As supply chains rupture and decarbonisation becomes imperative, companies in vital industries are feeling squeezed and falling behind. To succeed, they must move quickly from a traditional to an integrated approach to managing work, then beyond to ‘quantum work management’.
This is Part 1 of a series. Read the other parts here:
[Listen to the audio version, read by David Hodes]
My first article in a new series explores the problems with the traditional approach to work management. The first shift is to realise that all work is work.
Let’s start by considering the multitude of types of work a large facility might encounter on any given day: Research. Planning. Health & Safety. Design. Building. Testing. Maintaining. Project Management. Consulting. Contracting. Accounting & Finance. Trades. Professionals. Administrative. Analysis and Improvement. Strategy. Meetings. Change Management. IT. Learning and Development. Organisational Design. Leadership.
The work we undertake in our industrial environments has a single imperative: to perfectly manage the trade-offs between safety, throughput and cost outcomes within a given set of environmental, social and governance (ESG) constraints.
This goal is a significant and ongoing challenge in the contemporary operating environment. Unstable geopolitical dynamics, uncertain supply chains, overarching social and environmental issues and increasingly volatile global markets create complex conditions that require constant attention and adjustment.
Against this backdrop of change, sustaining market-based democratic systems and the free enterprises that operate within them will require a transformation into new ways of working, whether you’re in products, services, or both.
The scale of the challenge is amplified by the long-term shortage of skilled workers—from PhDs to trades, from administrators to creatives. To design, plan and execute transformations successfully, we must make better use of the scarce resources to which we have access.
There are different ways to think about work given the challenge. In addition, there are likely varying levels of sophistication and maturity in work management across your organisation. However, the archetypal approaches to work management outlined in this series of articles are Traditional, Integrated and Quantum. I will aim to showcase the characteristics and dynamics of each approach and contrast the organisational outcomes that can result.
Traditional Work Management focuses on managing people and their attention to the tasks they are assigned. Safety, throughput, and cost outcomes are considered discretely. As a result, work management can feel inexplicable as you juggle trade-offs that don’t make holistic sense. Work then feels frustrating as everyone realises the business has put artificial limits on success.
This kind of work is characterised by linear thinking, waterfall planning, fixed processes, reactive behaviours, and individualised, subjective decision making. Information is typically of low quality and high latency. Activity is undertaken based on screen fragments and printed work orders, work methods, drawings, safety controls, Gantt charts, spreadsheets, checklists, PowerPoint, and so on.
Service sign-off is manual, creating discrepancies in records. Inaccuracies happen with invoicing, and supervisors are left to arbitrate what work was done and decide what adjustments must be accounted for.
“The scale of the challenge is amplified by the long-term shortage of skilled workers”
There is difficulty in correctly accounting for contractor remuneration based on non-standardised contracts, with varying business rules governing the application of standard and penalty rates. It is thus difficult to track costs; myriad functional cost centres are not necessarily aligned with day-to-day activities.
Opening and closing of activities are mostly divorced in the system of record from the actual activity start and end times, and touch-time effort. Priorities and dependencies are often ambiguous and subjectively determined. Master data containing work standards is seldom updated and often wrong.
Owners rely on vendors to reconcile time and attendance of standard and penalty hours by person and resource type. Focused operators have clear incentives to manage inputs, work, and outputs. They are naturally deferred to but run on intuition and memory rather than true data. For example, contractors and vendors claim to have delivered on scope, time and budget. It is challenging and administratively burdensome to validate or audit their claims. All the same, work tracking is updated, and invoices are often paid regardless.
There is a largely static, deterministic and incomplete articulation of demand for work to be performed by resource types at times in places. In addition, there is low resolution and visibility of capacity available for work by resource type at times and in places. All the while, vendor revenue is the owner’s cost, setting up an inherent conflict when win-win trade-offs cannot be readily determined in a timely fashion.
Owner’s knowledge workers (eg, engineering, maintenance, operations and technical) are siloed in different business functions, preventing the application of scarce resources to the highest value-adding work from wherever it arises.
Study phase teams are often disconnected from delivery teams, working to different KPIs, without a single person with end-to-end accountability for the delivery of scope on time and within budget.
The interface between knowledge-work consultants (engineers, environmental, project management etc) and owner’s staff run to different drumbeats, off different systems and processes, making effective coordination and prioritisation very difficult.
“Information is typically of low quality and high latency”
Long- and short-term operational planning coordinates people and equipment at low levels of fidelity. Plans and resources are difficult to change and update in the light of changing conditions.
For example, the Master Equipment Calendars (MEC) cannot easily be modified as there is much work that could be done, and some which must not be done, once a major maintenance event has been programmed. In addition, having low capability in tactical agility means it is tough to mobilise resources to where they need to be to maintain the integrity of the MEC.
Timetabling is set, but demands change on an hourly basis. As a result, people often end up ‘stranded’ where they are assigned rather than focused on the highest priorities of the enterprise. For example, erecting scaffolding for an urgent piece of emergent work in a major shut is more critical than dismantling scaffolding in the processing plant, but the means are not there to readily respond.
The net result is an increase in lead times, inventory, work in process, OPEX, rework, unit costs and bang for the buck for CAPEX. And a decrease in revenue, margins, speed to market, due-date dependability, quality, innovation, engagement and ROI.
It has never been the case that having these critical business metrics trending in this way is in any way sustainable. But, given the tectonic shifts unfolding in global supply chains in our post-pandemic world, the imperative for improvement has become far more acute.
As you can see, traditional work management is failing organisations just when they need to be operating productively at maximum effectiveness. In my next article, I’ll provide a characterisation of integrated work management, with which many of the challenges articulated in this article can be resolved. But is it enough?
The change to using Theory of Constraints (TOC) as an underlying operating system is both profound and exhilarating. We’ve developed the Systems Thinker Course to bring the ideas into your organisation.
[Background image: Battersea Power Station, Rodney Minter Brown on Unsplash]
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