Creating excellence in heavy industry – clear goals, empowerment and accountability with Raymond Floyd.
Raymond Floyd has had a career leading the operations for some of our largest petrochemical and mining organisations. His teams were some of the first to be recognised for excellence in operations, winning the Shingo Prize in 1991 with Exxon, and other prestigious awards. Raymond is the author of the Shingo Prize-winning book "Liquid Lean: Developing Lean Culture in the Process Industries" and "A Culture of Rapid Improvement: Creating and Sustaining an Engaged Workforce".
Raymond began his engineering career at General Motors, working in the US auto industry, and was becoming increasingly aware of the lean practices happening in the Japanese auto industry. After ten years, Raymond left General Motors as he felt the organisation was not heading in the right direction and joined Exxon in their chemical business. He took the idea and philosophy of lean with him. Many others believed that lean would not work in the US as it was dependent upon the culture of the Japanese people. Of course, that has proved to be incorrect. Lean has a much broader scope and applies to almost any industry that we can think of today.
Raymond encouraged lean quality stations, and these were dependent on the team. They were goal focussed, and the team knew what their part of the plan was. He would ask of his team members, 'What are you going to advance the goals? What have you done to advance the goals? What are you planning to do to advance the goals?' As team members reported on what they have done, others would see this and agree that they too could lean their activities. A ripple effect occurred as other teams reproduced these lean activities in ways that were encouraged.
Though teams not allowed to change the nature of the work, they were encouraged to change the way that the work was done. For example, an odd job of a service technician would be to change a pump. The first thing they would do would be to stand at the tools station, wait and order what they think they needed, and then repeat this at the parts station. If they then arrived at the job site and had forgotten a tool or part, they would have to repeat the waiting and ordering process. This front line team improved the way their work was done by introducing carts that would contain all of the tools, parts and instructions required to complete the job. The technician would no longer have to guess what they would need to complete the job. Organised carts began popping up with other front line teams, improving the way that work was done across the organisation. Improvement ideas were spreading out across the front line and then began to rise the ladder as well.
A typical organisation will achieve 3% improvement year on year through leadership led improvement. Raymond knows of a study from the '80s where middle management was removed, and the organisation still achieved 3% improvement through the frontline people. What Raymond has experienced through his career is the combined outcomes of leadership and frontline employees improving towards the goals of the organisation, results in over 10% improvement year on year. He has found this unified, aligned total culture of continuous improvement to achieve the highest results.
Raymond has focused his career on engaging all people within an organisation. Ideally, this is initially through helping everyone to understand the company's goals, develop their own aligned goals and start continuously improving towards these. And secondly, by giving his people the correct tools, enough time and resources and a great team with clear rules to guide them. Finally, leaders would need to demonstrate their interest in their team's culture as well as performance.
In 1991, Exxon Baytown started a group called diversity pioneers - they discussed race, gender, national origin, sex and sexual preferences, and put into practise strategies for fostering this diversity. This was a rare and pioneering movement at the time. Exxon was already a very fair organisation and genuinely selected the best person for promotion. When they delved deeper, however, they found inequality in the way that the best person was developed in the first place.
They took control of developing all people to be the best person they could be and built a reliable team. After two years of this personal development, Exxon Baytown received more than 35 improvements per person per year. This statistic was unheard of and is still a significant one by today's standards. Improvements in maintenance and engineering processes and outcomes for the plant and equipment were strongly encouraged. Velocity and acceleration toward the achievement of company goals was the result.
Raymond provided insights into how processing companies can survive and continue through the current and upcoming global changes. In a commodity market, the pricing will drop until the best producer is making money, and when there is more demand, the pricing will increase, and the lower performers will make some money. The challenge moving forward with potentially dropping market in some commodities is that the highest performing, most efficient plants will survive. Now is the time to be the best that you can be. Processing industries need to develop a culture of continuous improvement to increase quality, velocity and acceleration every day to survive.
Raymond makes an analogy in his second book from a conversation given to him from a pit crew worker at the Indianapolis 500; the actual time difference between first and second car was less than the time difference between them in the pit stops. The race was in effect, won in the pit stops. Upon reflection, Raymond believes this is similar in process industries where the plant and equipment are highly comparable. The difference in performance resulted from the variations in maintenance and engineering processes and skills within the organisation.
It has been an absolute pleasure to talk with Raymond and gain his wisdom. Thanks, Raymond, for helping me to develop my knowledge as well.
Liquid Lean book link:
A Culture of Rapid Improvement book link:
03.07min I have to admit I never actually thought of myself as being in lean practice. At the time we won the Shingo Prize, I was the global head of Exxon's synthetic rubber business and what we were doing was running the synthetic rubber business in the best way we knew how.
06.45min but if they have a quality station or something of that sort that shows the visible manifestation: this is the company goals you have given us; this is how we've translated it to our work area; this is what we are doing, this is what we have done, this is what we plan to do. Makes it really easy to have a conversation that you're really just meeting for the first time.
16.34min but if you get everybody involved, the engineers and managers are doing what they should be doing, and everybody else is doing what they can be doing, and you begin to get a true synergy.
22.38min So Shell, Exxon, Petro Canada, Repsol; they all have a statistically significant group of people. They have some good ones, they have some they'd prefer not to have, and they have a large range of good, honest, hard-working people. The thing that really distinguishes their performance is the systems that that group of people are given to work with.
28.42min you could see people change; you could see that what you were doing was changing people’s lives, not just changing the performance of the organisation—changing the lives of the people within that organisation. And that's a really satisfying experience.
36.55min It's all a process of giving people the things that they need to have in order for them to do what you'd like them to do.