Overcome Corporate Amnesia & Remember How to Run a Business

Overcome Corporate Amnesia & Remember How to Run a Business

The demographic of our global workforce is dramatically changing. As Baby Boomers (people born from 1946-1964) begin to retire in the coming years in droves, the younger generations are starting to make up large portions of our workface. Approximately 10,000 people that fit into this bracket turn 65 each day – and it doesn’t take a mathematician to deduce that the current labor participation rate is diminishing rapidly. This trend will continue to do so until about 2030.

 

By then, 75 percent of the American workforce is expected to be made up of Millennials, according to the U.S. Bureau of Labor Statistics. Similar figures are echoed round the world. For asset intensive industries and manufacturers, this is a daunting prospect. ‘Corporate amnesia’ – the symptom where an organization forgets how to run its business due to layoffs or attrition of highly skilled and experienced people - is a very real conundrum in a sector with comparatively high tenure rates. It’s feared that a vacuum of knowledge, information and critical expertise is expected to be left behind as more and more stalwarts hang up their boots. While it’s true that there isn’t  enough time left for traditional knowledge management and transfer through shadowing and succession plans; there is time to tackle the generational shift head-on with innovative transitional frameworks.

This means leveraging the joint knowledge and skillsets of both veteran engineers and younger professionals. Before I go into the vital changes that need to be made to avoid it, it’s important to assess some of the stereotypes that have infiltrated common thinking. Veteran engineers and technicians are hailed as having astute, far-reaching knowledge of operations and procedures, equipment and the minutiae of machinery. Younger generations, on the other hand, are thought to be audaciously tech savvy; they’ve grown up around technology and have an affinity with digital applications.

"The impact of the workforce turnover was very significant. The organization couldn’t duplicate the past high level of performance for plant change overs where we were able to complete a planned outage in minimum time. We saw our Equipment Effectiveness decline by more then 20% and it started impacting our downstream customers."

However, rather than being viewed as a gulf of disparate skills and talents, both groups bring important attributes to the table.

A far greater worry for manufacturers should be the failure to standardize and document practices and procedures in a timely manner. This is prohibiting many organizations from sustaining performance – and profits. The spectre of corporate amnesia should be used as a wake-up call. Mindsets need to be transformed and new tools leveraged; past heritage, knowledge and wisdom can be still be passed down, and combined with new, highly digitalized approaches. If the nous of older workers can be bottled up in digital models and passed on before they leave, I believe the global heavy industries’ workforce has great potential. To get more of an idea of what this might be like in real terms, let’s take a look at how a petro-chemical company embraced the generational challenge. With a facility in the Gulf Coast of Texas, this organization was operating with less than a third of its experienced team remaining. Maintenance and reliability programs have to be at the core of any business of this kind.


And yet, in this facility, reliability efforts had waxed and waned over the years. They’d been given high priority, then low priority; this rollercoaster scenario was reflected in business results. On investigation, the scope selection process for routine activities performed during outages was merely subjective. Less than 20 percent of the asset base had been assessed for criticality. Criticality assessments are used to classify all equipment and identify specific plant equipment that will result in unacceptable safety, environmental, production or simply financial losses. Not knowing exactly which equipment was objectively critical was costing this facility dearly as the work was not prioritized and scheduled on relative risk. Moreover, there was a lack of data recording, failure histories, contingencies and detailed maintenance plans. Any incoming staff would, in effect, be working blind.

Fast-forward several months

With the help of experienced consultants, the highly knowledgeable ‘old-timers’ and tech-savvy millennials triumphed together by creating an accelerating digital model. Moving the focus from preventative maintenance to reliability-centred. For instance, the team uploaded detailed strategies to mitigate failure risks for hundreds of highly critical pieces of equipment to the CMMS (Computerised Maintenance Management System) – representing another 10+ percent of critical equipment. Significantly, this equipment wasn’t even deemed critical a few months ago. The differentiator here is that without digital models, this would have taken a team of three or four full-time equivalents a few years to carry out. Subsequently, they identified the top 100 common components identified in those systems on the critical list. The younger employees then created digital models of these and simulated risks associated with the most credible failure modes. These comprehensive templates became the building blocks used to assemble long-term equipment strategies and standardized work packages. Digital models can allow transformations to happen within weeks, not years. And that’s the gamechanger. Essentially, they’d created an accelerated reliability model together. This dynamic strategic approach is set to yield significant reductions in operating costs, while increasing plant availability and forecasting accuracy.

The rollout of the new, improved maintenance plans was supported by an eLearning platform -spearheaded by the younger workers. Encapsulating the available experience created a sustainable path for continuous improvement, learning and training for the business. Corporate amnesia can be erased by quickly adapting and finding effective ways to support the new teams, and allowing them to learn from the experience of predecessors – rather than feeling alienated. Likewise, the older, outgoing workforce needs to value what Millennials have to offer. More importantly, failure to standardize and document operating practices and procedures is putting the sustainable performance of many organizations in the heavy industries in jeopardy. To overcome corporate amnesia, businesses need to create transition frameworks that lay the foundations for digital dependant cohorts, as they become professionals in industries built and bolstered by previous generations. If manufacturers can learn from the past, rather than forget about it – the good and the bad – then they can maintain focus on the rewards ahead.

About

Joy Singh, Senior Consultant

Joy Singh is a senior consultant with T.A. Cook in North America. He has over 10 years of experience in a wide variety of industries. Joy currently provides consulting services for asset-intensive businesses in the refining and chemical processing industry. His work supports his clients in organizational development, leadership training, maintenance optimization, planning and scheduling, work execution and operational excellence.

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