Institutional Imprint

    July 18, 2014 1:19 PM by Dr. Scott M. Shemwell

    Volume 3 Number 14

    This last Fourth of July, I watched the televised concert and celebration from Washington, D.C.  It seemed that for that brief moment political and other differences were cast aside as Americans and non-Americans gathered to say happy birthday USA.

    Many believe that Americans have lost faith in their institutions whether religious, corporate or government.  Sometimes it appears that these pundits may have a point.  However, perhaps we need to redefine what we mean by the word, institution.

    In his 1942 book, Capitalism, Socialism, and Democracy (a time when democracies and by extension capitalism were on the defense) the Austrian economists Joseph Schumpeter wrote, “The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.  This process of Creative Destruction is the essential fact about capitalism.”[i]

    The term, Creative Destruction, suggests that the new is built from the old and while the destructive process is difficult, even traumatic ever-stronger societies are the result.  Moreover, this process is continuous so each generation experiences it.

    Perhaps what many Americans are seeing are existing establishments in the midst of Creative Destruction.  Churches are founded, disappear or evolve.

    Corporations can have exceptionally short lives.  For example, the stock listings on the Dow Jones Industrial Average have change 53 times since its inception in 1885.[ii]  This is an average of less than 2.5 years per group listing for this most prestigious index.

    Government agencies are not immune to transformation as well.  Recent events with the Veteran’s Administration will most like result in changes to that entity.  Post 9/11, the creation of the Department of Homeland Security reorganized and integrated all or part of 22 different departments and agencies of the U.S. Federal government.[iii]

    Animals and human have a critical period of learning early in life.  Whether children effortlessly learning a language or ducklings bonding (imprinting) with humans.  This neural mechanism is fundamental to the survivability of the young.[iv]

    In the midst of strife, turmoil and seemingly even decay, Americans celebrated not the establishments that govern them but their core American Institution—the Declaration of Independence.  “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness,” is the imprint on this still young country.

    What organizational edifices hinder your core Institution?

    About the Author

    Dr. Scott M. Shemwell has over 30 years technical and executive management experience primarily in the energy sector.  He is the author of three books and has written extensively about the field of operations management.  Shemwell is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling operations excellence and regulatory compliance management.  He has studied cultural interactions for more than 30 years--his dissertation; Cross Cultural Negotiations Between Japanese and American Businessmen: A Systems Analysis (Exploratory Study) is an early peer reviewed manuscript addressing the systemic structure of social relationships.

    End Notes

    [i] http://www.econlib.org/library/Enc/CreativeDestruction.html
    [ii] http://en.wikipedia.org/wiki/Historical_components_of_the_Dow_Jones_Industrial_Average
    [iii] http://www.dhs.gov/creation-department-homeland-security
    [iv] http://www.sparknotes.com/biology/animalbehavior/learning/section3.rhtml

    Ground Stop Chaos

    July 2, 2014 9:21 AM by Dr. Scott M. Shemwell

    Volume 3 Number 13

    Recently, weather caused substantial problems with air travel in which this author was caught.  Recognizing that airlines, air traffic control and others cannot control the weather and none of us want to be exposed to unnecessary risk, the unfolding events were interesting to say the least.

    As most travelers know, once the daily flight schedules are substantially impacted by negative events they almost never recover until at least the next day.  For example, this writer had already checked his baggage at the San Francisco airport on October 17, 1989 and was headed to the gates when the Loma Prieta earthquake hit.[i]

    Clearly the airport and other infrastructure stopped.  Fortunately, my business host (and his lovely wife) allowed me to spend the night at their condo without electricity (walking up many flights in his downtown condo sans toothbrush et al.).

    The next day with some difficulties, my (reunited) baggage and I returned to Houston, much relieved to go home but with strong feelings for those whose hometown would take weeks and months to return to normal.

    Twenty-five years later, a much less traumatic event seemingly caused more angst among many travelers.  One male passenger decided to challenge in a loud tone the airline employees delivering the message that things were delayed and not going well.  Things stayed polite, but at one point one male employee expressed a comment along the lines of, “What do you expect me to do about it?”  While for some tensions remained high, others took to their electronic communication devices and/or the bar.

    This traveler’s flight was rescheduled (usually in 30 minute intervals for approximately five hours before finally being cancelled).

    However, the real problem began when this author attempted to retrieve his checked luggage and drive home.  First, the typical forms necessary to find the bags.

    Hours later, I was told that the process was still underway and that the actual search for the luggage had not yet started.  Frustration beyond belief, as this was just a thunderstorm not an earthquake that destroyed a city.

    Finally, a young male baggage handler started to take control of the lost baggage “tickets” and found the bags.  He was later joined by his colleagues (men and women) and they made things happen!  Baggage was cleared and this author and others went home.

    Decades ago, as a young lieutenant in the US Army, an experienced sergeant “bailed me out.”  My apologies, as I do not remember his name, this individual moved in on chaos and made sense out of it and made things happen while I was trying to follow “the book.”

    From my perspective, these airline employees did not “throw the book out” but they simply stepped up!  For example, concerning access to the secure areas and their access cards, none of them in the hours I watched this process violated the “don’t tailgate” dictate (posted)—meaning don’t let anyone follow you into the secure areas.

    Hats off to these individuals!  I do not believe that any of them violated corporate policy or security requirements, but once the magnitude of the problem was identified, these individuals made things happen—this author got his luggage back!  However, management may want to review their standard operating processes (SOP) so that herculean efforts by their people are not the norm.

    Are your people empowered to make things happen in times of adversity?

     

    About the Author

    Dr. Scott M. Shemwell has over 30 years technical and executive management experience primarily in the energy sector.  He is the author of three books and has written extensively about the field of operations management.  Shemwell is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling operations excellence and regulatory compliance management.  He has studied cultural interactions for more than 30 years--his dissertation; Cross Cultural Negotiations Between Japanese and American Businessmen: A Systems Analysis (Exploratory Study) is an early peer reviewed manuscript addressing the systemic structure of social relationships.

    End Notes

    [i] http://earthquake.usgs.gov/regional/nca/1989/

    Price of Failure

    June 18, 2014 10:29 AM by Dr. Scott M. Shemwell

    Volume 3 Number 12

    A recent blog celebrated the management guru truism that organizations learn from failure and that individuals should be provided an environment where failure is acceptable and part of the learning organization process.  This author might take exception to that management “rule.”

    We all grow as people and it is true, in the opinion of this writer that sometimes we learn more from failure than from success.  In many cases, it is ok to foster a culture that rewards those you reach for the stars and occasionally miss.

    However, some industries require organizations to manage to a high degree of reliability—High Reliability Organizations.[i]  In these sectors the price of failure can threaten the very survivability of the firm itself.

    So can these different approaches to empowering people be reconciled?  The answer might surprise you; both can be highly aligned and generate an organizational culture where a “focus on failure” is highly prized.

    First let’s posit a matrix of hypotheses (researchers will forgive the lack of null hypotheses for brevity and to provide focus).

        - One of the processes described in the High Reliability Mindful Infrastructure is a “Preoccupation with Failure.”[ii]  From the perspective of the (R) Relationships, (B) Behavior, and (C) Conditions Framework (previously discussed in this blog series and elsewhere) this preoccupation with failure might be considered the Relationship variable.[iii]

        - BSEE has presented and the industry has accepted nine tenets of a robust safety culture.[iv]  A subset of them include:

            - Number 3—Personal Accountability
            - Number 5—Continuous Learning
            - Number 6—Raising Concerns
            - Number 7—Effective Communication
            - Number 8—Trust and Respect
            - Number 9—Inquiring Attitude

    We could probably make the case that the other three points should be included but readers will get the point.  These are a set of Behaviors.

        - SEMS II Stop Work Authority[v]  Finally, this is a Condition variable.

    Again at the risk of offending mathematicians everywhere, we posit that that this is effectively a set of difference equations (output based on past and present data)[vi] or perhaps differential equations (similar but continuously varying).[vii]  This is an extension of the R B C Model expressed mathematically as follows:

    It follows that Failure can be expressed as a function of R B C and therefore it can be treated equivalently by those organizations that encourage extended reach even if a new product launch flops and those High Reliability Organizations where failure is not an option.

    We may further develop the math later, but sociologically solving this set of simultaneous equations (a set of equations that are all satisfied by the same values of the variables[viii]) effectively supports the hypotheses that understanding failure does not mean one must experience it to learn from its potential consequences.  

    We need to foster an environment of individualism within the context of organizational constraints.

    How does your organization define failure and its consequences?

    About the Author

    Dr. Scott M. Shemwell has over 30 years technical and executive management experience primarily in the energy sector.  He is the author of three books and has written extensively about the field of operations management.  Shemwell is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling operations excellence and regulatory compliance management.  He has studied cultural interactions for more than 30 years--his dissertation; Cross Cultural Negotiations Between Japanese and American Businessmen: A Systems Analysis (Exploratory Study) is an early peer reviewed manuscript addressing the systemic structure of social relationships.

    End Notes

    [i] http://amp.aom.org/content/15/3/70.short
    [ii] Holland, Winford “Dutch” E. and Shemwell, Scott M. (2014). Implementing a Culture of Safety: A Roadmap to Performance-Based Compliance. New York: Xlibris.
    [iii] Shemwell, Scott M. (1996). Cross Cultural Negotiations between Japanese and American Businessmen: A Systems Analysis, (Exploratory Study). Unpublished doctoral dissertation, Nova Southeastern University, Ft. Lauderdale.
    [iv] http://www.bsee.gov/uploadedFiles/BSEE/BSEE_Newsroom/Speeches/2013/COS%20Speech.pdf
    [v] http://www.pecsafety.com/stop-work-authority-a-key-safety-management-tool/
    [vi] https://ccrma.stanford.edu/~jos/fp/Difference_Equation_I.html
    [vii] http://en.wikipedia.org/wiki/Differential_equation
    [viii] http://dictionary.reference.com/browse/simultaneous+equations

    What Management Wants to Hear

    June 3, 2014 8:40 AM by Dr. Scott M. Shemwell

    Volume 3 Number 11

    As of this writing, the US Veteran’s Administration is under increasing scrutiny.  One physician interviewed on television indicated that management did not want to hear about problems.  Have we heard this story before?

    I am not sure that this culture is one incorporating the Tenets of Safety we have discussed in this blog before—read satire.[i]  Actually, it is just the opposite; a case can be made that it violates all nine canons.  All the more troubling is that the medical industry is often held out as one that is very good at implementing and sustaining High Reliability.[ii]

    The VA discussion suggests that once veterans have an appointment with a medical professional, their medical care is of high quality so it is simply a bureaucratic process problem.  Isn’t getting to see a physician part of the medical care process?

    The systemic nature of large complex organizations (and their ecosystems) requires that management have a holistic perspective towards addressing and fixing process problems.  Through the blinders of “the actual medical care is high quality,” the VA response intimates that the organization does not meet the test of a High Reliability Organization—perhaps management does not even understand what an HRO is.

    Regardless, this organization’s customer is ill served and its reputation is badly tarnished.  The customer experience is poor and even the top individual practitioners’ character may be negatively impugned.

    An Emperor’s New Clothes culture will end up exposing an organization to unacceptable risks and maybe even ridicule.[iii]  Years, even decades of only hearing about the good stuff rots the foundation of even the best and most well intended organizations.

    Does your organizational culture “shoot” the messenger of bad news?

    About the Author

    Dr. Scott M. Shemwell has over 30 years technical and executive management experience primarily in the energy sector.  He is the author of three books and has written extensively about the field of operations management.  Shemwell is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling operations excellence and regulatory compliance management.  He has studied cultural interactions for more than 30 years--his dissertation; Cross Cultural Negotiations Between Japanese and American Businessmen: A Systems Analysis (Exploratory Study) is an early peer reviewed manuscript addressing the systemic structure of social relationships.

    End Notes

    [i] http://www.bsee.gov/uploadedFiles/BSEE/BSEE_Newsroom/Speeches/2013/COS%20Speech.pdf
    [ii] http://www.jointcommission.org/highreliability.aspx
    [iii] http://www.andersen.sdu.dk/vaerk/hersholt/TheEmperorsNewClothes_e.html

    Culture of Fear

    May 20, 2014 3:41 PM by Dr. Scott M. Shemwell

    Volume 3 Number 10

    Companies generally portray people as “our number one asset.”  However, senior executives often behave in a manner that negates that statement.  Treating human assets badly as if they are disposable sends a message of intimidation.

    Despite the words in the Chairman’s Letter to Shareholders, the Standard Operating Procedures, and so forth and so on, a message may be sent—be afraid be very afraid.  You may be next!  In other words, we really don’t value our employees.

    These companies often professes that they have a Culture of Safety.  NOT!  This behavior negates all the words and slogans.

    How does one take a Stop Work step in an organization of this culture?  Answer is—employees won’t.  The action of one highly placed individual (legally an agent, not a majority owner of the firm) may be jeopardizing shareholder value.

    Plan B—in a tight labor market, top talent will see through this canard and leave.  Fear is a great motivator—we are programmed for Fight or Flight.

    Either response; a company can expect a myriad of both, has the opportunity to destroy the intensions of the Board of Directors and put them at risk—does Directors and Officers (D&O) insurance cover this?  Probably, but you get the point.

    One can argue that this approach is a significant failure of governance.  This author has argued this point before.[i]  Predictive Analytics are all the rage now, so this author’s prediction is—such firms will live through highly visible governance failures within five years.

    In any event, shareholder value is put a risk.  A Culture of Fear will generate aberrant employee behavior that has a high likelihood of going against the Nine Tenets of Safety but forth by BSEE.[ii]

    Are executives in your organizations walking the talk or just talking the talk?

    About the Author

    Dr. Scott M. Shemwell has over 30 years technical and executive management experience primarily in the energy sector.  He is the author of three books and has written extensively about the field of operations management.  Shemwell is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling operations excellence and regulatory compliance management.  He has studied cultural interactions for more than 30 years--his dissertation; Cross Cultural Negotiations Between Japanese and American Businessmen: A Systems Analysis (Exploratory Study) is an early peer reviewed manuscript addressing the systemic structure of social relationships.

    End Notes

    [i] Shemwell, Scott M. (2011, October) Asset/Equipment Integrity Governance: Operations–Enterprise Alignment—A Case for Board Oversight. Author.
    [ii] http://ohsonline.com/articles/2013/05/01/bsee-chief-spells-out-nine-values-for-safety-success.aspx?admgarea=news

    No Newbies!

    May 7, 2014 9:27 AM by Dr. Scott M. Shemwell

    Volume 3 Number 9

    The industry and society in general continues a major demographic change as the older so called Baby Boomers retire as the Millennials enter the workforce.  This “Shift Change” may expose organizations to an unacceptable level of risk.

    New entrants must be trained and deemed competent to take over the tasks of the previous tenant.  Moreover, they must meet a certain minimum high bar to even be considered a contributing member of the team.

    For example, medical students begin working with patients early in their careers but only after attaining a high level understanding of the job requirements.  Years later they will become Board Certified Physicians but the initial level of proficiency must still be quite high.

    Aviation is another High Reliability sector whereby the first solo by a pilot is followed only after extensive training and experience with an instructor (mentor).  Only after a long vetting process does one captain an international “heavy” commercial airliner.

    Takeoff, navigation and safe landing are a set of necessary expertise before leaving the ground the very first time alone.  Both the pilot’s safety as well as those on the ground depend on this high minimum threshold—not to mention damage or loss of the aircraft asset.

    In the recent Wall Street Journal (WSJ) article, Nuclear Family: Navy Sub Culture Relies on Rules, ‘Odd Couple’ Matches the journalist advances the theme that it is ‘Not OK to Be New.’[i]  The critical systems and living conditions aboard a modern submarine requires a high minimum technical, leadership and teaming level of expertise from all hands.

    Young Ensigns are not given any real responsibilities but prior to promotion they are expected have upped their game significantly—they hit the ground running so to speak as a newly promoted Lieutenant Junior Grade.  One surmises that if they cannot demonstrate this ability they may not be the opportunity to continue along this career path.

    The WSJ writer states what is often known but not expressed, this model is inherent in the nuclear submarine culture.  Isn’t that true for the other sectors mentioned herein?  Isn’t it true for the oil and gas industry and your organization?

    How does your organization assure that the high entry level bar is met for critical positions?

     

    About the Author

    Dr. Scott M. Shemwell has over 30 years technical and executive management experience primarily in the energy sector.  He is the author of three books and has written extensively about the field of operations management.  Shemwell is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling operations excellence and regulatory compliance management.  He has studied cultural interactions for more than 30 years--his dissertation; Cross Cultural Negotiations Between Japanese and American Businessmen: A Systems Analysis (Exploratory Study) is an early peer reviewed manuscript addressing the systemic structure of social relationships.

    End Notes

    [i] http://online.wsj.com/news/articles/SB20001424052702303873604579495792882460298?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB20001424052702303873604579495792882460298.html

    The Tax Man Commeth

    April 16, 2014 9:11 AM by Dr. Scott M. Shemwell

    Volume 3 Number 8

    For those of us in the United States, April 15th is the last day to file and pay your federal income tax for the prior calendar year.  This is taxation on income earned regardless of its source.  It is not a tax on the wealth of an individual—generally perceived to be monetary and real property by nature.

    According to one wise unknown prognosticator, “The real measure of your wealth is how much you’d be worth if you lost all your money.”[i]  This author posits that this definition of wealth is embodied in a number of definitions of societal culture.[ii]  Restated, one’s culture is a major component of his or her wealth!

    Politicians routinely seek to tax individual wealth.[iii]  One can argue that the estate tax is exactly that!  So is precedent set?

    As one of my college math professors often stated, “Because XYZ is (insert equation here); therefore, it is intuitively obvious that …”  I must confess, that logic often escaped me at the time.

    Culture should be taxed!  Say it isn’t so, how can that be?  Well it is happening now.

    France’s “Culture Tax” on intellectual content hosted by media and ‘smart’ devices is justified as a need to subsidize the “cultural industries” digital transition of French audio visual content providers.[iv]  This slippery slope suggests that wealth created by one class of economic actors can be taxed by another faction.

    Organizational culture is a major source of competitive advantage.  It is one of the major differentiators of stakeholder value.  This author has argued in this series and elsewhere that a strong safety culture is valuable and organizational transparency is another source of value.

    If this competitive advantage is taxed in an attempt level the playing field, it is likely that firms will not enter and may even exit such environments.  Such a cultural tax is effectively an extension of “nationalization.”[v]

    Firms must be ever vigilant that their Intellectual Property (IP) is protected.  Culture is a major tenet of this IP wealth.

    What is your company doing to defend the value of its culture?

    About the Author

    Dr. Scott M. Shemwell has over 30 years technical and executive management experience primarily in the energy sector.  He is the author of three books and has written extensively about the field of operations management.  Shemwell is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling operations excellence and regulatory compliance management.  He has studied cultural interactions for more than 30 years--his dissertation; Cross Cultural Negotiations Between Japanese and American Businessmen: A Systems Analysis (Exploratory Study) is an early peer reviewed manuscript addressing the systemic structure of social relationships.

    End Notes

    [i]  http://tinybuddha.com/blog/the-real-measure-of-your-wealth/
    [ii]  https://www.tamu.edu/faculty/choudhury/culture.html
    [iii]  http://en.wikipedia.org/wiki/Wealth_tax
    [iv]  http://www.businessweek.com/articles/2013-12-26/frances-culture-tax-could-hit-youtube-and-facebook
    [v]  http://www.businessdictionary.com/definition/nationalization.html

    Cultural Sinistery

    April 3, 2014 8:29 AM by Dr. Scott M. Shemwell

    Volume 3 Number 7

    Grammarians will forgive the made up word in the title—it is meant to convey a sense of how culture can be used for ominous purposes as well as noble deeds.  The Europe of the 1930s is a subject of the political dialogue as of this writing.

    Whether nationalism is being resurrected (perhaps it has never left us) is not the subject of this piece.  Rather, one’s culture can become a tool for the unthinkable.[i]

    The German military had historically pledged allegiance to the state.  However, in 1934 the oath was changed from allegiance to the country to one of allegiance to an individual.  Feeling duty bound officers obeyed him even as he led the country and the world to destruction.[ii]

    Pundits talk of cultural transformation and/or change all the time as if management can will it on the organization.  However, Nilofer Merchant noted in her 2011 blog, “If the strategy conflicts with how a group of people already believe, behave or make decisions it will fail.”[iii]

    Changing behavior is a challenge.  Losing weight, stop smoking, start exercising, be a nicer person are all good New Year’s resolutions that for most (88%) have fallen off by this time of year.  Vague aspirations not tied to specific behavioral modifications are not internalized or institutionalized by us humans.  Making new behavior habit is the key.[iv]

    This author still hears industry conversations that suggest that the need for a culture of “more” and systemic safety is overblown.  Can it be that this resistance and even denial is based on the overall industry long standing beliefs and behaviors?

    The clarion call to leaders changing the culture is keep the pressure on.  Old habits die hard.  And yes, use the Idiosyncrasies of your culture that can provide transformation advantage in a positive way.

    What stands in your organization’s way of making safer operations habitual?

    About the Author

    Dr. Scott M. Shemwell has over 30 years technical and executive management experience primarily in the energy sector.  He is the author of three books and has written extensively about the field of operations management.  Shemwell is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling operations excellence and regulatory compliance management.  He has studied cultural interactions for more than 30 years--his dissertation; Cross Cultural Negotiations Between Japanese and American Businessmen: A Systems Analysis (Exploratory Study) is an early peer reviewed manuscript addressing the systemic structure of social relationships.

    End Notes

    [i] http://alphahistory.com/nazigermany/hitler-and-the-reichswehr/
    [ii] http://en.wikipedia.org/wiki/Hitler_oath
    [iii] http://blogs.hbr.org/2011/03/culture-trumps-strategy-every/
    [iv] http://blog.bufferapp.com/the-science-of-new-years-resolutions-why-88-fail-and-how-to-make-them-work

    Sustainability?

    March 17, 2014 9:08 AM by Dr. Scott M. Shemwell

    Volume 3 Number 6

    Pundits talk about change and the need for all of us to respond to environmental forces whether business or life driven.  Early adopters are quick to try new things and invest reasonable amounts in the potential future.  The fundamental challenge is whether or not the energy expended makes the new the reality.

    As a physics student, this author learned that applied energy will cause an electron jump to a higher orbit.  However, once that energy was withdrawn, the electron returns to its original orbit steady state.  This allegory was applied to human behavior in this blog, Repetita Placent, Volume 2 Number 9—May 2, 2013.

    So the challenge becomes sustaining the higher energy level.  It is easy to conduct a “rah rah” session.  A workshop, offsite or team building initiative will get everyone on the same page; today.  But what about tomorrow?

    Cultural transformation is physics.  Energy must be applied and sustained.  When management believes that a temporal investment is enough, they will be disappointed.  A perpetual outlay is required.

    Commitment is hard.  It requires a decision with recognition that accountability is integral.  Human energy cannot be withdrawn or else, the value drops to a lower level.

    When an organization embarks on a change management program, it must recognize that transformation is truly that.  Allowing individuals, departments or the enterprise to retreat cannot be an option.  The energy cannot be withdrawn or the old order will reemerge.

    How does your firm assure transformation sustainability?

    About the Author

    Dr. Scott M. Shemwell has over 30 years technical and executive management experience primarily in the energy sector.  He is the author of two books and has written extensively about the field of operations management.  Shemwell is the Managing Director of The Rapid Response Institute, a firm that focuses on providing its customers with solutions enabling operations excellence and regulatory compliance management.