been on board, they may have been able to override the system and correct the problem.  This is an area we have addressed herein on several occasions.  When does the human act?  Recent articles include:

    The decision model whether to override the computer remains elusive.  Likely, it will for some time.

    In this writer’s opinion, it is currently difficult to develop an appropriate governance model for this emerging man-machine interface.  That said, the task is upon society and individuals and organizations must proactively engage.

    Not Just Digitalization

    There is much ado about the promise of digitalization and speculation about its ability to be a game changer.  One wonders how any technology available to all warrants such status?

    Since the advent of the Turing machine, circa 1936 and its enablement of the winning of Word War II (at least in Europe), there has been a level of trust in information technology that is not always warranted.  Today, how many of us will sit with our children in the backseat of a driverless automobile?

    Human factors must be considered when new technology models are put forth.  After all, humans still govern, right?

    Maturity Assessment

    Building on the CMMI and our own maturity model development methodology we put forth a set of constructs.  Beginning in 2004, when we released our Roadmap study.  It was one of the earliest, if not the first industry wide assessment of the so-called digital oilfield and guide for organizations to transform themselves with this enabling technological model.

    As part of that study we posited a maturity model that still has applicability for heavy industry and its use of information technologies to manage the business.  An updated version is shown in the following figure.

    For many organizations, Level 3 is satisfactory and accomplished the required.  One can argue that an airline autopilot would be at least Level 4.

    The current issues Boeing has with is space capsule and 737 suggests that may not be the case.  By the way, this is not limited to this manufacturer, others have similar issues as well.

    In the opinion of this writer, as a society we are at best Level 2 when it comes to digitalization.  What do readers think?

    Paraphrasing a famous election cycle quote, “It’s the software, stupid.”  Are we near a digital tipping point?  Perhaps not.

    Much work is yet to be done.  Fear not for the robots taking your job—at least for the moment.

    What is Your Digitalization Management Maturity Level?

    For More Information

    Please note, RRI does not endorse or advocate the links to other third-party materials.  They are provided for education and entertainment only.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game

    You can contact the author as well.

    End Notes

      https://www.space.com/boeing-starliner-oft-fails-to-reach-correct-orbit.html

      https://en.wikipedia.org/wiki/Turing_machine

      https://therrinstitute.com/maturity-models/

      (2004, September). Roadmap to Enterprise Optimization: A Guide to the Impact of Information Driven Field Operations on the Petroleum Corporation.

      https://www.popularmechanics.com/flight/airlines/a26854898/plane-automation-crashes-incidents/

  • Running Across an Open Field: Strategy for Disruptive Technology?

    Running Across an Open Field: Strategy for Disruptive Technology?

    Several weeks ago, as an amateur history buff, I was watching a documentary about World War I.  During one segment the commentator discussed the apparent fact that if soldiers refused to charge out of their trenches across an open field into the teeth of waiting machine guns they would be shot.

    The brutality of such a command by (so-called) leadership is appalling.  It may have been one thing for Alexander the Great’s armies to engage in open battles with sharp pointed objects as weapons.

    It is quite another for General Pickett’s infantry at Gettysburg to charge cannons and 50+ years later to repeatedly try the same tactic (by both sides) at horrific costs.  Generals always fight the last war, so the saying goes.

    This blog is not about some of history’s follies, it is about learning so as not to repeat the mistakes of others.  These lessons apply to readers’ daily business world as well.

    When New Technology is Deployed

    New disruptive technology can tear the societal fabric.  Some old jobs and companies disappear, and new ones thrive.  This process has been repeated since antiquity.

    Our culture is having this dialogue today regarding digitalization and its suite of technological driven change, i.e., Blockchain, AI, etc.  Principal issues that must be addressed include Human Factors Engineering (HFE).

    “HFE places the human operator at the center of the complex operating environment.  HFE recognizes that this individual or set of individuals is the puppet master and is responsible for the entire show.”  In other words how do we interact with the new technological reality.

    Reliable and valid HFE is the key to successful digitalization initiatives.  It will be the vital to whatever is next as well.

    Tyranny of the Minority

    From political science, “For centuries, theorists have worried about the potential of unrestrained democracy to lead to a tyranny of the majority, in which majority groups ride roughshod over the rights of minorities.  What we often see today is instead a kind of tyranny of the minority: a system in which a particularly extreme and motivated fraction of the populace can wield outsized power in the face of a majority which is either too indifferent or too scared to oppose it,” (italics added).

    In most organizations, there are fewer leaders than those who fabricate a ‘work product.’  The responsibility of leadership is to set the vision, mission and goal as well as enabling the organization with the tools and support necessary to reach targeted stakeholder value.

    But what if this minority group is the slowest to come to grips with disruptive forces?  In the face of newness, they may ‘keep doing what they have always been doing.”  In such an environment, the organization will likely not reap the same reward as in the past.

    Does too indifferent or too scared describe your organization’s ecosystem workforce?  One suspects It would be good to know.

    Fast Fail

    In our last blog we discussed the rapid assessment of technology and when to drop it if it does not appear to be working out.  Perhaps, we should treat managerial processes the same way.  After a horrific and visible failure in leadership, conceivably one preserves best by looking for alternative?

    If charging head long across an open field leads to disaster, why keep doing it?  While a counter argument might be that we had no tools to defeat those equipped with the new technology, to this writer, that logic is suspect.

    Flanking an enemy’s line or using guerrilla tactics, et. al. are as old as human confrontation.  Unconventional warfare has a long record of documented success.

    The business lexicon is loaded with military terminology.  We often speak of business as if it is warfare, when of course it is not.  There are lessons to be learned about human and organizational behavior, however.

    Decades ago, the concept of Guerrilla Marketing was the rage.  With the advent of social media, it has advanced, and the methodology is available to all.  Huge budgets and massive media campaigns are no longer necessary.

    Head-to-Head the biggest ‘guy’ usually wins.  So, if you’re not him/her, DON’T DO IT!!  However, the small mammals may displace slow moving dinosaurs.

    Agile is not an IT term.  It should be the state of mind of leaders at all levels.  To charge across the open business landscape into technology designed to destroy your organization remains folly.

    How Are You Leading the Charge into the Future?

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    Please note, RRI does not endorse or advocate the links to other materials.  They are provided for education and entertainment only.

    See this 3:15 minute clip for more information on living in a World War I trench.  Pathetic way for leaders to force those under their command to live.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game

    You can contact the author as well.

    End Notes

      https://consult2050.com/job-disruption-due-to-digitalization/

      https://therrinstitute.com/wp-content/uploads/2018/10/HRM-in-Process-Industries-Sustained-by-Human-Factors.pdf

      Ibid.

      https://areomagazine.com/2019/04/02/the-tyranny-of-the-minority-and-how-to-prevent-it/

      https://therrinstitute.com/lessons-from-the-seventies/

      https://en.wikipedia.org/wiki/Guerrilla_marketing

  • Want – Like – Need

    Want – Like – Need

    Years ago, as part of a never-ending series of company reorganizations, a team of our change management consultants headed to the ‘field’ to interview users.  Upon their return, they presented an extensive list of technology investments deemed necessary to remain competitive.

    Their list focused on technology and not business concerns.  Wondering, I asked who they interviewed.  Proudly, they proclaimed the “field engineers.”  When queried–did they talk with district managers, regional engineers and others with P&L or other managerial responsibilities, the answer was “no.”

    This very expensive process by a major professional services organization simply generated a wish list of junior employees.  It was what they thought they WANTED.

    In our current jargon, “cool stuff.”  Needless to say, none of these projects were funded.  Wasted time and money by those not familiar with our business!

    Today, we are driven to LIKE everything!  CRM systems demand input before we have even procured the product or service.  Log on to any given website and the request to complete a survey will hit you before you read the first line.  Five stars or thumbs-up emojis appears to be the goal.

    Do wants and likes add value?  Perhaps a like is a statement of preference, but perhaps the consumer wants the digital driven question to just go away without the hassle of someone begging for a higher ranking like.  Fibbing to surveys has become a national pastime.

    Business should be most concerned about what a prospect or returning customer NEED.  What pain point or problem does your product/service solve?  If you can’t answer that question, no amount of wants and likes will add to your bottom line.

    I may want a hamburger and go to a fast food restaurant with lots of likes.  However, if I am in a hurry and their preference is clearly to move cars via the drive-through faster than those of us waiting inside, my need to eat quickly will not be met.  I may leave without my meal or most likely not respond to a survey seeking likes.  Then never return!

    That lost customer will never surface in any analysis—not even one star.  Enough of those responses and the business will be in jeopardy and management my not even know why.  Collecting likes should never be a Key Performance Indicator (KPI).

    Finding the Pain

    In a recent Global Energy Mentors leadership meeting, an investment group recounted their business model as one that focused on identifying organizational ‘pain’ points.  Once a specific pain was articulated, the search for new technologies that would address/resolve that pain was undertaken.

    This model flies in the face of Steve Job’s, “A lot of times, people don’t know what they want until you show it to them.”  That may be and sometimes unknown needs are uncovered.

    However, in critical infrastructure sectors where failure is not be an option because it can be very expensive solving a known need is usually most important.  Without exception, this entrepreneur’s success has been focusing on addressing industrial client known pain points.  As an example, our EVPM modeling process demands input from customer groups.

    In this blog series, we have referred to successful change management that comes from addressing the—what’s in it for me question.  From a customer perspective; freeing ‘me’ from known pain is often more valuable than alleviating pain I did not know I had.

    Does Your Value Proposition Solve a Need, Address a Want, or Simply Generate a Like?

    For More Information

    Please note, RRI does not endorse or advocate the links to other materials.  They are provided for education and entertainment only.

    You can contact the author more information as well.

    End Notes

      http://globalenergymentors.org/

      https://www.helpscout.com/blog/why-steve-jobs-never-listened-to-his-customers/

      https://therrinstitute.com/brand-your-digital-oilfield-culture-internalize-its-transformation/

  • Culture Matters A Lot!  Cultural Interactions Matter MORE!!

    Culture Matters A Lot! Cultural Interactions Matter MORE!!

    “Failures of culture have been the single biggest destroyers of value in the last five years,” states the former senior vice president of HR of Google in a recent article.  This revelation by one of the contemporary tech giants supports the previous dictum, “Culture eats strategy for breakfast.”  Depending on one’s perspective, this latter quote can be attributed to literature dating back to the mid-1980s.

    Regardless, the central role of culture in an organization has long been recognized.  One wonders, if this is true, why has so little changed in 30+ years?

    This writer is personally aware of three major cultural debacles by large publicly traded firms where shareholder value was destroyed through inter cultural challenges.  In one case, the ‘then’ acquiring firm was subsequently acquired itself in part because of a seemingly dysfunctional culture.

    The Inc. article goes on to describe three demonstrable risks management must attend to in their mitigation strategies:

    • The internal is now external—Organizational ecosystem employees/contractors/customers now have unfettered access to outside the ‘door.’ Constituent parties can use social media posts to comment about the good, bad, and ugly of an organization.
    • The data on culture shows clear economic impact—Case studies on culture are no longer ‘fuzzy’ and the impact of culture on the bottom line can now be documented.
    • People technology has advanced enough to help—Data and analytics enable organizations to develop a better understanding other their ‘workforce’ market constituency and develop strategies addressing their concerns and needs.

    The article concludes that culture is no longer a buzzword and organizations can leverage it to drive organizational alignment and behavior towards shareholder value.  Culture is now a measurable KPI.

    Care to benchmark yours?

     

    Cross Culture

    If one accepts the above premise, competitive value is created by the organization’s culture.  This is not a new statement and has been addressed by this author in various forums for years.

    Fundamentally, there are two types of cultural interactions:

    • Collaborative—Two or more organizations seek to work together to realize joint value. For example, the organizational ecosystem, i.e., suppliers and long-term customers.
    • Adversarial—Two or more organizations seek to realize value at the expense of others. Examples include competitors, government regulatory interactions, i.e., IRS or legal actions.

    Even an internal team is a composite of several legacy (organizational) cultures not to mention diverse ethnicity and societal circumstances.  It is this heterogeneous environment that the bottom line is ultimately impacted.

    This author began investigating cross-cultural engagement value (or lack thereof) in the era of Culture eats strategy for breakfast.  In any cross-cultural situation, the Relationship is the ultimate value developed, sustained or even lost.

    The R B C model describes a set of interpersonal Behaviors based upon a set of Conditions.  Behaviors are observable and describable (beware of observer bias) and Conditions can be equally known.  The Relationship(s) between parties are latent (not directly observed) and must be inferred.

    This inference is often the source of poor decision-making—the reason so many deals go ‘south.’  If the internal culture is now better defined, manageable and a bottom-line item, focus must be turned to intercultural engagements.

    Even as your organizational culture is more knowable.  Its relationship with other identifiable cultures is not.  If that were true, there might be fewer issues among parties.  One might even surmise; the divorce rate might be lower.

    At all levels, culture is an evolving construct.  Cigarette smoking is no longer publicly acceptable for many while marijuana consumption is.  Fashions come and go as well.

    Certainly ‘pop culture’ evolves rapidly.  Perhaps slower, but so do societal and ultimately business cultures.

    In this pundit’s opinion, successful inter-cultural engagements are the key to long term value—shared or otherwise.  The more the organization knows Who and What it is, the better it will be able to develop a ‘relationship’ with counterparts who know Who and What they are.

    Culture is the Food of Choice.  How is Your Organization Watching its Weight?

    For More Information

    Please note, RRI does not endorse or advocate this video and does not have a relationship with its producer and distributors.  It is provided for fun and entertainment only.

    You can contact the author more information as well.

    End Notes

      https://www.inc.com/michael-schneider/googles-former-head-of-hr-issues-a-warning-that-all-business-owners-leadership-teams-should-read.html

      https://quoteinvestigator.com/2017/05/23/culture-eats/

     http://www.stat.cmu.edu/~brian/905-2009/all-papers/Bollen-annurev.psych.53.100901.pdf

  • Systemic Reasoning Errors: Stink’en Think’en

    Systemic Reasoning Errors: Stink’en Think’en

    The April 13-14, 2019 edition of the Wall Street Journal featured an opinion piece by Holman W. Jenkins, Jr., Russiagate and the Media’s News Denial.  The author makes the point, “Judgement is teachable.  Long ago, in relation to the Enron debacle, I pointed to the work of Harvard’s Max Bazerman and Northwestern’s David Messick, who theorized how systematic reasoning errors can lead to unethical business judgments.”  He goes on to discuss how the journalism sector may be suffering from this problem, vis-à-vis the Trump Administration.

    Cognitive bias errors impact the way people process and interpret information.  Our attempt to simplify can lead to nonobjective, illogical and poor decision making.  So, do these poor judgement issues concern me?

    The emerging digitalization model to attain and sustain Operational Excellence by definition is systemically complex.  A highly integrated ecosystem coupled with tens of thousands of data sensors and quasi-independent processing systems support field operations.  Moreover, risk mitigation models in such an environment are themselves complex.

    Human decision-making processes in this new environment will necessarily change from the traditional management of automated systems and data analysis.  Extensive training must be part of the transformational process.

    Additionally, Governance models may need revision as well.  What is the role of the Board and ‘C’ Suite (CIO vs. COO?) with the digitalization of the organization?

    Clarification.  The term ‘stinking thinking’ refers to tactics either unintentionally or insidiously used to create expectation biases.  The title uses a colloquial term Stink’en Think’en as a function of lousy thought processes; nothing more.

    The challenges we face are much more than technology driven.  As always, human Behaviors are at the core and Conditions in the near future may be dramatically different from the present.

    New Relationships will emerge as well.  We have previously discussed the R B C model.  It is good guidance for this transformation.

    How Does Your Organization Mitigate Systemic Reasoning Errors by Its Decision Makers?

    For More Information

    How Cognitive Biases Influence How You Think and Act is a very good article on this subject.  Interested readers may want to check it out.

    You can contact the author more information as well.

    End Notes

      https://www.psychologytoday.com/us/blog/the-media-psychology-effect/201311/stinking-thinking-and-expectation-bias

      https://www.amazon.com/gp/product/B00U0JKMT0/ref=dbs_a_def_rwt_bibl_vppi_i1

  • Beat the Market: Can Operational Excellence Increase EPS?

    Beat the Market: Can Operational Excellence Increase EPS?

    In a recent Houston Chronicle article, its author puts forth the premise that while oil and gas companies should do well in the stock market this year, don’t expect the energy services sector to fare as well.  As those who are either in the sector or track it (stock analysts) know all to well that when the price of oil dips, so do the Returns of those companies that provide equipment, labor and other services to the E&P sector.

    The crude oil commodity price has always been cyclical.  Often Boom—Bust, this leads to the hiring and firing of tens of thousands of employees and contractors.

    As many as 750,000 in the 1980s were fired (not to mention those businesses that provided products/services to these individuals and companies).  A lousy career choice that may limit new entrants who will not be guaranteed a salary during a short-term “shut down.”

    For years, this pundit has held the belief that due to technology advancements in both engineered products/services and information management that a return to the good ole days of $100 oil is not likely.  Economic actors in the sector must continue to adopt new business models and processes, not just to remain competitive but to stay in business.

    For example, Weatherford International, founded in the 1940s is endangered of being delisted by the New York Stock Exchange.  Baker Hughes continues to struggle as General Electric has announced its divestiture.

    We remain committed to the belief that oil is probably well within a trading range that will not provide price relief to the service sector.  That said, how can energy service survivors return shareholders reasonable value?

    The traditional business model of layoffs and equipment stacking is well underway.  Short term Stop the Bleeding which makes one wonder why this sector added 10,000 in just the last two years during a ‘weak’ recovery.

    The Future is Now

    The concept of the so-called digital oilfield has been around for decades.  This author was first formally involved with construct in the early 1990s when it was titled the Digital Oilfield of the Future.  Hasn’t the future arrived?

    In 2004 we released an industry supported research project, Roadmap to Enterprise Optimization: A Guide to the Impact of Information Driven Field Operations on the Petroleum Corporation.  Other articles, white papers, blogs and workshops continue to date.

    In the recent Houston Chronicle article, one interviewee believes that the energy service sector needs to Collaborate and Digitalize if they are to generate higher Earnings per Share. 

    This leads one to question, why after all these years is the disconnect the same as two decades ago?  We can no longer blame the Baby Boom generation as the brake on digitalization.  The Boomers have largely left the sector building.  Moreover, we can no longer blame the cost and maturity of information technology.

    So, if the blame game is over how can the sector attain and sustain these laudable process goals?  One can make a case that business/technology models and their value propositions were either fragmented or not understood by management.

    Having attended countless conferences, seminars, et al. over the years there does tend to be a narrow focus on each business need.  For example, downhole, big data, safety, decommissioning, digital oilfield, offshore, drones, onshore and so the list goes.  All vying for the same CAPEX.

    Those days may be over.  The Operational Excellence construct directly addresses all the field driven processes and technologies necessary to assure profitable performance.

    As with other initiatives, what is needed is an actionable methodology with a well understood value proposition.  Today, even smaller energy services companies can implement Operational Excellence.  A solution is available!

    Operational Excellence is the key to higher Earnings per Share and greater investor interest in the firm.  This is true for both public companies as well as private and their banking/investor relationships.

    What is Your Organizations Excuse for Not becoming Operationally Excellent?

    For more information about how to solve the weak Earnings per Share problem, check out our new Operational Excellence Platform.


      https://www.houstonchronicle.com/business/energy/article/Several-major-changes-on-the-horizon-for-troubled-13556827.php

      https://therrinstitute.com/wp-content/uploads/2019/01/Dr-Scott-M-Shemwell-Publications-and-Interviews-January-2019.pdf

  • Millennials Take On Our Increasingly Complex World

    Millennials Take On Our Increasingly Complex World

    Originally published in 2013.

    On January 1st at 0348 hours a young engineer employed by a service company is trying to address a problem she has encountered with a compressor on a drilling rig in the Deepwater Gulf of Mexico.  She graduated from college three years ago and went to work for a large energy services company.  However, several months ago she changed jobs and is now on her first offshore hitch as team leader with her new company, a similar size global energy services company.

    She is a competent engineer but is uncertain what the company policy is regarding a piece of rotating equipment that while seemingly malfunctioning does not appear to jeopardize safety, the environment or production at the present time.  But she worries that the situation could get worse.

    A quick call to the “graveyard” shift at the company onshore Operations Center is not reassuring.  Staffed by those who are too junior to be on vacation during the holiday season, the engineer she talked with had only been with company three years and actually had less field experience than she did.  His supervisor was not encouraging either.  Should he call and wake experts at this early hour?

    Adding to the problem, the compressor’s data plate was mostly unreadable.  And of course, a famous Texas blue northern was blowing through.  High winds, rain and cold temperatures further impaired proper equipment identification, much less working conditions.

    Both the field engineer and the operations engineer are aware that their company signed a Bridging Document with their customer as part of the new Safety and Environmental Management System (SEMS) regulatory requirements and both had attended the appropriate training for this project.  Both are knowledgeable that the Stop Work Authority (SWA) gives them the right and even the obligation to dramatically intervene with operations if they feel it necessary.

    As a new mom, the field engineer is concerned that she might develop a reputation in the company as a “flaky” female if her next decision turned out to be a mistake.  The engineer at the operations center was receiving real time data feeds from the rotating equipment but he could not “feel” the vibrations like the on-site individual could and the equipment was still within tolerances.

    Horns of a Dilemma

    The engineers in our story are competent, qualified individuals doing a great job.  Early in their careers, they are the vanguard of field operations.  Millennials by label, they are technologically savvy and among the best and the brightest in their fields.

    Things never go “bump in the night” during daylight hours in perfect weather, hence the colloquial term.  Moreover, the personal stress of a new mother concerned about her reputation and opportunities for promotion resulting from just another day at the “office” should not be underestimated by those desk bound or later and more secure in their careers.

    The real world of field operations can be very unforgiving even when the results turn out OK.  All of the individuals in our story have significant “skin in this game.”

    It is fine to “empower” people in the team building sessions.  It is an entirely different story in the middle of the proverbial stormy night when one’s career and reputation are on the line.  Field personnel must believe they company will stand behind their decisions, right or maybe less so.

    Enablement

    These best and brightest can only be as good as their supporting infrastructure.  These individuals not only face engineering issues, any actions they take must be in accordance with company policy, the Bridging Document and various regulatory compliance requirements as well.  This is a lot to put on the plate of an engineering team.

    However, since their childhood these individuals have been online.  Our field engineer mother looks in on her infant son at day care from her smart phone from a hundred miles offshore.  The operations center engineer routinely Skype’s with his girlfriend, a physician, who is in east Africa serving with Doctors Without Borders.

    These individuals are at the top of their technological game.  However, they lack the field engineering experience of their more seasoned colleagues.  This represents a demographic challenge for organizations in the middle of the Big Crew Change.  How do these young people come up to speed—quickly?

    Organizations not only depend on the individuals depicted in our story for their bottom line, shareholder value is at risk if they cannot prevent the next major mega-disaster.  And what if they can prevent a minor incident?

    Loss time, loss production, loss anything has economic consequences.  Most organizations run on margins that are thinner than they would like.  Oil companies are included in this group.  More importantly, energy service provider margins can be even lower.  This business model pushes our engineers to lower costs, reduce downtime and in some cases push the envelope.

    Millennial Transformation

    Out engineers appear to have the deck stacked against them.  Normal Accident Theory (NAT) with its roots in the Three Mile Island nuclear power plant incident suggests that tightly coupled technologies with invariant sequences and limited slack such as Deepwater drilling operations will have accidents in the normal course of events.  In other words there is a certain inevitability of a major incident on their watch.  Maybe not during this rotation but a certain possibility during their careers.

    However, these Millennials have a safety arsenal their parents did not—a new business model that capitalizes on their technology prowess.  The emerging field of High Reliability Theory (HRT) “emphasizes are a strategic prioritization of safety, careful attention to design and procedures, a limited degree of trial-and-error learning, redundancy, decentralized decision-making, continuous training often through simulation, and strong cultures that create a broad vigilance for and responsiveness to potential accidents.”

    Arm field engineers and graveyard operations watch colleagues with HRT driven policy and associated tools and then get out of their way.  A strategic or systemic safety model with a holistic perspective of the life cycle the process coupled with truly empowered key personnel trained with the latest learning tools in a strong Culture of Safety offer a new perspective for a new workforce.

    Aircraft pilots routinely retain and upgrade their skills in sophisticated flight simulators.  “What If” scenarios, whereby the team can learn by trial and error environment where the worst result is a computer animated “do-over.”  Other industry sectors train using this well documented successful approach.

    In a true Culture of Safety a mom would not worry about her job or career if she erred on the side of safe operations.  She would not be labeled nor would her co-worker in the Operations Center hesitate to wake up the experts New Year’s Eve.

    Finally, if the maintenance history and all updated equipment manuals were available on a Smart Tablet with training videos and animation support, trepidation by those new to the company/process would lessen.  Organizational policy, its Operations Management System and bridging documentation built into the workflow will enable better decision making in the High Reliability Organization of the near future.

    A decade ago the digital oilfield was labeled the Digital Oilfield of the Future.  Integrated Operations is a common model today.  The Millennial’s World-of-the-Future will mirror the concepts of an HRO.

    Will she be working for you or your competitor?

    End Notes

    http://www.doctorswithoutborders.org/

    Weick, Karl E., Sutcliffe, Kathleen M. and Obstfeld, David. (2008). Organizing for High Reliability: Processes of Collective Mindfulness. In Arjen Boin (Ed.), Crisis Management Volume III. (pp. 31-66). Los Angeles: Sage.

    Ibid.

  • Command and Control: Is this the Way to Run the modern Railroad?

    Command and Control: Is this the Way to Run the modern Railroad?

    The managerial model, Command and Control (C&C) dates back to the dawn of humanity when tribal chieftains dictated the behavior of the group.  It survives to this day in many forms.  Typically, one thinks of military operations as the current manifestation of C&C in the western world.

    According to Wikipedia, by one definition found in The US Department of Defense (DOD) Dictionary of Military and Associated Terms, “command and control functions are performed through an arrangement of personnel, equipment, communications, facilities, and procedures employed by a commander in planning, directing, coordinating, and controlling forces and operations in the accomplishment of the mission.”  This definition has evolved from a more simplistic version found in the Cambridge Dictionary, ”situation in which managers tell employees everything that they should do, rather than allowing them to decide some things for themselves.”

    One suspects that most laypeople believe the latter definition to be to be the typical approach to C&C in their organizations.  In today’s complex (often global) organizational ecosystem, that version is outdated.

    The International Command and Control Institute, publication (circa 2005) , Understanding Command and Control develops this management construct in great detail.  As the following figure suggests, even a simple C&C structure such as a heating/AC system is driven by a set of KPIs.

    This is indicative of the digitalization of the system versus the analog controls many of us can recall from our youth.  Adding another layer, today’s ‘Smart’ thermostat operates within a well-defined governance schema such as the Internet of Things.

    Strong Bond Governance

    We first made the case for “Strong Bond Governance” in our September 17, 2013 Governing Energy blog, Strong vs. Weak?  In Critical Infrastructure sectors such as energy, medicine, etc. as defined by the US Department of Homeland Security we make the case for the construct of High Reliability Management (HRM).

    The Strong Bond Governance (SBG) paradigm enables HRM.  SBG demands Board of Directors and C Suite engagement in operations.

    Not directly but by putting in place a governance structure.  This has not always been the case with a number of catastrophic man-made disasters as the result.

    In some ways, C&C mimics HRM.  However, there are some significant differences.  HRM sets in place a structure designed to meet the test of adversities.

    • Preoccupation with Failure—a recognition that ‘failure is an option’ and the organization must respond quickly and effectively to mitigate exposure and recover. C&C does not directly address is concern.

     

    • Reluctance to Simplify—today’s organizational ecosystems are complex. Reducing operational decisions to the so-called Power Point three bullets, High, Likely, Low is completely unsatisfactory and potentially exposes the firm to business or technical process catastrophe.  Likewise, C&C models do not directly address this approach.

     

    • Operational Sensitivity—the field is where organizational action is, and senior management must have a focus on this critical component of the business. C&C also has a focus on operations, especially in the military sector.

     

    • Resiliency—things will go ‘bump in the night.’ Organizations must but in place the processes and expertise to rapidly respond to goblins that will be encountered.  C&C does not address this process.

     

    • Deference to Expertise—engage those who have the ‘know how’ to solve problems and that is mostly likely not the management team. This is substantially difference than the C&C model

    HRM allows management to look at computer dashboard and get a snapshot of most if not all aspects of the organization.  However, this does not mean that these individuals can manage from afar.  Those closed to and more knowledge about this issue must take the lead.

    Concluding Thoughts

    Watching the news, History Channel and/or various movies, one can see that even the military no longer uses simplistic C&C.  Small semi-autonomous teams take on the bad guys.  To be sure there is a Mission, Rules of Engagement and other governance controls in place.

    This provides local commanders the latitude needed to accomplish the mission at a minimum of human (good guy/non-combatants) and other collateral damages.  Additionally, military aircraft employ ‘High Reliability Management’ techniques where the expertise of the entire crew is used rather than the Captain dictating operational performance.

    Asiana Flight 214 crashed attempting a landing at San Francisco in July 2013.  One causal component was deemed to be the C&C culture of the Korean pilots.  Cockpit Management might have saved this aircraft and the lives lost.

    Likewise, those organizations and their ecosystems in critical infrastructure sectors that use HRM enjoy safer and more productive track records than those that do not—better bottom line.  The October 2014 Ebola scare is an example where the public health sector employed HRM and limited the impact of a highly contagious deathly pathogen.

    There is a tendency when the stakes are high for management to take the ‘reigns.’  In other words, engage in micromanagement.  The usual results are often sub-optimal.  The ‘gut instinct’ towards simplistic C&C is a strong urge and this addiction must be put into remission.

    A well-established Strong Bond Governance, High Reliability Organization can weather any storm the markets or nature can throw at it.  However, this organization transformation must precede the advent of major challenges!

    Traditional C&C is not an OE Imperative

     

     

  • Are Organizational Governance Models Broken: Why Can’t Management Get a Handle on Things?

    Are Organizational Governance Models Broken: Why Can’t Management Get a Handle on Things?

    Over 15 years ago, organizations such as Enron, Worldcom, Tysons, and others failed after massive managerial maleficence and even criminality.  Enron’s auditor, Arthur Andersen folded as well.

    The result of this carnage was the imprisonment of many, the death (apparent heart attack) of the disgraced former CEO of Enron, suicides, massive shareholder value destruction and the Sarbanes Oxley Act of 2002.  SOX, as the act was commonly called was supposed to fix fractures in organizational transparency!

    Later, Bernie Madoff, Robert Allen Sanford and others (Ponzi schemes) stole billions from trusting clients.  Where was the oversight for crimes of these magnitudes?

    Almost a decade ago, three major disasters causes incalculable death and destruction:

    • BP Deepwater Horizon aka Macondo—commencing April 20, 2010
    • San Bruno Pipeline Explosion—commencing September 9, 2010
    • Fukushima Daiichi Nuclear Incident—commencing March 11, 2011

    According to one 2018 report, “Close to half (46%) of senior oil and gas professionals believe that there has been under investment in inspection and maintenance of infrastructure and equipment in recent years.”  Has anything been learned about the risks posed by Critical Infrastructure to the Bottom Line and societal reputations?  What about continued loss of human life?

    Finally, our US political class tells us they cannot ‘securely’ run an election and that outside interference somehow tainted or even changed the 2016 national election.  Five plus months before the next national election, what has changed?

    Nuisance to Menacing

    Now a series of high profile Cyberbreaches (seemingly exponentially) continue as do management’s apparent attempts to hide the damage from affected customers and shareholders.  Is this lack of transparency a SOX violation?

    More regulations are not the answer.  Criminals and others with malice don’t pay much attention to laws.  They never have, whether mugging you in the park or stealing your identity online.

    Purportedly, the first ‘hack’ took place in 1903 when a demonstration of the Morse Code was disrupted and insulting messages were sent through the theater projector. Perhaps a mere nuisance then, today cyber malcontents desire vast fortunes, political intrigue and even social instability.

    In our November/December, 2017 Petroleum Africa article, A Governance Model for the Era of Digitalization: Achieving Operational Excellence Using Disruptive Data Management Techniques, we mentioned that at a conference in late 2017, an investment banker when responding to a discussion about the use of IoT as part of the digital oilfield (now how we run the business) “suggested words to the effect that if the enterprise is driven by these technologies then it is now an agenda item for the Board of Directors.”  This is consistent with this author’s previous statements to this effect.

    What’s Going On?

    In his 1984 book, Normal Accidents: Living with High-Risk Technologies, Charles Perrow put forth the theorem that in our complex world, “It takes just the right combination of circumstances to produce a catastrophe, just as it takes the right combination of inevitable errors to produce an accident.”

    We have written extensively about Governance and Operational Excellence, including methodologies for developing and sustaining both.  In 2014, we put forth the construct of Strong Bond Governance as well as ways Critical Infrastructure sectors can become High Reliability Organizations.

    Finally, we have developed and implemented a Best Practices Model for Operational Excellence that incorporates modern governance that address issues discussed herein.

    Normal Incident Theory indicates, that in any complex system accidents will happen.  This theory has been debunked just like Keynesian Economics.  Yet practitioners of both continue unswayed by empirical data.

    It appears that corporate governance models have fallen into the same trap, making assumptions that business and technology models are limited and reactive.  This appears to be a short-sighted approach with ample empirical evidence that these models are no longer relevant.

    Threats to shareholder value and even the safety and economic security of entire populations that depend on Critical Infrastructures are increasing for a variety of reasons.  Organizational Governance models must keep pace.  Clearly, this is now part of the fiduciary responsibility of Board members as well as the entire “C” suite of executives.

    Further Reading

    The author and others have published extensively on this subject.  The list of appropriate articles and papers is too extensive to list here.  However, readers are invited to peruse Dr. Shemwell’s extensive list of blogs and publications.  For more information on this and other subjects, please contact us.