1. 1. A Voyage Beyond the Horizon and Back Houshower 07/01/99, i A Voyage Beyond the Horizon and Back The Heartland Refinerys Continuous Improvement Story A Learning History Exploration of Continuous Improvement Efforts At the Heartland Refinery January 1995 to August 1, 1998 Written by Hans Houshower, Ph.D Learning History Team Judy Gilbert, Team Leader, Heartland Refinery Hans Houshower, Ph.D Cultural Anthropology Art Kleiner, Editorial Consultant, Reflection Learning Associates Paul Monus, Global Oil George Roth, MIT Sloan School of Management Argerie Vasilakes, Global Oil
2. 2. A Voyage Beyond the Horizon and Back Houshower 07/01/99, ii Its a damn tough life full of toil and strife we whalermen undergo, And we dont give a damn when the gale is done how hard the winds did blow, Cause were homeward bound from the Arctic Ground with a good ship taut and free, And we wont give a damn when we drink our rum with the girls of Old Maui Rollin Down to Old Maui, a traditional Sea Chanty Wooden ships on the water Very free and easy, You know thats the way its supposed to be, Silver people on the shoreline, let us be, Talkin bout very free and easy Wooden Ships, by Crosby, Stills & Nash
3. 3. A Voyage Beyond the Horizon and Back Houshower 07/01/99, iii Contents Introduction: The Sailors Journey Toward Proactive Manufacturing (iv) by Refinery Manager North American Oil The Learning History Approach (v) Cast of Characters (vii) Timeline: Notable Events at Heartland Refinery, 1993-98 (ix) Prologue: The Heartland Refinery, Queen of the Fleet (p. 1) Chapter 1: The Heartland Refinery Sails A New Ship Reengineering and the Roots of Continuous Improvement (p. 2) Chapter 2: The Sailors Learned to Sail the Seven Seas (p. 6) 2.1 Everyone Went Back to Sailing School (p. 7) 2.2 The Crew Practiced Sailing on Dry Land (p. 10) 2.3 The Ship Sailed Beneath One Banner, Dont Just Fix It, Improve It! (p. 16) 2.4 The Ships Officers Steered a New Course the Continuous Improvement Forum (p. 23) 2.5 The Officers and Crew Practiced Essential SkillsThey Listened and Communicated (p. 28) Chapter 3: Everyone Got Onboard and Sailed TogetherCommitment Was Crucial For Success (p. 32) 3.1 Everyone Onboard Took Risks with New Behaviors (p. 33) 3.2 The Ships Officers Demonstrated Seriousness of Purpose (p.36) 3.3 The Crew Discovered that Teamwork Requires Shared Commitment (p. 40) Chapter 4: The Crew Sailed Successfully through Stormy Seas (p. 43) 4.1 External Forces Created Rough Weather, Uncertainty and Disappointment (p.44) 4.2 The Sailors Discovered a Reservoir of Capacity and Sailed for the Horizon (p.48) Chapter 5: A Voyage beyond the Horizon and BackShared Lessons from the Journey (p. 53) 5.1 The Sailors Achieved Bottom Line Results But It Was More Difficult to Impact the Wider Organization (p.54) 5.2 The Crew Discovered an Essential Ingredient for SuccessTotal Employee Involvement (p.57) Epilogue: The Sailors Journey toward Continuous Improvement (p. 63) Organizational Charts Heartland Refinery (p. 65)
4. 4. A Voyage Beyond the Horizon and Back Houshower 07/01/99, iv INTRODUCTION: The Sailors Journey Toward Proactive Manufacturing By Refinery Manager North American Oil In late 1994, Heartland Refinery employees began a journey toward Proactive Manufacturing, using the tools provided by [Outside Consultant]s Manufacturing Game and Peter Senges model of the Learning Organization. Heartland Refinery had been recently re-engineered into a complex matrix team structure and was in chaos, due to lack of focus, clear vision and understanding of the behaviors needed to unite the teams. During 1995, employees developed their own roadmap and action plans in an effort to attain best-in-class performance in all aspects critical to refinery operation. Their goal was to improve the bottom line and to develop the behavioral attributes of a learning organization. Dont just fix it, improve it! became the slogan and guide for all activities. The Manufacturing Game workshops spawned over 100 ad-hoc cross-functional teams to address specific identified opportunities, or other opportunities if the teams so chose. Employees volunteered to serve as program facilitators and as members of a Continuous Improvement Forum that was established to encourage proactivity and provide support and resources to the action teams. A clear vision was developed and shared among all employees, and a passion for improvement through proactive behaviors became universal. This passion carried the Refinery through a three-year period of uncertainty during an unsuccessful attempt to sell, and finally a decision to close Heartland Refinery. Astonishingly, improvements continued unabated and were a major factor in the ultimate, last minute sale of the Refinery. Improvements occurred in safety, environmental performance, reliability, unit rates and yields, and hydrocarbon loss. Significant results included an over $0.75 per bbl improvement in the bottom line. Other sites within Global Oil and externally are pursuing improvements through Proactive Manufacturing and the learning organization approach. In order to facilitate success at these other sites, Heartland Refinery commissioned a Learning History of the Heartland experience to determine what behaviors, approaches, styles, programs and activities contributed, in a positive or negative way, to the overall successful result of the Heartland experiment. Learning Histories were used successfully at Heartland in the past several years to determine why certain action teams worked well and produced outstanding results, as well as to determine what was on the minds and in the hearts of employees who were directly involved. Learning Histories go far beyond a post audit review of a project, digging more deeply into the motivation and passion of those involved in the endeavor. It is our belief that these insights will significantly assist others to achieve outstanding improvements more expeditiously.
5. 5. A Voyage Beyond the Horizon and Back Houshower 07/01/99, v The Learning History Approach The Goal of the Learning History The learning history is designed to spark constructive conversation by presenting first- hand interview and review comments on the same page and in two columns. Interview comments are drawn from confidential interviews with participants from many parts of the organization. All persons interviewed have opportunities to review their quotes for accuracy. The goal is to present multiple perspectives on the notable events, including strengths and weaknesses, of a change effort. There is a great deal of blank space on each page. You are encouraged to note your reactions in empty spaces and margins. Those reactions will support discussion of the issues raised by the learning history. In fact, such additional conversations are the goal. The document is intended to serve as a tool for learning in your organization. The Two-Column Format or Jointly Told Tale Material running across the width of the full page, like this text, provides the context, introduction and background for each part of the story. In the left-hand column, you will see commentary and key questions from the learning historians. Question: Is there a connection between 100% attendance and learning? The right-hand column contains the primary narrative. You will see each paragraph in the right-hand column credited to a particular individual, who tells his or her part of the story, like this: [Refinery Management Team Member]: I wanted to get all the people to go. I think we probably achieved 99%. This included co-ops, administrative assistants and all the people that we invited from the outside. That was a big plus that I didnt realize in the beginning would be that good. qq Sidebars Occasional boxed passages, across the page and with smaller type, contain explanations that expand on issues raised in the right hand column, but that would otherwise slow the narrative. For instance, sidebar passages might describe a site-specific business practice, or a particular event that turned out to be significant. Also, refer to sidebars for answers to questions about details in the main text. There are no rules for reading the two column learning history. Different individuals read segments in different orders. By making your own choices, and discussing your responses with colleagues, you will best serve your own learning and that of your organization.
6. 6. A Voyage Beyond the Horizon and Back Houshower 07/01/99, vi Learning Histories at the Heartland Refinery In fall 1995, the Heartland Refinery assembled a team to explore the potential of learning histories as a tool for enhancing improvement efforts. The team included two members of the Heartland management team and an outside consultant with a Ph.D. and professional experience in social science research and writing. The team participated in a learning history seminar offered by the MIT Center for Organizational Learning and developed a learning history project that focused on the success of a refinery action team. Based on the successful outcome of the initial project, the Learning History team has conducted three additional learning histories, including the present project. The Heartland Refinery Continuous Improvement Forum has used the learning histories to identify critical success factors on the path to continuous improvement. The CI Forum has then integrated the lessons learned into employee learning in an effort to transfer learning to other teams at the refinery.
7. 7. A Voyage Beyond the Horizon and Back Houshower 07/01/99, vii CAST OF CHARACTERS Titles & Positions Refinery Manager Refinery Maintenance Manager Refinery Management Team Member Refinery Change Manager Refinery Engineer Refinery Maintenance Supervisor Refinery Operations Supervisor Refinery Training Supervisor Refinery Operator Union Officer Global Oil Manager (Global Oil manager at a facility other than Heartland Refinery) Global Oil Senior Manager (Global Oil Senior Management Team) Outside Consultant The Interview GroupAn Organizational Cross-Section The Heartland Refinerys Continuous Improvement Story was written to capture the learning and key success factors which led to breakthrough productivity improvements from 1995 to 1998 at Heartland Refinery. The CI Forum was established to develop a path and ongoing support for the continuous improvement efforts of the refinery. Included in the approximately 35-member Forum were the refinery management team and a broad cross-section of salaried employees. To provide a representative sense of the transformation at Heartland Refinery, we talked with a variety of people associated with the refinery from across Global Oil including senior Global Oil managers, refinery management, salaried employees, and hourly workers. We also talked with people not associated directly with Heartland Refinery but familiar with the improvements and bottom line results. This included members of management at other Global Oil sites and outside consultants. To assure a degree of confidentiality to the people involved, we have identified people only by their title or role. By identifying people in this way, we draw attention away from the characters as personalities and help reduce the biases that people take on if they think they know who is speaking. We focus instead on the universal roles, responsibility and relationships that people have in relation to the improvement efforts. We have also used titles to replace names mentioned by others in their interviews. Persons whose quotes are included are identified by the most obvious connection with the Heartland Refinery improvements. For example, Heartland Refinery people are identified as Refinery Management Team Member, Maintenance Worker, Process Operator, Maintenance Supervisor, and Process Supervisor. We also interviewed people outside Heartland Refinery who were members of Global Oil management at other locations but were closely aware of Heartlands improvement efforts. Some people interviewed for this
8. 8. A Voyage Beyond the Horizon and Back Houshower 07/01/99, viii Learning History held senior management positions within Global Oil at its U.S. and world headquarters and had a particular responsibility or relationship with Heartland Refinery. Still others quoted were outsiders involved in the improvement efforts. The forty people who were interviewed make up the voices that tell the story of Heartland Refinerys Continuous Improvement program. As the Continuous Improvement program was developed and implemented, Global Oil made a decision to divest the Heartland Refinery through a sale. Sales efforts in 1996 were unsuccessful and at the end of the year, Global Oil determined to close the plant by the end of 1998. These decisions did not deter the Continuous Improvement efforts but did change the organizational structure. Ultimately, Heartlands remarkable productivity improvements in the face of considerable adversity caught the attention of North American Oil who purchased the plant in August 1998. North American Oil and Global Oil have both stated publicly that the sale occurred largely because the improvements Heartland had accomplished added considerably to the value of the refinery. To help the reader understand the timeframe and where people fit into the organization, a timeline and pre- and post-sale organization charts are included as appendices.
9. 9. A Voyage Beyond the Horizon and Back Houshower 07/01/99, ix Timeline: Notable Events at Heartland Refinery, 1993 1998 1993-94 Reengineering 1994 Pilot Manufacturing Game sessions 1995 All Heartland Refinery employees participate in Manufacturing Game Cross-functional Action Teams launched Dont Just Fix It, Improve It! program implemented Continuous Improvement (CI) Forum established CI Forum develops roadmap (7 critical elements and 2 & 5 year goals) 1-11-1996 Global Oil announces intent to sell Heartland Refinery 1996 New communications processes implemented (e.g. E-mail digest, Info Bulletins) 11-8-1996 Global Oil announces plans to close Heartland Refinery 1997 Enhanced Gainsharing program implemented Heartland Integrated Complex plan announced 6-12-1998 Global Oil announces placement of all refinery employees 7-1-1998 Global Oil announces sale of Heartland to North American Oil qq Heartland Refinery Established and Achieved Breakthrough Targets Cash Margin Enhancement: 1997 vs. 1994 (dollar/bbl crude @ 1995 basis) Higher Reliability 0.08 Hydrocarbon Loss 0.27 Process Optimization 0.22 Crude Delivery & Quality Costs 0.05 Energy Efficiency 0.06 Cost Savings Initiatives 0.09 Total Cash Margin Enhancements $0.77
10. 10. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 1 Prologue: The Heartland Refinery, Queen of the Fleet In 1885, Oil was discovered near Heartland, Midwest State and, almost overnight, an agricultural town of 4,000 was transformed into a manufacturing and railroad center. Oil wells dominated the landscape and entrepreneurs began shipping barrels by rail. Heartland grew rapidly into a city with five Class One railroads and one of the Midwests first urban electrification and electric street railway system. The Heartland oil boom soon caught the attention of a well-known oil baron who built a refinery there in 1886. The Heartland Refinery would become a standard bearer among U.S. oil refineries and support the growth of Heartland into a major transportation-manufacturing center. Major Heartland industries have included the Heartland Locomotive Works, the Midwest State Steel Foundry and a Major International Aerospace Division plant. The Famous Auto Companys Heartland Plant and the United States Traction Weapon Plant are still active. Heartlands reputation for oil refining and manufacturing grew throughout the first half of the twentieth century and Heartlands workforce contributed mightily to the re-supply and replacement of World War II equipment and armament. By 1945, Heartland was a small city of 50,000 and the Heartland Refinery provided fuel for transportation and aerospace industries and for a communitys identity where fully two-thirds of local workers were employed in transportation-related industries. The Heartland Locomotive Works ceased production in 1951, signaling the decline of the rail transportation era and the beginning of Heartlands post-war transition from industrial Superpower to rust belt town. Heartland Refinery continued to operate twenty-four hours per day, even as industrial neighbors closed or reduced production to marginal levels. The Heartland Refinery was Benchmark Oils Queen of the Fleet, throughout the 1950s and 1960s with a substantial impact on the local economy in jobs, net value and associated business. Heartlands survival amidst the industrial decline of the post-war era accentuated this status. Even so, Heartland Refinery could not remain isolated from the growth of a global economy and multi- national ownership. In 1987, Global Oil purchased Benchmark Oil. Heartland Refinery soon realized that she was no longer Queen and that forces in the international oil business and the global economy would now play an important role in determining business decisions at Heartland. Beginning in 1992, Global Oil folded the Heartland and Metropolitan refineries into an Midwest State System, that consolidated corporate control in Major City, Midwest State. In addition, in 1993, the Midwest State system introduced a reengineering plan for the Heartland and Metropolitan refineries in an effort to reduce costs and maximize production. Reengineering represented a major change in the way the refinery would conduct business with a significant impact on personnel, including dislocation and downsizing. In addition, reengineering at the Heartland Refinery is where the Heartland continuous improvement story begins.
11. 11. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 2 Chapter One The Heartland Refinery Sails A New Ship Reengineering and the Roots of Continuous Improvement Reengineering is the first word people mention when they talk about notable events in Heartlands continuous improvement structure. Reengineering was tough. It involved radical change in the organization of work, job loss or dislocation and even chWesternges to personal identity. But nearly everyone acknowledges that reengineering prepared the way for significant improvement by implementing a new organizational structure suited to teamwork and increased area and individual responsibility for decision making and responsibility. q Reengineering of the Midwest State Refining System in 1993, under the guidance of a reengineering consultant, restructured the Heartland and Metropolitan refinery organizations. All job titles were changed and no one was assured that either they or their job would continue at the refinery. The management team selected employees for the positions on the new organization chart. Not everyone received a job offer and many people lost their jobs at the plant. Everyone had a new title and new reporting responsibilities. q The Site Manager became responsible only for operations (Producing Salable Product). Reporting to him were the Shift Team Managers who oversaw day-to-day process operations. The most significant change was the addition of Area Team Leaders and Area Teams. Maintenance workers were no longer assigned to a Maintenance Supervisor, but to an Area Team Leader. These teams were responsible for keeping the plant running. The creation of Area Teams necessitated regular meetings of representatives from process, maintenance and other functional departments. qq Maintenance Supervisors, Maintenance Engineers and Reliability/Inspection Engineers had dotted- line relationships with the Area Teams. Maintenance, Human Resources, Health/Safety/Environment and Commercial Managers were responsible for two sites and reported to the Manager of the Midwest State System. Like it or not, reengineering provided a structure for change. [Refinery Maintenance Manager]: Reengineering contributed the infrastructure that allowed us to accomplish many things that we did. Mainly, the way it allowed us to tear down departmental walls and develop formal area teams. We also took engineers and put them on area teams. They became our improvement drivers and that really helped facilitate improvements.
12. 12. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 3 [Refinery Management Team Member]: The reengineering vision was pretty accurate. Basically, the concept of an asset team approach was correct, but to launch those teams, you needed improvement. [Refinery Management Team Member]: Reengineering gave us an organizational structure that was more functional to meet the needs of this business. It was more in tune with a team-based process and information sharing. It created teams [Refinery Maintenance Supervisor]: On the positive side, it brought people together in teams, brought operations much closer to maintenance and introduced the idea of everyone working together to solve a problem. [Refinery Operations Supervisor]: The reengineering process helped us go into cross-functional teams and made people more at ease about working together. And affected everyone. [Refinery Maintenance Supervisor]: It made everybody change a little because there werent any craft bosses anymore. If they came to me, I had to say, I dont know anything about that, do what you think is best. [Union Officer]: I think its significant that the union agreed to participate in programs as early as 1988and we caught a lot of flak too. But the local recognized that we had to start working with the company to make changes to achieve the same ends. Reengineering Emphasized leadership [Global Oil Manager]: If a person was a stronger manager than leader, they were in trouble because they didnt have anything to fall back on. However, it was good for leaders because they are more innovative. What really surfaced is, who is a leader and who is a manager. And autonomy, [Refinery Training Supervisor]: Reengineering created some ownership in areas, but it took years for individuals to understand that this is my pump and I am responsible for its operation. Management did let guys decide which jobs should be two-man jobs because there were fewer people and if they needed extra help. These were early steps up the knowledge ladder.
13. 13. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 4 Including significant Financial authority. [Refinery Management Team Member]: One of the good things that came out of reengineering was that front-line guys got more financial authority and along with that came responsibility. When somebody says, You four guys have $2 million dollars of improvement money to spend on what you think makes sense, that is a whole different ball game. That is a lot of trust and you dont want to goof. [Refinery Training Supervisor]: Reengineering freed up money. I had a budget of close to $1 million. I financed all the Manufacturing Game sessions with this money. [Refinery Management Team Member]: Global Oil was really struggling to find a good process, but has been notorious for not being patient when things dont happen right away. Yet we stuck with this one. We had a manager who was in position for an extended period who stuck with it. However, a new structure Without new behaviors Was simply not enough. [Refinery Manager]: We received the reengineered organization and were told to put it into place, but we didnt understand what that meant. It wasnt too long until we began to see that we had something that was good in terms of structure, teams and integration, but that we didnt have the behaviors in place to understand how to optimize it. Workers did not understand The need for change, [Union Officer]: Unfortunately, management often doesnt understand what they already have. For example, our union had allowed them to take two machinists and put them in a condition monitoring program, full-time. That was the problem with reengineering if you have a car that is running good, you give it a tune-up or change a part, you dont rebuild the engine. Especially when Reengineering Removed expertise From many areas [Refinery Maintenance Supervisor]: In 1988, we began rebuilding our reliability efforts and decided we needed more involvement from machinistswe trained the first machinists as condition monitoring technicians. Unfortunately, reengineering came along and broke up the expertise that we had established in the maintenance department.
14. 14. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 5 And created confusion And anger around, Who was in charge? [Refinery Maintenance Worker]: I didnt have an instrument shop boss who was an instrument person. If I ran into a problem I couldnt solve, I had no supervisor to go to. Or, if I needed something or more training, I had no champion. q Question: It looks like reengineering was handed down to the Midwest State System without specific guidelines for implementation. Was this a weakness, in that it meant every facility would handle it differently? On the other hand, was it an opportunity, for the same reason? Question: How much of the problem was in perception of how the new organizational structure was supposed to work versus lack of acceptance (not believing the structure would work)? [Refinery Training Supervisor]: People were very hostile and confused. They did not like reengineering. I didnt like it. Everybody was trying to figure out what their role was. We took all the craft supervisors away and told the workers that they were self-empowered. They didnt want all that responsibility. Rapid turnover in plant managers did not help. [Union Officer]: Prior to [Refinery Manager], we went through a fair number of plant managers and their theories and thoughts. Quite frankly, there was confusion as to whom we were really following. [Union Officer]: I dont know whether it was Global Oil or all corporations, but they seemed to really get caught up in consultantsthey were all over and you kept bringing them in until they told you what you wanted to hear. . .of course, the programs they implemented had about a two year life expectancy because they were changing plant managers, process managers and maintenance managers at the same rate. Labor relations Were strained [Refinery Management Team Member]: Coming out of reengineering, this was a very difficult and delicate period for labor relations. The union didnt want to talk with us because they assumed that anything we were going to do was going to eliminate jobs. And many people Felt lost. [Outside Consultant]: People really seemed to be struggling like hell. Someone might say, I got this title, Resource Allocator, and I dont know what the hell that means, but I think it might be like what the foreman used to do. Peoples statements indicated that they had completely lost their identity.
15. 15. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 6 qq Question: What avenues are needed to express employee concerns in a major structural change effort like reengineering? [Refinery Change Manager]: Things were in disarray. Nobody was taking ownership, not even senior management. At one stage during reengineering, one senior manager wasnt willing to buy a house. In fact, the Heartland Continuous improvement Story began when employee morale was lowest. qq Question: What set of conditions is necessary to provide the initial impetus for change? [Global Oil Senior Manager]: By 1993, it was clear that the reengineering process lowered costs, but did not engage the folks in what the refinery really needed to do. Certainly, morale was low as a result of layoffs. The Heartland continuous improvement story begins in 1994/95 when [Refinery Manager] and his team decided to do things differently. Chapter Two: The Sailors Learned to Sail the Seven Seas A successful sailing journey is a complex endeavor, fraught with the peril of uncontrollable weather and events. At the Heartland Refinery, the pieces for a successful journey came together at about the same time: (1.0) A new organizational structure based on reengineering (2.1) Participation by almost everyone in the organization (2.2) Insights and skills from the Manufacturing Game (2.3) A simple-to-implement program for improving manufacturing (2.4) An understandable roadmap for success provided by the Continuous Improvement Forum (2.5) And broader and deeper communications Significant results were achieved from the refinerys investment in its people and manufacturing processes.
16. 16. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 7 Chapter Two: The Sailors Learned to Sail the Seven Seas 2.1 Everyone Went Back to Sailing School Virtually everyone remembers mandatory attendance for all employees at the Manufacturing Game workshops as a notable event. The Manufacturing Game was first introduced at the Heartland Refinery in mid-1994 when [Outside Consultant], the games creator, was facilitating several sessions at Global Oils Heartland Chemical plant. A reliability specialist sold the maintenance training manager for Heartland Refinery on the potential in the program and authorized two pilot sessions in mid 1994. Success from these early workshop sold senior refinery management on scheduling sessions for all employees. Not everyone was ready to experiment with a new approach or change behavior, and they were not required to participate. However, all were required to attend the Manufacturing Game workshop, to observe and witness the active involvement of coworkers and the Plant Manager who participated in every session. The result was a high level of shared experience and vision at an early stage in the improvement effort.
17. 17. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 8 Virtually everyone attended The Manufacturing Game [Refinery Training Supervisor]: I wanted to get all the people to go. I think we probably achieved 99%. This included co-ops, administrative assistants and all the people that we invited from the outside. That was a big plus that I didnt realize in the beginning would be that good. And received The same opportunity to get onboard. [Refinery Maintenance Supervisor]: The Manufacturing Game was a big part of our improvement across the facility because all people in the refinery had an opportunity to go through this program and get onboard with the same ideas, for example: Dont Just Fix It, Improve It. These ideas started really grabbing hold and we soon started seeing benefits. Even when They disagreed on the games value [Refinery Engineer]: The game was not important except that it brought everyone together. We could have played Monopoly. The issue was how you were going to discuss, deal with problems and communicate. Everyone understood They were building a foundation for performance. [Global Oil Manager]: The whole idea of the Manufacturing Game and the clear rallying point, Dont Just Fix It, Improve It, were the foundation the house of performance was built on. Everybody in the refinery was behind this and it provided a basis to guide direct actions. qq How does making attendance mandatory affect peoples ability to learn? Were there other options available to management at that time, or was coercion the only option at that time? Do assets seeking to use the Manufacturing Game have to achieve 100% attendance at a workshop by everyone? [Global Oil Manager]: By making attendance mandatory they sent the message, this is important. But they didnt try to force participation. If you chose to watch for awhile, that was fine, but you got to witness involvement and saw that that this could be beneficial. [Global Oil Manager]: What really interested me was the mandate for all employees. Usually the Manufacturing Game turns into an optional participation for most people, but at Heartland it was actually mandatedand what was critical was that [Refinery Manager] and [Refinery Maintenance Manager] participated in every session.
18. 18. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 9 The senior manager Participated in every session. [Global Oil Manager]: [Refinery Manager] made it mandatory and [Refinery Manager] participated heavily which motivated other managers. He developed quite a few champions and set up the Continuous Improvement Forum (CIF) where he could participate at a higher level and continue to promote progress. [Global Oil Manager]: Its really important that the manager with the most at stake be there to support this. If its my business and Im telling all my employees they have to be at a session, I should be there. [Refinery Manager] and [Refinery Maintenance Manager] managed to do itthat was a big key. And helped Transform a game Into a shared vision [Refinery Training Supervisor]: [Midwest State System Manager] coined the term proactive manufacturing. He saw it as a whole plant concept. A lot of people want to do the game to save money in maintenance, but thats not going to do it. Its not about maintenance. Its everybody working together and sharing. for how to run a refinery. q Is senior management participation the key to creating receptivity? q How clear must the vision and sense of core purpose for the asset be? q What form does the articulation of the vision and core purpose need to be? A flag? Pictures? Statements only? [Refinery Change Manager]: The big ticket was getting a common vision of where we wanted to go, pulling together and having some ownership. We had to run the refinery like it was ours.
19. 19. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 10 Chapter Two: The Sailors Learned to Sail the Seven Seas 2.2 The Crew Practiced Sailing on Dry Land The Manufacturing Game was a packaged workshop for improving manufacturing performance that was first implemented in mid-1994. By the end of 1995, nearly every refinery employee had participated in a game session. Not everyone agrees about the positive impact of the game, or about its learning outcomes. Hourly workers in particular talk about the games focus on principles they already understood and practiced. However, nearly everyone interviewed acknowledged some personal impact of the experience and included it as a noticeable event in Heartlands continuous improvement story. Heartland implemented The Manufacturing Game to address a specific need for proactive maintenance. [Refinery Maintenance Manager]: I will be perfectly honest with you. One of the objectives I gave my department was that I wanted us to move toward proactive maintenance, but having been away from maintenance for a few years, I was at a loss to give them specific instructions. And about that time Chemicals invited me to come over and play this proactive manufacturing game. Of course, being a manager, I was too sophisticated to play a game, so I sent two of our maintenance specialists. They came back and said, Youre a genius thats exactly what we should do. So I scurried over to the next session to find out what I was so smart about. Thats how we got started. But the game helped everyone Think about systems (at their personal point of impact), [Refinery Management Team Member]: The Manufacturing Game got everybody thinking. If Joe Blow is over here yanking something, it might affect whoever is on the other end of the line. It got you thinking, OK, if we look at this as a holistic thing, then maybe we can fix it better.
20. 20. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 11 qq Question: Must individuals personally experience learning for The Game to be effective? qq What were the things workers had been saying that hadnt yet been appreciated and incorporated by the site into decision making rules and policy? Who said what to whom? Does this imply an inability to listen on the part of management? What prevented workers views from being heard and acted on? [Refinery Maintenance Supervisor]: The Manufacturing Game focused attention on how important the storehouse was. If you needed parts and couldnt get them or if you stored too much, it was all in the game. And just like the butane story, it showed what the workers were already saying was important. You have to have certain items in stores to keep the place running. See what team effort Could accomplish, Question: Is it vital for people to play unfamiliar roles, to get new insight? In the game? In the plant? [Refinery Operations Supervisor]: The game was a tangible way for people to see that a team effort workedthat is, learning to see what other people in the refinery do, putting the most knowledgeable people together to work on something and giving them adequate resources. Experience other persons Responsibilities, [Global Oil Manager]: The game allows you to see that there are a number of different factors that go into improved reliability, especially when everybody gets to play a different role. Challenge their own Assumptions, Question: How much impact did the Game / workshop have on peoples capacity, awareness, and action from a systems thinking or holistic perspective? [Refinery Change Manager]: We had a thirty-year maintenance supervisor who was regarded by everybody as a good supervisor. He said, Before I played the game, I think I used to know what maintenance was. I really didnt. He was saying that he didnt see the interdependence with operations and time delays. And he didnt see the financial consequences of his work on business operations. [Outside Consultant]: The Manufacturing Game put people in a position where they couldnt fall into their old habits, so they learned. For example, more than one person told me, What I learned out of this is that Im not a team player. And understand Defect elimination [Refinery Management Team Member]: The game allowed people to actually see what we meant by eliminating defects in a non-threatening environment.
21. 21. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 12 [Refinery Management Team Member]: The game showed you in graphic form that if you dont take time to plan work and do it right, you will just keep getting more bugs. It taught you to allocate resources and eliminate defects. Without realizing They were learning. [Refinery Change Manager]: The game offers you a picture of what might be, I can save a lot of money on maintenance. Everybody always says, I already knew that. I think they dont notice the workshop and thats OK. Its a magical experience in some ways. People go in disillusioned and cynical and come out wanting to help. q Question: It looks like learning is not always fully appreciated in the moment, but when the experience is shared, it gives everyone something to build on. Is this true? [Refinery Maintenance Supervisor]: There was a lot of griping about it, but everyone got something out of it, even though they didnt realize it. Playing the game certainly made everyone realize that there was more to it than what happened in front of them every day. Many hourly workers Felt they already Practiced what the Game preached [Refinery Operator]: The idea of the Manufacturing Game was to show you that only a few people take care of equipment. But hourly workers have always worked for perfection and to fix things that needed to be fixed. When you have to play a game that tells you what youve been telling management for years, its like rubbing your nose in it. A lot of company people said, This is great. I guess they are the ones that should play the game. Question: What would the value be to an ongoing process of using the Game as a practice field, with everyone getting to play new scenarios, to build insights and try experiments in accelerated time? Who should have multiple experiences? [Refinery Maintenance Worker]: The Manufacturing Game is like this: You teach someone how to play bridge and then you play one game. Then, you never play another game and everybody says, Well, you know how to play bridge. I dont think thats the object. You dont want to learn how to play the game, you want to learn how to make it work.
22. 22. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 13 And that it Should have focused on other issues, including manpower. For instance, the game focused too much on mechanical defects. We did not apply the game concept to manpower and trainingand these are defects that can cause big trouble. There is an unfortunate mindset that ignores problems if they dont move oil, but if a gauging system goes down and the area specialist is gonehey, Id still be working on it because I dont work out there. But looking back, Most agree That the game helped start The improvement process. qq Question: What was it about the game that caused this? [Refinery Operations Supervisor]: It was later, when we started progressing with the CI Forum and action teams that we looked back on the board game and thought, This is what they meant. The Manufacturing Game was the beginning of a thought process that grew in impact. [Refinery Maintenance Supervisor]: Having been involved with preventive maintenance activities for my entire career, the game was a dream come true. Top management support for a program centered on a proactive approach to problem solving was wonderful. Prior to the implementation of this program, we did experience success, but infrequently and with much greater effort. The game made improvements much easier to accomplish because, in a short period of time, there was a common desire to achieve improvement goals. People began to Reevaluate typical Business practices, [Refinery Maintenance Supervisor]: People began recognizing that defects came in with equipment we werent generating defects, we were buying them. So people started looking closer at what we were buying and reevaluating the lowest bid philosophy. [Refinery Maintenance Supervisor]: Im not a great game guyit opened management eyes more than workers. But I give it credit for helping people be more conscious of the budget, especially during the Town Hall meeting where they broke it down and you talked about the costs of each job.
23. 23. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 14 qq Town Hall Meetings: The site manager held quarterly Town Hall Meetings to review major issues including refinery financial information, productivity, and Health/Safety/Environmental statistics. Town Hall Meetings included a sit-down lunch for 2-300 employees in the Refinery Recreation Hall. Various managers and supervisors presented important information. Question & Answer sessions allowed employees to ask and receive answers from top refinery management regarding critical issues. Especially through their work on the action teams [Refinery Change Manager]: The game did have a cause and effect impact on root cause analysis. Some contractors came to maintenance and pointed out a problem with some pipethere was a one inch groove in the bottom. Maintenance took an extra effort to look at this from a design standpoint. Instead of simply replacing the pipe, they changed its diameter to reduce turbulence. This is a success story, just like the butane story, but one that wasnt publicized as much. It happened invisibly due to the influence of the game. That were formed as part of the game workshops. [Refinery Change Manager]: As an outcome of the workshop, we immediately did real work. We formed action teams on the second part of the second day and worked on a real problem. q Action Teams: Action Teams were formed during the second day of the Manufacturing Game session. The goal for each team was to apply learning from the game by identifying and addressing a particular defect problem in their area. The number of teams grew in relation to the number of game sessions. The Action Teams enjoyed a great deal of freedom to prioritize problems and they received financial support as needed. Clearly, The Manufacturing Game Was an important tool for focusing everyone on a new improvement agenda. [Refinery Maintenance Supervisor]: The Manufacturing Game was a tool that [Refinery Manager] used to focus everyone on what our targets and objectives should be. It was just common sensefixing things right the first time and taking time to do it. [Refinery Maintenance Worker]: The game helped by getting everybody together to recognize the problems that we had. People practiced Simply working together, And over time, [Refinery Training Supervisor]: the game breaks down status. I made sure that an hourly maintenance guy sat in operations or that an engineer sat in maintenance. They focused on the game and let all the other stuff go. They simply worked together.
24. 24. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 15 Sharpened the vision of what they wanted to create. qq Question: The game and accompanying action team sessions grappled with issues of how and why people learn and improve. How does your organization address these questions? [Outside Consultant]: Over the course of many sessions, the focus shifted from problems to results and each time more good results were covered. People were creating a shared vision and the presentations by [Refinery Manager] and [Refinery Maintenance Manager] were sharpening the picture of what people wanted to create.
25. 25. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 16 Chapter Two: The Sailors Learned to Sail the Seven Seas 2.3 The Ship Sailed Beneath One Banner: Dont Just Fix It, Improve It! Dont Just Fix It, Improve It, was the slogan that became a plant wide model for proactive maintenance and manufacturing. The slogan was formally introduced in 1995 as part of the program to reduce the expense of equipment defects and failure rates. Reducing mean time between failure rates for refining equipment was an important measurable outcome, but the slogan was just as important in supporting a mental model for how to conduct business in all parts of the refinery operation. Throughout 1995, dozens of action teams worked independently on Improve it projects. Many success stories contributed to measurable improvements throughout the refinery, and the butane action team story painted a clear picture for an internal and external audience of what it was possible to accomplish.
26. 26. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 17 Three simple decision rules that will create proactivity, if understood and promoted in every decision, every day, by everyone The old rules (formerly driving reactive behavior) were more like: dont fix it if it aint broke dont spend any money its not my job it! Dont just fix it, improve it! Dont Just Fix It, Improve It, was a simple message that applied to everything. [Refinery Maintenance Manager]: Dont Just Fix It, Improve It, was a simple consistent message that applied to virtually everything. We were not just talking about pumps, but our other organizational and management decisions. At the time, we did not realize it, but it became our policy. And what an easy to remember policy it was! [Refinery Maintenance Manager]: [Midwest State System Manager] was new to refining and he could cope with a problem happening, but his question was always, What are you doing so that this wont happen again? [Midwest State System Manager] was the first person I heard use the expression, Dont Just Fix It, Improve It.
27. 27. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 18 It was easy to sell Because it emphasized craftsmanship [Refinery Maintenance Worker]: Dont Just Fix It, Improve It, was a good thing. It put a little more emphasis on the craftsman, to get their input to other people. They started to listen to what we really had to say. [Refinery Maintenance Supervisor]: I saw a lot more flexibility on the operations side. Dont Just Fix It, Improve It, was ingrained into everybodys head. If we were trying to do a rush job, the mechanics quickly pointed it out to us: Dont just fix it, improve it, huh? And better equipment. [Refinery Maintenance Worker]: People were definitely working differently. We were doing the same amount of work with fewer people. Our materials were better and we were working smarter. The message Became ingrained as everyone practiced it qq Question: It appears that change takes time. Does making this explicit (through a slogan) support progress? [Refinery Maintenance Supervisor]: The slogan became a reality when everyone repeated it. As an example, I evaluated 40 pieces of equipment and of those, 5-6 were in bad shape and had very high maintenance costs. My recommendation was to repair those first and budget for the rest on a priority basis over 2-3 years. However, when I presented this to my supervisor, he said, Lets do them all. This was how the proactive mindset worked. And management Invested the necessary resources. [Refinery Maintenance Supervisor]: Over three years, since installing air conditioning at a cost of $5,000 per shelter, we have gone from replacing eighteen control boards each year (at $4,000 each) to less than four last yearand weve had some very high temperatures. Management was willing to say, Nobody likes to spend money, but OK, youre convinced this is a problem, so spend. We did and we solved the problem and saved a lot of money. [Refinery Maintenance Worker]: There was a strong commitment to improving stuff. Training was always offered in areas where we lacked it or needed it, and we have some real nice equipment to use. The improvement concept has proved itself in our mean time between failure rates. As a result, People gained ownership, [Refinery Management Team Member]: The action teams felt they had the power to fix things and they were given money and authority to make changes.
28. 28. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 19 [Refinery Operations Supervisor]: To replace parts is easy. To improve you need investigation, new parts and capital. It costs more money, but [Refinery Manager] and [Refinery Maintenance Manager] were completely on board. If you could demonstrate improvement potential, they were glad to spend the money. Results improved, [Refinery Manager]: [Refinery Maintenance Manager] and I shared a philosophy that if you gave people adequate leash and the necessary tools and resources, you could get some very good results. And people worked together More effectively. [Refinery Maintenance Worker]: With cross-functional action teams, you tend to take ownership in the equipment you are working on. You develop a work history behind why it fails and you know what keeps it functioning. You also get familiar with the people who operate the equipment. Together, you structure the day and become more efficient at doing what you do. Managers came to view Maintenance work as skilled insurance (versus a necessary evil), [Refinery Management Team Member]: You had to change perception to realize that a maintenance guy is like having insurance. You would rather be paying him to sit and do nothing and then, you could take that time to train him and put him on an action team. An essential idea was not to break trust. If maintenance improved everything so it didnt break, we werent going to get rid of them. We would find something for them to do and we would develop skills that they didnt have because we had extra time for training. And hourly workers Changed their view of work to flexible problem solving. [Refinery Maintenance Supervisor]: Our objective was just common sense. We fixed things right the first time and took time to do it. Wed first look for a problem and then put team members together to address it. The idea was to solve the problem and then disband and go on to the next issue.
29. 29. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 20 qq Question: How do you measure the impact of changes in attitude on improvement? [Refinery Change Manager]: The oil and sewer team offers a good example of how completely some of the teams took ownership of problems and how independently they worked. They never had a meeting or wrote a report. In fact, we thought they were dead in the water. However, we noticed a 75% reduction in oil to the sewers. That saved us big dollars. How did this happen? They just did it with a proactive attitude. The message reinforced The importance of Pride in work, [Refinery Engineer]: With Dont Just Fix It, Improve It, the maintenance technicians had more pride in their jobs. They knew they were doing things right. And operators gained more trust in maintenance since things didnt break right away. [Refinery Operator]: Preventive maintenance is just basic stuff. When you determine that something is a problem, you need to follow through and repair it until you fix it properly. You need to stick with the problem. an attitude that was already present, [Refinery Operator]: Everybody wants to do a good job. The mind set has always been present. When the refinery runs good, we have a good day. When it doesnt, our day is hectic. You might be in the office, look out, see that the flare is up, and think, Boy, something must have broken down. But you go back to work. For the operator who is killing himself to keep it running, it is traumatic. But not always supported. [Refinery Operations Supervisor]: I like the Dont Just Fix It, Improve It piece of the program. This was an approach I recognized from twenty-five years ago as a helper on the unit. But at that time, an hourly person was supposed to do what they were told and stay within a box. [Union Officer]: The improvement attitude was always there for the craftsmen. If you go out and fix something you want to make sure things are running, but this does need to be reinforced with programs like Dont Just Fix It, Improve It.
30. 30. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 21 The slogan reinforced Managements commitment [Refinery Maintenance Worker]: Management finally turned around and said, Well, we are getting rid of the reactive way we do maintenance and go to a proactive approach. We knew that before. The only way to improve something is to maintain it. to plant-wide improvement, [Global Oil Manager]: The message was a shared vision that was very understandable to all employees. It allowed 500 employees to make correct decisions in the field and dramatically improve reliability. And helped everyone Experience early success, [Outside Consultant]: Early on, they had a big turn-around and these action teams, instead of working on pumps, had some pretty big impacts because they really caught on to the idea of defect elimination. This was the beginning of people starting to implement Dont Just Fix It, Improve It. Especially through the Butane action team story [Refinery Manager]: We were lucky to get the butane success story quickly. You could point to it and say, Thats what this is about. In addition, from the mechanics and operators point of view, a stupid thing had been going on far too long. Now, they finally had the opportunity and a way to change it. This reinforced the idea that management was committed to improvement. That proved They could achieve Significant monetary success. [Refinery Change Manager]: The butane story proved there could be success and the learning history helped because we were able to tell the story in an authentic way. The story became well known inside and outside the refinery and Global Oil. Everyone talked about it as an example of what could happen with this approach. q Butane Action Team: The Butane Action Team was formed during one of the early Manufacturing Game workshops. The team was initially asked to address human factors that management assumed were contributing to excessive flaring in the butane area. With support from the area team leader, the team decided to ignore their instructions and address the problem by focusing on hourly concerns about safety and equipment reliability. In a relatively short time, and with very modest investment, the team identified and resolved several equipment problems that resulted in annual savings of $1.5 million in reducing product weight loss. The Butane Story has been widely publicized through a Learning History on the actions of this team.
31. 31. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 22 In fact, There were many success stories That could have been told to demonstrate the real power of The simple message, Dont Just Fix It, Improve It qq Question: How important were action teams for making improvement concepts understandable and for achieving performance? And how important is it to publicize success stories? [Global Oil Manager]: Documenting and advertising success stories is clearly important. The butane story was a high profile story because of the $1.5 million savings. But there were dozens of others that meant a lot to people in their areas. In fact, these should have been more widely acknowledged. You have to get all the stories out or you wont get the participation and buy-in from the wider organization. qq Dont Just Fix It, Improve It and Mean Time Before Failure (MTBF) at Heartland In spite of the closure decision, pump MTBF and Planned Work continued to improve. Pump reliability increased by fivefold; costs dropped more than $1.5 million per year. Maintenance switched from reactive repair of breakdowns to proactive defect elimination and prevention with a focus on operational discipline. Our learning culture enabled us to continue improving in spite of a very difficult situation, eventually resulting in sale of the asset to North American Oil, a win-win-win for Global Oil, for North American Oil, and for the employees/community. Our learning culture enabled us to create a new future for Heartland Refinery 0 10 20 30 40 50 60 70 1992 1993 1994 1995 1996 1997 1998 1999 Year PumpMTBF(months) Chapter Two: the Sailors Learned to Sail the Seven Seas
32. 32. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 23 2.4 The Ships Officers Steered a New Coursethe Continuous Improvement Forum Dont Just Fix It, Improve It, spawned hundreds of individual and action team efforts to improve performance. While some were successful in measurable terms, many were not. Management recognized that a formal process for shared leadership and course-setting was needed to sustain this effort. Heartland management launched the Continuous Improvement Forum (CIF) in late 1995. As participants recall, the CIF was an innovative vehicle for sustaining improvement efforts and reinforcing passion and commitment for overall performance. The Heartland Refinery CI Forum was an organizational innovation designed to get the whole system into the room, including senior managers, supervisors and team leaders. Typically, 25 to 30 people attended, and meetings lasted for half a day to all day, depending on the agenda. In addition to a focus on performance goals and hard targets, systems thinking, visioning, learning histories, and productive conversation tools all found a place. An essential feature of the CI Forum was the focus on collective thinking and use of reflection to learn. The impetus to create the Forum came from two places. First, in the Manufacturing Game workshops it is a regular practice to stop the simulation after every five weeks of operation and review performance measures. The second motivation came from the Refinery manager who wanted a means to understand action team results, create a roadmap for the future, and create more alignment in his teams.
33. 33. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 24 Management established The continuous improvement forum to communicate what was important [Refinery Manager]: We established the CI Forum in late 1995 with about twenty-five people that could make things happen with responsibility and authority to spend money in the right places. We wanted everyone to understand what was important in terms of performance. We had the ideas, we had the workshops underway, and we had some measurable success in performance. But we still didnt have a clear articulation of what the overall improvement program really was about. We decided that we needed to have some kind of forum to make sure that everybody, from all the departments and teams, were on the same page. We wanted everyone to understand what was truly important in terms of performance. [Refinery Training Supervisor]: A group of us worked on where we were going. [Refinery Manager] said, This is what we have accomplished and this is where we want to go. People got onboard because they knew they were going somewhere. And formalize The path forward Around seven key Improvement issues. [Refinery Maintenance Manager]: We got a visit from [Global Oil Manager] who had been plant manager at Outback Refinery and we were telling him how we were doing things proactively. His question was, Where are you goingwhats your game plan? We had to say, Well, we dont really have one. He suggested we take a look at the road map they had developed and it was really from this conversation that the CIF developed around the effort to pull proactive manufacturing together plant-wide.
34. 34. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 25 q The Roadmap and Seven Key Issues: As noted by persons interviewed, the refinery roadmap identified measurable improvement goals and progress in seven important performance areas. The roadmap was not unique to Heartland. In fact, it was adapted from the roadmap of another Global refinery. The CI Forum quickly incorporated the roadmap as a primary strategic planning tool for persons and teams in all areas of the refinery. The CI Forum established benchmarks and goals for performance in the seven key areas over a five-year period. This challenging process involved critical self-analysis, aggressive target setting, and effective communication to convince others to buy-in to the program and make progress toward measurable objectives. In general, persons interviewed spoke more about the participatory structure of the forum and the importance of open dialogue in achieving objectives. However, the importance of connecting continuous improvement to measurable goals should not be ignored. Just like the Dont Just Fix It, Improve It! slogan, the Progress Roadmap was widely circulated and used to measure personal and team progress through the improvement effort. Heartland Refinery: Key Issues and Improvement Roadmap Key Issue 1995 1997 1997 CIF Average 2000 Rating Target Rating Range Target 1. Leadership 1.0 3.1 2.5 1.0 5.0 4.6 2. Personal Commitment/ 1.1 2.8 2.4 1.0 5.0 4.2 Team Participation 3. Customer Focus 0.8 2.8 2.0 1.0 3.9 4.1 4. Supplier Relations 0.8 2.7 1.9 0.5 4.0 4.3 5. Standardization, Control 0.8 2.6 1.8 0.5 4.0 4.3 & Capability 6. Communication & 0.6 2.6 1.8 1.0 4.4 4.5 Performance Reporting 7. Strategic Integration of 0.5 2.8 2.6 0.0 5.0 4.5 Improvement in Refinery qq Question: Was the incorporation of the Roadmap luck, or did this result from a willingness to learn from others? [Refinery Manager]: We didnt invent the seven key issues and the road map. We adopted and adapted to them. We looked at them and they made a lot of sense because they incorporated just about everything that we could think of that we needed to address. We looked at the roadmap and did a gap analysis between where we were and where we wanted to be. Then we laid out action items for the next five years, but we focused on the next year. [Refinery Management Team Member]: The CI Forum focused everyone on the seven key issues that we defined as critical for the plant. We wanted to see how we could implement those within the facility.
35. 35. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 26 [Refinery Management Team Member]: The CI Forum allowed us to come back and ask, OK, what are the issues? What do we need to keep pushing? The CI Forum constantly refocused our attention on looking for new opportunities to improve. It was important that senior managers did not dominate because it supported consensus and ownership. [Refinery Manager]: We did lay out an agenda that summarized the progress toward the goals that we were trying to make happen. But this was just to provide a topic for discussion and we had a lot of discussion about the topic. Some meetings lasted three to four hours and didnt really resolve anything. Those were frustrating, but they had to be that way, because over time, we were able to achieve close to universal agreement about the five year targets that we established for hydrocarbon loss, safety, and other important measurements. There wasnt anybody on the management team that could say that the refinery was headed in a direction that they didnt agree with or have a say in. They understood where we were going and why we were doing it. The forum steered improvement in a clear direction, [Global Oil Manager]: The formation of the CIF established a formal process for keeping the improvement process going and keeping it in the forefront for all employees. For example, the forum used the bug symbol and a newsletter to communicate with everyone. [Refinery Manager]: We were after the total refinery operation and the roadmap provided a good articulation of what our program was and where we wanted to go over five years. I dont think there were any key refinery issues that we didnt address. We assigned champions to each issue and they were folks that could make a difference.
36. 36. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 27 identified roles for managers, [Refinery Management Team Member]: The forum involved most of the people in charge of different areas and held them accountable. We were going to go forward and everyone knew his or her role in the process. looked for new opportunities, [[Refinery Operations Supervisor]: The CIF looked for ways to maximize efficiencies and opportunities. I really enjoyed the meetings. I went to a lot of them on my days off. and communicated a participatory attitude to the entire workforce. [Global Oil Manager]: Everyone that participated in the CI Forum had the [Refinery Manager] to you attitude that really emphasized direct communication about all the issues. By having that, you could take the message back to people in your area and could communicate with everyone. [Refinery Manager]: Throughout Global Oil, people have team meetings, but they are not as representative of the whole organization. Other sites do not go as deep across the system as we did with the CI Forum. And they do not operate as much like a forum where everyone is encouraged to participate.
37. 37. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 28 Chapter Two: The Sailors Learned to Sail the Seven Seas 2.5 The Officers and Crew Practiced Essential Skills They Listened and Communicated As early as the first Manufacturing Game session, reflection sessions (on the second day of the program) provided a place for everyone to practice listening and communicating. This effort and the introduction of new communication technology had a significant impact on performance. Both initiatives helped the officers and crew collaborate to achieve higher performance. Perhaps, it all started with listening. [Refinery Maintenance Supervisor]: Management started listening. Some of that came from the Game and some is just so simple. I'm just talking about, Oh, this grinding wheel isnt quite as good as the one I saw at the show last weekwhy dont you buy one? And you say, OK, Ill do that. You invest a few hundred dollars and show that you are listening and that you will take someones ideas and put them to work. When management listens to workers in small ways, they will come up with more ideas, knowing they have a chance to put them into play. That is the basis of trust. Senior managers were willing to listen until it hurt. [Refinery Maintenance Manager]: After the game was over I asked the union people what they thought about it and they said, Hey, this is what weve been telling you for years. My response was, Well, were finally gonna listen to you. The game provided a mechanism for communicating across the entire organizationthat was its biggest contribution. [Outside Consultant]: The January 1995 workshop was the toughest we had. [Refinery Training Supervisor] invited all of the most disgruntled people in the refinery because he was trying to make sure that [Refinery Manager] got a good understanding of what the big issues were. People were really tough on [Refinery Manager] but he handled it very well. He didnt turn defensive.
38. 38. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 29 They listened to frustration, [Refinery Training Supervisor]: I put [Refinery Manager] together with some very vocal guys. They chewed him and he didnt say a word. Usually all the moaning gets sanitized and all the top man hears is that there are problems but they are being worked on. This time, [Refinery Manager] heard directly from the front-line workers and he became more receptiveit was the listening and understanding that made the difference. tough criticism, [Refinery Operator]: We do not need a gamewe know the worth of improvement. Just explain clearly what you expect from us and let us explain what we expect from you and lets get together. That is all we need to do. [Refinery Operator]: The game was a joke, but it had a section where you could vent your frustrations and [Refinery Manager] and [Refinery Maintenance Manager] were there and had to take it, and that was good. and ideas for change. [Refinery Operations Supervisor]: The reflection sessions allowed people to be heard and listened to. In the past, good ideas ended up in a black holeall of a sudden, people started to see results. [Refinery Management Team Member]: Our training sessions were really communication sessions. People can perform when they understand what to expect. Managers encouraged employees to experiment with their ideas. [Refinery Operator]: The butane action team was a spin off from a Manufacturing Game session. Everybody participated and listened to each other, and like the story says, we saved Global Oil $1.5 million per year for a $15- 20,000 item. There were two parts to this story: the hourly guys made the success happen and the head of the team listened. [Refinery Operator]: The best thing we have ever done is open up planning meetings and bring in some of the people that work with equipment. If you include people that work in the field it really benefits the company. You cant just install something. You need to identify the needs of the people that are running the equipment.
39. 39. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 30 Hourly participation also improved with new technology including [Refinery Operator]: The E-mail digest, info bulletins and all new communications were real good things. Before, you would have to write a note and put it in inter-office mail, but it would take two days to get a response. With E-mail, a response can be five minutes and you can tell a lot more people what is going on. the PI system, [Refinery Engineer]: The PI system allows everybody to access all the manufacturing parameters so that more people will see process changes and inform others if they see a change that should not have occurred. info-bulletins [Refinery Management Team Member]: The info-bulletin is another way to communicate with everyone. Everybody gets used to seeing it and it becomes ingrained over time. and e-Mail. [Refinery Operator]: Having a lot of PCs installed, having everybody on e-mail and information bulletinsall these things together improved communications. They helped everybody feel that they knew what was going on and were part of what was happening. q The Impact of Improved Communications/Technology: Communication improved following reengineering and the establishment of daily cross-functional production meetings and regular area team meetings. q In 1995, the PI (Process Information) System was introduced. PI is a computer software program that stores, analyzes, and displays vast amounts of process data, and most important, makes that data available in less than five minutes (compared with one day for the previous system). The new system dramatically improved the quality and availability of process data available to a wide range of refinery employees. q In 1996, personal e-mail accounts were provided to all hourly employees, giving everyone in the refinery access to electronic communication. As needed, special Info Bulletins were quickly developed and distributed via e-mail, especially regarding rapidly developing sale/closure issues. Direct communication contributed to more collaborative relationships [Refinery Engineer]: People need to understand exactly whats going on, whats important and what makes money and what doesnt. These issues need to be communicated directly from the top dogs mouth so that people know there is commitment. This was something [Refinery Manager] accomplished through his participation in game sessions and Town Hall meetings.
40. 40. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 31 and a higher level of trust. qq Question: just how important is trust in a change effort? [Refinery Management Team Member]: What we tried to do was establish a more collaborative working relationship with the union and start really discussing ways to improve refinery performance. We would go off-site with the union committee to educate each other on business and union issues. It was an open dialogue and a way to start establishing communications.
41. 41. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 32 Chapter Three: Everyone Got Onboard and Sailed Together-- Personal Commitment Was Crucial For Success When the learning history was commissioned, some persons in the organization expressed a hypothesis that personal transformation was an important part of the overall improvement process. The learning history interviews did not provide evidence to confirm or disconfirm this. We asked people to talk about the notable events in the story of the Heartland Refinery. When we asked people to talk about what happened in the area of personal change, they emphasized shared public expressions of behavior change. These included: (3.1) taking risks, (3.2) seriousness of purpose, and (3.3) the shared commitment that resulted from taking time to build a constructive dialogue among all employees.
42. 42. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 33 Chapter Three: Everyone Got Onboard and Sailed Together Personal Commitment Was Crucial for Success 3.1 Everyone Onboard Took Risks With New Behaviors You cant expect to move forward without taking risks, is an important lesson that Heartland managers and workers internalized and practiced. Heartland managers and hourly personnel affirm [Refinery Manager] for his willingness to let go of control and live with the perception that he was a weak leader. In addition, they recognize a number of individuals for acts of courage that helped change behavior and move the organization toward higher performance. The plant manager understood the importance of encouraging people to take risks. [Global Oil Senior Manager]: The trick is beating down the barriers that separate people and demonstrating the rewards of taking risks in terms of communicating how they feel and wanting to help each other, rather than seeking personal praise and benefits. Heartland was successful in taking people from an individual to a team level because [Refinery Manager] was very good at this. He is a servant leader who constantly draws attention away from him to others. [Refinery Maintenance Supervisor]: [Refinery Manager] had one of the biggest effects on performance. He allowed people to take risks without the danger of being censured if it didnt work as expected. You cant expect to move forward without taking risks. Although he received criticism for lacking authority [Refinery Maintenance Manager]: Our senior management were perceived as lacking leadership because we werent in everybodys face all the time telling them what to do. In the long run, forcing the organization to step up to the plate, giving area teams authority and resources to make and implement decisions, this was a major contribution to the organizations accepting ownership for refinery performance.
43. 43. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 34 he wanted people to take responsibility [Refinery Management Team Member]: [Refinery Manager] is not one who is going to go out and figure out how to run the Cat Cracker. However, if you need something for the Cat he is going to try and round up the troops and resources so you can fix it. He was always out in front saying, We need to fix this guyshow can we do it best? and he supported them. [Refinery Operations Supervisor]: [Refinery Managers] role was to make sure that something was being done, not to solve the problem. qq Question: Did this approach change behavior from finding fault to seeking greater responsibility? [Refinery Maintenance Supervisor]: The impact on behavior was widespread. When we had an incident, like the instrument freeze-up, we didnt look for whose fault it was. We looked for ways to make sure it didnt happen again. Other places I have been, it was a lot easier to pin the blame on someone than to fix the problem. [Refinery Management Team Member]: Management had to learn to let go and the workforce had to learn not to just sit back. We had to move from, Gee, they didnt ask me to be on an action team, to Well, you dont have to be asked: Call the team and tell them you want to be on it. As part of the upward feedback process in performance assessment, Global Oil Oil made it mandatory and put this requirement in its communications with Heartland Refinery. We said to ourselves, No, thats not the way we operate in our culture. We promoted it in light of continuous improvement and the team environment, but did not mandate it. Every eligible employee participated. A variety of individuals also took risks at key moments, qq Question: How often do we think of taking risks within our organization? [Outside Consultant]: The role that the training manager played was powerful. He was willing to do some things because of his years as a union officer that I think is unusual in an organizational change effort. Some of the things he did, like getting all the union guys to show up with the plant manager, I dont think many people would have the courage to do that.
44. 44. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 35 in an effort to build real understanding, [Refinery Training Supervisor]: To be honest, I set [Refinery Manager] up. In January 1995, I invited him to play the game. I picked some guys to participate who were very vocal because I thought [Refinery Manager] was getting a sanitized version of our situation and the dissatisfaction levels in the plant. The hourly guys really told him how they felt. Some of it was right and some of it was not, but at least he understood how they felt. passion for improvement. [Refinery Manager]: [Refinery Change Manager], [Outside Consultant], and [Refinery Training Supervisor] pushed very hard all the time. They pushed us farther and at a very rapid speed and did not let [Refinery Maintenance Manager], me or anybody set higher priorities. We all adopted their passion for improvement as a way to move the organization in the right direction. The plant manager was even willing to share his fears with everyone. [Refinery Change Manager]: [Refinery Management Team Member] asked, Is this plant safe to work in? At that point, [Refinery Manager] opened up and made some very honest comments to the group. He said, Whenever I hear a steam vent release or boom, I wake up in the middle of the night sweating. I dont know if its safe either. Is it? He let that hang in the middle of the room with these angry union people, engineers and others. This was a big turning point because honesty about current reality became an important issue. Breakthrough performance simply could not have happened without this openness. [Refinery Change Manager]: Lee Solomon, the industry consultant who does refinery benchmarking, has said that the number one factor that makes a pacesetter asset is that you need a maverick at the top. You need someone who is willing to take risks. We had that in our senior managers. Without them, its hard to imagine that this would have happened.
45. 45. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 36 Chapter Three: Everyone Got Onboard and Sailed Together Personal Commitment Was Crucial for Success 3.2 The Ships Officers Demonstrated Seriousness of Purpose Senior managers at Heartland consistently demonstrated their commitment to people, shared responsibility and the Heartland Refinery. They proved they were serious about change through significant commitments of personal time, direct communication with employees and direct support for employee ideas. Their efforts helped build an organization that was willing to learn and benefit from the workforces already existing pride and sense of community. Seriousness of purpose by senior managers was a key ingredient. [Global Oil Senior Manager]: Success began with the commitment of [Refinery Manager] and [Refinery Maintenance Manager] to the process. Without their leadership and desire to improve the operation, nothing could have happened. Having [Refinery Change Manager] around helped themhe gave himself completely to the process and was a zealot in the best sense. The key was simply the realization by senior refinery managers, and with support from [Midwest State System Manager], that this was the way to achieve sustainable results. [Refinery Management Team Member]: [Refinery Manager] took everything seriously. It was really in his heart to do it, not something that someone from London said was the flavor of the day. This included a desire for input from all parts of the organization. [Refinery Training Supervisor]: [Refinery Manager] came to almost every Manufacturing Game and reflection session. He and [Refinery Maintenance Manager] listened to what people had to say. The people wanted to be listened to and respected. They wanted to give suggestions and have input. If you are really listening, you cant just sit there and listen forever. You have to do something. That is what really counts. The plant managers leadership style was important. [Outside Consultant]: [Refinery Manager] is probably the best plant manager I have met. He works with people and understands people. Yet he does not let that weight his decisions for the plantif he has to make an unpopular decision, he will.
46. 46. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 37 [Refinery Management Team Member]: We were fortunate that [Refinery Manager] was here a long time for a refinery manager. That helped give people confidence and build trust. He communicated directly, [Refinery Maintenance Worker]: [Refinery Manager] explains what he wants and you see the follow-up. We had Town Hall meetings quite often and I felt confident he was telling the truth. At a steak fry, he is talking with you and laughing. He is not standoffishhe is in with the work force. [Refinery Maintenance Supervisor]: [Refinery Manager] is a coach. He is very fair and consistent. He has the ability to understand that people have value. If you came to him with an idea and you had it well thought out, he would give you the thumbs up and support you monetarily. and encouraged shared decision-making. [Refinery Management Team Member]: [Refinery Managers] management style is that he wants you to make decisions. Early on, he actually got criticized for this, but he prevailed because people understood that they had authority to do what needed to be done. In 1995, we needed to take some shut down time. I got a meeting of the appropriate people together and then, [Refinery Manager] wasnt able to attend. I asked him, Do you want me to change the meeting date? He said, You guys go ahead. If there are any issues that you cant resolve, just let me know and I will resolve them. At the end of the meeting, the commercial representative said, I cant imagine doing this at another refinery. But this was typical of what we did. Some suggest that the change in leadership began with an earlier plant manager [Refinery Maintenance Supervisor]: The most meaningful event is not on your list: [Midwest State System Manager] having employees up for lunch. [Midwest State System Manager] would call me up (I was a shop supervisor at the time) and say, I want so many people today or tomorrow for lunch. So I would go and shop around for people. At the beginning, nobody wanted to go. They thought it was another management thing, but [Midwest State System Manager] really listened to them and they could see results from their suggestions. It was like the CI Forum happening before improvement started.
47. 47. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 38 [Refinery Management Team Member]: [Midwest State System Manager] won a lot of little battles and this helped employees pick up a notch on performance because they knew there was somebody who would take the story back and show Global Oil what we were doing. even though the organization did not want to listen. [Refinery Maintenance Worker]: [Midwest State System Manager] wanted to hear what we had to say. He listened and took it seriously. I think he resigned because he took a lot of what he got on the grass roots level and tried to take it higher up where they didnt want to hear what was going on. At Heartland, senior managers demonstrated their commitment every day. [Refinery Engineer]: Direct support from upper management for all the issues that people had been pointing out over a number of years was the major driver of continuous improvementit was that simple. [Refinery Maintenance Manager]: The continued time commitment of the senior guys, as part of the Manufacturing Game sessions and through the CI Forum, made a huge difference. [Outside Consultant]: The biggest challenge we had is that the bulk of the employees had to witness that this kind of program was sincerely believed in and supported by leadership from the top. qq Question: Was managements leadership approach essential or was it an added benefit? [Refinery Management Team Member]: [Refinery Manager] and [Refinery Maintenance Manager] proved that they were serious by two things. One, you had to go. And two, they gave up their time to go to all of these sessions. They proved that they were serious and that was important stuff. This provided evidence of the organizations willingness to change, [Outside Consultant]: There really was not a change in knowing what to do. The real change was in the organization being willing to do it. This is more of a behavior kind of change. I think [Refinery Maintenance Manager] was very impressed with that and that he noticed some difference in how people down in the shop felt about this issue. The mechanics felt like, Oh, management is finally committed to doing some right stuff.
48. 48. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 39 in a way that embraced the workforces pride [Refinery Operator]: A bunch of proud people that work here have made success happen. We knew we were always doing a good job, regardless of how the bean counters put Heartlands performance in perspective. [Refinery Management Team Member]: We shouldnt forget that our union and hourly people are good conscientious folks who bought into this process. That really helped in all the agreements and efforts to improve performance. and powerful sense of community. [Refinery Operator]: Most people really care. That is what has made continuous improvement work. Their fathers and grandfathers worked here, and front line managers and operators went to school together. There is an unbelievable sense of community pride.
49. 49. A Voyage Beyond the Horizon and Back Houshower 07/01/99, 40 Chapter Three: Everyone Got Onboard and Sailed Together Personal Commitment Was Crucial for Success 3.3 The Crew Discovered that Teamwork Requires Shared Commitment Teamwork is a desirable component of improvement for all organizations. To an extent, Heartland built teamwork on the foundation of a strong local culture that emphasized faith, family and work ethic and on the structural innovations of the reengineering effort, like area and cross-functional action teams. The Continuous Improvement Forum was also organized as a cross-functional team for managers. In addition, Heartland Refinery personnel discovered that teamwork takes on a new and more powerful meaning when built on the cornerstone of shared commitment. Commitment is not something that arises naturally out of working at the same refinery. It must be developed and nurtured through the practice of building a constructive dialogue with others. Effective teamwork requires significant energy and involvement. [Refinery Maintenance Supervisor]: Our success comes back to teamwork. There is no single entity out here. People share here and even with other refineries. We are willing to send people to help and we are willing to learn. A good example is that I insist that my technicians, anytime they work on an analyzer, make sure that the operators who use the equipment know that they worked on it and ask t