Asset management in leadership change

David Berger says system health teams offer a sustainable means, regardless of management structure.

By David Berger

Whether you manage physical assets that are plant equipment, facilities, IT equipment, or other asset classes, it’s difficult to avoid working in silos. Companies have to compartmentalize by function, process, craft/skills, technology, geography, customer segment, asset type, asset manufacturer, and many other possible silos, in order manage work more effectively. It’s always fascinating to watch the new executive, in an effort to gain a reputation of getting things done, present a new organizational chart that moves from one set of silos to another. Not that this is necessarily a bad thing, for example, moving the maintenance function from under operations to under engineering, or vice versa, but it simply shakes things up a little and presents a new set of tradeoffs until the next executive makes changes.

Even more frustrating to middle management and front-line workers is when organizational change by executive decree precedes any changes to your processes and your supporting CMMS or, worse, before any sense of a new asset management strategy is provided. What are the objectives of the new organizational structure, in terms of both qualitative and quantitative measures and targets? How will targets be met? What are the implications from a change-management perspective? These are all important considerations long before sticks and boxes are moved around on an organizational chart.

System health teams (SHTs) provide one alternative to this endless cycling of silos. SHTs acknowledge that there will always be silos of some kind, and provide an effective means of integrating them.

Objective of system health teams

The primary purpose of SHTs is to monitor and improve the performance of a logical grouping of assets, by working with a cross-functional team. Simple analysis and reporting tools are used to measure progress against a set of targets. Sample measures that might be tracked and improved over time include:

  • asset availability (uptime)
  • asset utilization (asset is available, but is it being used?)
  • asset reliability (MTBF)
  • asset performance (percent of engineered design capability)
  • quality of output (percent rejects due to asset-related issues)
  • total cost of ownership (lifecycle cost).

Systems can be interpreted as interrelated assets that work together, such as HVAC equipment in a facility, or a given category of equipment like robotic palletizing systems. System health includes both short- and long-term viability of the asset group for which the SHT is responsible. This might involve bringing the SHT together for an emergency meeting to solve an immediate problem with the system or resolving a longer term issue through extensive monitoring and root cause analysis. The SHT must also exploit improvement opportunities over the short to long term, such as experimenting with different parts, comparing equipment manufacturers, switching maintenance policies, playing with inspection intervals, or trying different repair/replace strategies.

System health team structure

The SHT structure is an overlay onto your existing organizational structure, thereby creating a matrix organization. Each SHT must influence, not replace, the work of individuals in the existing organizational structure; otherwise confusion and diffusion of responsibility will ensue. For example, asset owners and planners are ultimately responsible for developing and improving the work program, but results of a given SHT meeting might influence how that gets done.

Each SHT draws from silos that are relevant to the system. For production assets, this typically includes representation from maintenance, engineering, operations, and materials management. For a multi-site operation or a large facility such as a power plant, there may be 25 to 50 or more systems. SHTs must be scaled to the number of assets and their complexity. On a practical level, the number of people available to form teams will also be a driving factor in how many teams are formed.

Each team should have a designated leader with clear roles and responsibilities. At least initially, the team leader is usually the asset owner drawn from engineering. The leader is responsible for running the meetings of the SHT, including coordination of all preparation and follow-up work. Leaders usually require some level of training on how to set an agenda, facilitate a meeting, and most importantly, how to motivate busy people drawn from other departments that do not officially report to you. All team leaders should report, dotted-line, to an executive sponsor of the SHT program, who is typically the head of engineering in an asset-intensive environment.

The role of the CMMS

All teams are responsible for tracking against a set of targets relevant to their systems, showing improvements over time. The CMMS is used to report on progress at least weekly. A dashboard can be shared with senior management to ensure it’s kept abreast of any important trends and anomalies. Depending on the number of teams, SHTs will present a minimum of once a year to senior management, demonstrating progress since the previous presentation.

The more advanced CMMS packages can also be used for tracking anomalies — unexpected events, incidents, or variances relevant to a given system. When an anomaly occurs, a case is opened within the CMMS. The SHT can help to monitor and resolve the case along with the asset owner who has ultimate accountability. The case may result in multiple phases before it’s eventually closed, such as immediate corrective action, investigation, root cause analysis, risk management, management of change, and possibly some permanent corrective action to prevent recurrence.

Implementation suggestions

The SHTs are best implemented initially as a proof of concept for a test period of at least one year, starting with a minimum of the critical systems. The key deliverables from that first year are:

  • setting and achieving some reasonable improvement targets
  • basic training for team leaders and their teams in how to facilitate effective problem-solving and brainstorming meetings
  • involvement of the SHTs in short- and long-term issue resolution and exploiting opportunities
  • conducting at least monthly SHT meetings over and above emergency or ad hoc meetings
  • at least two formal presentations of each SHT to the senior management team.
David Berger, a Certified Management Consultant (C.M.C.) registered in Ontario, Canada, is a Principal of Western Management Consultants, based in the Toronto officeDavid Berger, a Certified Management Consultant (C.M.C.) registered in Ontario, Canada, is a Principal of Western Management Consultants, based in the Toronto office. David has written more than 200 articles on a variety of topics such as maintenance management, operations management, information technology, e-commerce, organizational design, and strategy. In Plant Services magazine, he has written a monthly column on maintenance management in the United States, as well as three very extensive reviews of maintenance management systems available in North America. David has done extensive work in the areas of strategy, information technology and business process re-engineering. He can be reached at
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If the first year is a success, then in the second and subsequent years the number, composition, mandate, and reporting structure of the SHTs can be revisited. Some companies may opt to post the team-leader role and create permanent positions, depending on the success of the SHT program. Other companies pool multiple SHTs together and create permanent group-leader roles for each grouping of say five SHTs. Additionally, the CMMS can be used to further develop analysis and reporting tools in support of meeting refined SHT objectives.

Key SHT benefits

The key benefit of implementing SHTs is to assist departments and individuals in meeting their performance targets. This is accomplished by bringing together the most knowledgeable resources from across the enterprise relevant to a given grouping of assets and, on a regular basis, focusing their attention on solving problems and identifying improvement opportunities. SHTs also provide leadership and professional development opportunities for team and group leaders, as well as individual team members. As well, the SHT presentations and weekly status reports are another avenue for the senior management team to stay abreast of significant trends, anomalies, and areas to focus on for improvement.

SHT risks and tradeoffs

Of course, SHTs do not come without tradeoffs. Most importantly, SHTs create a matrix organization with multiple reporting structures and a new layer of bureaucracy. This requires greater sophistication to manage properly, for example, avoiding mixed messages and diffusion of responsibility across multiple bosses.

Read David Berger's monthly column, Asset Manager.