This presentation was delivered by Chris Seifert of Wilson Perumal & Company at the Canadian National Energy Board's 2015 Pipeline Safety Forum. It discusses the impact of increasing complexity on safety and environmental risk, and lessons that can be learned from high reliability organizations to mitigate that risk.

1. 1
3
Lessons
from
High
Reliability
Organiza7ons
Presenta*on
to
the
Canadian
Na*onal
Energy
Board
at
the
2015
Pipeline
Safety
Forum

2. The world has changed!
2
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“Individual
produc7vity”
Volume
Cost
Pre-­‐Industrial
Age
Driven
by
variable
costs
“Economies
of
Scale”
Volume
Industrial
Age
Driven
by
fixed
costs
“Complexity”
Complexity
Post-­‐Industrial
Age
Driven
by
complexity
costs

3. Complexity is stretching the capabilities
of most organizations
3
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TECHNOLOGY
PRODUCTS
&
SERVICES
PROCESSES
ORGANIZATIONS
REGULATIONS
MARKETS
X
XX
X
XCOMMUNICATIONS

4. Complexity grows exponentially
4
#Items #links
1 0
2 1
3 3
4 6
5 10
…
10 45
$
Complexity

5. 5
Characteristics of complex systems
1. Non-linear reactions
2. Emerging properties
3. Feedback loops
4. Unknown interactions

6. Many companies are passing a
complexity threshold
6
Level
of
complexity
you
can
support
VALUE
(diminishing
returns)
COST
&
RISK
(exponen*al
growth)
$
Complexity
Few
companies
are
s.ll
here
Many
companies
are
here
An
increasing
number
of
companies
are
here

7. 7
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Increased
complexity
Poor
execution
Loss of
process
control
Poor
performance
Added
processes
Vicious
Complexity
Cycle
The typical response to complexity is to
add even more complexity

8. Catastrophic incidents are becoming more
frequent and more severe
8
1979
–
Three-­‐Mile
Island
core
meltdown
1988
–
Piper
Alpha
explosion
2005
–
Texas
City
Refinery
explosion
2010
–
San
Bruno
Pipeline
explosion
2010
–
BP
Deepwater
Horizon
oil
spill
2011
–
Fukushima
Daiichi
disaster
2013
–
West
Fer7lizer
plant
explosion

9. 9
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Traditional risk management doesn’t
address these “normal accidents” well
Too complex
to anticipate
Too fast
to address
Too infrequent to
understand

10. 10
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The Pessimist’s View
“Regardless
of
the
effec*veness
of
management
and
opera*ons,
accidents
in
systems
that
are
characterized
by
*ght
coupling
and
interac*ve
complexity
will
be
normal
or
inevitable
as
they
oTen
cannot
be
foreseen
or
prevented.”

11. Wilson
Perumal
&
Company,
Inc. 11
Yet a few High Reliability Organizations
seem to defy the Pessimistic View!

12. Birth
of
the
Nuclear
Navy
50+
year
history
150
mobile
nuclear
reactors
6,000+
years
of
reactor
plant
opera*on
12
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The Nuclear Navy has never had a reactor
accident over its

13. 13
Three Lessons from the Nuclear Navy
#1 Safety is not a GOAL!
#2 Simplify your management system
#3 Culture kills!

14. 14
Lesson #1
Achieving zero
incidents should not
be a GOAL!
It should be an
EXPECTATION!

15. 15
This has important implications for what
we reward

16. 16
Lesson #2: Keep your management system
as simple as possible, but no simpler

17. 17
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The Nuclear Navy simplifies with one
management system for all outcomes
People
Process
Equipment
Change
Key
Controls
Safety
People
Process
Equipment
Change
Key
Controls
Environ-­‐
mental
People
Process
Equipment
Change
Key
Controls
Quality
People
Process
Equipment
Change
Key
Controls
Reliability
People
Process
Equipment
Change
Key
Controls
Cost
Common
Management
System
Approach
Nuclear
Navy
Management
System
People
Process
Equipment
Change
Increased
performance
Accelerated
learning
Reduced
cost
and
overhead
Safety
Quality
Environmental
Reliability
Compliance
Cost
Key
Controls

18. 18
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Don’t manage the outcomes...
…manage the sources of risk!
Examples
Procedures
Training/
cer*fica*on
Performance
mgmt
Engineering
disciplines
Maintenance
planning/
scheduling
MOC
process
Culture
Risk
ID
Examples
No
expecta*ons
Lack
of
knowledge
Wrong
incen*ves
Equipment
not
capable
Process
not
capable
Inadequate
MOC
Leadership
Employee
Accountability
Risk
ID
Risk
Control
Knowledge
Sharing
Change
Management
Con7nuous
Improvement
Safety
Environment
Compliance
Quality
Produc7vity
Yield
Cost
Outcomes
Sources
of
Risk
Causes
of
Failure
Key
Controls
Mgmt.
System
Elements
People
Processes
Equipment
Change

19. Wilson
Perumal
&
Company,
Inc. 19
The Nuclear Navy’s proactive management
system allows it to learn faster
Reactive risk
management
Proactive risk
management
Proac7ve
Reac7ve
Proac7ve
Reac7ve

20. Lesson #3: Culture is the key!
20

21. Opera*onal
Discipline
is
essen*al
to
the
Navy’s
superb
safety
and
opera*onal
record
21
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Human performance is the Nuclear Navy’s
last layer of defense
RobustEquipment
RigorousProcedures
OperationalDiscipline

22. 22
The culture required was a vast departure
from traditional military culture
Tradi7onal
Military
Culture
Follow
orders
Do
what
you
are
told
Don’t
ask
ques*ons
Never
ques*on
your
superiors
Rickover’s
Cultural
Pillars
Have
a
higher
level
of
understanding
Follow
procedures
Ques*on
procedures
when
things
don’t
seem
right
Back
each
other
up
Do
it
all
with
integrity

23. The
Nuclear
Navy’s
OD
DNA
Level
of
Knowledge
Formality
Ques7oning
Actude
Forceful
Watch
Team
Backup
Integrity
LEVEL
OF
KNOWLEDGE
FORMALITY
QUESTIONING
ATTITUDE
FORCEFUL
BACKUP
INTEGRITY
CONTINUITY
OF
POWER
REACTOR
SAFETY
Safety and reliability depend on specific
operator behaviors
23
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The
“Pillars
of
the
Program”

24. The Pillars are self-reinforcing
Ques:oning
A=tude
enhances
Level
of
Knowledge
Integrity
Level
of
Knowledge
Ques7oning
Actude
Formality
Forceful
Watch
Team
Backup
Level
of
Knowledge
allows
ID
of
out-­‐of-­‐
the-­‐ordinary
condi:ons
Ques:oning
A=tude
supports
process
improvement,
not
work
arounds
Ques:oning
A=tude
helps
you
spot
what
others
may
have
missed
Level
of
Knowledge
allows
you
to
back
up
others
Integrity
means
you
can
be
relied
upon
to
support
your
team
Backup
drives
procedural
compliance
Formality
ensures
backup
is
professional
&
produc:ve

25. 25
Changing culture requires more than
posters and training
Beliefs
Consequences
Behaviours
Leaders
can’t
force
people
to
believe
something…….
……or
to
behave
in
a
certain
way.
But
they
can
change
what
is
rewarded!

26. 26
Three Lessons from the Nuclear Navy
#1 Safety is not a GOAL!
#2 Simplify your management system
#3 Culture kills!

27. 27
cseifert@wilsonperumal.com

28. Thank
You
28
Chris
Seifert
Partner,
Opera:onal
Excellence
Prac:ce
cseifert@wilsonperumal.com
(972)
800-­‐3618
www.wilsonperumal.com
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