Maintenance and Reliability Best Practices

CHAPTER 1

Introducing Best Practices

I have not failed. I have found 10,000 ways that won’t work.

—THOMAS EDISON

After reading this chapter, you will be able to understand:

• What best practices are and why we care

• What best practices have to do with maintenance and reliability

• Key maintenance and reliability (M&R) and asset management (AM) terms and benchmark examples

Also, you will be able to assess your knowledge about the fundamentals of maintenance, reliability, and asset management best practices by taking a test.

Introduction: What Is a Best Practice?

The notion of a best practice is not new. Frederick Taylor, the father of modern management, said nearly 100 years ago, Among the various methods and implements used in each element of each trade, there is always one method and one implement which is quicker and better than any of the rest. In recent times, this viewpoint has come to be known as the one best way or best practice.

Best practice is an idea that asserts there is a technique, method,or process that is more effective at delivering the desired outcome than any other technique, method, or process. With this technique, a project or an activity such as maintenance can be completed with fewer problems and unforeseen complications. Simply, a technique, method, or process may be deemed a best practice when it produces superior results.

A best practice is typically a documented practice used by the most respected, competitive, and profitable organizations. When implemented appropriately, it should improve performance and efficiency in a specific area. We must understand that best practice is a relative term. To some, it may be a routine or a standard practice; to others, it may be a best practice because the current practice or method is not effective in producing the desired results.

History is filled with examples of people who were unwilling to accept or adopt the industry standard as the best way to do anything. The enormous technological changes since the Industrial Revolution bear witness to this fact. For example, at one time horses were considered the best form of transportation, even after horseless carriageswere invented. Today, most people drive a gasoline (petrol), electric, or hybrid vehicle—all improvements on the original horseless carriage. In turn, concerns over oil costs, supplies, and global warming are driving the next group of transportation improvements.

In the 1968 Summer Olympics, a young athlete named Dick Fosbury revolutionized the high-jumping technique. Using an approach that became known as the Fosbury Flop, he won the gold medal by going over the bar back-first instead of head-first. Had he relied on standard practice, as did all his fellow competitors, he probably would not have won the event. Instead, by ignoring standard practice, he raised the performance bar—literally—for everyone. The purpose of any standard is to provide a kind of reference. Therefore, that standard must be What is possible? and not What is somebody else doing?

In real-world applications, a best practice is a very useful concept. Despite the need to improve processes with changing times, a best practice is considered by some simply to be a business buzzword used to describe the process of developing and following a standard way of doing activities that any organization can use or implement to get better results. Implementing best practices in the area of maintenance, reliability, and asset management can help an organization to:

• Increase output with the same set of assets

• Reduce the need for capital replacements

• Reduce maintenance cost per unit

• Reduce the total cost per unit of output

• Improve performance—cost, productivity, and safety

• Reduce the total cost of ownership (TCO)

• Increase competitiveness

• Increase market share

A best practice tends to spread throughout an industry after success has been demonstrated. However, demonstrated best practices could be slow to implement, even within an organization. According to the American Productivity and Quality Center, the three main barriers to the adoption of a best practice are a lack of:

1. Knowledge about current best practices

2. Motivation to make changes for their adoption

3. Knowledge and skills required to do so

The objective of this book is to provide knowledge of best practices in the areas of maintenance, reliability, and asset management. Cost-effectively implementing and sustaining best practices requires a culture of reliability excellence that is a journey and takes time. In later chapters, we will discuss what we can do to eliminate barriers and create a sustainable reliability culture in an organization.

Key Terms and Definitions

Asset

A component or device, software, or a system that has potential or actual value to the organization. Value can be tangible or intangible, financial or nonfinancial.

Asset Management

An organizational process that maximizes value from an asset during its life.

Benchmark

A standard measurement or reference that forms the basis for comparison. This performance level is recognized as the standard of excellence for a specific business process.

Best Practice

A technique, method, or process that is more effective at delivering the desired outcome than any other technique, method, or process. It is a documented practice used by the most respected, competitive, and profitable organizations. This practice usually becomes a benchmark.

Maintenance

The act of maintaining or the work of keeping an asset in proper operating condition. Also called capacity assurance.

Organization

A group of people (or an individual) that has its own functions with responsibilities and relationships to achieve its objectives. The organization includes, but is not limited to, sole trader, company, corporation, enterprise, department, plant or factory, partnership, charity or institution, or part or combination thereof.

Reliability

The probability that an asset or item will perform its required functions for a specific period under stated conditions. It is usually expressed as a percentage and calculated using mean time between failures (MTBF).

What Do Best Practices Have to Do with Maintenance and Reliability?

In any organization, assets are needed to produce products or provide services. An item or asset, as defined here, could be an electrical/electronic or mechanical hardware component or device, a building, a software product, or a manufacturing system or process.

A well-designed, robust M&R program is required to ensure that assets are available and cost-effectively performing to their designed capacity when needed in an organization. The performance of an asset is based on three factors (see Figure 1.1):

1. Inherent reliability—how it was designed

2. Operating environment—how it will be operated

3. Maintenance plan—how it will be maintained

FIGURE 1.1 Asset Performance

Usually, assets are designed with a certain level of reliability. This designed-in (or built-in) reliability—inherent reliability, the first factor in the list above—is the result of the individual components’ reliability and the way they are configured. We cannot change or improve the reliability of an asset after it has been installed unless we replace or modify it with better and improved components (with the exception of redesigning it).

The second factor, the asset’s operating environment, considers both the operating conditions under which the asset has to operate and the operator’s skills. Several studies have indicated that 40% or more of all failures are the result of operational errors or lack of understanding. Organizations need to ensure that operators are appropriately educated and trained in operating these assets without causing operational errors that lead to failures. In fact, operators should be the first line of defense both in monitoring the asset’s performance and any abnormal conditions and in initiating timely corrective actions.

The third factor is a maintenance plan that defines how the asset will be maintained. The objective of a good maintenance plan is to sustain asset reliability and to improve its availability. The plan should include the necessary maintenance and service-type actions needed to detect potential failures before they lead to unscheduled downtime.

Reasons for Not Implementing Best Practices

Over the years, the author has conducted many maintenance and reliability best practices workshops and has discussed failures of implementing best practices with hundreds of participants. These discussions concluded that the top 10 excuses or reasons for failure in implementing best practices are:

1. We thought we had a better way.

2. Our current process was working—why change?

3. We tried this before, and it didn’t work.

4. It was too hard.

5. We didn’t understand why it was necessary.

6. We didn’t trust our system vendor.

7. The vendor told us it was not necessary.

8. Our company (our process) is different (unique).

9. We could not afford it.

10. We did not have the time.

Examining these excuses, we can derive these four fundamental reasons not to implement best practices:

• Failure to understand the business operational risks

• Inability to correlate best practice cause and effect

• Fear of change

• Budget and schedule constraints

So what do best practices have to do with these principles of maintenance and reliability? Throughout the many years of the maintenance and reliability industry, good and bad practices have been identified. These practices, both the good and the bad, have been brought up in briefings at national and international conferences, discussed in person and over the airwaves, and written about in magazines, books, websites,and blogs. The best of these practices are now becoming more accepted and more widely published at the local, national, and international level,becoming the benchmarks that companies seek to achieve. Throughout this book, we will be discussing best practices related to maintenance,reliability, and asset management and how they can be implemented effectively to improve asset performance and reduce the overall cost of asset ownership.

Examples of Maintenanceand Reliability Benchmarks

What are the best practices in the maintenance and reliability field, and how can they be implemented to get better results? M&R best practicesare practices that have been demonstrated by organizations that are leaders in their industry. These companies are the quality producers with very competitive costs, usually the lowest in their industry. Figure 1.2 lists a few examples (by no means an exhaustive list) of maintenance and reliability best practice benchmarks along with their related typical world-class values. Benchmarks are discussed in more detail in Chapter 9.

The first value shown in Figure 1.2, maintenance cost as a percentage of replacement asset value (RAV), is a maintenance performance measure used extensively as a benchmark for evaluating best practices. We can immediately identify the cost differences between companies that are typical and companies that are world class or best in class. However, typical companies are likely to spend more to build up their maintenance and reliability program. Then, once they have achieved the desired level of reliability and availability, they should be able to reduce the maintenance cost by continuing to apply the best practices.

FIGURE 1.2 Comparing Best Practices Benchmark

We need to be very diligent in using these benchmarks for comparative purposes because definitions of these benchmarks can vary from one organization to another. It is significantly important to ensure that the terms used by the two organizations have the same meaning. The performance measures in Figure 1.2 have been included to demonstrate this.

Note: The Society for Maintenance & Reliability Professionals (SMRP) has done an excellent job defining and standardizing many of these benchmark metrics. The author has been involved with that effort for many years.

The details of a few maintenance and reliability best practice benchmarks along with their related typical world-class values as shown in Figure 1.2 are as follows:

1. Maintenance cost as a percentage of RAV. This measure is calculated as maintenance cost divided by the replacement asset value. In this benchmark, two factors must be defined in order to ensure a comparison is accurate:

a. Maintenance cost. This cost of maintenance for a plant or facility includes maintenance labor, maintenance materials,contractors used to perform maintenance work, capital maintenance, and the cost of all projects to replace worn-out assets.

b. RAV. The replacement asset value typically comes from engineering or the company’s insurance carrier and not from accounting. It is not the book value considered for accounting purposes. Instead, it is the current replacement cost of all assets for an industrial facility. This measure should include both the cost of removing old assets and the cost of installing new ones.

2. Maintenance material cost as a percentage of RAV. This benchmark is very similar to the previous measure. It is calculated simply as maintenance material cost divided by the replacement asset value. In most organizations, the material cost is easiest to obtain from the computerized maintenance management system (CMMS) or the organization’s financial system. To ensure a comparison is accurate, we must ensure that the maintenance cost includes all maintenance material purchased for all assets in a plant, including maintenance storeroom parts and material, parts and material used by contractors on maintenance, and capital maintenance work.

Caution: Organizations need to understand that neither maintenance cost nor maintenance material cost can be reduced in a sustainable manner without the application of best practices. Many organizations attempt to focus solely on maintenance cost reduction, but this approach is usually misdirected until they have reviewed and improved their processes and applied best practices.

3. Schedule compliance. This measure is the ratio of maintenance labor hours consumed for the jobs or tasks completed (which were on an approved schedule) divided by the total maintenance labor hours available during that period. Some organizations also track the number of jobs or tasks completed that were on an approved schedule versus the total jobs or tasks on a schedule.

Maintenance schedule. The maintenance schedule identifies jobs or tasks to be completed and approved in the previous week or at least 3 days in advance. It should cover 100% of maintenance labor.

For example, organization A is typical; its schedule compliance is 40%. Organization B has applied best practices and has a schedule compliance of 80%. This comparison indicates that organization B is actually getting twice as much scheduled work out of its maintenance staff as organization A. When schedule compliance is high, we usually find that organizations also have high uptime and asset utilization rates. There is a direct correlation between them.

4. Percentage of planned work. This measure calculates the percentage of maintenance work orders where all parts, material,specifications, procedures, tools, etc., have been defined prior to scheduling the work. This best practice is a key to the long-term success of any successful maintenance organization.

For example, a typical organization A has a percentage of planned work measured at 30%, whereas organization B has a percentage of planned work measured at 90%. This comparison indicates that organization B is proactively planning three times more work and will typically have high uptime and a high asset utilization rate. Organization B’s maintenance cost is also low because unplanned work costs more to execute.

5. Production/operations breakdowns losses. This number becomes small and insignificant as best practices are applied and become a normal way of life. One important issue that directly impacts this benchmark is that all personnel from executives to production operators must be responsible for the plant’s assets. The organization management must support the journey to excellence in implementing best practices. Operators must see assets as something they own. The only way this transformation can occur is through education and empowerment.

6. Parts stockout rate. This measure is based on the number of times a maintenance employee visits the storeroom to get the parts needed versus how often parts are supposed to be in the storeroom but are not available in stock.

In working with many organizations over the years, we’ve noted that benchmarking is not an easy process, particularly when there are no standard definitions of terms to benchmark. For example, RAV may not have the same meaning to organization A as it does to organization B. They may have different definitions. This problem has been a major challenge in M&R-related benchmarking initiatives. To support standardization of terms, the author has published an Uptime Elements:Dictionary for Reliability Leaders & Asset Managers.

When measuring performance against known benchmarks of best practices, we will find that all benchmarks are interconnected and interdependent. This is why an organization must have a clearly defined group of maintenance and reliability processes to implement best practices. Tailoring a best practice to your work environment is essential to a successful and effective implementation.

Thus far, we have discussed just a few examples of best practices and their benchmarks. Throughout this book, we will be discussing practices that may be standard, good, or best, depending upon where you stand in your journey for excellence in maintenance and reliability.

Basic Test on Maintenance and Reliability Knowledge

Many maintenance and reliability practitioners have not been successful in implementing best practices. It is usually because there is a lack of or limited understanding of the best practices or because management is not getting adequate support. Take the following test to assess your knowledge of M&R best practices. This test will help you understand where you stand in your reliability journey.

Once you complete the test, go to Appendix A and score yourself appropriately. Try not to guess when answering any of the questions. If you are uncertain, skip the question and review the text later; otherwise,your results may give you a false sense of how well you know best practices when it comes to maintenance and reliability.

1. Best practices are practices that are defined and applied by an organization to improve its operation. These practices may or may not be proven, but results are found to be acceptable.

a. True

b. False

2. Maintainability is measured by PM schedule compliance.

a. True

b. False

3. All maintenance personnel’s time should be covered by work orders.

a. True

b. False

4. Operations and maintenance must work as a team to achieve improved OEE.

a. True

b. False

5. A best practice is to have 90% or more of all maintenance work planned.

a. True

b. False

6. 100% of PM and PdM tasks should be developed using FMEA/RCM methodology, at least for critical assets.

a. True

b. False

7. Utilization of assets in a world-class facility should be above 85%.

a. True

b. False

8. 100% of maintenance personnel’s (craft/technician) time should be scheduled.

a. True

b. False

9. Time-based PMs should be about 30% of all PMs.

a. True

b. False

10. The 10% rule of PM should be applied on critical assets.

a. True

b. False

11. Most emergency work orders should be written by production/operations.

a. True

b. False

12. It is a common practice for operators to perform PMs.

a. True

b. False

13. The P-F interval can be applied to visual inspections.

a. True

b. False

14. Understanding of a P-F interval should help in optimizing PM frequency.

a. True

b. False

15. The best method of measuring the reliability of an asset is by counting downtime events.

a. True

b. False

16. The primary purpose of scheduling is to coordinate maintenance jobs for the greatest utilization of the maintenance resources.

a. True

b. False

17. What percentage of your assets should be ranked critical based on the risk to business?

a. Less than 30%

b. 30–50%

c. Over 50%

18. Vibration monitoring can detect uniform impeller wear.

a. True

b. False

19. Understanding the known and likely causes of failures can help design a maintenance strategy for an asset to prevent or predict failure.

a. True

b. False

20. Reliability can be improved easily after a maintenance plan has been put into operation.

a. True

b. False

21. What percentage of maintenance work should be proactive?

a. 100%

b. 85% or more

c. 50%

22. MTBF is measured by operating time divided by the number of failures of an asset.

a. True

b. False

23. Maintenance cost will decrease as reliability increases.

a. True

b. False

24. The F on the P-F interval indicates that equipment is still functioning.

a. True

b. False

25. A rule of thumb is that, on average, an experienced planner can plan work for how many craftspeople?

a. 10

b. 15

c. 20 or more

26. Which of the following is not a primary objective for implementing a planning process?

a. Reduce reactive work

b. Prevent delays during the maintenance process

c. Mesh the production schedule and the maintenance schedule

27. The best method of measuring the reliability of an asset is to know:

a. MTTR

b. MTBF

c. Both

28. With the exception of emergency work orders, planning and scheduling will benefit all maintenance work.

a. True

b. False

29. Leading KPIs predict results.

a. True

b. False

30. The sixth S in the 6S (also called 5S plus) process stands for safety.

a. True

b. False

31. RCM stands for:

a. Regimented centers of maintenance

b. Reliability-centered maintenance

c. Reliable centers of maintenance (uses best practices)

32. The objective of RCM is to preserve functions.

a. True

b. False

33. It does not cost anything to keep a part (material) in the storeroom after we bought and paid for it.

a. True

b. False

34. The inventory turnover ratio for an MRO store should be:

a. Less than 2

b. Between 4 and 6

c. Over 6

35. PM compliance is a lagging KPI.

a. True

b. False

36. Reliability is one key component of OEE.

a. True

b. False

37. Reliability and maintainability can only be designed in.

a. True

b. False

38. Creating a reliability culture from a reactive mode can be accomplished in a short period of time if enough resources are made available.

a. True

b. False

39. Karl Fischer’s coulometric titration method is an effective technique to determine the metallic content (in PPM) in an oil sample.

a. True

b. False

40. An IR thermography window is an effective method to satisfy NFPA 70E arc flash requirements.

a. True

b. False

41. FMEA is applicable only to assets currently in use.

a. True

b. False

42. RCM methodology can’t be used effectively on new systems being designed.

a. True

b. False

43. Properly training the M&R workforce can increase asset and plant (factory) availability.

a. True

b. False

44. TPM is a type of maintenance performed by the operators.

a. True

b. False

45. Lagging KPIs are the results of a process.

a. True

b. False

46. EOQ improves the inventory turn ratio.

a. True

b. False

47. New incoming oil from the supplier is always clean and ready to be used.

a. True

b. False

48. Which phase of the asset life cycle has the highest cost?

a. Design

b. Acquisition

c. O&M

49. Most of the maintenance costs become fixed:

a. After installation of the asset

b. During the operation phase

c. During the design phase

50. RCM provides the best results when used:

a. During operation (production)

b. During design/development

c. After an asset has failed or keeps failing

d. During build/fabrication

51. How soon we can restore an asset is measured by:

a. MTBF

b. MTTR

c. MTBMA

d. None of the above

52. Availability is a function of:

a. MTBF

b. MTTR

c. Uptime

d. Uptime and downtime

53. The failure rate of a component/asset can be calculated by knowing:

a. The number of failures

b. MTBF

c. MTTR

d. Uptime

54. The biggest benefit of a failure mode and effects analysis occurs during:

a. The operation phase

b. The maintenance phase

c. The design phase

d. None of the above

55. PM schedule compliance should be equal to or greater than 95%.

a. True

b. False

56. Maintainability is measured by:

a. The PM schedule compliance rate

b. The average time between maintenance actions

c. The percentage of time that equipment is working satisfactorily

d. The average time required to restore the equipment

57. Which process ensures that resources, material, and equipment are available before a job is performed?

a. Planning

b. Scheduling

c. Inventory

d. Workflow

58. Which analysis identifies a cost-effective approach to reduce maintenance and operational problems?

a. Weibull

b. FTA

c. Pareto

d. Bottleneck

59. When a task/job is completed, who should close out the work order in a CMMS system?

a. Person who did the work

b. Supervisor

c. Planner

d. Scheduler

60. The objective of an agreement between operations and maintenance is to:

a. Clarify who is responsible when a problem arises

b. Minimize confusion

c. Clarify roles and responsibilities

d. All of the above

61. Which work order characteristic (element) is most important?

a. Description of work completed

b. Cost of work

c. Asset ID

d. Cost/charge number

62. Which factor is most influential in developing the skills of the M&R team members?

a. Current maintenance repair skills

b. Current plant performance requirements

c. Future plant performance requirements

d. None of the above

63. The first stage of team development is known as:

a. Norming

b. Forming

c. Storming

d. Warming

64. Which maintenance strategy has a goal of zero defects, zero breakdowns, and an effective workplace design?

a. CM

b. TPM

c. RTF

d. CBM

65. A mission statement is a statement of an organization’s:

a. Structure

b. Roles and responsibilities

c. Purpose—what the organization wants to do

d. Net worth

66. In which phase of the asset’s life cycle is the highest cost incurred?

a. Design and procure

b. Build and install

c. Operate and maintain

d. Decommission and dispose

67. Optimizing inventory levels by ordering the right quantity at a specific time interval in order to minimize inventory cost, but still meet customer needs, is called:

a. Inventory cost analysis

b. Economy order quantity

c. Inventory turns analysis

d. Order cost analysis

68. Who is a stakeholder?

a. A person responsible for preparing the project budget

b. A person or organization that can affect, be affected by, or believe to be affected by a decision or activity

c. A person or organization that performs/supports change management to make a new improvement project succeed

d. A person or organization that is not involved in the project and whose interest will not be affected by the completion of the project

69. The last step in a basic communication model is to:

a. Decode

b. Encode

c. Provide feedback/response

d. Transmit a message

70. RPN (risk priority number) is the:

a. Sum of severity (S), occurrence (O), and detection (D)

b. Product of severity (S), occurrence (O), and detection (D)

c. Minimum value of severity (S), occurrence (O), and detection (D)

d. Maximum value of severity (S), occurrence (O), and detection (D)

71. What does a change agent do?

a. Supports change

b. Initiates change

c. Opposes change

d. Helps implement change

72. Which of the following is a reliability tactic?

a. Implementing a preventive maintenance program

b. Improving individual components to increase MTBF

c. Training technicians to improve repair time and reduce MTTR

d. Optimizing PM to reduce maintenance costs

73. TPM (total productive maintenance) has the potential of providing almost a seamless integration between:

a. Production and quality

b. Maintenance and quality

c. Production and maintenance

d. Production and engineering

74. The process that is intended to find potential failures and repair or replace bad components before they fail is known as:

a. Preventive maintenance

b. Failure-finding maintenance

c. Troubleshooting maintenance

d. Breakdown maintenance

75. A maintenance engineer has a list of pump failure modes and frequency of occurrence. Which of the following diagrams can help to prioritize maintenance tasks?

a. Ishikawa diagram

b. Bathtub curve

c. Pareto chart

d. Reliability growth diagram

76. A fault tree analysis (FTA) typically generates a

a. Set of statistical data

b. Report on the relative costs of design options

c. Diagram showing a hierarchy of failure causes

d. List for a specific plan of action

Please go to Appendix A to check the best answers to these questions. If your correct answers are:

• 68 or more: You have excellent M&R knowledge, but you should always continue to learn and enhance your knowledge.

• 45–67: You have a good M&R knowledge, but there is a potential for improvement.

• 44 or less: You have significant opportunities to improve.

Summary

A best practice is a technique or methodology that is found to be the most effective and has consistently shown to achieve superior results. When implemented appropriately, a best practice should improve performance and efficiency in a specific area. We need to understand that best practice is a relative term. A practice may be routine or standard to some, but to others it may be a best practice because their current practice or method is not effective in producing the desired results.

A best practice is often not what everyone else is doing, but is what is possible to achieve. It requires persuasive techniques that rely more on appeals than on force. A best practice usually requires a change in process; therefore, it needs to be accepted by all parties/stakeholders for successful implementation.

A best practice tends to spread throughout an industry after success has been demonstrated. However, demonstrated best practices can often be slow to implement, even within an organization. According to the American Productivity and Quality Center, the three main barriers to adoption of a best practice are a lack of:

1. Knowledge about current best practices

2. Motivation to make changes for their adoption

3. Knowledge and skills required to make changes

The workforce needs to have the knowledge of best practices in the area of maintenance and reliability in order to implement them effectively: A commitment to using the best practices in the M&R field and utilizing all the knowledge and technology at one’s disposal ensures success.

Remember that fundamental reasons not to implement best practices are:

• Failure to understand the business operational risks

• Inability to correlate best practice cause and effect

• Fear of change

• Budget and schedule constraints

Also, the performance of an asset is based on three factors:

1. Inherent reliability—how it was designed

2. Operating environment—how it will be operated

3. Maintenance plan—how it will be maintained

In later chapters, we will discuss all these factors in more detail so that we can achieve high asset performance throughout the asset life at minimum (optimum) cost.

Self-Assessment Questions

Q1.1   Define a best practice. What are the barriers to implementing best practices?

Q1.2   What are key factors that impact the performance of plant machinery?

Q1.3   Why has reliability become a competitive advantage in today’s environment?

Q1.4   Identify five key performance measures in the area of maintenance and reliability. Elaborate on each element of these measures. What are typical world-class benchmark numbersfor these performance measures?

Q1.5   Define what makes a benchmark world class. Discuss, using specific examples.

Q1.6   Define planned work and identify its benefits. What is a typical world-class benchmark number?

Q1.7   State and discuss four reasons that organizations fail to implement best practices.

References and Suggested Reading

Gulati, Ramesh, and Terrence O’Hanlon. 10 Rights of Asset Management. ReliabilityWeb.com, 2017. Gulati, Ramesh. Uptime Elements: Dictionary for Reliability Leaders &

Asset Managers. ReliabilityWeb.com, 2017. IW. Industry Week. Penton Media Publications, 2006–2008. Moore, Ron. Making Common Sense to Common Practice: Models for Operational Excellence. 5th ed.

SMRP and IMC (International Maintenance Conference). Annual Conference Proceedings, 2008–2019.

CHAPTER 2

Culture and Leadership

Effective leadership is putting first things first. Effective management is discipline, carrying it out.

—STEPHEN COVEY

After reading this chapter, you will be able to understand:

• Organizational culture

• Leadership and its role

• Vision, mission, and goals

• Reliability culture

• Change management and the role of a change agent

Successful implementation of a best practice or a new practice, small or large, is a challenge for any organization. A best practice is an improvement and a change. The implementation requires enthusiasm rather than distrust or fear from the individuals who will be impacted by the change. Guiding, nurturing, and shepherding the workforce are the skills needed to ensure that changes are received and implemented with a positive attitude. Usually, how the workforce perceives these changes needs to be evaluated and considered in developing a change implementation plan. And so do people’s beliefs, values, attitudes, and expectations need to be evaluated and considered.

Leadership plays a key role in enabling this process by providing both vision and resources. Creating a reliability culture conducive to change is a long journey. It is not just the maintenance workforce that needs to change its thinking, but also others in the organization (operations, production, design, stores, information technology, etc.). All need to be working together as a team to create a sustainable reliability culture and eventually a culture of excellence.

The vision of where the organization, or some unit of it, wants to be is an important element of creating a reliability culture. Stephen Covey, a leading motivational author, emphasizes the importance of mission, vision, and goals when he talks about beginning with the end in mind in his famous best seller, 7 Habits of Highly Effective People. According to a study by a Stanford management professor and reported in the Wall Street Journal, organizations using mission and vision statements successfully outperform those that do not (with the key being these organizations actually using their mission and vision statements). When we visualize, we are able to materialize and convert our vision into goals and then into reality.

All organizations want to improve their processes in order to become efficient and effective. For maintenance and reliability (M&R) organizational culture, progress requires not only reducing but also eliminating failures while optimizing and educating workers to perform their tasks effectively.

These efforts could require significant changes in work practices,processes, and organization structure. Eventually, these changes become part of people’s daily work habits in the organization and lead to a positive reliability culture. But for these changes to truly become part of a reliability culture, an effective change management process must be executed.

Key Terms and Definitions

Change Management

The process of bringing planned change to an organization. Change management usually means leading an organization through a series of steps to meet a defined goal. It requires the involvement of key players and stakeholders in order to minimize resistance to change. Synonymous with management of change (MOC).

Cultural Change

A major shift in the attitudes, norms, sentiments, beliefs, values, operating principles, and behavior of an organization.

Culture

A common set of values, beliefs, attitudes, perceptions, and accepted behaviors shared by individuals within an organization.

Leader

A person who guides others or whom other people follow. A leader holds a dominant position within a particular field and can exercise a high degree of influence over others.

Leadership

The act of inspiring a group of people or an organization to perform and engage in achieving a common goal. Leaders of the organization must establish a clear vision, communicate that vision to those in the organization, and provide the direction, resources, and knowledge necessary to achieve goals and accomplish the vision. Leadership may require coordinating and balancing the conflicting interests of all members or stakeholders.

Mission

An organization’s purpose and scope of operations that distinguishes the organization from others of its type. A mission is something to be accomplished, whereas a vision is something to be pursued for that accomplishment.

Organizational Culture

The beliefs and values that define how people interpret experiences and how they behave, both individually and in groups within an organization.

Strategy

An action plan that sets the direction for the coordinated use of resources through programs, projects, policies, and procedures, as well as organizational design and the establishment of performance standards.

Vision

The achievable dream of what an organization or a person wants to do and where it wants to go.

Leadership and Organizational Culture:Leadership Styles and Frameworks

What Is Leadership?

Leadership is not a position or a title; it is action and example.

— UNKNOWN

The great leader Nelson Mandela once said,A leader is like a shepherd. He stays behind the flock, letting the most nimble go out ahead, whereupon the others follow, not realizing that all along that they are being directed from behind.

Leadership is polymorphic in nature; it takes on different meanings in different instances. Many times we confuse leadership and management. They have different roles. Many times we have to perform both roles, but they are often independent of each other. Managers are concerned about today; they often deal with budgets, schedules, etc. In contrast, leaders are concerned about tomorrow.

Contrary to popular belief, leadership has little to do with a person’s stature or placement in the organization’s hierarchy. It’s more about developing a positive attitude and transmitting it to others, encouraging them to reach a common goal. No matter what a person’s job responsibilities are, employees are expected to show their leadership skills at some point in the workplace.

Leadership Styles and Framework

Leadership style refers to a leader’s characteristic behaviors when directing, motivating, guiding, and managing groups of people. Great leaders can inspire a change movement and can also motivate others to perform, create, and innovate.

When we consider great leaders, we often see vast differences in how each person leads. Researchers have developed various theories and frameworks that allow us to better identify and understand these different leadership styles.

Lewin’s Leadership Styles

In 1939, a group of researchers led by psychologist Kurt Lewin identified different styles of leadership: authoritarian (autocratic), participative (democratic), and delegative (laissez-faire). Further research has since identified more distinct types of leadership. Nevertheless, this early study was very influential and provided a springboard for more defined leadership theories.

Authoritarian Leadership (Autocratic) Authoritarian leaders, also known as autocratic leaders, provide clear expectations for what needs to be done, when it should be done, and how it should be done. This style of leadership is focused strongly on both commands by the leader and control of the followers. There is also a clear division between the leader of the group and the members. Authoritarian leaders make decisions independently, with little or no input from the rest of the group.

An autocratic leadership style is a strong one-dimensional leadership style that gives full power or authority to the leader (boss/manager). The leader is the ultimate decision maker.

Participative Leadership (Democratic) The democratic leadership style is more participative in nature: The leader involves team members while making critical decisions. This style works well for an organization where team members are highly skilled and experienced. The best part of this kind of leadership style is that communication is active from top to bottom. Participative leaders encourage group members to be actively engaged in the process. As a result, the members are more motivated and creative. Democratic leaders tend to make followers feel like they are an important part of the team, which helps foster commitment to the team’s goals.

Delegative Leadership (Laissez-Faire) Delegative leaders offer little or no guidance to group members and leave the decision making up to the group members. Although this style can be useful in situations involving highly qualified experts, it often leads to poorly defined roles and a lack of motivation. Lewin noted that laissez-faire leadership tended to result in groups that lacked direction—where members blamed each other for mistakes, refused to accept personal responsibility, and produced a lack of progress and work.

Lewin’s study found that participative leadership, also known as democratic leadership, is typically the most effective leadership style.

Additional Styles of Leadership

In addition to the three styles identified by Lewin and his colleagues,researchers in this field have described numerous other characteristic patterns of leadership. Here are just a few of the best-known leadership styles:

Transformational Leadership Transformational leadership is often identified as the single most effective style. This style was first described during the late 1970s and later expanded upon by researcher Bernard M. Bass. Some of its key characteristics are the ability to motivate and inspire followers and to direct positive changes in groups.

Transformational leaders tend to be emotionally intelligent, energetic, and passionate. They are committed not only to helping the organization achieve its goals but also to helping group members fulfill their potential. Research has revealed that this style of leadership results in higher performance and more improved group satisfaction than other leadership styles.

Situational Leadership Situational leadership stresses the significant influence of the environment and the situation on leadership. Hersey and Blanchard’s model is one of the best-known situational theories. First published in 1969, this model describes four primary styles of leadership:

• The telling style is characterized by telling people what to do.

• The selling style involves leaders convincing followers to buy into their ideas and messages.

• The participating style is marked by allowing group members to take a more active role in the decision-making process.

• The delegating style involves taking a hands-off approach to leadership and allowing group members to make the majority of decisions.

Later, Blanchard expanded upon the original Hersey and Blanchard model to emphasize how the developmental and skill level of learners influences the style that should be used by leaders. Blanchard also described four different learning styles:

• The directing style involves giving orders and expecting obedience but offers little in the way of guidance and assistance.

• The coaching style means giving lots of orders, but leaders also give lots of support.

• The supporting style is an approach that offers plenty of help but very little direction.

• The delegating style is low in both directions.

Transactional Leadership This style starts with the idea that team members agree to obey their leader when they accept a job. The transaction usually involves the organization paying team members in return for their effort and compliance on a short-term task. The leader has a right to punish team members if their work doesn’t meet an appropriate standard.

Transactional leadership is present in many business leadership situations, and it does offer some benefits. For example, it clarifies everyone’s roles and responsibilities. Because transactional leadership judges team members on performance, people who are ambitious or who are motivated by external rewards—including compensation—often thrive.

The downside of this style is that, on its own, it can be chilling and amoral, and it can lead to high staff turnover. It also has serious limitations for knowledge-based or creative work. As a result, team members can often do little to improve their job satisfaction.

Charismatic Leadership Charismatic leadership resembles transformational leadership—both types of leaders inspire and motivate their team members. The difference lies in their intent. Transformational leaders want to transform their teams and organizations, while leaders who rely on charisma often focus on themselves and their ambitions,and they may not want to change anything. Charismatic leaders might believe that they can do no wrong, even when others warn them about the path that they’re on.

Coaching Leadership This style has been part of the discussion for quite some time about whether or not it should be considered a style of leadership. It is, however, an effective leadership style, one that doesn’t lead directly, but indirectly. In this style, leaders are more like coaches or teachers when working with team members.

Coaching is a relatively modern leadership style that is being employed more often by many organizations. It comes with a bouquet of additional benefits such as boosting employee motivation, increasing their performance skills, grooming, and motivating team members.

Tribal Leadership The tribal leadership model, which is based on leveraging natural groups to build a thriving organization, is advocated by author Dave Logan and his associates. As they write in their book Tribal Leadership:

Tribes in an organization get work done—sometimes a lot of work—but they don’t form because of work. Tribes are a basic building block of any large human effort, including earning a living. As such, their influence is greater than that of teams, the entire company, and even superstar CEOs or managers. In companies, tribes decide whether the new leader is going to flourish or get taken out. They determine how much work gets done, and of what quality.

This leadership style, as discussed, is a clear road map for the reality of managing organizations, careers, and life, says Reid Hoffman,cofounder of LinkedIn.

Strategic Leadership Strategic leadership refers to the leader’s expression of a strategic vision for the organization in a way that persuades others to pursue that vision with the help of the right strategies and tools. Different leadership styles impact the vision and direction of growth and the potential success of an organization. To successfully deal with change, all executives need the skills and tools for both strategy formulation and implementation. Managing change requires strategic leaders who not only provide a sense of direction but also build ownership and alignment within their workgroups to implement change.

This leadership style leads to team members who are well trained and well equipped to deal with unforeseen risks and threats.

Servant Leadership A servant leader is someone, regardless of level,who leads simply by meeting the needs of the team. The term sometimes describes a person without formal recognition as a leader. These people often lead by example. Servant leaders have high integrity and lead with generosity. Their approach can create a positive corporate culture and can lead to high morale among team members.

How you get the results is more important than the results themselves, according to Art Barter, the author of The Art of Servant Leadership.

Supporters of the servant leadership model suggest that it’s a good way to move ahead in a world where values are increasingly important and where servant leaders can achieve power because of their values,ideals, and ethics.

The most effective leaders know that leadership is not a one-size-fitsall approach. They adapt their style to fit each unique situation. When you understand the different leadership frameworks and styles available, you’re better able to guide your team through challenging situations.

Organizational Culture

What Is Organizational Culture?

Culture refers to an organization’s values, beliefs, and behaviors. In general, it consists of the beliefs and values that define how people interpret experiences and behave, both individually and in groups. Culture is both a cause and a consequence of the way people behave. Cultural statements become operationalized when leaders articulate and publish the values of their organization. Cultural statements provide a pattern for how employees should behave. Organizations with strong work cultures—including reliability cultures—achieve higher results because employees sustain focus on both what to do and how to do it.

Behavior and success are key enablers in creating the culture. There is a circular flow of mutual causation among organizational behavior, success, and culture, as shown in Figure 2.1. When a change is accepted by the team members, it changes their behavior. They do tasks differently as required by the new change. Then, if this change allows work to get done more easily, they can see some success. This success makes them accept the change and leads to changing habits or routine work methods. Eventually, it becomes the culture to do the tasks a new way (Figure 2.2).

FIGURE 2.1 Organizational Culture and Success Flow

FIGURE 2.2 Change and Culture

Leadership’s Role in Creating and Sustaining Organizational Culture

Leaders at both the corporate and plant/factory levels must keenly understand the impact that reliability has on the bottom-line performance of the organization. The valuation of an asset-dependent organization is significantly affected by the effectiveness with which that asset is managed. Leadership is a key enabler in creating an environment to implement reliability strategies, which helps in fostering a reliabilityculture in the long run.

True leadership is uncommon in today’s society and organizations because it is not genuinely understood. Furthermore, it has been misinterpreted, according to James McGregor Burns, author of the book Leadership, who wrote: Leadership is leaders inducing followers to act for certain goals that represent the values and the motivations—the wants and needs, the aspirations and expectations—of both leaders and followers. And the genius of leadership lies in the manner in which leaders see and act their own and their followers’ values and motivations.

General Colin Powell said, "Leadership is the art of accomplishing more than the science of management says possible." In fact, observed author Oren Harari in The Leadership Secrets of Colin Powell, aspiring business leaders would do well to adopt Powell’s style. Powell captured his leadership approach in 18 lessons:

• Lesson 1. Being responsible sometimes means pissing people off.

• Lesson 2. The day soldiers stop bringing you their problems is the day you have stopped leading them. They have either lost confidence that you can help them or concluded that you do not care. Either case is a failure of leadership.

• Lesson 3. Don’t be buffaloed by experts and elites. Experts often possess more data than judgment. Elites can become so inbred that they produce hemophiliacs who bleed to death as soon as they are nicked by the real world.

• Lesson 4. Don’t be afraid to challenge the pros, even in their own backyard.

• Lesson 5. Never neglect details. When everyone’s mind is dulled or distracted, the leader must be doubly vigilant.

• Lesson 6. You don’t know what you can get away with until you try.

• Lesson 7. Keep looking below surface appearances. Don’t shrink from doing so (just) because you might not like what you find.

• Lesson 8. Organization doesn’t really accomplish anything. Plans don’t accomplish anything, either. Theories of management don’t much matter. Endeavors succeed or fail because of the people involved. Only by attracting the best people will you accomplish great deeds.

• Lesson 9. Organization charts and fancy titles count for next to nothing.

• Lesson 10. Never let your ego get so close to your position that when your position goes, your ego goes with it.

• Lesson 11. Fit no stereotypes. Don’t chase the latest management fads. The situation dictates which approach best accomplishes the team’s mission.

• Lesson 12. Perpetual optimism is a force multiplier.

• Lesson 13. Powell’s Rules for Picking People: Look for intelligence and judgment and, most critically, a capacity to anticipate, to see around corners. Also, look for loyalty, integrity, a high energy drive, a balanced ego, and the drive to get things done.

• Lesson 14. Great leaders are almost always great simplifiers,who can cut through argument, debate, and doubt, to offer a solution everybody can understand.

• Lesson 15. Part I: Use the formula P = 40 to 70, in which P stands for the probability of success and the numbers indicate the percentage of information acquired. Part II: Once the information is in the 40 to 70 range, go with your gut.

• Lesson 16. The commander in the field is always right, and the rear echelon is wrong unless proved otherwise.

• Lesson 17. Have fun in your command. Don’t always run at a breakneck pace. Take leave when you’ve earned it. Spend time with your families. Corollary: Surround yourself with people who take their work seriously, but not themselves, those who work hard and play hard.

• Lesson 18. Command is lonely.

Harari, who was a management professor at the University of San Francisco, said Powell engaged in the kind of practical, mission- and people-based leadership that has translated into performance excellence and competitive success. Powell didn’t use bluster to inspire his troops. He was polite and was not interested in intimidating people. He [was] convinced that frightened people don’t take the initiative or responsibility and that their organizations suffer as a result.

On the other hand, Harari said Powell didn’t mind making people angry—particularly in pursuit of organizational excellence. To repeat Lesson 1 above, Being responsible sometimes means pissing people off, Harari quoted Powell, who believed that good leaders must defy the status quo.

Harari closed The Leadership Secrets of Colin Powell with this observation: Leadership is not rank, privilege, titles, or money. It is a responsibility.

Donald Phillips, the author of Lincoln on Leadership—Executive Strategies for Tough Times, points out the following of Lincoln’s principles on leadership:

• Get out of the office and circulate among the troops.

• Build strong alliances.

• Persuade rather than coerce.

• Honesty and integrity are the best policies.

• Never act out of vengeance.

• Have the courage to accept unjust criticism.

• Be decisive.

• Lead by being led.

• Set goals and be results-oriented.

• Encourage innovations.

• Preach a VISION and continually reaffirm it.

In modern days, Lincoln’s principle of Get out of the office and circulate among the troops is known to us as management by wandering around (MBWA), as dubbed by Tom Peters and Robert Waterman in their 1982 book, In Search of Excellence. The principle has also been given other names and phrases, such as roving leadership, being in touch, and get out of the ivory tower. It is simply the process of getting out of the office and interacting with people. Peters and Nancy Austin, in A Passion for Excellence, define MBWA as the technologies of the obvious.

Leaders emerge in every life situation to guide others along a particular path of change and toward a final destination point. Effective leadership is not easy. History has shown us that the responsibilities and hazards of leadership are as great as their rewards. Studies in the field of leadership recognize and stress the need for building strong interpersonal relationships and bonds. In their book, Leaders, Warren Bennis and Burt Nanus wrote that leadership establishes trust, that leaders pay attention, and that they have the ability to trust others even if the risk seems great.

One dictionary definition of leader describes a primary shoot of a plant, the main artery through which the organism lives and thrives. In much the same way, organizations prosper or die as the result of their leader’s ability to embody and communicate the organization’s vision. How the M&R leader influences others very much dictates the health of the M&R department and, ultimately, the entire organization.

Effective visions, according to Tom Peters, are inspiring. They should be clear and challenging—and about excellence. An effective vision consists of a concise statement or picture of where the organization and its people are heading and why they should be proud