SMRP Body of Knowledge: Chapter 1 Business & Management PDF

1.0 Business & Management Translate business goals into maintenance and reliability goals that support an organization’s business goals. 1.1 Create Strategic Direction and Plan for M&R Operation Maintenance and reliability leaders create a vision and a mission as well as a strategic plan, to gui...

1.0 Business & Management Translate business goals into maintenance and reliability goals that support an organization’s business goals. 1.1 Create Strategic Direction and Plan for M&R Operation Maintenance and reliability leaders create a vision and a mission as well as a strategic plan, to guide implementation of appropriate maintenance and reliability systems and processes, in order to achieve organizational business goals. The strategic plan provides a clear purpose (a demonstrated business need), defined goals and, in turn, benefits to the organization. Goals should be clear, measurable and established in a top-down (cascading) manner. Maintenance and reliability leaders utilize their knowledge of industry benchmarks to assist in establishing these goals, provide a measurement system, and determine gaps in their maintenance and reliability processes. It is important for operations, maintenance, and other involved disciplines to agree on the goals and the measures used to quantify them. Equally important is an understanding of everyone’s role in the strategic plan and the responsibilities they have. Routine review and discussion of progress will provide team commitment and allow for periodic adjustments to the plan that may be required. 1.1.1 Concepts Understand the organization’s business goals Understand current maintenance and reliability capabilities Understand “the gap” between current capabilities and stated goals Understand risk and culture Establish a vision, mission, and strategic plan Establish clear and measurable goals Strategic plan and goals needs to align with and support overall business goals Strategic plan and goals must be understood and supported by operations, maintenance, and other involved stakeholders 1.1.2 Tools 1.1.2.1 Reporting Systems Page 4 of 149  1.1.2.2 Strategic Planning Tools Balanced Scorecard Key Performance Indicators (KPI) SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) Risk analysis OEE (Overall Equipment Effectiveness) 1.1.2.3 Cost Concepts ROI (return on Investment) NPV (Net Present Value) 1.1.2.4 Benchmarking 1.1.3 Processes Create vision, mission, and strategic plan to support organizational business goals Develop a business case for change Develop cascading goals Benchmarking Reliability and Maintenance assessments Leading and lagging KPIs Gap assessment Develop roles and responsibilities 1.1.3.1 Definitions Mission Vision Strategic plan 1.2 Administer Strategic Plan To obtain the support and resources required to implement the strategic plan, a solid business case should be developed that specifies the benefits in financial terms and operational risk mitigation. The business case should include an understanding of the changes that will be required to the organization structure, personnel, roles and responsibilities, tools and training, and priorities. Page 5 of 149 Support for the resource requirements will be enhanced when management understands the value provided by the plan. Maintenance and reliability leaders should communicate this vision to those with a stake in the process to garner commitment to implementation and execution of the plan. This requires champions positioned to lead the effort and enlist support of customers, stakeholders and staff. 1.2.1 Concepts 1.2.1.1 Understand the Vision, Mission, and Strategic Plan 1.2.1.1.1 Vision A vision statement describes a future state of a venture in both short and long terms. Intervals of two to five to ten years are common. Vision statements focus on tomorrow and what the venture would like to become. The language often is in present tense as if the vision had been achieved. 1.2.1.1.2 Mission This is the plan for how you will achieve your vision. Your mission is a call to action. Some reference to a business model would be appropriate. You need not include every detail, which would only handcuff you later. Nonetheless, it is through your mission statement that people will be able to understand how they are going to share your vision with you. 1.2.1.1.3 Strategic Plan This is a document used to communicate with the organization. You’ll need to inform the team with the organization’s goals, the actions needed to achieve those goals and all the other critical elements developed during the planning exercise. Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomes/results, and assess and adjust the organization's direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning Page 6 of 149  articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful. 1.2.1.2. Understand the Business Case and Benefits to Stakeholders We define a business case as a well-reasoned argument designed to convince an audience of the benefits of an investment, while educating them about the changes, costs, and risks that will be part of the effort. The goal of your business case is to inform key stakeholders about the initiative and convince them to support it in some specific ways. A complete business case is a package of information, analysis, and recommendations. It includes a plain language statement of the problem to be solved, with key data to illustrate its significance, as well as its severity and complexity. It also identifies customers and other stakeholders and how they are affected by the problem. The case clearly states assumptions, estimates, and other weaknesses in your underlying data. It presents the options available to the decision maker, comparing features, costs and benefits, and stakeholder impacts for each option. The case concludes with a recommended course of action and a justification that presents its strengths and weaknesses. The business case package includes a variety of presentations, both oral and written, with supporting media such as handouts, slides, or demonstrations. Your business case distills weeks or months of work. You need to be armed with all the data, but you will also need to present your findings and recommendations in a cogent, convincing and interesting way. The best analysis can be entirely misunderstood if the presentation is disorganized, overly technical, or too mired in detail. Decide what the key points are and build your presentation around them. You can always add detail in response to questions. 1.2.1.3 Identify Champion(s) to Lead Implementation of the Strategic Plan A significant factor in the success of projects is the Champion. A champion is an individual who identifies with a new development (whether or not he made it) and uses all the weapons at his command against the funded resistance of the organization. He functions as an entrepreneur within the organization. Since he does not have official authority to take unnecessary risks, he puts his job in the organization (and often his standing) on the line. Page 7 of 149  He has great energy as well as the capacity to invite and withstand disapproval. The strategic plan needs ownership at the executive level as well as at the staff level. Identify champions of the strategic plan at all levels of the organization and have them help define what’s in it for the people they influence. It is important to include all verticals of your organization in this process. Marketing, strategy, planning, and business-development teams should all have buy-in. There are opportunities across the organization for strategic growth. Make sure each team is aligned in the goals and doing its part to execute the plan. Strategic Plan and Goals must be Understood and Supported by Operations, Maintenance and Other Involved Discipline As mentioned before, everybody must understand what the plan is, the goals, the instruments, and how the follow up process is to be done. 1.2.2 Tools 1.2.2.1 Reporting Tools Reporting tools are software applications that make data extracted in a query accessible to the user. For example, a “dashboard” is a common reporting tool that makes a variety of information available on a single screen, in the form of charts, graphs, ordered lists, etc. To do your job well, you need the right information at the right time. Unfortunately, that information lives in an ever-increasing array of disconnected spreadsheets, systems, databases, and applications. The tool set must include development tools, configuration and administration tools, and report viewing tools. CMMS / EAMS Computerized Maintenance Management System (CMMS) software makes it easier for maintenance managers to track, manage and report their asset or equipment maintenance needs. To better understand what a CMMS is, we will break the term down into individual components: Computerized: Computerized refers to the fact that with a CMMS, your maintenance data is stored on a computer. Page 8 of 149 Maintenance: Maintenance is what users of CMMS software do every day, whether it’s responding to an on-demand work order for a broken window or performing routine inspection on a generator. Computer software cannot accomplish the work of a skilled technician. What it can do, however, is ensure tasks are prioritized correctly and that everything is in place (inventory, labor) to ensure success. CMMS solutions give technicians the freedom to focus less on paperwork and more on hands-on maintenance. Management: Managing maintenance is the most essential role of a CMMS solution. Maintenance management software is designed to give users immediate insight into the state of his or her maintenance needs with comprehensive work order schedules, accurate inventory forecasts, and instant access to hundreds of invaluable reports. CMMS solutions make maintenance management easier by empowering managers with information so that they can make the most informed decisions possible. Systems: Different CMMS solutions offer diverse types of systems. The best CMMS systems allow users to accomplish existing maintenance practices more effectively while introducing time-saving features that lead to cost reductions and further time savings. Enterprise Asset Management System (EAMS) is the optimal lifecycle management of the physical assets of an organization. Subjects covered include the design, construction, commissioning, operations, maintenance and decommissioning or replacement of plant, equipment and facilities. To better understand what an EAMS is, we will break the term down into individual components. Enterprise: Enterprise refers to the scope of the assets in the organization departments, locations, facilities; and potentially supporting business functions, including Finance & GL, Human Resources and Payroll. Various assets are managed by modern enterprises at present. An “Enterprise” often refers to more than one plant, often a group of plants, and often the term covers multiple operations within a single plant. Assets: The assets may be fixed assets like buildings, plants, machineries or moving assets like vehicles, ships, moving equipment etc. Page 9 of 149  The lifecycle management of the high-value physical assets requires regressive planning and execution of the work. Management: Maintenance Management solutions helps companies like yours do the following: Deploy maintenance resources effectively. Manage maintenance-related, work-order processes efficiently. Schedule maintenance based on asset condition rather than on arbitrary dates. Model scenarios to determine optimum preventive maintenance. Create customized reports to meet business-specific asset management needs. Enterprise Asset Management and Maintenance Solutions enables companies to improve performance visibility by analyzing data for key trends and anomalies, forecasting reliability issues, and making forward-looking decisions that deliver improved bottom-line results. Key functions of EAM software include the following. Work Orders: Scheduling jobs, assigning personnel, reserving materials, and recording costs. Preventive Maintenance: Keeping track of preventive maintenance inspections and jobs, including step-by-step instructions or checklists, lists of materials required, and other pertinent details. Asset Management: Recording data about equipment and property including specifications, warranty information, service contracts, spare parts, purchase date, and expected lifetime. Inventory Control: Management of spare parts, tools, and other materials including the reservation of materials. Page 10 of 149  Advanced Reporting and Analytics: Creating customized reports and analyses that can be used to forecast likely problems in time to prevent them. Financial Management and Reporting Tools include Purchase Requisitions (PR), Purchase Orders (PO), and Approvals for Expenditures (AFE) Scorecards A performance scorecard is a graphical representation of the progress over time of some entity, such as an enterprise, an employee or a business unit, toward some specified goal or goals. Performance scorecards are widely used in many industries throughout both the public and private sectors. Scorecards can be arranged into many visual configurations, but most will at least place goals alongside a running tally of current totals, to provide an at- a-glance measure of progress. Though the term “scorecard” is often used synonymously with “dashboard,” there is at least one significant difference: Scorecards must exhibit progress against a goal, while dashboards can simply display individual pieces of data without any context. 1.2.2.2 Communication Plan The communication plan serves as a guide to the communication and sponsorship efforts throughout the duration of the project. It is a living and working document and is updated periodically as audience needs change. It explains how to convey the right message from the right communicator to the right audience; and through the right channel at the right time. It addresses the six basic elements of communications: communicator, message, communication channel, feedback mechanism, receiver/audience, and time frame. Communication plans should encompass one time and repetitious events to inform and update key audiences and stakeholders on vision, case for change, goals, programs, metrics, and key personnel; along with information on where to get more information as well as key contacts for answering questions and providing ongoing feedback. A communication plan includes the following: Page 11 of 149  Who – The target audiences. What – The key messages to be articulated. When – The timing. It specifies the appropriate time-of-delivery for each message, including repeating events or updates. Why – The desired outcomes. How –The communication vehicle. It is how the message will be delivered. By Whom – The sender. This is the person who will deliver the information and how he or she is chosen. 1.2.2.3 Project Planning Methodology Project management is the discipline of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria. A project is a temporary endeavor designed to produce a unique product, service or result with a defined beginning and end (usually time-constrained and often constrained by funding or deliverable) undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value. The temporary nature of projects stands in contrast with business as usual (or operations), which are repetitive, permanent, or semi-permanent functional activities to produce products or services. In practice, the management of such distinct production approaches requires the development of distinct technical skills and management strategies. The primary challenge of project management is to achieve all the project goals within the given constraints. This information is usually described in project documentation, created at the beginning of the development process. The primary constraints are scope, time, quality and budget. The secondary challenge is to optimize the allocation of necessary inputs and apply them to meet pre-defined objectives. 1.2.2.4 Milestone Milestones are tools used in project management to mark specific points along a project timeline. These points may signal, among other anchors, such anchors as the following: a project start and end date, a need for external review, or input and budget checks. In many instances, milestones do not impact project duration. Instead, they focus on major progress points that must be reached to achieve success. Page 12 of 149  A good project management plan will include timelines that allow the organization to clearly see the time investment necessary to implement the plan and project. 1.2.3 Processes 1.2.3.1 Present Business Case to Stakeholders Addressing the individual concerns of stakeholders in the room will go a long way toward winning you allies and gaining buy-in by key stakeholders and formal and informal change agents within the organization. For example, if the finance person frets about keeping expenses under control, discuss expense numbers; if someone is interested in growth in Asia, show how your project helps the company grow in the region. Research past presentations and outcomes to make sure bases are covered. If other projects had questions or issues, make sure you have answers and address those issues. Consider allowing decision makers to preview your presentation. Ask for their input in advance and include their recommendations in the final presentation. That increases their investment in your success. Letting key stakeholders see how you listened to their input and included their ideas increases their buy-in into your proposal. 1.2.3.2 Communicate the Plan to Garner “Buy-In” For a plan to be effective, it must enjoy full support from an organization’s executive leadership. An information security officer must play the role of a salesman, not only to corporate leadership but also to rank-and-file staff. Top-to-bottom organizational buy-in is essential and will dictate the effectiveness of the plan and its associated policies and procedures. The need for executive level sponsorship is twofold. First, to assure staff buy-in, corporate leadership needs to visibly and consistently validate the policy and procedures. If the executive level doesn’t fully support the program, there will be little reason for the rest of the organization to do so. Second, it is necessary to ensure that funding will be in place to support the program. A significant initial investment of human resources, hardware, and software is necessary for the correct development of the program. Page 13 of 149 It is vital to communicate with top executives and receive their attention and support. Changes and movements are always involved in these projects and the support and goodwill of all of the organization including top management is necessary. 1.2.3.3 Determine Necessary Organizational Structure and Staffing The organization may be structured in diverse ways, according to its main objectives. Company structure determines how the business will operate and perform. Organizational structure can allow for the allocation of responsibilities for the company’s functions in management and production. Operational standards and routines may be developed based upon the foundation of the organizational structure. Designing an organizational structure helps to determine which staff participate in decision making, which can be helpful in shaping the actions of the company or business. An organizational structure defines how activities such as task allocation, coordination and supervision are directed toward the achievement of organizational aims. Organizations need to be efficient, flexible, innovative and caring to achieve a sustainable competitive advantage. Organizational structure can also function as a viewing glass or perspective through which individuals perceive their organization and its environment. 1.2.3.4 Determine Roles, Responsibilities and Expectations The success of a team can be impeded by a lack of clarity regarding the roles, responsibilities, and expectations of the various agencies and individuals who compose its membership. To fully understand the distinction between a role and a responsibility, please keep in mind the following definitions: Roles are the positions team members assume or the parts that they play in an operation or process. (For example, a role an individual might assume is that of facilitator, or communications liaison.) Formal roles essentially describe “who” is responsible for “what.” Responsibilities are the specific tasks or duties that members are expected to complete as a function of their roles. They are the specific activities or obligations for which they are held accountable when they assume—or are assigned to—a role on a project or team. (For example, the role of a team facilitator might include responsibilities as follows: that meeting agendas reflect feedback and input from all members; that the Page 14 of 149  meetings start and end on time; and that all members have opportunities to contribute to discussions.) Expectations are performance indicators that evaluate how well the responsibilities are being performed. They provide a standard by which people are held accountable for their responsibilities in the organization. 1.2.3.5 Determine Necessary Tools and Training How should an organization best determine its training needs? Here are eight ideas to consider: Define your need area or areas. Once you have identified an area in which your organization needs to trained or developed, define the need area with specifics. Can you validate that the need exists? What could excellence in this area do for your organization? How will excellence impact your organization’s overall key performance indicators? Analyze and assess your current state. In addition to traditional analysis, use an assessment. You can find an assessment to measure just about anything, from technical skills to soft skills, from leadership competencies to attitudes, from behavioral tendencies to teaming skills, and everything in between. Look for instruments that are research-backed and reliably measure the specific area or areas you identify. A good assessment should provide comparative norms that you could benchmark your organization against and then measure an individual’s progress following training. Develop your plan. Effective training and development should change behaviors and performance so never enter into it without a plan. Establish goals and objectives that describe where you want to be and when. Determine the resources you will need. Think about what can go wrong during the execution of your plan and develop contingency plans. Focus on measurable outcomes that result from employees successfully applying what they learn. Engage experts. Face it: If you already had in-house expertise then you would not have gaps in performance, knowledge and behaviors! You need the expertise of outside resources that have a proven track record of helping clients succeed. The good ones will help you design your plan and they may also recommend assessments and tools to benchmark and measure progress. The best ones will help you become self-sufficient. Page 15 of 149  (Note to self: Beware of those organizations that want to perpetually train you.) Train your leaders first. Always train your leaders first. Leaders should model the new skills and behaviors themselves. They must know the training well enough to accurately observe performance, reinforce training and coach employees in applying and mastering the training. Effective leaders schedule observation time to follow up training. They have the necessary tools to provide formal and informal feedback to employees. Unless management observation and feedback is intentional, what is learned will not be retained and the organization will have wasted the opportunity and resources spent on a training program. Train your staff and institutionalize the training. The most effective training programs are those which follow this sage advice: Never do for the learner what the learner should do for himself. The learner will only master a skill or behavior through repeated application. Repetition is the heart of learning, so what is learned during the training must be reinforced in the days, weeks, and months following the training. Catch them doing it right. Leaders should plan on catching their people correctly applying the training and provide immediate feedback to encourage continued use and development. An excellent practice following training is to dedicate a portion of staff meetings for employee discussion and skills reinforcement. Recognize staffers who have done well applying what was learned. Finally, remember that people don’t always do what you expect but they do what you inspect. 1.2.3.6 Determine the Detailed Implementation Plan In this portion of the business plan, you’ll clarify objectives, assign tasks with deadlines, and chart your progress in reaching goals and milestones. Guidelines for the implementation plan include the following: Objectives: These should be crystal clear and specifically spelled out. You will use them as a building block for the rest of the implementation plan. Tasks: This part details what must be accomplished to achieve your objectives. Include a task manager for each step, so that roles are clearly defined and there is accountability. As you enumerate tasks and assignments, these descriptions should be plainly and generally stated; don’t get into a step-by- step, micromanaged explanation of how the tasks will be carried out. Page 16 of 149  Emphasize the expected results associated with these tasks. Time allocation: Each task should be paired with an appropriate timeframe for completion. You should be aggressive but reasonable with your time allocation to ensure not just completion but competent work. For assistance in framing this timescale, use a program such as Microsoft Project, or just create your own Gantt chart. A Gantt chart is a helpful tool that shows how long it will take to complete different tasks and in what order the tasks should be finished. Progress: You or a member of your management team needs to oversee monitoring each task’s progress and the completion percentage of each objective. When delays occur, try to get to the root of the problem. Did the person responsible drop the ball? Did he or she have too many responsibilities to handle? Did a third party, such as a supplier or the bank, fail to hold up its end of a deal? Adjust your Gantt chart appropriately to account for the delay, and make a note of the previous deadline and the reason it was missed. The more efficiently you start implementing your business plan, the more likely it is that you will survive this initial period. 1.2.3.7 Determine Available Resources Having sufficient support for your efforts to become success will make your plan and activities more effective and efficient. Having sufficient resources to carry out the changes you want to make is equally important. Before you start planning, you need to look at what you already do with regard and what resources you have available. Then you can further expand and improve your current efforts. Resources include the following: Human resources: People who are already in the staff or who you’ll need to find. Financial resources: These include incomes and assignations as well as other special sources to be determined by the specialist to find what are we looking. Materials, instruments and others: This includes whatever will be required to achieve the goals. Page 17 of 149 1.3 Measure Performance Measuring the right things, the right way is the key to any successful maintenance and reliability process. With a clear mission, vision and strategic plan, you are ready to match these ideas with leading and lagging key performance indicators (KPIs). These measures will help you know when you have achieved your goals. Each KPI should be the result of multiple dimensions that check for quantity as well as the quality. This approach will magnify any manipulation of data and enable achievement of each goal. Providing written definitions of roles and responsibilities, getting everyone in the organization involved in the process and providing good and bad feedback weekly will ensure continuous improvement. 1.3.1 Concepts 1.3.1.1 Review the Mission, Vision and Strategic Plan Mission could be defined as the reason why you do something. Vision could be defined as where are you trying to go, or where you would like to see process develop over a period of time. Values keep all the elements together in the organization; they could be defined as how you go about it. Every person in the process should understand the above three elements and include them in their activities, in order to build a strong foundation for the establishment of the goals and objectives that define the strategic direction. Mission is a statement about your core purpose, why the organization exists. It should be stated in the present tense. Vision is the statement about the desired stage: Where should we push? What process will achieve a stage? Vision could be stated in the future tense. Strategic Plan is the organization process that defines the direction and the allocation of resources. The strategic plan makes the decision to pursue the strategy. A strategy describes how the goals are going to be achieved with resources. 1.3.1.2 Establish Written Expectations for Each Process For the organization to dispose of resources according to requirements, every process should have its expectations described in writing. This methodology will allow for a continuous control of resource allocation and control of the final products. Page 18 of 149 It could establish the correctives in the proper moment, avoiding an overflow in the use of resources and identifying requirements with regard to quality, quantity and opportunity. Some authors define steps in the development of these written expectations. They need to be clear for everybody and identify where you need them. Everybody needs to be involved, so meetings are necessary to discuss the steps, understand why they are needed, and to make them unique. Once these phases are complete, write them clearly in a simple language that makes them universal and obtain final agreement. 1.3.1.3. Develop Leading Key Performance Indicators Leading indicators are oriented toward input. They are hard-to-measure and easy-to-influence. As an example of a leading indicator, a personal goal for many of us could be to lose weight. To achieve this goal, it will be necessary to reduce calories taken and to burn calories. These two indicators are easy- to-influence but difficult-to-measure. Leading indicators are often related to activities undertaken by the work team. In the example above, exercise and eating are activities. Leading KPIs are process oriented. We can identify some leading indicators as follows: the percentage of work orders over the specific time; or the percentage of available man-hours to total available man hours over the specific time. 1.3.1.4. Develop Lagging Key Performance Indicators Lagging indicators are typically oriented toward output. They are easy-to- measure but hard-to-influence. Using the weight loss example, standing on the scale and measuring your weight is easy to measure. You immediately get an answer. But weight loss is not an activity. Lagging KPI are oriented to results. We can identify some lagging indicators as follows: Maintenance Cost, Maintenance Cost over Total Sales, Maintenance Cost over Unit Output, Mean Time Between Failures (MTBF), Failure Frequency, and Unscheduled Maintenance Downtime. Page 19 of 149 1.3.1.5 Develop Qualitative Performance Measures Qualitative measures gauge the amount of what is happening. Numbers are building blocks of amounts. Even when you’re turning attitudes into numbers, you’re doing it to gauge an amount. That technically means that every measure is quantitative. 1.3.1.6 Establish Related KPIs that can be used as Multiple Dimensions A Key Performance Indicator (KPI) is a quantifiable measurement for gauging business success. A KPI is a collection of calculations associated with a group of measures. These calculations and measurements are used to evaluate business success. Typically, the calculations are a combination of Multidimensional Expressions (MDX) expressions or calculated members. KPIs include additional data and information about how client applications should display the results of the KPI's calculations. A KPI manages information about a goal set and the actual formula of the performance that is recorded as well as measurements showing trends and the current status of the performance. The alignment of KPIs with the vision, mission, strategies and objectives of the organization is the key to realizing an impact on the bottom line. The challenge is to develop KPIs that provide a holistic and balanced view of the business. Faced with potentially hundreds (if not thousands) of candidate metrics, how does one select those that are most meaningful? One approach is to think of individual KPIs not just as a singular metric but as a balanced metric of several dimensions. These dimensions include business perspectives (customer, financial, and process and development), measurement families (cost, productivity, and quality) and measurement categories (direct, additive, and composite). By overlaying these various dimensions, one can create a KPI framework that succinctly captures the most critical business drivers. Robert Kaplan and David Norton introduced the balanced scorecard methodology for performance management in the early 1990s. Since then, the conceptual framework of the scorecard methodology has been enthusiastically embraced by Corporate America. As a performance management tool, the balanced scorecard assists management in aligning, communicating and tracking progress against ongoing business strategies, objectives and targets. The balanced scorecard combines traditional financial Page 20 of 149 measures with nonfinancial measures to measure the health of the company from four equally important perspectives as follows: Financial: It measures the economic impact of actions on growth, profitability and risk from the shareholder's perspective (net income, ROI, ROA, and cash flow). Customer: it measures the ability of an organization to provide quality goods and services that meet customer expectations (customer retention, profitability, satisfaction, and loyalty). Internal Business Processes: It measures the internal business processes that create customer and shareholder satisfaction (project management, Total Quality Management (TQM), and Six Sigma). Learning and Growth: It measures the organizational environment that fosters change, innovation, information sharing and growth (staff morale, training, and knowledge sharing). Although the focus of each perspective is distinctly different, there is a common thread of causality and a universal linkage between the four perspectives. For example, if a company invests in learning and growth to improve employee skills and elevate morale, then those results will be translated into improved internal business processes through best practices and change management programs such as Six Sigma and TQM. Subsequently, these activities will result in superior quality products and services for the customer, which in turn will drive increased sales and an improved financial bottom line. Another important consideration in the development of KPIs is the selection of the appropriate measurement family. The appropriate KPIs will capture operational performance over time and then be related to internal business and external industry benchmarks. Although the following list reflects common measurement families, different industries will have their own specific business drivers and related measures. Page 21 of 149 Productivity: This KPI family measures employee output (in terms of units, transactions or dollars) and uptime levels. KPIs can also be selected to show employees use their time. Examples are sales-to-assets ratio, dollar revenue from new customers, and various KPIs related to the sales pipeline. Quality: These KPIs measure the ability to meet or exceed the requirements and expectations of the customer. Examples are customer complaints, percent returns, and defects per million opportunities (DPMO). Profitability: These measure the overall effectiveness of the management organization in generating profits. Examples include profit contribution by segment or customer, and margin spreads. Timeliness: Measures the point in time when management and employee tasks are completed, according to the day, week or month. Examples are on-time delivery and percent of late orders. Process Efficiency: Measures how effectively the management organization uses quality control, Six Sigma and best practices to streamline operational processes. Examples are yield percentage, process uptime, and capacity utilization. Cycle Time: Measures the duration of time required by employees to complete tasks in hours, days or months. Examples are processing time, and time to service customer. Resource Utilization: Measures how effectively the management organization leverages existing business resources such as assets, bricks and mortar and investments. Examples are sales per total assets, sales per channel, and win rate. Cost Savings: Measures how successfully the management organization achieves economies-of-scale and scope-of-work with its people, staff and practices to control operational and overhead costs. Examples are cost per unit, inventory turns, and cost of goods. Page 22 of 149  Growth: Measures the ability of the management organization to maintain a competitive economic position in the growth of the economy and industry. Examples are market share, customer acquisition and retention, and account penetration. Innovation: Measures the capability of the organization to develop new products, processes and services to penetrate new markets and customer segments. Examples are new patents, new product rollouts, and R&D spend). Technology: Measures how effectively the IT organization develops, implements and maintains information management infrastructure and applications. Example KPIs are IT capital spending, CRM technologies implemented, and Web-enabled access). The perspectives and measurement families can now be combined to develop a KPI profile matrix as shown in Figure 1). This matrix provides a construct for balancing the number and types of KPIs. For example, performance management implementations typically fall short of balancing financial and non-financial KPIs. The profile matrix helps ensure a proper mix of financial and non-financial measures. 1.3.1.7 Establish a Goal for Each Key Performance Indicator A key performance indicator (KPI) indicates whether or not you are achieving one of your strategic goals. You need KPI targets to communicate the level of performance you are trying to achieve. To set the targets, follow these four steps: 1. Set a long-term target: Start by defining your long-term target first. This target (which is set for 3-5 years out) typically corresponds with your strategic plan and is a known goal throughout your company. These long- term targets can be: Derived from your overall mission. Related to your benchmarking. Based on your own historical performance. 2. Determine leading and lagging indicators: Lagging indicators show whether or not you accomplished your goals. Leading indicators show what needs to be done to meet your goals. Page 23 of 149  3. Leading and lagging Indicators must be linked together. 4. Break them down into annually and quarterly targets. 1.3.1.8 Provide Written Definitions of Roles and Responsibilities A role can be defined as “a prescribed or expected behavior associated with a particular position or status in a group or organization” and a responsibility as “a duty or obligation to satisfactorily perform or complete a task (which can be assigned by someone else, or created by one's own promise or circumstances) that one must fulfill.” In order to identify all of the objectives, goals and targets, one must first completely define and determine the following. Activities performed on a timescale basis. The correct use without deviation of instruments and tools. In general, all available resources should be identified. Who will act and when they will be involved in the project. This requires a complete analysis of the team capabilities as well as preparation to assure the correct performance of each person for each situation. Allocate the resources in a timescale program to avoid deviations. All the resources, people and supplies might not be available in the quantities desired so it is necessary to run the correct planning on resources. Knowing when personnel will be needed on the site and what instruments will be needed in hand allows you to pursue maximum performance during the action window. 1.3.1.9 Develop Training Materials To reach all our goals in the time and quantities expected and planned, it is necessary to involve all actors, team members, contractors, specialist, accountants, field consultants, operators, maintenance people as well as human resources and top management in the whole project. It is important to explain in detail each of the project phases, including what is expected and when from all persons, and what is the expectation of their performance. Page 24 of 149 To accomplish these critical tasks and achieve the goals, it is necessary to study and develop the communication structure and also to design and prepare of all the instruments. Content specialist, if available, could diagram and produce project workbooks. These specialists will collect the information from each team member working in the planning process and work toward a product that should be universal and easy-to-understand, carrying a clear message to everyone. Once the material is ready, prepare a training calendar and require participation from everyone who is involved in the activity. The assistance will not warranty the results but the teamwork and the power of the information will motivate everybody to support the intentions of the company or organization. Personnel at every corporate levels should be treated with the same respect if you expect the most of them. 1.3.1.10 Develop Incentives for Each Measure Building an effective incentive plan requires a company to align interdependent elements within the business in a way that communicates a clear behavior standard to its employees. The incentive plan must have a purpose. It must project the potential that can be realized if the purpose is fulfilled and it must identify the people who are able to effect those outcomes. This interdependent alignment is held together by forming the right measures and metrics in your reward strategies. Those indicators should be measurable even if not be directly reflected in the financial statements. The chosen measures should help track progress towards strategic objectives and reflect improvements in productivity. The role of indicators is to improve performance and influence behavior. Along with the communication program, indicators help focus on results and encourage ownership culture. 1.3.1.11 Review Measure Effectiveness Feedback presented in a timely and effective manner is a critical component of a successful performance management program. Such can be included when setting performance goals. Feedback on progress towards goals will improve performance. Employees need to know in a timely manner how they are doing, what is working and what is not. Page 25 of 149  When: It is necessary to inform in a timely manner. If an improvement needs to be made in their performance, the sooner they find out about it the sooner they can correct the problem. If employees have reached or exceeded a goal, the sooner they receive positive feedback, the more rewarding it is to them. Direct: Feedback works best when it relates to a specific goal. How: Feedback should help improve performance. People respond better to positive information so express feedback in a positive manner. That does mean that “making up” the message. If someone or something needs to be disputed, challenged, called into question or otherwise faced or confronted, do not hesitate to do so. However, the actions must be aligned with a common goal that has been agreed upon. 1.3.2 Tools 1.3.2.1 KPIs KPIs are the key business statistics. They measure a company’s performance in critical areas. They show progress (or lack of progress) toward realizing organization objectives or strategic plans. They monitor activities, which, if improperly or poorly performed, could cause severe losses, result in a system failure or yield a defective final product. Most goals are achieved not just through the efforts of a single person but rather by multiple people in a variety of departments across an organization. Performance management experts agree that cascading and aligning goals across multiple owners creates a "shared accountability" that is vital to a company's success. The company then uses its Key Performance Indicators as the foundation to analyze and track performance and base key strategic decisions regarding staffing and resources. The achievement of our objectives is measured using qualitative assessments and through the monitoring of quantitative indicators. To provide a full and rounded view of our business, we use non-financial as well as financial measures. Non-financial measures are often leading indicators of future financial performance. Improvements in these measures build our competitive advantage. Page 26 of 149 Although all our non-financial measures are important, some are more significant than others. These significant measures are designated as Key Performance Indicators (KPIs). If we can make a list of KPIs then it will be found that most depend on the goals, the activities, and the team. The junction of these three elements define where to measure and what to measure to achieve the goals. For example, maintenance work needs to support the business aims and operating strategy. Once the link between business goals and the maintenance activities that are needed to achieve them is made clear then everyone can see the benefits that maintenance brings to the business. Interlinked, cascading objectives connect the business together from top to bottom, and KPIs measure and check if they are being achieved. 1.3.2.2 CMMS A Computerized Maintenance Management System (CMMS) is computer software designed to simplify maintenance management. We’ll break the term by each of its components as follows: Computerized: Maintenance data was historically recorded with a pencil and paper. Because of this, maintenance was largely reactive rather than proactive. That is, maintenance was performed only when something went wrong. Preventive maintenance was less common because it was unrealistic to track which assets needed routine maintenance when all your asset’s maintenance records were kept in a filing cabinet. Computerized refers to the fact that with a CMMS, your maintenance data is stored on a computer. When organizations began to migrate from paper and pencil to their computers, suddenly, organizations could track work orders, quickly generate accurate reports, and easily identify assets that require preventive maintenance. These changes led to extended asset lifespans and improved organization. Ultimately computerization reduced costs and increased profits. Maintenance: This is what it is supposed to done every day. The system idea ensures tasks are prioritized correctly and that the inventory and labor everything else is in place to ensure success. CMMS solutions give technicians the freedom to focus less on paperwork and more on hands-on maintenance. Page 27 of 149  Management: Maintenance management software gives users immediate insight into the state of his or her maintenance needs. It does so with comprehensive work-order schedules, accurate inventory forecasts, and instant access to hundreds of invaluable reports. System: The best CMMS system is one that allows users to accomplish the existing maintenance practices more effectively while introducing time- saving features that lead to a reduction of costs and time savings. Any organization that must perform maintenance on equipment, assets and property can use a CMMS package. Some CMMS products focus on industry sectors such as the maintenance of vehicle fleets or healthcare facilities. Other products aim to be generally applied. CMMS packages can produce status reports and documents that give details or summaries of maintenance activities. The more sophisticated the package, the more analytic capabilities are available. CMMS packages can be web-based, meaning they are hosted by the company selling the product on an outside server; or they can be LAN based, meaning that the company buying the software hosts the product on its own server. 1.3.2.3 Business Intelligence Software Business intelligence (BI) is a technology-driven process for analyzing data and presenting actionable information to help corporate executives, business managers and other end users make more informed business decisions. A wide variety of tools, applications and methodologies enable organizations to collect data from internal systems and external sources; prepare the data for analysis and develop and run queries against the data; and create reports, dashboards and data visualizations to make the analytical results available to corporate decision makers as well as operational workers. BI software offers maintenance and repair professionals the following benefits: Accelerate and improve decision making. Optimize internal business processes. Increase operational efficiency. Page 28 of 149  Drive new revenues. Gain competitive advantages over business rivals. Help companies identify market trends and spot business problems that need to be addressed. BI software comprises a set of strategies, processes, applications, data, technologies and technical architectures. Enterprises use these features to support the collection, data analysis, presentation and dissemination of business information. The software provides historical, current and predictive views of business operations. Common functions include the following: Reporting Online analytical processing Data and text mining Complex event processing Business performance management Benchmarking Predictive Analytics and many others BI software can handle copious amounts of structured and sometimes unstructured data, which helps identify, develop and otherwise create new strategic business opportunities. BI software aims to allow for the easy interpretation of these big data. Identifying new opportunities and implementing an effective strategy based on insights can provide businesses with a competitive market advantage and long-term stability. 1.3.2.4 Scorecards The Balanced Scorecard (BSC) is a strategic planning and management system that organizations use to accomplish the following: Communicate what they are trying to accomplish Align day-to-day work with strategy Prioritize projects, products, and services Measure and monitor progress towards strategic targets The BI system connects the dots between big picture strategy elements and operational elements. Big picture elements include mission (our purpose), vision (what we aspire for), core values (what we believe in) and strategic focus areas (themes, results and/or goals). The more operational elements Page 29 of 149 include objectives (continuous improvement activities), measures (or key performance indicators, or KPIs, which track strategic performance), targets (our desired level of performance), and initiatives (projects that help you reach your targets). The Balanced Scorecard suggests that we view the organization from four perspectives and develop objectives, measures (KPIs), targets, and initiatives (actions) relative to each of these four points of view. Financial: The financial perspective is often called stewardship or other more appropriate names in the public sector. Its view is towards organizational financial performance and the use of financial resources. Customer/Stakeholder: This perspective on organizational performance is from the points of view of the customer or other key stakeholders whom the organization serves. Internal Process: Organizational performance can also be viewed through the lenses of quality and efficiency as they relate to our product and services as well as other key processes within the business. Organizational capacity (originally called learning and growth): Finally, organizational performance can be viewed through the lenses of human capital, infrastructure, technology, culture and other capacities that are key to breakthrough performance. 1.3.2.5 Audits An audit is a systematic evidence gathering process. Non-financial audits of systems and processes involve periodic verifications to verify that a documented Quality Health Safety and Environmental (QHSE) management system or industrial process is being effectively implemented. Audits help validate compliance with regulatory requirements and industry standards. They can also be used as an information tool to drive better business decisions. An audit is a systematic and independent examination of books, accounts, statutory records, documents and vouchers of an organization to ascertain how far the financial statements as well as non-financial disclosures present a true and fair view of the concern. It also attempts to ensure that the books of accounts are properly maintained by the concern as required by law. Page 30 of 149 Any subject matter may be audited. Audits provide third-party assurance to various stakeholders that the subject matter is free from material misstatement. The term is most frequently applied to audits of the financial information relating to a legal person. Other areas which are commonly audited include secretarial & compliance audit, internal controls, quality management, project management, water management, and energy conservation. From an audit, stakeholders may effectively evaluate and improve the effectiveness of risk management, control, and the governance process over the subject matter. 1.3.2.6 Communications Plan Communication is the process of transmitting ideas and information. For an organization, that means conveying the true nature of your organization, the issues it deals with, and its accomplishments in the community. Communication can take many forms, including the following. Word of mouth News stories in both print and broadcast media Press releases and press conferences Posters, brochures, and fliers Outreach and presentations to other health and community service providers and to community groups and organizations Special events and open houses held by the organization To communicate effectively, it helps to plan what you want from your communication, and what you need to do to get it. In developing a communication plan, consider answering these items. Why do you want to communicate (purpose)? Who is your audience? What do you want to communicate (message)? What communication channels will you use? How will you distribute your message? Page 31 of 149  The answers to these questions constitute your action plan, that is, what you need to do to communicate successfully with your audience. The remainder of your communication plan, involves two more steps. Implement: Design your message and distribute it to your intended audience. Evaluate: Review your efforts, and adjust your plan accordingly. 1.2.3.7 Incentives An incentive motivates an individual to perform an action. It is not necessary to provide incentives for what one is supposed to do or for what one is contracted to do. Nonetheless it will be helpful to motivate the team to move to an alternative or an updated process in the startup phase. One could establish recognition of the indicated goals. One could reward milestones with respect to specific KPI that have been established to measure the project development. A few words of recognition could help achieve the desired results. It is necessary to do a complete study to avoid over-dimensioning the goals in such a manner that the incentive becomes a countermeasure instead of an incentive. Define the levels, quantities, amounts or any other kind of measure that people could monetarize themselves to perform their activities. Offer the option to receive something else from what are they doing every day. Incentives aim to provide value for money and contribute to organizational success. 1.3.3 Processes 1.3.3.1 Train Stakeholders on Definitions, Expectations and Goals Key Performance Indicators define the factors that the institution needs to benchmark and monitor. Assessment techniques provide the mechanism for measuring and evaluating the defined factors to evaluate progress or impact. KPIs specify what is measured and assessment techniques detail how and when it will be measured. KPI is a measure that defines and evaluate the success of an organization. Typically, it is expressed in terms of making progress towards its long-term organizational goals. A KPI incorporates information on the sources, Page 32 of 149 calculations and definitions for each measure and it sets out the timetable for submission of monthly data. After the definition, analysis and plan creation is done, a training system needs to be established. Training needs to reach every team-member, that is, every constituent of the program stakeholders. The idea is to correct distribute or divulge the information keeping in mind the following aspects. Definitions: All the new and existing components, elements, acronyms, and any other nomenclature or vocabulary should be communicated. Expectations: Everyone must be instructed on what the company wants from them in terms of an assessment performance. Goals: As the program is defined and refined, everybody must understand what the company is looking for. Everybody needs to be in line with the rhythm needed to achieve the aims of the company. Those goals will depend on what everyone in the company and top management agree that they are willing to conquer. Management must be convinced that the necessary time and resources are available to achieve this important activity and that the activity will be positively reflected in our work if performed properly. 1.3.3.2 Track Performance One approach is to keep a notebook or diary and take notes all day about assignments received, goals set, guidelines provided as well as intermediate and final deadlines established, tasks to complete and concrete actions taken. Regardless of the kind of registry, it must be used to capture key components such as the following. Expectations: This component includes any goals and requirements spelled out; instructions given, and assigned to-do lists. Also includes are standard operating procedures, rules or guidelines reviewed, deadlines set and timelines established. Concrete Actions: This component is a record of your actual work. It includes each to-do item that is completed, each goal that is achieved, each requirement that is fulfilled, and each deadline that is met. Page 33 of 149  Measurements: This component shows tracks how concrete actions match up against the expectations. Have requirements been met or exceeded? What instructions, standard operating procedures and rules were followed? Were goals met on time? All the recorded dates constitute a basis for the construction of periodical report. The performance analysis introduced can be used to check if changes were introduced and what corrective actions were taken to return the goal path. This journal will be a source of useful information for evaluating cost, evaluating the people and doing what management is supposed to do: Administrate the operation. 1.3.3.3 Periodically Present Results to Leadership Making presentations to C-suite executives can be a nerve-wracking proposition for even seasoned leaders. Top executives aren’t shy about showing their impatience with reports that don’t quickly address their key concerns or that fail to draw a connection between workforce data, operational situation or financial results. To be useful to leadership, your executive presentations should have these characteristics. Keep it simple, tight and short. Focus on the metrics that matter most to your executives. It is best to show just a few slides with your key messages or metrics. If you have been given 15 minutes to present, that means no more than 15 minutes, which usually means a maximum of seven slides. The first sentences in the presentation state why we are here and what decision will ultimately be needed from executive-level management. Executives want context. Is a certain metric good or bad relative to the industry. There are several important considerations to keep in mind when presenting to senior executives. They can be impatient because their schedules are jam- packed and they have to make lots of high-stakes decisions, often with little time to weigh options. The considerations are: Page 34 of 149  Summarize up front: You should lead with the information your audience really cares about: high-level findings, conclusions, recommendations, a call to action. State those points clearly and succinctly right at the start, and then move on to supporting data, subtleties, and material that’s peripherally relevant. Set expectations: Let the audience know you’ll spend the first few minutes presenting your summary and the rest of the time will be reserved for discussion. Create summary slides: When making your slide deck, place a brief overview of key points at the front. The rest of your slides should serve as an appendix. Follow the 10 percent rule. Give them what they asked for: This time-pressed group of senior managers invited you to speak because they felt you could supply a missing piece of information. So, answer that specific request directly and quickly. Rehearse: Before presenting, run your talk and your slides by a colleague who will serve as an honest coach. Try to find someone who’s had success getting ideas adopted at the executive level. Ask for pointed feedback. This is not a lot of work but it is a necessary and sensible advice on how to convey information to company leaders. 1.3.3.4 Revise Plan Periodically When a plan is generated and established it is necessary to update it periodically. You will need to review the field reports, the KPI information and, in general, the feedback received from the field actors who handle the process day by day. The latest version of the plan needs to be released where there are changes and improvements. Periodic release of a new plan allows new results to be retrieved while also removing any obstacles from the path as identified from daily performance. Page 35 of 149 Once the plan is ready or a revised version released, a communication plan is important to allow access to everyone. Access to the updated information should be available without losses or deviations due to following outdated procedures or operations that have been discarded or replaced. 1.3.3.5 Communicate Plan The distribution of the responsibilities and opportunities must be established without exceptions. The communications plan must define the following. Who: Who must perform or indicate an activity or instruction to accomplish each of the phases involved in the project in reference? What: This statement defines in detail what must be executed. The details on the specification would not constitute a limit to the ideas, improvements, or other expectations. This statement could constitute a warranty of what is expected in which case that warranty must be indicated. When: The opportunity to take a measurement, make a decision or perform some other action is usually determinant to reaching the goals. These opportunities must be indicated in the plan and identified. In this manner, everybody in the corporate community could identify opportunity and could coach, support or guide the activity. Where: The place and circumstance associated with when the action must be taken is also important to note so everybody and everything must follow it. How: In a symphony, all the notes and chords must sound in time, and all the instruments must be tuned and performed properly to avoid distortion. In our case, this analogy could represent deviations in costs or loss of interest. So, similar to conducting a symphony, it is important to define what is expected from everybody, what instruments they require, and the intensity of the action expected. 1.3.3.6 Measure Performance Weekly As we mentioned in previous points, continuous evaluation of the process performance is necessary. Electronic devices and data collection systems will be helpful to develop a way to retrieve information from many devices and use a computer to produce a report on a weekly basis. Page 36 of 149 These could be a brief period if the process is slow, but the information management systems today could handle short periods and weekly reporting does not present any problem. Be sure to have a report or reports available to all team members, or to a specific group with the information of the activities they performed. 1.3.3.7 Provide Weekly Feedback Once the information is in hand it is possible to give feedback to all the team members. Both positive and negative feedback is necessary to communicate. Following the formulas for negative feedback, one should specifically mention those that could be affecting the job, and run through a detailed analysis to determine the cause of the faults or shortcomings. Avoid public analysis and judgment of the person or persons who are affecting the performance. The public approach is known to have consequences on behavior and could create an adversary for the project. In case of good news, report it and identify key person or persons that helped achieve the result. Also commend any team with outstanding performance that will allows the company to achieve certain objectives. If it is considered in the incentives and recognition plan, use this weekly moment to give them the incentives. This practice will capitalize on incentives and have an overall beneficial effect on the project. 1.3.3.8 Communicate Exemplary Performance An excellent instrument of promotion to help achieve the goals is to publicize those important developments and outstanding performance of a team member or group of team members. For publicity, use all the media available within the program or in the broader corporation to let the people be recognized by others. Allow them to be featured in computer dashboards all around the corporation. Write an article for periodical newsletters or magazine published by the organization. Write a letter of recognition, or give an award of something material or metallic that has been included in the recognition program of the corporation. Page 37 of 149  This could not be for everybody but it is a global achievement and with relevant results for the corporation. It is necessary to recognize attitudes and performance that are over-and-above the expected behavior. It is important that the recognition is supported by real results. 1.4 Organizational Changes An organization’s resistance to change needs to be countered by leadership to influence and sustain the change. Changes include the way that maintenance is identified, planned, executed, tracked and analyzed. Developing a change management plan is important because it affects the people who do the work. People have a different ability to change depending on the implementation and their role as well as their diverse backgrounds and personality. How each progresses through the change process needs to be kept in mind when developing a change management plan. 1.4.1 Concepts Organizational change is complex and often misunderstood. It can either propel the maintenance, reliability or asset management program forward or prevent it from being successful. To ensure the organization progresses through the change curve successfully, a change management plan is required. The change curve describes the four stages of change: shock; denial, anger and fear; acceptance, and commitment. Most people go through these four stages as they adjust to the change. A change plan identifies the requirements and ongoing activities required to assist the organization and its people through the curve. There are models to assist with the change management plan and activities for the organization; these typically embrace the mission, vision and strategic plan of the organization as well as current and future business processes and roles and responsibilities. The change management plan will address, the expected changes, leaders, and sponsors, stakeholders, goals and objective of the change and a tactical plan to implement the change which may include communication, training, re- organization, etc. Success in organizational change can be attributed to the workability of the change management plan and activities. Change management does not have to be done perfectly but a little work goes a long way. Page 38 of 149 1.4.1.1 Review and Understand the Mission, Vision and Strategic Plan As described above (in Section 1.0 on Business Management) the organization needs to understand current and future states before change can occur. Before planning for organizational change, the mission, vision and strategic plan must be reviewed and understood. 1.4.1.2 Develop Future Business Process Documentation The future state of the organization must be established for the staff to understand the proposed changes and how such changes will affect them. This future state includes new business processes and organizational structures as well as new roles and responsibilities. Each of the processes, structures, and roles should include written expectations, benefits, and proposed performance measures. 1.4.1.3 Establish Leadership and Sponsors Change must be led from the top. Organizational change will only be successful when fully supported at the highest levels of the organization. The leadership may come from a plant manager if the change only affects a single site, or a CEO if the change affects the entire organization. Sponsors must be established to provide support to the individuals managing and implementing the change. 1.4.1.4 Determine Stakeholders Organizational change affects almost everyone in the organization in one way or another. Therefore, it is vital to understand the impact of the change on each stakeholder, how the stakeholder will react to that change, and how to assist that stakeholder along the change curve. 1.4.1.5 Develop a Change Management Plan The change management plan will provide the strategic and tactical activities to assist the organization through the change and successfully realize the future state. The change management plan will include the inputs from the organizational strategy, stakeholders, and objectives to determine the specific activities and milestones of the organizational change. Page 39 of 149 1.4.2 Tools Many tools will be involved in the organizational change activities. Each tools will be consistent with all other tools, regardless of the change management model. 1.4.2.1 Change Model A change model is a tool that will provide guidance on how organizational change should be prepared, implemented, and sustained. Each model includes a set of tools and various approaches to assist the staff through the change curve. Multiple models are available, and each has its own advantages and disadvantages. Some of the most common are models by Prosci, ADKAR, Kotter, Lewin, and Beckhard and Harris. 1.4.2.2 Change Plan The change plan provides the expectations, activities, and resources to implement the change. The change plan will typically include the following. The reasons for the change; Type and scope of change; Stakeholder analysis, support and management activities; Change management team; Leadership and sponsor support; A communication plan; A method to track the adoption of the change; and How barriers to adoption will be addressed. 1.4.2.3 Performance Objectives Performance objectives (KPIs) are necessary to understand the adoption of the organizational change and the support of individuals and business units in the change. Performance objectives should be written according to the SMART framework. Also, when selecting the performance objectives, the objectives should be balanced to ensure inadvertent behavior is not triggered by focusing on a single objective. Also the performance objectives should be a mix of leading and lagging indicators to ensure the organization change is occurring as planned. Page 40 of 149 1.4.2.4 Scorecards Scorecards visually display the performance objectives for an organization. The performance objectives are usually displayed to reflect four key areas of business: Financial, Customer, Internal Business Process, and Learning & Growth. A scorecard that includes these four areas is known as a balanced scorecard. 1.4.2.5 Audits Audits are systematic and independent examination of a process, record, documents, etc. An audit is used to understand how well the selected change management model has been followed and how well the change has been adopted. This tool allows organizations to learn from the change management process and improve it for future changes. 1.4.2.6 Stakeholders Analysis Stakeholder Analysis is a tool used to identify the stakeholders of the change, their current position on the change and what must be done to bring the stakeholders along with the change. This tool ensures that the stakeholders do not become blockers of the change. 1.4.2.7 Incentives Incentives are ways to motivate people to adopt the change. Incentives can come in many forms, such as monetary, recognition, celebrations, etc. Typically, incentives are used to reward those who achieved a specific milestone or performance objective related to the change. 1.4.2.8 Communication Plan Communication plans are tools that identify what information must be communicated, to whom, when it must be communicated and how it will be communicated. A communication plan plays a critical role in the building awareness and desire in the stakeholders; and in bringing the majority of the staff through the change curve. Further information on communication can be found above in Section 1.5 on Communicate with Stakeholders. 1.4.2.9 Vision and Strategy The Vision not only defines your organization's purpose (that is, the purpose of the change) but also focuses on its goals and aspirations. These statements are designed to be uplifting and inspiring, to create awareness and desire for the change. Page 41 of 149 1.4.3 Processes There are many change models available, but they all follow the same process with the same steps. Listed below are the key activities and generic processes for change management. 1.4.3.1 Create Urgency For the early adopters to embrace the change and bring the majority along the change curve, there needs to be an urgent need for change. This urgent need for change can come from internal or external threats to the organization or internal or external opportunities to be capitalized on. 1.4.3.2 Train on Goals The stakeholders need to fully understand the change. They need to see how it will affect their role or function and understand the goals associated the change. Without this guiding direction, the stakeholders will worry about the change and not readily adopt or support the change. 1.4.3.3 Create the Vision The sponsor, stakeholders and change manager need to create a compelling vision to effectively communicate the need for the change. This vision will provide the staff with clarity on why the change is needed. It will not only create awareness of the change but also will focus the team on the end goal. 1.4.3.4 Communicate the Vision Communicating the vision must be done frequently across multiple media. The communication plan will prescribe exactly what is required, but the change and need for it should be communicated often by all levels of the organization. 1.4.3.5 Remove Obstacles Obstacles will arise quickly at all levels of the organization. Team members, team leaders, and managers must be empowered to work through and remove the obstacles preventing the change. If the local team is unable to resolve the situation then managers and senior leaders must be prepared to step in and remove the obstacle quickly. If the obstacles linger too long then the change is at risk of stalling and failing. Page 42 of 149 1.4.3.6 Create Short-term Wins Having staff adopt the change and move along the change curve quickly requires a sense of accomplishment and success. To keep staff motivated and focused, use a series of short-term goals that lead up to the overall goals of the change. Once the team achieves the short-term goals, celebrate. Reward and recognize the team for their success. Everyone wants to be on a winning team, so create winning teams to bring more people along the change curve. 1.4.3.7 Embed the Change As the change progresses, there will be less focus on it. To sustain the change after the initial excitement and launch, embed the new ways of working into the daily routines of the staff. Implement routine checks and balances, rewrite the existing processes and procedures to incorporate the changes. The new behaviors have to be embedded into the staff’s daily routines. Otherwise the change may go backwards and fail. 1.4.3.8 Conduct Audits of the Process A way to ensure the changes have been embedded is to routinely audit and check that the new processes are being followed. This audit can be conducted routinely by the team leader and line manager as part of their standard work (which helps to embed the change). Also, audits can be conducted by other members of the team to ensure compliance with the process. These audits should not be punitive. Rather they can act as an opportunity to identify gaps in the change management process; and they can improve the coaching and training process. 1.4.3.9 Communicate Results to Leadership Periodically To maintain full support to see the change through to full adoption, the senior leadership team must be kept in the loop. Regular communication must include actual versus planned objectives, what barriers need to be overcome, and plans to close the gaps between actual and planned objectives. 1.4.3.10 Reinforce Good Behaviors Similar to the step “Create short term wins,” the goal here is to reinforce the good behaviors through incentives and recognition. Page 43 of 149  1.4.3.11 Track Performance The performance objectives must be tracked, reviewed routinely and be relevant to the organization objectives. Any gaps from actual to planned must be addressed and actions put into place to close the gaps. 1.4.3.12 Revise Plan Periodically No change is truly ever complete. Once the change is embedded, the processes must be checked to ensure the change continues. Any gaps between actual and expected results should be reviewed, and a plan must be implemented to close those gaps. This activity may be built into the routine planning activities of the organization. 1.5 Communication with Stakeholders Maintenance and Reliability leaders should be capable of creating and executing a comprehensive communication plan to achieve organizational business goals. The plan includes appropriate communication with all stakeholders and recognizes the audiences for the various intended messages. To ensure the engagement of the stakeholders, an effective communication plan provides methods of sharing information, receiving feedback and providing input to decision-making processes. Multiple communication approaches and methods should be used and the advantages and limitations of each should be understood. 1.5.1 Concepts Why communicate? Simply put, communication is expression. We each have a unique way of thinking hence also a unique way of perceiving things. In the field of maintenance and reliability, it is important to communicate inputs and experience as well as individual ideas that could help solve crucial real-world problems. Communication processes include how do people send and receive communications and how communications are affected by noise, environment, filtering, and experience. People communicate through different mediums such as speaking, writing, visual signs etc. Focus is the key element in any source of communication; otherwise it is considered noise. When we talk, focus on the communicator or the speaker’s voice; otherwise this voice could be lost in the noise from the environment, such as traffic, other voices, music etc. Page 44 of 149