Remember when Corona was just some people’s favourite beer?
(Potential branding and image problem for this venerable brew.)
Is it too soon to talk about positive outcomes from the plague?
I don’t think so, evolution did not lead to species dominance for the ostrich.
A common quest for almost any business is to find ways to lower costs without sacrificing quality.
Typically, we seek to understand our businesses “Fixed Costs” vs “Variable Costs” and wise business operators focus their efforts on reducing the variable costs of the business.
The plague, and our remote work responses to the plague, have opened the door to one of the most significant paradigm shifts in modern business; many costs understood for decades to be “Fixed” are suddenly revealed to have been transitioned by technology to “Variable Cost” status.
It is straight up irresponsible business practice to ignore one’s variable costs.
This is true across the economic spectrum, and natural selection will take care of those who cannot assimilate the new business truths.
Leaders who can quickly shift their mind set to leverage these new variable costs will gain significant survival advantage, those who cannot embrace this change, well I believe Mr. Darwin answered that question back in November 1859.
The exact potentials here do vary from sector to sector, and business to business, and some businesses may be entirely exempt from this paradigm shift, but many others need to consider a complete re-write of what they believe to be true.
Leaders who can reset their understandings of operational cost “truths” quickly and efficiently will earn significant competitive advantage for their operations.
I cannot and will not attempt to detail all the coin on the table.
Just for the Shutdown/Turnaround Community of Practice the potential is stunning, and our little piece of the industry is only a small part of the entire impact potential for our sector.
Think about Engineering Providers, think multiple floors of expensive downtown office tower.
If the Ethics Oaths of Engineering Professionals have any meaning, then daily oversight and supervision is ridiculous.
Think about how easy it turns out to be to move large portions of this work to “remote work”. (The other side of this coin will be the impact on formerly very secure downtown office real-estate investment)
Finance professionals are also subject to professional governance and ethics oaths, is there some profit I’m missing that is derived from being able to watch your people do their work minute to minute?
I can appreciate that for business to tick-tock efficiently personal interactions are required, but could five floors of Engineering office be condensed to Three, to Two, or even just one single floor?
What happens if our professional staff only commute into the city to the office once or twice a week?
If we focus just on our own piece within the Community of Practice. We have a picture in our mind of how we enter a significant Major Maintenance event. We understand our Direct vs Indirect costs, the essence of cost control.
Or do we?
Office trailers, LOA, Travel Expense, furniture, equipment, power, utilities, washrooms, lunchrooms.
If we have a great client with realistic timelines, we will be launching our drive for Execution Excellence somewhere in the T – 18 to T -36 months range, depending on scope.
How many of our project team do we need to provision full time on site given the proven power and reliability of our current tech? (I’m not the IT guru to speak to the impact 5G is about to introduce, but as capable as our network tech is now, it’s about to be redefined in its entirety.)
Let’s take a realistic look at who is walking the iron.
If people’s work does not require them to be out on the iron, then how can a Turnaround Manager continue to sign-off on the cost of office, provisioning, and LOA when they could just as efficiently be working from their home or a providers remote location via Network magic.
Is there any reason with today’s tech capability to pay LOA and expenses for GC payroll and admin on site? How does being on site make facilitate our 24 hour turnaround on LEMS?
How many planners do we need out in the field? Certainly, we need a solid technical planner out in the field, but what about the planners who never leave their office, working from drawings and supplied data, why can’t they work from their own home base?
I like having a Master scheduler on site 24 hours a day for the actual execution, and I probably always will want that in person attendance for execution, but why would I need to pay all the bolt on costs to keep schedulers on site for two years of project planning when they can deliver the exact same product and quality remotely for a fraction of the cost?
We don’t need to explore every nook and cranny here; the point of this article is to get us all thinking about it.
We can see that the world of remote service has previously unimagine potential for both providers and clients.
We don’t want to blindly return to what once was simply because it once was.
We need to be self-honest enough to admit when the world has evolved and with it our understanding of Best Practice.
Aside from the cash we are now talking about, we all know exactly how favourable our EHS leads will be to the idea of reducing our not essential staffing.
March 23, 2005: Texas City Refinery explosion just to name one of the ghosts that haunt our Safety professionals.
Allow me a quick Alice moment down the rabbit hole…
Ironically, with so many people we think we need on site that we do not, or who think they need to be on site when they do not — and bless their drive to succeed even as we begin to rethink the logic — in my experience the one group who should on site, and out on the iron, but in my experience is seldom held to task by the client is PMs.
A Project Manager who considers walking the site and spending time with the crews beneath their dignity, is not in fact managing anything, managers are not senior executives, management by hearsay is not management.
Leadership has every right to expect that managers are speaking to what they know, what they’ve touched, what their eyes have seen.
Conversely, let’s take a hard look at site personnel who literally never walk the site.
Here’s one I bet you are not expecting me to call out, Admin support, I’m using this because even pre-plague my own team had great success with Skype in Admin support, we were forced to find a solution to being dramatically under supported, but you know what, it didn’t just “get us through a tight spot”, it gave us meeting management, action logs, decision logs, minutes, and it also gave us a recordings of the meetings.
What I’m saying is by not dragging our Admin support around to every meeting when we were spread thin over extended geography, by using the tech instead and Skyping Admin into the meetings, quality was improved, nothing at all was lost by not having Admin at the conference table in person.
I’ve worked projects with multiple admin staff being dragged on site by various PMs and Managers, all LOA, all expensed, and all adding up to an extremely expensive and inefficient way to provide meeting management.
I remember laughing with my frugal team on one execution when we noticed that on this one relatively tiny project every PM that had a small project flew in their own Admin support.
With thoughtful scheduling a single quality Admin resource sitting at a well provisioned desk, (located almost anywhere in the world), could easily support every PM and Manager on the project for meeting management.
If it seems like I’m picking on a small thing there, let us remember, Execution Excellence requires that we address all our variable costs of business, not just the high-profile shiny pieces.
Continuous Improvement means rethinking our suppositions repeatedly and continuously.
Much of what we’ve been forced to see by the Corona lockdown, we probably should have been able to see without having our hand forced, such is hindsight.
Nonetheless, we are here now, it would be irresponsible to ignore what the virus has taught us, it has been, after all, a rather expensive education.