S UPPORT FROM THE T OP

In the first interview, when changes to the structure were being planned but had not yet been implemented, Colin spoke highly of the attitude demonstrated by the new CEO. Comments on the new CEO were also sought from Catherine in later interviews.

Colin described a non-compliance issue that had not been addressed for over a decade that came to the CEO's attention. When he queried the Facility Manager, the CEO got the same response as every other person usually got: to the effect that "it's a major capital project - several million dollars - not in this year's budget - we'll find money for it next year". The CEO's response was essentially "Yes. It is in the budget - get it done now." Colin spoke of how he then used this story whenever he spoke to recalcitrant operations managers with outstanding audit actions. "I can't say that they have to do it, but once I tell them that story, they start thinking for themselves that maybe they should [get it done]".

Colin has far less trouble getting HSE+ issues acknowledged by operations managers with such a clear example of the new CEO's attitude towards compliance to the corporate HSE+ management system. Even before the restructuring is affected, the new CEO is making sure that the entire organisation hears directly from him that just documentation and reporting are not enough to demonstrate compliance. The HSE+ management system, and the operational discipline that it requires, is to be supported and followed through with real actions. This attitude of the new CEO alone has a clear and definite impact on how Colin is able to influence others in the organisation to promote operational safety priorities. The new CEO continues to demonstrate a proactive attitude with the fully restructured executive leadership team. He has broadened the scope of various executive functions, and almost doubled the number of Executive Managers who answer directly to him. This is to be followed up by restructuring of entire departments, including the HSE+ function: which is to then encompass nearly all operational safety and risk professionals in the one group,

answering to Catherine and collaborating with each other. The corporate management system is to also get a boost, initially with a demand for compliance with recommended actions, followed by more streamlined processes of reporting and documentation to relieve the old system of repetitive requirements to satisfy procedures and standards.

In her interviews, Catherine speaks of considerable resistance to change within the organisation with examples of several arguments and various long discussions about how so much change could possibly be necessary, let alone positive, for Company C. She also states that the new CEO has already taken this into account and has settled in for the long uphill battle that accompanies any major change. Her own mandate, supported by the CEO, involves the entire organisation at all levels from the General Managers of HSE+ down to site-based HSE+ Advisors. The most senior HSE+ management role in Company C is now one that comprises significant responsibility and status.

Catherine’s position in the organisation is still two levels down from the CEO, but she has been given considerable authority over all of the operational safety and risk professionals in order to develop a coherent functional unit. Also, even after the restructuring is complete, she will have access to this additional status as an inevitable association with being a focus of the attention of the new CEO and his leadership team.

4.4.7 O

D

O

S

There are several key dynamics that are identified in the material gathered from Company C that relate to operational safety. The preceding five sections discuss those that directly relate to the research focus of organisational salience and perceived influence. The most important finding from Company C interviews is that the organisation has limited corporate focus on operational safety activities even though the core activities of the company are highly hazardous and rely upon complex technologies. Company C's approach of promoting decentralisation has led to disparate and disjointed attempts to address operational safety issues at several levels of management without any functional integration or interaction. The strategy and policy that are managed at the corporate level do not translate into actual operational excellence or appropriate risk management. More than one safety incident within the global operations has been related to a lack of collaboration and communication amongst operational safety specialists between and even within the various business units. There is a stated interest in addressing operational safety and discipline that is described as a building a strong safety culture, supported by comprehensive HSE+ and technical integrity chapters in the documented operations management policy and procedures. However, the

lack of clear corporate direction by commitment of associated resources has led to a chaotic mix of specialists, experts, advisors and managers scattered throughout the company, without any means of interacting with each other or any motivation to do so. It cannot be said if the effects of an inadequate structure reflect inadequate functional leadership or if the functional leadership is inadequate because of an inadequate structure to work with. Either way, it is clear that the ultimate effect on Company C’s operational safety performance does not reflect the operational excellence and discipline that are described in their operations management system as fundamental aspects of their core activities. The corporate HSE+ Manager has had too little authority and too few resources to develop or implement a coordinated approach to fulfil even the functions of assuring that operations comply with Company C's own corporate expectations for safety, let alone industry best practice in hazard and risk management.

The new leadership of Company C has since instituted a program of centralising the HSE+ function, including elements of technical expertise and risk management. This is a clear confirmation that the decentralised structure is not considered to be appropriate to

integrate operational safety management or to provide the necessary, cohesive framework for operational discipline. Leadership is a significant factor with the overt and advertised commitment of the new CEO in following up issues of safety and risk with active resolution considerably raising the priority placed on operational safety management. In addition to the CEO’s full support, the newly defined role of corporate HSE+ Manager has broader authority with a responsibility for pulling together HSE+ and technical safety professionals into an integrated group that is to be fully independent of the operations accountability. It is clear that both of the interviewees consider that the decentralised structure of the company has made it difficult to coordinate efforts or effectively share information. This failing has resulted in various incidents at various times that could have been averted by better communication and collaboration amongst those responsible for technical protocols and operational discipline. This situation has been recognised as a critical issue that is being directly addressed by centralisation of a functional group for operational safety and risk that gathers together the majority of in-house technical expertise and safety experience. It is also of note that the decentralised structure of the company allowed for a baseless and self-sustaining complacency due to both inappropriate guidance and incorrect feedback between corporate leadership and operations management with inadequate information flows. This generated a misplaced confidence in a supposedly sound corporate culture and an unrealistic claim of operational excellence, when basic expectations were not yet met.

The corporate message of a strong safety culture was supported only by the documented operations management system which was distributed throughout Company C without the adequate centralised corporate resources to ensure that it was implemented. The structure and the system also did not include any process or provision for timely, consistent and effective assurance activities that would identify gaps in compliance by the independent verification of actual operational performance against the established corporate standards. In fact, as soon as centralised functional communication was developed under the new centralised management structure, fundamental systemic management failings were found within the routine practices of the organisation, such as with technical competency

management. In this organisation, the widely recognised operations management system had actually reduced the effectiveness of HSE+ staff by providing operations and leadership a false sense of confidence that the risks and safety issues were appropriately managed. The lack of necessary leadership could be partially attributed to this false sense of security, itself due to the superficial corporate oversight. There was no leadership focus on

operational safety because there was no sense of needing such focus because neither the structure nor the management system provided clear lines of recognising non-compliances. However, there is also evidence of a lack of investment in developing and maintaining the necessary technical and professional skills that are required to fulfil or support the technical leadership roles that did exist within the organisation.

The other significant theme arising from examination of Company C’s restructuring is that the leadership of Company C had valued management skills above technical expertise and there was no incentive or reward for the technical competence and specialised skills of operational safety professionals, which contributed to the lack of rigour in managing operational safety activities. It would be reasonable to surmise that the competency and credibility of both technical professionals and leaders has had a significant impact on the priority given to operational safety management in this organisation.

4.5

COMPANY D

4.5.1 P

F

O

S

Company D is a moderately sized organisation involved in hazardous core activities that require complex technologies and continuous processes. The organisation is divided according to its core activities with a number of Executive Managers, each responsible for the operational divisions that are associated with different core activities.

The operational divisions of Company D are identified in Chart D as Division A, Division B and so on. The other Executive Managers of Company D manage support functions such as Corporate Finance, Strategy and Human Resources. These Executive Managers all report directly to the CEO of Company D and form the executive leadership team.

Due to the hazardous nature of the core activities, there is a clear recognition within the organisation of the need for operational safety. Various technical professionals, specialists and experts throughout the organisation are specifically identified as responsible for operational safety related responsibilities. The various positions and functions address all aspects of operational safety management, including: corporate oversight; operations management system; audits and investigations; hazard and risk analysis; technical integrity and asset reliability; incident reporting and review; competency training; and monitoring of performance against corporate standards and best practice criteria.

The two principal operating divisions of Company D manage their operational safety tasks differently, each in a manner that best suits their own operations. Division B, which is considerably smaller than Division A, has a centralised functional group responsible for operational compliance throughout the division with a Senior Manager who answers to the Executive Manager of Division B.

In contrast, Division A has various small technical teams with functional leaders distributed throughout the division and fully embedded in the operating lines. These various functional

potential POSS role

bold line = accountability (answers to …) dashed line = responsibility (provides services to …)

EXECUTIVE LEADERSHIP etc etc etc etc

TWO LEVELS BELOW CEO etc etc etc

THREE LEVELS BELOW CEO INTERVIEWEE etc DIANA etc etc etc CHART D Process Safety and Risk Expert Board of Directors Company D Environment, Training, Systems etc Executive Manager Division A Executive Manager Finance Executive Manager Human Resources Executive Manager Legal Managers of other sites and faciliities Div A Senior Advisor Safety Risk Management Senior Advisors Env OHS Security Senior Manager HSE+ Division A Environment, Training, SHE etc Process Safety Specialist Technical Support Manager Operational Excellence Manager Security &

Safety Systems & Risk CEO Company D Executive Manager Strategy Manager Site #1 Division A Operations, Governance Projects … Div A Compliance, Risk, Systems, Operational Safety Manager - HS+ Executive Manager Division B Production, Projects, Reliability etc Executive Managers - other Divisions Senior Manager HSE+ Division B Senior Managers - Finance, Services, Processes Div B Manager - Risk Manager Finance Division A

teams are each separately responsible for Technical Support, Asset Integrity, Operational Excellence and HSE for each site and facility as shown in abbreviated form in Chart D. The various functional team leaders in Division A are directly accountable to their own

operational Site or Facility Managers.

The Executive Manager of Division A has, as a direct report, a Senior HSE+ Manager responsible for support of various functions, including HSE plus process safety, risk management, security and operational excellence. This functional Senior HSE+ Manager in Division A supervises only a small team of technical specialists who provide support and advice to the higher echelons of operations managers in Division A. This position is a potential POSS role and the most-likely POSS role in Company D.

At the time of the research interviews, the Senior HSE+ Manager for Division A sits on the executive leadership team of Company D. Though accountable to the operational Executive Manager of Division A (shown as a solid line in Chart D) he also has a responsibility to the CEO (shown as a dotted line) and direct access to the other Executive Managers in the organisation. However, there is no functional responsibility or accountability between this corporate level team and the functional HSE+ teams that are embedded in Division A's operating lines.

This role is therefore considered to be the closest to a POSS position by virtue of the access to authority (made available by this additional status); and due to the functional

independence of the role (focussed on promoting best practice and ensuring that

operational risks are appropriately managed). The role is not specialised and the functional responsibilities are quite broad: including security, environment and OHS in addition to operational safety activities. However, there are no direct commercial responsibilities related to the role that would introduce conflicting priorities. The senior functional manager in Division B, though lower in the organisational hierarchy and not on the executive leadership team, may also be a candidate for POSS as the head of a team of specialists in a similar range of functions. This was not confirmed during interviews. The research interviewee from Company D is not either of the senior functional managers, but is a direct report. She is identified in Chart D as Diana, a Senior Advisor answering to Division A's Senior HSE+ Manager. Diana's specialist role is fully dedicated to HSE+ issues and particularly to process safety. Diana speaks of her role in the organisation as mostly reactive and as a service provider to Division A operations managers. Diana is positioned only a few levels below the CEO but she does not have any staff of her own nor any functional authority over the various professionals in HSE+, even for those involved with

operational discipline and risk management. All of the HSE+ professionals who are

embedded in the operating lines and are accountable only to their various Site and Facility Managers. The scope of Diana's role and the extent of her influence are discussed in further detail in Section 4.5.2.

During the interviews, Diana speaks of her concern with how different the current model of support as a service provider is to an earlier, more proactive model within the organisation. It is of considerable interest to this research that Company D previously had the POSS-like position of Diana's boss - the Senior HSE+ Manager of Division A - as being accountable only to the CEO. This previous role as a functional Executive Manager, was responsible for HSE plus Risk Management, Operational Excellence and Security for all of Company D and was fully independent of the operating divisions. At that time, the focus was not on service provision but rather on "policing" the operating divisions. Diana notes that Division B has retained attributes of this earlier model while Division A has not. These issues and Diana's observations of these changes to the organisational dynamics are central to the research concerns. Their impacts are discussed in greater detail in Section 4.5.3.

Diana also discusses the reasons underlying the various changes to the corporate structure and management, attributing them to different approaches of executive leadership. She describes how the organisation has had several different CEOs in recent years and how each CEO has restructured the executive leadership team to suit their own vision for the organisation. Each CEO also has had different attitudes about centralised control of various functions and several critical changes have been made on the basis of these attitudes and preferences. Diana suggests that the different backgrounds and capabilities of each new CEO have had both direct and indirect consequences to the management of operational safety activities. The impacts of CEO attitudes and aptitudes on positions and functions of the senior safety professionals in Company D are considered in Section 4.5.4.

The descriptions of the different structural models and the reasons for the changes are of such interest and relevance to the central research concerns that the previous Executive HSE+ Manager was also sought out and interviewed. This second interviewee, David, is not shown on Chart D which represents the most current organisational structure. David used to be the functional Executive Manager for HSE+ in the version of the corporate structure where he answered only to the CEO of Company D. David sat on the leadership team with no accountability to any of the other Executive Managers, including those responsible for implementing HSE+ in their own operations facilities. The characteristics and issues of this older structure and the associated authorities and influence are discussed in Section 4.5.5.