THE WELCH COMPANY
440 Davis Court #1602
San Francisco, CA 94111-2496
415 781 5700
S U M M A R Y
DIARY: June 11, 1994 08:38 AM Saturday;
PMI Asilomar Conference.
2...Partnering New Business Model
3...Communication Snafus Cost $500M - Case Study of Expediting
4...Information Overload Prevents Message Expedite Get Things Done
5...Engineer Never Got Message Information Overload Paralyzes Productivity
6...Root Cause Analysis Penetrates "Fog of War" to Discover Causation
7...Everybody Sues Everybody
8...Partnering Develops Win Win Solution
.....Rigid Inflexible Bureaucratic Methods, Resist Accountability
.....Feel Good Management Slippery Slope Leads to Murphy's Law
9...What about "lessons learned"?
10...What changes in the submittal and approval processes were instituted?
11...Management Creativity with Language
12...History of Who, What, When, Where, Why, How, Which
13...Intelligence Process of Organization and Alignment Spawn Creativity
.....Alphabet - Paradigm Shift to Invest in Deferred Rewards
.....Thinking Through Writing to Avoid Murphy
16...Failure Shows Steps to Success
17...New Management Skills Needed
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0201 - The Construction Group
020101 - Mr. Michael L. Bell; President
0202 - ICF Kaiser Engineers, Inc.
020201 - Mr. Sherrill R. McDonald; Manager; Construction Department
0203 - Pacific Gas & Electric Company
020301 - Mr. Bill DeHart, PMP
020302 - Project Manager
020304 - Project Management
Asilomar Conference, 940610
Contract Disputes Concurrent Discovery
Conflict Resolution Examples of Need for SDS
Good Management Defined Intelligence Memory Organization Analysis Ali
Ship Lost at Sea $500M Dollar Loss Case Study Nobody Used Good Manag
2207 - ..
2208 - Summary/Objective
220901 - Follow up ref SDS 17 0000
220903 - ..
220904 - Partnering New Business Model
220906 - John Igoe and Sherrill McDonald, VP Kaiser Engineers, presented the
220907 - fundamentals of "partnering" to avoid litigation, as shown in the
220908 - conference flyer at ref DRP 1 9584, and considered in the HBR article
220909 - at ref SDS 13 8498.
220912 - ..
220913 - Communication Snafus Cost $500M - Case Study of Expediting
220915 - Follow up ref SDS 6 1199 on 920128 "rough sea" ahead analogy.
220917 - A few years ago a new ship was built to transport oil from Saudia
220918 - Arabia around the Horn of Africa to East coast refineries in the U.S.
220919 - On its maiden voyage the ship sank in heavy seas with the loss of
220920 - $100M in oil, and $300M to replace the ship. Fortunately no loss of
220921 - life occurred, so the only issue was financial settlement between the
220922 - oil company, the refineries, the ship builder and the engineer.
220924 - ..
220925 - Four (4) years later a trial was held to adjudicate competing claims.
220927 - [On 950207 explained slippery slope of ignoring small mistakes
220928 - that then escalate into crisis that is covered up and denied.
220929 - ref SDS 19 6696]
220931 - [On 980316 small scale of "meaning drift" problem that needs
220932 - alignment. ref SDS 27 1680]
220934 - ..
220935 - [On 990308 hypothetical scenario in construction. ref SDS 30 6399
220937 - ..
220938 - [On 991001 space probe crashed on Mars due communication that was
220939 - not aligned. ref SDS 31 0001]
220941 - ..
220942 - [On 031211 information management methods at top law firms
220943 - illustrate how little deviations on inconsequential details have a
220944 - big impact on major problems. ref SDS 34 5B83
220946 - ..
220947 - Ship construction records and the captain's log (recovered from
220948 - salvage) were reviewed.
220950 - ..
220951 - Construction had begun in March 1988 on a 24 month fast-track
220952 - schedule. There was a bonus for completing on time, and a stiff
220953 - penalty if delivery lagged by more than 6 months. The CEO for the oil
220954 - company testified that, when the agreement was signed, everybody felt
220955 - good about streamlining communication by using "high tech" to reduce
220956 - unnecessary middle managers and staff tracking inconsequential details
220957 - that seem like overkill. The parties had all been ISO certified, so
220958 - business processes were in sync to focus on the big picture and the
220959 - bottom line, reviewed previously on 921127. ref SDS 8 0674
220961 - ..
220962 - Nobody expected problems completing on time because they had a 6 month
220963 - window, and high tech would expedite the work.
220965 - ..
220966 - Asked to explain "High Tech," the CEO cited cost and schedule control,
220967 - CAD, voice mail, fax and email. The oil company's Vice President for
220968 - Planning testified that CPM and Lotus Notes were used, and new
220969 - computers using just released Microsoft Windows 3.0, Microsoft Project
220970 - and Office programs were provided by the oil company to make sure
220971 - everyone was compatible. Key executives attended a two-day project
220972 - launch seminar on TQM and effective dialog skills to expedite problem
220973 - handling. At that seminar, Steven Covey was hired to present his
220974 - ideas on empathic listening (reviewed on 921205, ref SDS 9 5903).
220976 - ..
220977 - At the seminar someone asked how the project would avoid past problems
220978 - when inconsequential details were overlooked, and later became major
220979 - problems? (On 921127 this issue was raised on another matter.
220980 - ref SDS 8 0674) It was then decided after interviewing a number of
220981 - management consultants to hire Arthur Anderson to design a management
220982 - system for keeping an "audit trail" on action items. This eventually
220983 - resulted in using Lotus Notes to share information through a network.
220984 - ..
220985 - On 890809 executives like to work by conversation, but feel
220986 - listening is a problem. ref SDS 3 CJ9J
220988 - ..
220989 - Covey was reviewed on 921205. ref SDS 9 5903
220991 - ..
220992 - [On 031211 information management methods at top law firms
220993 - illustrate how little deviations on inconsequential details have
220994 - a big impact on major problems. ref SDS 34 5B83
220996 - ..
220997 - About 2 months after the contract was signed, the ship builder
220998 - proposed substitute wiring, which was submitted two weeks late while
220999 - investigating cost savings and product availability. Review by the
221000 - design engineer was delayed 4 weeks because 10 days after submittals
221001 - were due, the lead engineer left to visit another project. Nobody
221002 - thought this was a problem at the time, because they had a six month
221003 - window and were using high tech to expedite the work and save money,
221004 - so a week or so delay seemed inconsequential.
221006 - ..
221007 - At trial the project manager for the ship builder was asked about a
221008 - memo from the scheduling engineer warning that slippage on certain
221009 - activities had changed the critical path.
221011 - ..
221012 - The project manager pointed a finger at the lead engineer, who was
221013 - seated at the table with counsel representing the defendant during
221014 - trial, and testified that he sent a fax and an email, then he called
221015 - and left a voice message for the lead engineer to "expedite review" of
221016 - the substitute wiring. He stated that under the "fast track"
221017 - concurrent engineering process adopted for the project, the ship
221018 - builder had placed orders and begun installation of the wire in order
221019 - to earn the bonus for timely completion. He requested immediate
221020 - notice of any problems.
221022 - ..
221023 - The lead engineer testified that their fax machine was down that day.
221024 - A repair invoice supported that testimony. The engineer recalled he
221025 - may have received the email, but could not remember, because that was
221026 - a transition perioed. The firm was staffing up to handle increased
221027 - communication from growth of business and so a lot of his backlogged
221028 - email was forwarded to others for expedited response. A revised
221029 - organization chart and hiring records coorborated the Lead Engineer's
221030 - testimony of his recollection.
221032 - ..
221033 - The Lead Engineer, also, recalled receiving the voice mail from the
221034 - Project Manager requesting that review of wiring submittals be
221035 - expedited; he further related having been offended by the "bullying"
221036 - tone of the message, which seemed more like a demand than a request.
221038 - ..
221039 - The judge asked the Engineer how his firm distinguishes requests from
221040 - demands under the contract provisions prepared by the Engineer that
221041 - require the contractor to give the Engineer timely notice of needed
221042 - actions in order to avoid delay and extra cost?
221044 - ..
221045 - The Lead Engineer testified there probably is no real difference, and
221046 - that his testimony at trial was to provide context that shows stress
221047 - which may have impacted performance at the time.
221049 - ..
221050 - This was supported by a tape recording produced at trial, where the
221051 - Project Manager's message was heard, initially complaining with
221052 - pointed language about having to punch a lot of buttons for "skill
221053 - routing" and having to call back several times to finally get to the
221054 - Lead Engineer's voice mail. There was a clear request on expediting
221055 - review of submittals. The defense conceded this point, but felt the
221056 - problems with the fax machine, overlooked email and one single voice
221057 - mail all seemed inconsequential in relation to all the communication
221058 - that the lead engineer was having at that time.
221060 - ..
221061 - The Lead Engineer said he got the voice message, along with 8 others
221062 - on different matters, at the end of the day, following a long meeting
221063 - on TQM with the VP of Operations, who assigned him to visit a remote
221064 - site about another project. The Engineer noted that the Project
221065 - Manager did not say that a fax and email had been sent. He testified
221066 - that if he had been notified of this he would have taken immediate
221067 - action to obtain the record, and this would have avoided ensuing
221068 - problems. As it was, without the full record, the Engineer assumed
221069 - the Project Manager's message referred to a submittal approved the
221070 - previous day, and was being processed for return to the ship builder.
221071 - The Project Manager's message did not expressly state that a new
221072 - submittal had been made; so the Engineer believed the matter had
221073 - already been expedited.
221075 - [On 031211 management methods at top law firms illustrate how
221076 - information overload causes little deviations on inconsequential
221077 - details to have a big impact on major problems. ref SDS 34 5B83
221079 - ..
221080 - The Project Manager testified he was exasperated when he finally got
221081 - through to the Lead Engineer's voice mail, and so forgot to mention
221082 - the wire by name. Everyone had been talking about the wire issue for
221083 - weeks, so the Engineer should have known this call deserved attention,
221084 - and should have called back to verify understandings. They sent the
221085 - fax three (3) timee. It came back twice, so they assumed it was
221086 - delivered the third time.
221088 - ..
221089 - The Project Manager futher testified that the Engineer was aware of
221090 - the submittal log which showed the information was available that is
221091 - being claimed by the Engineer at trial was not mentioned expressly in
221092 - a phone message.
221094 - ..
221095 - The Ship Builder and the Oil Company both maintained that the
221096 - Engineering firm was given additional payment to use a new documment
221097 - management system in order to avoid confusion in the record, so that
221098 - the work could be expedited. The system included a diary for
221099 - reporting feedback on communications with an audit trail showing links
221100 - back to original sources. The Lead Engineer gave a brief
221101 - demonstration during testimony showing how documents are identified
221102 - and entries are made for receipt and then response.
221104 - [On 011102 case study traditional information management using
221105 - diary and journal methods write understandings of daily work,
221106 - e.g., captain's ship log, airplane flight test reports, project
221107 - manager daily diary, scientific method contemporaneous record
221108 - reporting on experiments, surveyor's journal. ref SDS 32 TO5J
221110 - ..
221111 - The judge asked why the diary is blank? There is nothing in the
221112 - system showing anyone ever wrote down who was responsible for the
221113 - work, when commitments were made and amended, and of course there was
221114 - no documentation of alignment showing that what was done aligned with
221115 - anything. The judge asked again why the diary is completely blank?
221117 - ..
221118 - Counsel for the Engineer said that the diary is a standard part of the
221119 - software, but the purpose of using the system on this project was
221120 - solely to track receipt and response to documents. Counsel explained
221121 - that documentation of communications was accomplished by all the other
221122 - systems everyone was using, like email, meeting notes, memos, and
221123 - telephone messages. He said that amendments were documented by
221124 - written change orders, so there was no need to use the diary part of
221125 - the document management system. Documenting communications was not
221126 - the purpose of this particular system.
221128 - ..
221129 - The Judge asked isn't the central problem in this case that, yes,
221130 - change orders were written, but there is dispute on scope and intent.
221131 - The parties are presenting testimony that they recollect dramatically
221132 - different communications, but nobody wrote anything down, so they want
221133 - a third party, me, the judge, to flip a coin on who to believe about
221134 - matters three (3) to four (4) years ago.
221136 - ..
221137 - Counsel responded that the Engineer will present documentation of
221138 - important issues, but it was not written down in the computer system
221139 - that has your attention right now, because the diary is blank.
221140 - Counsel further pointed out that the Contractor side used software
221141 - with a diary as part of its email system, and their diary is blank, as
221142 - well. The parties are not here to resolve why industry practice does
221143 - not document the work chronologically in a diary, but to resolve a
221144 - dispute based on evidence presented.
221146 - [On 020504 study shows professional standards for communication
221147 - practices and requirements on good management specified in FAR,
221148 - ISO, Health Care, Covey, Drucker, law, contract notice provisions,
221149 - and 2,000 years of literacy for contemporaneous documentation for
221150 - alignment and feedback to work intelligently, quickly, and
221151 - accurately are ignored in government, business, health care, every
221152 - sector. ref SDS 33 NS6F
221154 - ..
221155 - The Judge turned to the Lead Engineer, still in the witness chair, and
221156 - commented that the parties are here on a $500M dispute. Both you,
221157 - representing the Engineer, and the Project Manager for the ship
221158 - builder side, indicate there was a problem about making a change to
221159 - the wiring. Was this an important matter to document somewhere, if
221160 - not in the diary, as noted by your lawyer just now?
221162 - ..
221163 - The Lead Engineer testified there was not enough time to think about
221164 - submittal logs, because, while listening to voice messages, his boss
221165 - came in and asked him to attend an emergency meeting. A fire had
221166 - broken out at a school designed by the firm 10 years earlier, and the
221167 - fire department needed drawings right away to assess how to develop
221168 - evacuation plans. The Fire Chief testified that the Lead Engineer had
221169 - been very helpful, although it turned out they did not use the
221170 - information, but had only requested it, as a matter of procedure, in
221171 - case the problem escalated. Everyone was relieved, when the fire
221172 - turned out not to cause loss of life, and damage was less severe than
221173 - could have happened.
221175 - ..
221176 - After the emergency was resolved, it was then 0700p, and so the Lead
221177 - Engineer had to rush to attend his son's graduation from high school.
221179 - ..
221180 - The next day, the Lead Engineer's first task was to assign an ad hoc
221181 - team to begin plans on repairing damage to the school, and to get work
221182 - started on re-openning the school.
221184 - ..
221185 - As a result, he had a lot on his mind other than a submittal log,
221186 - which is maintained by a junior engineer and admin staff. The
221187 - Engineer, also, testified that, despite using new autmoated systems,
221188 - everyone knew the ship builder was behind on submitting information,
221189 - so it would not have crossed his mind that, on this one occassion,
221190 - checking the submittal log and writing an extensive memo to the file
221191 - on what was done and why about the wiring change would be beneficial.
221192 - He testified that contractors rarely insist that Engineers rely on
221193 - paperwork, since normally contractors do everything possible to
221194 - expedite the work by avoiding documentation requirements in the
221195 - contract.
221197 - [On 020504 study shows professional standards for communication
221198 - practices and requirements on good management specified in FAR,
221199 - ISO, Health Care, Covey, Drucker, law, contract notice provisions,
221200 - and 2,000 years of literacy for contemporaneous documentation for
221201 - alignment and feedback to work intelligently, quickly, and
221202 - accurately are ignored in government, business, health care, every
221203 - sector. ref SDS 33 NS6F
Information Overload Prevents Message Expedite Get Things Done Faile
230401 - ..
230402 - Information Overload Prevents Message Expedite Get Things Done
230403 - Engineer Never Got Message Information Overload Paralyzes Productivity
230405 - Counsel for the Engineer asked the Lead Engineer would it be fair to
230406 - summarize your testimony by saying that the project manager tried his
230407 - best to notify the Engineer to expedite action on the wire problem,
230408 - ref SDS 0 O194, but "information overload" prevented the Engineer from
230409 - taking timely action? The Engineer was not deliberately, nor even
230410 - passively, negligent, but simply never got the message? Is that
230411 - correct?
230413 - ..
230414 - The Lead Engineer said: "Yes, that is a fair summary. We try our best
230415 - at all times to use the tools, experience, and training we had to
230416 - respond to the project manager's requests in a manner that would
230417 - maintain progress of the work."
230419 - ..
230420 - On cross examination, counsel for the contractor, asked the Lead
230421 - Engineer, if he felt that, while information overload was the reason
230422 - for failing to take action, should this relieve the Engineer from
230423 - responsibility, accountability, liability, what have you, for the cost
230424 - that resulted from having failed to take action after being notified
230425 - by the contractor? Does "information overload" from a hectic schedule
230426 - excuse failure to perform, or should the Engineer be responsible for
230427 - having failed to hire more people, use different methods, and tools,
230428 - what have you, in order to manage the amount of work to perform the
230429 - project, including the flow of daily information?
230431 - ..
230432 - The Lead Engineer then responded that hiring more people would have
230433 - been unnecessary overkill, because...
230435 - ..
230436 - At this point, there was objection that the witness was being asked
230437 - for an opinion on a matter of law; a conference was held in the
230438 - Judge's chambers, and then testimony resumed.
230440 - ..
230441 - Evidence showed that other senior engineers, who could have taken
230442 - action, were tied up on other projects; vacation was a factor. The
230443 - ship builder's Project Manager testified he forgot about getting
230444 - approval on the wire, because work was proceeding based on his message
230445 - for the Engineer. The Engineer never became aware of the contractor's
230446 - notice of any problems, and daily construction had a lot of matters to
230447 - expedite in order to earn the bonus, which occupied the Project
230448 - Manager's time and attention.
230450 - ..
230451 - Two months later, the Engineer rejected the substitute wire because
230452 - test reports included with the submittal did not show results for load
230453 - requirements under extreme conditions that occur during storms, as
230454 - called out in the specifications.
230456 - ..
230457 - The ship builder protested that the wire had "...been tested every way
230458 - from Sunday," and passed, and that the engineer was not being a "team
230459 - player." The ship builder was working around the clock in three
230460 - shifts, and complained that the engineer was delaying the work just
230461 - because of "paperwork."
230463 - ..
230464 - The judge gaveled the court back to attention, when everyone laughed,
230465 - recalling the earlier testimony about contractor's who expedite by
230466 - avoiding "paperwork." The Project Manager asked "What's so funny?"
230467 - ref SDS 0 QW96 The wire vendor maintained the severity of storms is
230468 - subjective, and offered to test the wire during construction.
230469 - Changing to another wire would delay completion another 4 months,
230470 - eliminating the bonus. Delay would, also, prevent the owner from
230471 - meeting delivery dates for the oil. Everyone recognized that the 6
230472 - month slack in the original schedule would disappear, if the wire was
230473 - changed.
230475 - [On 961105 US Army Corps of Engineers wanted to expedite and avoid
230476 - making the contractor angry. ref SDS 23 6121]
230478 - ..
230479 - [On 970110 US Army Corps of Engineers overlooks small problems of
230480 - contract provisions to focus on big issues. ref SDS 24 7768]
230482 - ..
230483 - The record is murky on what happened next. There were many meetings
230484 - for which no record was prepared. Hearsay was aduced that the CEOs
230485 - reached agreement over lunch and dinner in different continents using
230486 - a cell phone. The CEOs denied this occurred; however, the substitute
230487 - wire was installed, and a document was produced that said the ship
230488 - would not sail in stormy weather, until the wire was tested, which
230489 - would not be a hardship, because ships normally avoid storms by
230490 - waiting them out in safe harbor.
230494 - ..
230495 - Root Cause Analysis Penetrates "Fog of War" to Discover Causation
230497 - The ship's log showed it sailed from Saudia Arabia loaded with oil a
230498 - week later than planned; so the ship builder did not earn a bonus, but
230499 - neither was a penalty assessed. The Captain expected to make up the
230500 - time to meet delivery contracts to refineries, since clear weather was
230501 - forecast for the entire 6 week trip.
230503 - ..
230504 - [On 011102 case study traditional information management
230505 - using diary and journal methods write understandings of
230506 - daily work, e.g., captain's ship log, airplane flight test
230507 - reports, project manager daily diary, scientific method
230508 - contemporaneous record reporting on experiments, surveyor's
230509 - journal. ref SDS 32 TO5J
230511 - ..
230512 - Everyone felt good because the big picture and the bottom line looked
230513 - good for everyone.
230515 - ..
230516 - A day after the ship rounded the Horn of Africa and headed North, an
230517 - unexpected storm suddenly formed in the South Atlantic. The ship
230518 - could have taken refuge, but the Captain decided to maintain course in
230519 - order to make up for the late start. Weather reports said it would be
230520 - a short storm and not very severe. Fortunately the wiring held up.
230521 - In fact, a week after departure, the Captain received a message that
230522 - tests showed the substitute wire was okay, which gave him confidence
230523 - in weathering the unexpected storm while remaining at sea, rather than
230524 - waiting it out in safe harbor, which might have cost a weeks time.
230526 - ..
230527 - However, the ship sank because the bilge pumps failed under heavier
230528 - than normal loads caused by the storm that lasted longer than
230529 - expected. This flooded a control room for the steering system, which
230530 - then failed. The Captain could not steer the ship, and it foundered
230531 - in the storm. Fortunately, there was another ship nearby that was
230532 - able to rescue the crew, but the ship eventually was torn apart and
230533 - sank. Miraculously very little oil escaped into the sea, so an
230534 - environmental disaster was avoided.
230536 - ..
230537 - Investigation by maritime authorities and the insurance company showed
230538 - that alternate pump specifications had been submitted by the ship
230539 - builder. Because of the wire controversy, ref SDS 0 O194, the
230540 - engineers did not have time to review a lot of components. Submittals
230541 - were returned to the ship builder stamped "Not Reviewed," but the
230542 - owner was not notified, so neither was the Captain. A junior engineer
230543 - was assigned to make a check of major equipment. Months later, after
230544 - returning from vacation, and completing other assignments, he wrote a
230545 - memo to his boss that the bilge pumps and a few other items were not
230546 - on the approved list of manufacturers. The engineer, also, learned
230547 - that using a special oil, the bilge pumps might be okay.
230549 - ..
230550 - The judge interceded at this part of the testimony and asked...
230552 - "How can work proceed when submittals are stamped "Not
230553 - Approved"?
230555 - Isn't that a red flag to the inspector or somebody like that?
230557 - ..
230558 - Shouldn't the owner, the Engineer, or the Contractor have been
230559 - alerted about a problem when the design is not approved?
230560 - Otherwise why have a design, review, and inspection process?
230562 - Court's questions reflect similar experience on Broadwater
230563 - Dam where submittals on the design was never approved by
230564 - the Engineer, reported on 911116. ref SDS 4 0001
230566 - ..
230567 - Counsel for the owner responded to the judge that the parties are
230568 - aware of the submittal issue. The owner agrees that there was a
230569 - failure of communication which contributed to the loss of the ship;
230570 - however, the parties have agreed this is not an issue in the case for
230571 - determination by the Court, because everyone was equally at fault.
230572 - Counsel for the contractor and for the Engineer concurred.
230574 - ..
230575 - When testimony resumed, the junior engineer testified that the
230576 - equipment lists he prepared evidently got mixed up and lost in the
230577 - 20,000 or so documents, despite the high tech management system that
230578 - had been used.
230580 - ..
230581 - The Lead Engineer and the document software vendor testified that the
230582 - information management system was effective, despite this one mixup.
230583 - They claimed that, without the system, there would have been a lot
230584 - more problems, because of the fast track management of the project
230585 - increased the rate of communication, and the contractor was "papering"
230586 - the job with frivolous claims. They concurred that when there is a
230587 - lot of information, for whatever reason, keeping track of everything
230588 - is very difficult. They felt this project worked better than others
230589 - on document management, but the degree of this one problem that seemed
230590 - like a little inconsequential detail, which everybody overlooked,
230591 - turned out to cause major damage.
230593 - ..
230594 - The Chief Engineer testified he saw a list of approved equipment that
230595 - included the bilge pumps.
230597 - ..
230598 - The junior engineer said several iterations of the list were prepared
230599 - to make corrections and add comments by other engineers, who reviewed
230600 - the list, but were assigned to other projects, with the result that
230601 - this was only one matter among many other matters on many projects
230602 - that everyone was considering day-to-day. Therefore, the bilge pumps
230603 - on this one list just seem to "fall through the cracks," even though
230604 - everyone was working hard to be careful and thorough.
230606 - ..
230607 - The Chief Engineer, who was, also, Vice President of Design, said he
230608 - never saw the corrected list. The design engineer told his boss, the
230609 - Lead Engineer, about the solution to use a higher quality oil, but the
230610 - specification sheet was misplaced. The Lead Engineer didn't think
230611 - this would be necessary because he and other senior engineers, who
230612 - attended the meeting, were unaware of problems due to a special oil
230613 - for bilge pumps. They, also, maintained that it was a contractor
230614 - responsibility, since a lot of submittals were received late.
230616 - ..
230617 - The design engineer pointed out these pumps are based on a new design.
230619 - ..
230620 - The VP of Design testified that a representative of the oil company
230621 - attended many of these meetings, and so everyone assumed he was aware
230622 - of the issue and concurred with the Engineer's position, based on
230623 - discussion at the meetings. After many months and more meetings, the
230624 - VP asked a senior engineer, who was meeting with the firm's president
230625 - to explain the situation and request instructions, since by this time
230626 - the ship was about to sail.
230628 - ..
230629 - The General Manager of Ship Design for the Oil Company, testified that
230630 - different engineers attended design reviews at different times. He
230631 - knew about the wire problem, ref SDS 0 O194, and submitted a memo that
230632 - he disagreed strongly with the firm's decision on that issue. But,
230633 - nobody told him about a possible problem with pumps. One of the
230634 - engineers for the oil company, who had since left the firm, testified
230635 - that he mentioned to the GM at a company picnic that he had written a
230636 - memo on a possible issue about a new kind of pump, and the GM said he
230637 - would look into it, but nobody ever told the engineer to follow up, so
230638 - he thought it was being handled by others, or, had been determined not
230639 - to be important after all by senior people. The engineer could not
230640 - produce the memo at the hearing, because of the company policy for all
230641 - information to remain in the company. The controller for the oil
230642 - company testified that they delete old files after 6 months to save
230643 - computer and file cabinet storage space. He produced a written
230644 - policy that supported this action.
230646 - ..
230647 - The president of the engineering firm testified that after being told
230648 - by the senior engineer that there might be a problem with bilge pumps,
230649 - he called the VP of Engineering. They discussed the need to notify
230650 - the Captain about the pump issue, and they, also, discussed the goal
230651 - to get the next order for building 5 more ships. They wanted to show
230652 - that the firm was a "team player" who could expedite the work to get
230653 - things done on time.
230655 - ..
230656 - The president said that he and the GM expected that, since the Captain
230657 - was under orders not to sail during storms because of the wire issue,
230658 - it seemed reasonable at the time not to notify anyone that other
230659 - equipment might be at risk.
230661 - ..
230662 - The VP did not recall this discussion. He testified there were
230663 - thousands of discussions, and at various times different aspects of
230664 - these issues may have arose, and so it would be natural for the
230665 - president to attribute his understanding now to the VP, albeit
230666 - incorrectly in this case. Months later, after more meetings, it was
230667 - finally decided that the Captain should be warned about possible
230668 - problems with the pumps in severe weather, since this is a safety
230669 - issue. The president of the engineering firm sent a fax to the
230670 - General Manager for the shipping division of the oil company. He,
230671 - also, called and left a message that a fax on this matter had been
230672 - sent, explaining it was a possible matter of safety because the ship
230673 - was scheduled to set sail that day.
230675 - ..
230676 - The GM testified that he got the fax the next day, but not the message
230677 - about the urgency of the matter. The GM sent a fax to the Chief of
230678 - Design, who was on vacation, but was due to return two days later.
230679 - The GM had another emergency and so did not follow up immediately on
230680 - the pump issue, since it did not seem to be urgent.
230682 - ..
230683 - When the Chief of Design returned from vacation a day late, it took
230684 - him 3 days to get through his mail and briefings on matters that
230685 - occurred while he was on vacation for 4 weeks. He gave the fax from
230686 - the GM to the senior engineer who was overseeing the project. This
230687 - engineer immediately notified his boss that he recalled from a meeting
230688 - 2 years earlier that the contractor was considering a new design for
230689 - pumps which would save time on construction, cost less, and required
230690 - less maintenance. He recalled that reduced maintenance was attractive
230691 - to the oil company, and this is one reason the ship builder was
230692 - awarded the contract. He was unaware that a special oil was needed
230693 - for severe weather, i.e., storms. Since it did not come up in the
230694 - engineering reviews he attended during construction, he had forgotten
230695 - about it. He never saw the memo on this by the other engineer,
230696 - because he was assigned to other projects and was not in the office
230697 - most of the time.
230699 - ..
230700 - As a result, a message was sent immediately to the ship not to sail in
230701 - stormy weather, since it was by then known that an unexpected storm
230702 - had formed in the path of the ship.
230704 - ..
230705 - The Captain testified from his entries in the ship's log showing that
230706 - when he received the message he was busy supervising rigging the ship
230707 - for the storm. He did not see the message himself, but was told by
230708 - the second mate that there was a message not to sail in storms because
230709 - of pumps. The Captain's log contained underlined writing that said
230710 - this was another mistake by headquarters, because the captain knew the
230711 - wire was the problem that prevented sailing during storms, and he had
230712 - already recorded in the log having received a message that the wire
230713 - passed testing. The Captain testified it therefore never occurred to
230714 - him that the pumps were a separate problem, because it had never come
230715 - up in all the meetings.
230717 - [On 011102 case study traditional information management
230718 - using diary and journal methods write understandings of
230719 - daily work, e.g., captain's ship log, airplane flight test
230720 - reports, project manager daily diary, scientific method
230721 - contemporaneous record reporting on experiments, surveyor's
230722 - journal. ref SDS 32 TO5J
230725 - ..
230726 - Everybody Sues Everybody
230728 - The oil refineries sued the oil company for $200M due to lost revenue
230729 - and time. The oil company and its surety sued the engineer and the
230730 - ship builder for the $100M plus $300M for the loss of the ship. The
230731 - Engineer counter sued the oil company and the ship builder for failure
230732 - to notify of agreements to use new an untested design that required
230733 - increased review time that conflicted with concurrent engineering
230734 - mandated by the oil company. The ship builder counter sued the oil
230735 - company and the engineer for negligence, failure to disclose material
230736 - information, and failure to provide timely information that caused it
230737 - to accelerate which led to mistakes, oversights and rework to meet
230738 - objectives mandated by the oil company. The collateral claims
230739 - amounted to another $100M, making the total amount dispute $500M.
230741 - ..
230742 - Based on these facts, the Asilomar attendees were divided into
230743 - "partnering teams" to work out a solution that was fair to ship
230744 - owners, the insurance companies, the engineering firm and the ship
230745 - builder.
230749 - ..
230750 - Partnering Develops Win Win Solution
230752 - Sherrill, as a senior project manager with Kaiser Engineers formulated
230753 - an agreement, where the engineer and the ship builder got an order
230754 - from the owners for another 8 ships, instead of 5. The work would
230755 - again be expedited on fast track using concurrent engineering, but
230756 - this time everyone would use Windows 95 and email to ensure that
230757 - communication is expedited to avoid past problems. The engineer and
230758 - ship builder reduced the price to save the owner money, based on
230759 - savings from reengineering to cut unnecessary middle managers.
230761 - [Discussed later at ASPE seminar. ref SDS 18 9848]
Bureaucratic Inflexible Formalistic
240401 - ..
240402 - Rigid Inflexible Bureaucratic Methods, Resist Accountability
240403 - Feel Good Management Slippery Slope Leads to Murphy's Law
240405 - The loss of the ship at sea, cited above, ref SDS 0 8473, shows
240406 - mistakes, extra cost and conflict arise because it is difficult to
240407 - overcome the emotional urge to "expedite" by using conversation,
240408 - which is inherently error prone, since the mind cannot maintain
240409 - alignment for long periods. Writing fixes this problem, but takes
240410 - time and often entails filling out forms, which seem bureaucratic,
240411 - inflexible, and support accountability. Limited time encourages
240412 - use of conversation, which seems fast, easy and flexible, with
240413 - reduced accountability. It, also, satisfies the biological drive
240414 - to interact directly with people. These dynamics make it hard for
240415 - people to use writing on a consistent basis, despite training,
240416 - books, policy, regulations, standards and guidelines that require
240417 - use of sound management practices, as explained on 921205.
240418 - ref SDS 9 6013
240420 - ..
240421 - Efforts to "expedite" by avoiding paper work cause small problems
240422 - that could be corrected with a few thousand dollars, either go
240423 - unnoticed or are swept under the rug using "feel good" management
240424 - practices to ignore problems. Later "Murphy" is blamed when a
240425 - critical mass of errors erupts as a billion dollar problem.
240427 - An example is the Tudor report on the Speed Increaser
240428 - explained on 920124. ref SDS 5 4476.
240430 - ..
240431 - On 921021 the Space Shuttle "O" Ring failure showed the huge
240432 - cost of "feel good" management. ref SDS 7 4499
240434 - ..
240435 - Another example of confusing records is the keyboard matter
240436 - for CPU #3 on 940606. ref SDS 14 0000.
240438 - ..
240439 - [A later example was PMI's failure to follow its PMBOK to plan
240440 - and perform the Asilomar Conference in 1996, reported on
240441 - 960721. ref SDS 21 8258; another example is the Welch contract
240442 - with COE on Port of Oakland project. ref SDS 22 3333
240444 - ..
240445 - [On 960620 Communication Metrics was proposed as the solution
240446 - in a paper on Concurrent Discovery, ref SDS 20 1101]
240448 - ..
240449 - [On 970524 case study found small communication mistakes
240450 - caused Columbia Space Shuttle crash in 1986. ref SDS 25 7298]
240452 - ..
240453 - [On 991001 NASA space craft crashed on Mars due to small
240454 - mistake that compounded over time, caused loss of $125M.
240455 - ref SDS 31 3192]
240456 - ..
240457 - The Asilomar speakers today demonstrated how problems can be
240458 - resolved without litigation where there is mutual interest in seeing
240459 - the other entity survive, fault is divided, sufficient funds are
240460 - available to make it worthwhile to forgive and move on. These happy
240461 - conditions are not present in many situations.
240463 - [On 960807 partnering on a Port of Oakland project that resulted
240464 - in major claims, ref SDS 22 7477]
240466 - ..
240467 - [On 981027, 2 years later USACE paid $30M on a $40M contract to
240468 - buy-off mistakes. ref SDS 28 9152]
240471 - ..
240473 - ..
240474 - What about "lessons learned"?
240476 - What about the discipline of the system?
240478 - In this case the parties shared the loss, so both had an interest in
240479 - improving the process. They evidently did so by relocating the control
240480 - room, installing redundant pumps and steering in future ships.
240482 - ..
240484 - ..
240485 - What changes in the submittal and approval processes were instituted?
240487 - Will additional testing of materials be required? Were new rules for
240488 - evaluating and responding to mechanical problems while at sea,
240489 - promulgated? How would TQM develop appropriate metrics to avoid
240490 - future design, construct failures?
240492 - ..
240493 - How well was the partnering agreement implemented? Was the agreement
240494 - contingent?
240496 - ..
240497 - There may have been a lawsuit later on, if all of its terms did not
240498 - work out as well as hoped.
Innovation in Management, TQM
Customer Perceived Value, Innovation,
Correlates all MI - who, what, when, where
Discovery, Strategic Resource
Alphabet as Knowledge Tool
Innovation Creativity Hunches Incite
Mental Maps Changing Perspective Brings Creativity
Creativity Aided by Records Showing Patterns
Paradigm Shift Creativity Hunches Incite from Recognizing New Pattern
Counterintuitive Alphabet Hard to Learn Foundation Knowledge Civiliza
Paradigm Shifts Hard to Sell Because People Fear Untried Costly Solut
Good Management Defined Intelligence Memory Organization Analysis Ali
391501 - ..
391502 - Management Creativity with Language
391504 - Mike Bell gave an excellent presentation on how to become more
391505 - creative by using mind mapping and special verbs. The key verbs seem
391506 - to be "reverse" and "combine."
391508 - Mike did not provide a "case study" of a project in trouble, and how
391509 - they solved, or could have solved, problem, as indicated in the
391510 - Asilomar brochure at ref DRP 1 line 234.
391513 - ..
391514 - History of Who, What, When, Where, Why, How, Which
391515 - Intelligence Process of Organization and Alignment Spawn Creativity
391517 - Mike explained the importance of "reporting" (like a journalist), for
391518 - developing a foundation of facts that can be reassembled to provide
391519 - the context of cause and effect that guides daily action so it aligns
391520 - with objectives, requirements and commitments. The case study on the
391521 - ship project, per above, indicates how organizational memory is
391522 - essential to keep daily work on course. ref SDS 0 8239
391524 - ..
391525 - The more facts the greater the number of alternative combinations that
391526 - can be tried. This proposition is supported by the SDS record format
391527 - that provides electronic prompts to spur ideas and facilitate dynamic
391528 - editing. Automated and custom linking to history and objectives, draw
391529 - out the creative genius in the User, per POIMS. ref OF 2 3742
391531 - ..
391532 - Thus, SDS automates the "right" brain stuff so the left brain
391533 - creativity has greater reign, as discussed below.
391535 - ..
391536 - With the correct automated environment, creativity is enhanced by
391537 - using a computer keyboard. The synergy between the right and left
391538 - brain instructs the right and left hands to build ideas like a
391539 - sculptor molding clay. Speaking, like conventional writing, is a
391540 - mono-mental task, and is a linear activity, that flows in a single
391541 - direction. Writing on a keyboard, like playing the piano is a
391542 - balanced mult-mental task, involving the hands, the eyes and the
391543 - mind. If we wish, we can say the words to ourself, to feel an
391544 - alternate sensation of the ideas. We can rearrange, duplicate,
391545 - modify and compare alternate arrangements, that magnify creativity
391546 - relative to conventional management reliance on conversation.
391549 - ..
391550 - Mind Mapping
391552 - Mike explained "mind mapping" to apply the "creative" left brain, to
391553 - develop ideas for evaluation by the "control" dominate right brain.
391554 - The former is random association, the latter is sequential.
391556 - Mike offered a good example of creative problem solving where someone
391557 - is owed $1,000, but the account on the which check is drawn has only
391558 - $960, and so the bank will not honor the check. He deposits $40 into
391559 - the payor's account in order to get the $960 out.
391561 - [On 980307 Andy Grove, Chairman of Intel, reports writing copious
391562 - notes of meetings to avid mistakes caused by ambiguity of mental
391563 - maps. ref SDS 26 3668]
391564 - ..
391565 - A favorable outcome results from fairly fortuitous
391566 - circumstances, including being able to determine the amount of the
391567 - shortfall, by leaning over the counter to read the teller's computer
391568 - screen. That might not be easily accomplished by everyone.
391571 - ..
391572 - Paradigm Shift
391574 - Mike echoed Milan's presentation last night about the need for
391575 - attendees to experience "paradigm shifts," ref SDS 17 3955. He
391576 - illustrated this in part by changing glasses with attendees, to show
391577 - that other people see things differently. The example of putting
391578 - money in the bank to get more out was a good example of innovation
391579 - that supported the notion of "paradigm shift", by trying
391580 - unconventional solutions.
391582 - ..
391583 - These examples, however, do not offer guidance on improving personal
391584 - and organizational management. The latter require significant and
391585 - extended investment, before a reward is achieved. We don't find out
391586 - how management changes will turn out, for several years. This entails
391587 - risk that is met by relying on prior "safe" experience. That means the
391588 - status quo, not TQM.
391591 - ..
391592 - Alphabet - Paradigm Shift to Invest in Deferred Rewards
391594 - The alphabet is an example of TQM at its best, as reviewed on
391595 - 940609. ref SDS 16 8854
391597 - Small children are sent to school because that is a good time to
391598 - learn and because we are big enough to make them invest in
391599 - themselves by staying in school long enough for the rewards of
391600 - "knowing" the alphabet to pay off. This is a key paradigm shift,
391601 - learning that knowledge and ideas can be expressed by other than
391602 - sound (conversation) and pictures. Second, the organic nature of
391603 - knowledge is derived from assembling the alphabet in an endless
391604 - variety, mirroring the structure of the mind itself. Most kids,
391605 - especially today where the alternative to learning the alphabet is
391606 - no longer gathering wood, hauling water, and weeding the garden,
391607 - would likely resist this paradigm shift, in favor of pursuits that
391608 - offer more immediate rewards, e.g. watching television. This is
391609 - the same situation their fathers and mothers face at the office,
391610 - except there is no one bigger than them to facilitate their
391611 - "paradigm shift."
391613 - [On 990218 alphabet key public utility. ref SDS 29 3100]
391616 - ..
391617 - Meaningful Examples
391619 - During a break, I asked Mike to give an example of a "paradigm
391620 - shift" showing the level of effort and results to expect. A soft
391621 - example is changing the role of a "manager" from giving orders,
391622 - deadlines and threats of dire consequences, to setting objectives
391623 - jointly, giving guidance, helping do the work, and sharing in the
391624 - benefits of success, as well as the cost of any shortfall in
391625 - performance.
391628 - ..
391629 - Thinking Through Writing to Avoid Murphy
391631 - Another example is reducing reliance on conversation, which seems
391632 - like a fast, easy way to communicate, in favor of more writing in
391633 - order to obtain better analysis by both parties. This is a major
391634 - paradigm shift because more writing seems to take more time, is
391635 - less personable and entails greater accountability. It requires a
391636 - way to organize writing so it can be retrieved when needed, and
391637 - shared as needed. It requires integration with time to link
391638 - controllable action items with history. The hope that this
391639 - investment will reduce errors of first impression that cause
391640 - "Murphy" requires a period of time for the investment to pay off,
391641 - and so, like learning the alphabet, entails a bigger risk than
391642 - merely changing the role of manager from "control" to more
391643 - "influence" (see for example analysis ref SDS 15 7411).
391644 - ..
391645 - Mike said he would do this, but ran out of time, perhaps because
391646 - of the discussion about the "woman with water in her head."
391649 - ..
391650 - Failure Shows Steps to Success
391652 - Mike offered a novel insight about how to figure out what to do to
391653 - succeed. He suggests that instead of trying to list the steps to
391654 - success, instead, list what will cause and result in the event of
391655 - failure. This discloses what should be avoided, and provides deeper
391656 - insight about what to do.
391659 - ..
391660 - New Management Skills Needed
391662 - At the social hour, after his presentation, I visited with Mike and he
391663 - was very helpful with ideas on my pending presentation at PMI in
391664 - Vancouver, to set up the need for change, like he and Milan did so
391665 - well this weekend. Mike feels conferees should come away with a
391666 - concern about acquiring new skills, in order for their organizations
391667 - to stay in the race for markets, earnings and job creation. We also
391668 - need to offer a meaningful vision of what change to make, what risks
391669 - to take, a plan for implementation, i.e. a budget and schedule, so
391670 - cost and benefit can be measured.
391672 - ..
391673 - The need for managers to acquire new skills was presented by Dr.
391674 - Mike Little (a VP of technology at Boeing) in the keynote speech
391675 - at the Seattle PMI symposium in 1989. I asked Dr. Little during
391676 - Q&A, what changes should be made by executives like him. All he
391677 - could come up with was to learn to type. ref SDS 1 2222 Somehow,
391678 - it seems we need a bit more guidance in order to "take the
391679 - plunge," than this.
Distribution. . . . See "CONTACTS"