Operation go-live! Mastering the people side of operational readiness

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2 2 London 2012 te ultimate Up to 30% of te value of a capital programme can be destroyed due to operational readiness failures. 1 In te complex interplay between tecnology, infrastructure and process, it is often te people side of delivering te operation tat presents te greatest callenge. Reflecting on recent success stories, suc as te London 2012 Olympic & Paralympic Games, ow can early and iterative readiness planning, testing and exercising elp to deliver a seamless operation from day one? 1 Deloitte (2012) Effective Operational Readiness of Large Mining Capital Projects Avoiding value leakage in te transition from project execution into operations.

3 13 London 2012 te ultimate Good practice dictates tat programmes and projects sould be justified by a solid business case. Tis underpins sponsorsip, investment and, ultimately, stakeolder expectations. Yet many large-scale capital projects fail to deliver on tese expectations, wit ineffective operational readiness a significant contributory factor. Recent case studies in te mining industry ave demonstrated tat as muc as 30% of te potential value of a major programme can be destroyed as a result failures. 2 For many programme directors terefore, a compreensive approac tat builds and evidences teir organisations readiness offers real value as tey prepare for day one. It is increasingly recognised tat a focus on operational readiness is a key differentiator in a programme s ability to deliver against te commitments made in its business case. Programmes tat embed operational readiness from te outset typically identify risks earlier, mitigate design issues wen tey are less costly to resolve and build igly capable teams wo deliver te operation to teir end users wit greater efficiency and confidence. Conversely, programmes tat fail to do tis often expose te operation to increased initial spend, on-going operational cost, unnecessary burdens on teir people and damaged stakeolder confidence. However, wile a number of industries do focus on operational readiness, few can claim to ave mastered managing te uman factor, wit people by far te most callenging and least predictable component in delivering a complex operation. Programmes tat embed operational readiness from te outset typically identify risks earlier, mitigate design issues wen tey are less costly to resolve and build igly capable teams. 2 Deloitte (2012) Effective Operational Readiness of Large Mining Capital Projects Avoiding value leakage in te transition from project execution into operations.

4 4 London 2012 te ultimate Many programme managers ask weter operational readiness is te destination or te journey. In reality, it is bot. Readiness programmes sould ave a clear end goal an agreed and sponsored articulation of wat readiness means for eac function and partner. Over te course of te programme, tese readiness objectives sould be actively tested; and progress towards tem tracked, monitored and reported. Ultimately, demonstrable acievement of tese objectives gives confidence and evidence to stakeolders to declare tat we are ready. But operational readiness also describes te evolving capability of an organisation to deliver te operation at go-live. It is te glue tat binds togeter te functional silos and integrates te external partners, moving people away from blinkered one-dimensional planning and callenging tem to tink, collectively, How will tis work on day one and beyond? A readiness programme, troug exercising and testing, also validates te integration points between people, process, infrastructure and tecnology, identifying risks and gaps to be addressed long before operational launc. Increasing confidence and capability troug progressive testing and learning Start simple Define core risks and priorities Identify readiness roles and responsibilities Test individual functions and processes Incorporate lessons learned into functional plans Validate integration points between functions and partners Progressively test end-to-end processes Build a common understanding of te integrated operation Use testing outputs to refine te integrated operational plan Bring all partners togeter to stress te entire model in response to simulated complex internal and external factors Focus all levels of te organisation on te realities of day one operations.

5 5 London 2012 te ultimate A common pitfall is to interpret operational readiness as te tings tat need to be ticked off in te ramp-up to go-live. Wilst effective transition planning, training, communications and reviews of risk/issue close-out are important in acieving readiness, tey do not go far enoug in addressing te uman factor so critical to success. Furtermore, by only considering operational readiness at later stages, programmes may ave already exposed temselves to significant value destruction Take a typical programme scenario, for example. A design team is tasked wit developing a future operating model, and briefed to design infrastructure, select systems and equipment, and develop operational processes. However, te team tat will ultimately deliver te operation is not involved in developing and validating tis future model. A separate team will be responsible for training end users. By te time te operations team begins to ramp-up, buildings ave been built, equipment as been procured and processes embedded into systems. Emotional connections ave been establised and loyalties formed according to organisational boundaries. Te operations team quickly identifies risks to delivery, inefficiencies and inadequacies, and are left feeling exposed wit teir commitment to te new ways of working diminised. But to cange tings now would be too costly, time consuming, and jeopardise te go-live date. And so, from te outset, not only is te operation compromised in its ability to function effectively, but te morale and commitment of te team is also undermined, due to features tat could ave been designed out wit an earlier focus on operational readiness. A common pitfall is to interpret operational readiness as te tings tat need to be ticked off in te ramp-up to go-live.

6 6 Wilst effective transition planning, training, communications and reviews of risk/issue close-out are important in acieving readiness, tey do not go far enoug in addressing te uman factor so critical to success. London 2012 te ultimate

7 7 Used effectively, experiential learning and exercises can transform a programme s management of te people side of acieving operational readiness. London 2012 te ultimate Traditional operational planning and design metodologies invariably incorporate review stage gates. Tecnology projects may even incorporate an element of conference room piloting or model office in te final stages of testing. But linear planning and end-stage reviews can be limited in te dimensions tat are addressed and te viewpoints eard. A standard review process is unlikely to validate te complex integration points, roles, responsibilities, systems, locations, communication cannels and individual responses tat go to make up an end-to-end operation. Wat is experiential learning? Experiential or immersive learning and exercising tecniques provide a way to bring functions and partners togeter to callenge and validate plans, and build collective capability. Based on te premise tat skills are best acquired troug experience, te main goal of exercising is to accelerate te development of capability by presenting people wit real life callenges. It provides a safe environment in wic to test end-to-end processes, validate assumptions, identify gaps and build a team s confidence More and capability in delivery, as well as teir commitment to adopting te new ways of working, before designs are locked down and delivery resources committed. As a result, exercising also elps to demonstrate and accelerate some intangible, yet essential, operational readiness elements, including: Strengtening internal and external relationsips, particularly across multiple sites, regions, partners and oter organisations Improving collaboration, fostering common work practices and protocol Increasing awareness of oters practices, needs and expectations Higligting individual uman beaviours in situations tat replicate real life Developing knowledge, skills, attitudes and confidence.

8 8 London 2012 te ultimate How can it be applied in a capital programme? Across te lifecycle of a major programme, exercising can be used to progressively build capability and engagement. Suc an approac was used to good effect to build te capability of te delivery teams at London 2012 (see page 10). Exercises can be targeted at particular topics pertinent to te current project pase and progressively develop in scope and sopistication as te emerging operation evolves. During te early pases of design, exercises will focus on clarifying scope boundaries, roles and responsibilities between partner organisations. Wit tis foundation in place, tese early pase exercises sould focus on developing and validating Plan A, business as usual operations. As te design matures, exercises develop in complexity to look at less common situations, including contingency and crisis scenarios. As te scope and complexity of exercises increases, so does te level of realism. By moving end-users from te office to a more realistic environment, suc as a simulated operations centre or model facility, it is possible to get a more realistic view of teir response under pressure. As go-live approaces, exercises focus on building te capability of te organisation at all levels, from te Executive team troug to te frontline operational teams and fully integrating tis across te partner network. Innovative tools to build capability Go-live ramp up programmes Advanced tracking & reporting tools Real-time simulations Cross-programme readiness objectives framework Integrated Immersive Evidence-based Immersive learning Multi-partner table-top exercises End-to-end plan validation

9 9 London 2012 te ultimate Andy Cox, former Captain in te Britis Army and now a Senior Manager in Deloitte s Simulations and Wargaming practice, considers ow te corporate world can learn from military exercising tecniques. Te Britis Army as developed an approac to operational readiness tat blends traditional capability development wit a focus on reearsing integrated operations, using two distinct concepts. Many corporate programme managers will recognise te concept of force preparation, wic focuses on developing appropriate staffing levels, procuring and delivering essential equipment and training individual roles and functions. But once tese foundations are establised, te military transitions to focus on force generation, wic elps map out ow to develop te integrated capability of te end-to-end operation and te frontline delivery team. Tis approac as tree distinct pases: 3 1. Foundation training allowing all individuals to acieve flexible core competence in teir functionally specific roles. 2. Mission-specific training addresses te need to adapt to meet te specific, intended operational context, focusing on te competencies needed to deliver te mission in its entirety, and integrating all of te delivery functions, partners, equipment and systems to develop a collective competence. 3. Mission reearsal training preparing units to deliver operational responses in real time wit realistic pressures and callenges wit te aim to practice and test skills learnt troug te entire force generation process. Reearsals require individuals, functions and wider units to collectively respond using te command, control and communications arcitecture tey will ave during te live mission. 4 3, 4 Ministry of Defence, Army Doctrine Publication (ADP) Operations, ttps:// More

10 10 London 2012 te ultimate Lessons identified vs. lessons learned All too often, organisations go troug a valuable exercising period witout really taking on board te lessons identified. Te military approac is based on bot lessons identified (from wic a remedial action as been developed), and lessons learned (te results from te implementation of a remedial action tat delivers improved performance or increased capability). Te process demands tat lessons identified become institutionally learned and recommendations are exploited to maximise and enance operational capability. Wat sets te military approac apart is an understanding tat learning lessons is an individual as well as a collective activity. A lesson migt be clear institutionally, but until it is absorbed individually, te risks of repeating mistakes or missing opportunities will remain ig. Te military ave a very obvious reason for focusing on operational readiness. Wilst te corporate world will infrequently face suc stark realities, adopting some of te tecniques and robustness of te military approac can ave a ugely positive impact in managing te people side of acieving operational readiness. Wat sets te military approac apart is an understanding tat learning lessons is an individual as well as a collective activity.

11 11 London 2012 te ultimate London 2012 te ultimate As an atlete, you never want to perform someting in te final tat you aven t spent tousands of ours preparing for... Lord Coe, Cair, LOCOG In te summer of 2012, te eyes of te world were on London. Te overall success of te Games would be determined largely by te readiness of te UK-wide operation on day one. Te callenge was unparalleled in its complexity, seeking to integrate over 50 nationwide domain owners and 40 internal organising committee functions delivering to 200+ locations across a complex multistakeolder landscape. Over a period of 20 monts, Deloitte worked alongside a number of te key London 2012 delivery partners, including te Organising Committee (LOCOG), te Greater London Autority, Transport for London, Network Rail, te Cabinet Office, te Emergency and Security Services, and te Britis Olympic Association, to deliver a compreensive and sopisticated readiness programme. More

12 12 London 2012 te ultimate Working alongside LOCOG, we defined over 4,500 readiness objectives tat spanned te breadt of teir operation. Te premise of te programme was to make people feel like tey ad done it many times before. But ow can you acieve tis wen te venues ave yet to be built, te atletes ave yet to arrive and te equipment as yet to be procured? An experiential learning approac was used to focus participants on wat it would actually be like to operate teir function at Games time, balancing Plan A scenarios wit crisis management and everyting in between. From late 2010 onwards, a dedicated readiness team delivered over 300 exercises, ranging from scenario-based table-top activities to live day in te life venue simulations and multi-day, multipartner test events wit over 3,000 participants. Readiness exercises callenged participants to pool teir functional resources, apply teir collective plans and build strong working relationsips to resolve real life callenges tat, at Games time, would require a seamless integrated response. Weter simply talking troug ow to support a weelcair user to get from te Jubilee Line to te Velodrome, or collaborating wit multiple partners and locations to respond to a potentially Games-ending toxic smoke plume, te exercises all focused on building capability, confidence and a collective response instinct in te people wo would need to step up and take carge. Importantly, tis readiness programme started earlier tan in many oter projects, giving London 2012 te cance to test incrementally as plans and capability developed. Te robust performance analysis and reporting process identified and fed back actions trougout, escalating issues and risks, and tracking overall readiness status. And as te Games approaced, lessons from testing were continuously revisited and embedded to support te transition to, and delivery of operations. Wilst te London 2012 readiness programme was essential in elping people understand teir own roles, it was equally instrumental in elping tem understand ow teir role integrated wit, and was impacted by, everyone else s. An early focus on operational readiness elped integrate roles, functions and partners to ensure tat, on day one, tey operated as a single, seamless and accountable team rater tan 200+ individuals. Mattew Wilson, Operational Readiness Manager Competition & Non-Competition Venues, LOCOG Deloitte secondee More lessons from London 2012

13 13 London 2012 te ultimate Investing in operational readiness at te earliest stages of a new programme s lifecycle will add costs to te capital expenditure typically between 1-4% of total cost. However, tis investment drives benefits tat far exceed te cost bot immediately upon operational launc and on a recurring basis troug enanced efficiency, increased quality, better customer service, improved compliance and greater productivity. In te run-up to go-live, a compreensive readiness programme will build valuable confidence in operational performance amongst all stakeolders, from te frontline operator to programme director and external regulator. A leading oil and gas company as observed tat te costs of acieving effective operational readiness are typically quickly recouped troug increased asset reliability, improved safety, lower modification costs and reduced operating and capital expenditure associated wit downtime and turnarounds. Teir evidence suggests tat, in addition to te severe detrimental impact on capex and initial operational capacity, ongoing operations and maintenance costs over an asset s lifecycle are typically 1 2% iger, year-on-year and for te entire life of te asset, were operational readiness was not sufficiently acieved at te outset. 5 So te question is less can we afford to do it? but rater can we not? Evidence suggests tat, in addition to te severe detrimental impact on capex and initial operational capacity, ongoing operations and maintenance costs over an asset s lifecycle are typically 1 2% iger, year-on-year and for te entire life of te asset, were operational readiness was not sufficiently acieved at te outset. 5 Bob DiStefano, Operational Readiness: Bridging te Gap Between Construction and Operations for New Capital Assets ttp://reliabilityweb.com/index.pp/articles/bridging_te_gap_between_construction_and_operations/

14 14 of embedding operational readiness preparation into a major capital programme London 2012 te ultimate Start early: By embedding a focus on te reality of te end operation, and bringing accountable operational leaders into te programme early, every decision will be made wit consideration of te operational impact. Tis culture will ten permeate te organisation as it grows in te run-up to operational launc. Ensure senior sponsorsip: Operational readiness is as muc a mind-set as it is an approac or metodology. Only wit te rigt direction from senior leadersip will programmes be able to bridge te gap between tose wo design and build, and tose wo will eventually operate. For a capital project, operational readiness sould be te focus of a named director. Define wat readiness means: Readiness can be a nebulous concept. It is important tat time is spent defining wat ready looks like. Tis is critical in translating a vision into someting wic can be implemented. Eac function and delivery partner sould ave an opportunity to input into and agree te programme s operational vision, underpinned by readiness objectives. Develop an overarcing readiness strategy: As early as possible, define wo from across te internal and external stakeolder landscape will be responsible for driving and delivering eac readiness objective. Different teams or organisations may be better placed to lead on different objectives. Tis not only spreads te overead, but embeds te culture across te programme. Integration wit te programme plan: Once tis framework is establised, seek to integrate te readiness plan into te programme plan, so tat readiness activities complement te evolving programme outputs. Establis clear roles, responsibilities and governance: Operational readiness activities are wortless unless te actions, issues and risks tey identify are actively managed and openly sared. Strong governance tat involves external partners as well as internal functions will elp sare tese lessons and incorporate te learnings. More

15 15 London 2012 te ultimate Engaging teams in experiential learning trougout te operational readiness journey creates a sense of teamwork, participation and commitment to new ways of working tat is sustained across te wider team beyond day one. Measure and communicate progress towards readiness: Readiness objectives sould be evidenced troug exercises and oter activities, suc as traditional training and reviews, as te programme progresses. Readiness objectives can provide a quantitative and qualitative framework to track progress, evidence capability, igligt areas of risk and communicate wit stakeolders. Focusing on wat could go wrong can distract you from focusing on wat needs to go rigt: Many operational readiness approaces simply focus on ig risk, contingency scenarios. Wilst it is essential tat capability is built to respond to contingency and crisis scenarios, tis sould not divert attention away from building capability to deliver te core Plan A operation. Indeed, by focusing on building capability to deliver te Plan A operation, it is possible to actually mitigate te risk of some contingency and crisis situations occurring in te first place.

16 16 London 2012 te ultimate Deloitte s specialists ave extensive experience of supporting clients in acieving operational readiness. From design and delivery of a readiness programme troug to support at go-live and beyond, we offer a compreensive range of services trougout te lifecycle of a capital project, as well as a readiness ealt ceck to assess existing plans. We would be deligted to discuss te operational readiness plans for your programme. Please contact us troug your Deloitte contact or at [email protected] Orcestrating success Making a success of multi-billion pound projects tat extend over several years is 50% competence and 50% confidence. Deloitte provides clients wit bot. Drawing on extensive experience across a range of sectors, from major events to transport, our capital projects team arnesses expertise from across Deloitte to create a portfolio of skills tat gives clients te power to deliver major projects wit confidence.

17 17 Tim Parr Partner, Infrastructure & Capital Projects +44 (0) London 2012 te ultimate Rick Cudwort Partner, Security & Resilience +44 (0)

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