iso 55000 workshop: the role of leadership & culture...

Robyn KeastProfessor

Southern Cross Business SchoolIn partnership with

AAMCoG & Asset Institute

ISO 55000 WORKSHOP: THE ROLE OF LEADERSHIP & CULTURE

Keast &Brown 20 October 2014

Background

• ISO Asset Management Standards arise from growing realisation –• technology has taken us a long way• BUT:

• IT solutions often not fully understood or leveraged to optimally & effectively manage assets

• Many of the current ‘big problems’ relate to human not technical failures \poor decision-making, competencies & management/leadership

• Asset-related failures brought assets & asset management to the forefront of political and public attention

• Sharpened by a amplified focus on risk & risk awareness –industrial disasters, financial crisis, increasing & competing expectations & budgets

• Standards provide some stability & core direction for way forward


Asset Management definition revisited

• ISO55000 determines Asset Management in a broad scope:

• Not just physical assets, although these are significant elements -

• “coordinated activity of an organization to realize value from assets”

• based on a life cycle management approach to realize value


ISAM GUIDE: PRINCIPLES

• Assets exist to support service delivery – non asset solutions should also be considered

• Agencies should manage assets consistent with whole-of-government frameworks and take into account whole-of-life costing, future service demands and, balance between capital expenditure and maintenance requirements

• Asset management should be integrated with agency strategic and corporate planning

• Asset management decisions should holistically consider sustainability outcomes: environmental, social, economic and governance

• Governance arrangements should clearly establish responsibility for functional performance of, and accountability for, the asset and service delivery


ISO 5500X Combined: an overview

ISO Standards – Integrated Asset Management

• Core message from the standards is that assets must be managed within an integrated framework

• Organisational structure, governance, management, leadership & culture (tie value creation & profit generation to physical assets)

• Are key additions – shaping the standards – describing management system for asset management

• THIS SESSION : Insights into these human elements


Asset Governance & Management through the ISAM Guide


Integrated Strategic AssetManagement Framework

The ISAM Framework maps out the processes of asset management

At the top are the external functions that provide context for asset management, such as community consultation (in Blue)

At the centre are the ‘core’ processes involved in planning, such as the development of strategies (in Green)

At the bottom are the recursive processes of service delivery and evaluation (in Yellow)

On either side are knowledge management and organisational management (in Red), responsible for coordinating the processes of asset management

AM NetworX:Network Analysis

The processes of the ISAM framework are presented here as a network map

• Each node represents a coordinator for each of the functions of asset management

• The ties between the nodes are the relationshipsthat must exist for efficient service delivery

• The network map provides a blueprint for an‘ideal’ model for organisations to use in strategic asset management

• The aim is to structure organisational charts andand processes in the most efficient manner possible for service delivery


Diagnostic - Missing nodes

Functions that are not defined within the organisation will be absent from the network.

In this example the “Acquisitions Planning” role is missing from the top right hand corner of the network.

Diagnostic - Missing links

Those networks that are not fully integrated, where the different functions are not connected, will be missing the links between them.

The links between “Acquisitions Planning” and both “Operations Planning” and “Maintenance” in the top right hand corner are missing.

The lack of these connections make it harder for these functions to co-ordinate or share information.

Diagnostic - Incomplete networks

Asset management is an extended process that covers the life of the asset.

Organisations with assets in the early stages of development may not have identified all of the necessary people responsible for later functions.

In this instance the strategic planning functions are undefined, as are the service delivery and evaluation functions.

Diagnostic - Network fragmentation

The long term management of assets can result in the disconnection of functions crucial in earlier stages of development.

In this instance the functions responsible for external consultation and policy development are no longer connected with the network.

The loss of these connections can be problematic when there are changing factors that need to be considered in the ongoing management of the asset.

Diagnostic - Multiple Chains

An important aspect of the integration of these functions is the centralisation of the roles into clearly defined positions.

When important functions are removed from the network, the length of time it takes for information to be disseminated increases as it passes through chains.

Diagnostic - Multiple Connected Nodes

Ideally each of the functions in the network are embodied in a single position.

In this example there are multiple asset managers responsible for various sections of the network, rather than having the function located in a central role.

Network structures such as these require a high degree of coordination between the roles in order to function effectively.

Diagnostic - Multiple Unconnected Nodes

More problematic is the scenario in which a function is embodied in multiple nodes that are unconnected.

In this example the asset managers responsible for different sections of the network are not able to coordinate directly.

Diagnostic – Network Segregation

When groups of functions are not fully integrated the network becomes segregated into silos.

The network paths in this example are concentrated through asset management and knowledge management, doubling the distance that information must travel and potentially degrading the quality as it becomes relayed second hand.


So …How well integrated are you?

THE ROLE OF LEADERSHIP & CULTURE

* tie value creation & profit generation to physical assets


Organisational Management

Involves support for strategic asset management through effective leadership, communication and motivation.

LEADERSHIP CHANGE MANAGEMENT

ORGANISATIONAL COMPETENCIES

AND SKILLSAM CULTURE

KEY TERMS:

• Governance: steering, setting direction, allocating resources

• Management: realising organisation goals –tasks focused (organising, planning, coordinating)

• Leadership: influencing, motivating (people focused)

• Culture: ideas, customs, and social behaviour of a particular people or society

Competences refers to the knowledge and skills a person possesses oris required to possess in order to perform a work activity in anoccupational category or function to the standard expected inemployment.

There are three primary skill domains relevant to Asset Managers: 1. Information Management2. Business Management3. Engineering Management +

Network Management

Hyland, P.et al. (2009)

Organisational Management: Competences & Skills

Competence ISO55002• Competency in AM should be addressed at ALL org levels

• Alignment between roles and levels• Not just for those who are designated ‘asset managers’• Competences for all AM roles and responsibilities should be

determined by the organisation (requires collaboration between line managers and HR managers)

• Interdependency between AM Competences, Org design & business processes


Diagnostics & actions

• Gap analysis and remedial action• Competency assessment • Alignment of organizational objectives, AM policy,

AM objectives, SAMP and AM Plans• Personal development programmes (training &

development, education)• Hiring or contracting of competent persons• Training of target groups with associated

documentation and monitoring• Evaluation of training


Organisational Management: Leadership

Development of leadership skills is progressive, moving from simple knowledge structures and straight forward technical and social skills, to more complex integrated knowledge structures.•How to…

– Mentoring by experiences senior leaders– Well – timed leadership training courses– Job assignments that provide exposure to novel and challenging

problems– Hands-on experience in solving related problems– Through social interactions with peers

Development of leadership skills will be more effective if it is supported by the organisation

Organisational Management: Leadership

Involves supervising activities, giving orders and motivatingsubordinates in a way that meets the corporate objectives…so it can bedefined as the ability to influence others to contribute towards theeffectiveness and success of the groups of which they are membersand towards the achievement of common goals.

• Challenges– Motivate employees to align their individual goals with

organisational and asset management objectives– how to optimally achieve a number of often conflicting goals– meet needs of various communities/stakeholders– address sustainability and other social and environmental issues– Complex projects – complex leadership – managing networks

Leadership

• Other challenges in a day-to-day activities:– Be aware of needs to manage risk & innovate– Encourage planning and management of the asset

management process in a way that benefits key stakeholders – be conscious of globalisation issues – understand the impact of technological development how it

affects society (e.g. wealth creation and business).• Personal & Social competences for leadership:

– Internal motivation– Continuous improvement ethos– Superior communication and creative problem-solving skills– Social judgement skills

(Viljoen J & Dann S (2000); Mumford, MD et al. (2000))(Mumford, MD et al. (2000)

ISO 55000 Leadership and Top Management

Top Management Responsibilities– Developing AM policy, AM objectives and aligning with Organisational

policy– Recognize & resolve conflicts between internal culture of the

organization & the performance of its asset management system– Organizational design principles that align Organizational management

to AM system

• Important that (overall) ownership & accountability for asset management remains at top management level !

ISO 55000: Leadership commitment from all levels is essential for successfully establishing, operating and improving AM in organisations

Leadership Responsibilities (all levels)

– Involvement in planning, implementation and operation of the AM system

– Ensuring that appropriate resources (financial, human, IT) are available to support AM system

– Communicate organization’s AM objectives and importance of AM system to all employees, customers, suppliers, contractors and other stakeholders

Evidence base?

• Identified in:• AM policy, • AM objectives & alignment • Communication plan, • conflict management and resolution

framework, • stakeholder management plan, • know and map culture, • job descriptions

CULTURE & CHANGE MANAGEMENT

ASSET MANAGEMENT CULTURES

• When an organization supports asset management initiatives – long-life, efficiency and sustainability outcomes are more likely to result

• May involve: training employees to identify & communicate AM requirements – to reflect rewards & recognize & motivate all level of management to support

• But … sub-cultures exist & can be problematic (tribalism)

• Have to overcome silos – both mental & physical/structural

• An ideal culture – hybrid – Safety, Performance & Quality• Role of managers/leaders to balance and provide meta-cultural vision


ISO 55000 Management of culture

• Asset Management System relationship to Asset Management• Leadership, culture, motivation, behaviour - significant impact on AM

objectives but may be managed outside AM system• Context of the Organisation

• Internal context includes organisational culture and environment • Vision, mission and values

• Leadership• Recognise and resolve ‘culture clashes’

• Elements of an Asset Management System• Organisational context• Leadership• Culture, then is embedded within elements of AM System


AM Cultures


Source: Murphy 2010

• Tsang (2002) suggested improving strategic asset management may require: • the empowerment of employees, • teamwork, • participation and autonomy, • effective communication, • education and training, • appropriate rewards and recognition, and • trust in management

Factors in Asset Management Culture

Organisational Management:Asset Management Culture

AM BenchmarX: Asset Management Cultures

• It is important to understand Asset Management cultures toimprove performance

• The output is a diagram of the competing demands within asset management organisations

Asset Management Culture: Metrics

• Benchmarking tool designed to help asset management organisations better understand asset manager’s attitudes and behaviour


• setting goals and defining the ‘desired future state’1

• diagnosing the present condition in relation to these goals defining the transitional activities and commitments needed to achieve the desired future state

2

• developing strategies and an action plan to manage the transition and reach the desired future state.

3

Beckhard R (1969)

Organisational Management: Change Management Stages

Organisational Management: Change Management

Scales of Change

Fine tuning1 Usually done at a departmental or divisional level and involves an ongoing process to match the organisation’s strategy, processes, people and structure

Incremental adjustment2Is characterized by more distinct modifications to management processes and organisational strategies

Modular transformation3

Involves major changes to one or several departments of divisions

Corporate transformation4

Is characterized by radical alterations in the business strategy and include reorganisation, revsion of interaction patterns, reformed organisational mission and core values

ISO 55002 Management of Change

• Review consequences of planned and unplanned change (for example - scenario planning)

• Organisational change arenas • Organisational structures, roles or responsibilities• AM policy, objectives, plans• Processes and procedures for AM activities• New assets, asset systems, or technology• External factors incl. new legal or regulatory requirements• Supply chain constraints• Demands for goods and services• Demands on resources

• Develop organisational capability to make evidence-based decisions on proposed changes (for example, transition management)


Barriers to change

• Six key barriers to change:• top-down or laissez-faire senior management style• unclear strategy and conflicting priorities• an ineffective senior management team• poor vertical communication• poor coordination across function, businesses or borders• inadequate down-the-line leadership skills and development.

Organisational Management: Change Management

(Osborne and Brown,2005)

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1

2

3

4

51.1.1 Asset Management Policy

1.1.2 Asset Management Objectives

1.1.3 Asset Management Strategy

1.2.1 Acquisition Plan

1.2.2 Operations Plan

1.2.3 Maintenance Plan

1.2.4 Disposal Plan

2.1 Performance and Condition Monitoring

2.2 Corrective and Preventive Actions

2.3 Procurement

3.1.1 Corporate Governance

4.1.1 Data Management4.1.2 Asset Register4.1.3 Information System

4.1.4 Relational Knowledge Management

5.1.1 Leadership

5.1.2 Change Management

5.1.3 Organizational Competencies andSkills

5.1.4 Organisational Culture

6.1.1 Risk Management

6.1.2 Sustainability Management

7.1.1 Stakeholder Engagement Stategy

7.1.2 Level of Stakeholder Engagement

7.1.3 Addressing Community Concerns

8.1 Whole-of-Government Policy Model

Organisation A Industry Benchmark

Asset Management Capability Maturity Model – AM Audit for ISO preparedness

Asset Management Capability Maturity Model

TOOL KIT

Key Capabilities (cont’d)

• Understanding the requirements for good practice asset governance within government and industry

• Body of Knowledge for integrated strategic asset management

• Documentation about Best Practice from industry and research.

• Case study examples

10

Asset Management Capability Maturity Model

Policy & Strategy Delphi for Asset Management

• Policy Delphi method seeks to generate widest divergence of views in asset management and then come to consensus

• Speedy method when time is short or reliable fast response is required.

AM NetworX:Network AnalysisThe processes of the ISAM framework are presented here as a network map

Each node represents a coordinator for each of the functions of asset management

The ties between the nodes are the relationshipsthat must exist for efficient service delivery

The network map provides a blueprint for an ‘ideal’ model for organisations to usein strategic asset management

The aim is to structure organisational charts and processes in the most efficient manner possible for service delivery

AM BenchmarX: Asset Management Cultures

• It is important to understand Asset Management cultures toimprove performance

• The output is a diagram of the competing demands within asset management organisations

With contributions from:

• Professor Yvonne Brunetto

• Dr. Silvia Neilson•• Dr. Matt Xerri

• Dr. Dan Chamberlain

• Dr. Anna Wiewiora

• Dr. Nateque Mahmood

• Ms Mary McGeogh

• Mr Martin Laue


[email protected]

[email protected]

Thank you

INTEGRATION: THE BIG PICTURE

iso 55000 workshop: the role of leadership & culture...

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