AGL were unknowingly losing $20m per year on fuel costs by operating with many feedwater heaters out of service. For years individuals had attempted to get them back into service because they felt it was the right thing to do. But consistency brewed complacency.
AGL used human-centred design techniques to identify the root cause – we’re not talking technical root cause, rather behavioural root cause. Then they started on an ambitious journey to change the culture. Sarah Hannah, Head of Asset Systems (Acting) at AGL Energy will be outlining the astonishing results achieved in her session at Mainstream Conference 2019.
Here she tells us why you should be focusing on culture transformation instead of initiatives, and outlines how they have engaged AGLs leadership to come on their transformation journey.
Why Culture Eats Strategy for Breakfast
How many initiatives have we seen started in our companies which seemingly evaporate with no real value delivered. As asset management professionals, we are continually delivering initiatives to improve our asset management systems, our asset performance, our maintenance strategies… the list goes on.
How much of the time that we spend delivering these initiatives do we focus on ‘how’ we are delivering rather than ‘what’ we are delivering? And do we know ‘why’ we are delivering it?
“People are our most important asset and bringing them along on the asset management journey is not an option, it’s essential.”
The phrase ‘culture eats strategy for breakfast’ talks to the fact that if you aren’t identifying the root cause behaviours around the problem you are trying to solve, no matter what budget, what strategy you have – it will never succeed in the long term.
Culture is social behaviours and norms that we see within a group of people – we need to peel back the layers of the culture to understand the root cause of the problem these initiatives are looking to fix.
A Focus on Priority and Alignment
Getting support of senior leadership was crucial to the success of AGL’s efficiency journey. We followed the acronym PARS:
Every transformation project needs P, A, R and S – without one of these elements it will fail. Most people focus on Specificity and the lack of Resources they have. Few people focus on getting senior leadership aligned on the vision and selling the importance and priority of this work.
How on earth do I do this?
To achieve Priority: Understand the problems the senior leadership face, what keeps them up at night. Which of those problems are you solving?
Here’s an example from AGL’s energy efficiency journey. The ‘why’ is threefold: increase earnings by reducing fuel and carbon costs; reduce our greenhouse intensity; and improve the performance and integrity of our plant. Each ‘why’ speaks most loudly to a different stakeholder – the outcome is the same – but get to know your audience and tailor the message accordingly.
To achieve Alignment: Ask questions, don’t assume there is alignment. So you have been working with the engineering teams on developing maintenance strategies. Have you asked the maintenance manager what is important to them? Have you asked the maintenance planner what they think? Alignment is often the root cause of why initiatives fail.
Measurement Breeds Awareness
As the age old saying goes ‘if you can’t measure it, you can’t manage it’. I’ve seen this saying come true in so many ways. Measurement comes in many ways but I’ve seen it especially powerful when in the form of powerful actionable KPIs and asset health dashboards.
Don’t assume senior leadership are aware of the issues you are – without measurement it is most likely they are not.
A word of caution though…As you commence along the data transformation, focus will naturally be drawn to areas that are measured. I have seen this come at the expense of areas that are not yet measured as they become ‘out of sight, out of mind’.
Sarah Hannah will share the details of AGL’s incredible culture transformation at Mainstream Conference, 12-13 August 2019 in Melbourne.
About the Author
Sarah Hannah is Head of Asset Management (Acting) at AGL Energy. She is responsible for the asset management systems across Australia’s largest portfolio of power generators. Whilst Sarah comes from a Chemical & Process Engineering background, she brings a human touch to the industry. Sarah lives the value that people are our most important asset and bringing them along on the asset management journey is not an option, it’s essential.