EFCOG KAISER-HILL COMPANY, LLC Building a Learning Organization Nancy R. Tuor President & CEO Rocky Flats Closure Project Demolition of Building 776/777 Demolition of Building 371

EFCOG KAISER-HILL COMPANY, LLC Agenda l The reasons to create a learning organization l The impediments at Rocky Flats to creating a learning organization l Foundations for creating a successful learning organization in the DOE environment Rocky Flats Nuclear Weapons Plant Rocky Flats National Wildlife Refuge

EFCOG KAISER-HILL COMPANY, LLC Accelerating Rocky Flats Closure l Current cost estimate is under $7 billion; expected completion date is October, 2005

EFCOG KAISER-HILL COMPANY, LLC Project Performance Against Closure Contract Targets

EFCOG KAISER-HILL COMPANY, LLC Total Recordable Case Rate Average

EFCOG KAISER-HILL COMPANY, LLC Why Build a Learning Organization? What Was at Stake? l DOE expectations of continuous improvement in safety and compliance l Earnings potential l Reputation l Penalties Heavy equipment in vicinity of Present Landfill remediation

EFCOG KAISER-HILL COMPANY, LLC Innovative Incentive Sharing Leads to Accelerated Cleanup l Contract set stage for safety, cost savings and schedule acceleration

EFCOG KAISER-HILL COMPANY, LLC What Type of Organization did We Need to Build to Deliver “The Impossible” l One that could continuously improve in strategy and action l One that could learn quickly and move learning “to the floor” l One that could take bounded risks l One that could engage the workers as problem solvers l One that “organically” understood that acceleration resulted from doing things right the first time, not from speed Packaging transuranic waste into shipping containers A Learning Organization Was A Requirement to Achieve Our Goals

EFCOG KAISER-HILL COMPANY, LLC What Were the Impediments to Creating Learning Organization l Line Management Did Not Own Safety – Physically or Psychologically –All safety resources belonged to the central safety group –“Us” versus “Them” mentality –Central safety group was much too large, leaving impression that no one else needed to worry about it l Senior Management Totally Occupied with “Crisis Du Jour” –More time was spent looking backwards or making sure today’s work got done, rather than on anticipating and solving tomorrow’s problems –Lack of predictable processes (either production or safety) meant that senior management had little time to chart strategy or work on continuous improvement

EFCOG KAISER-HILL COMPANY, LLC What Were the Impediments to Creating Learning Organization (cont.) l Management stuck in their own paradigms –Nuke’s couldn’t think out of the box –Yellow iron managers didn’t know there was a box l Safety and technical programs had poor technical basis –Too much mediocrity; not enough excellence –Requirements often tied to personal preference, not sound technical basis –Plethora of “safety versus safety” requirements B371 canyon decontamination

EFCOG KAISER-HILL COMPANY, LLC What Were the Impediments to Creating Learning Organization (cont.) l Quality of Oversight and Assessment Staff –Not the best people, tended to be a dumping ground –Too many –Not properly trained –Not well grounded in what work looks like l Trust and credibility with workforce was lacking –They viewed many requirements as “make work” with no risk or hazard basis –Workers were not engaged in how the work was done – they just did what they were told l The site had forgotten how to succeed

EFCOG KAISER-HILL COMPANY, LLC Foundations for Creating a Successful Learning Organization l Infrastructure that enables work l Balance between line and staff authority l Oversight and assessment process that fosters continuous improvement l Senior management involvement l Partnership between management, staff and labor l “What If” attitude cultivated in strategy and execution Preparing B883 for demolition

EFCOG KAISER-HILL COMPANY, LLC Infrastructure that Enables Work l Work planning process –Scope of work and boundaries clearly defined –Strong focus on hazard identification and awareness –Controls specifically tailored to hazard –People doing the work involved upfront l Facilities available to support work –Work scope analyzed and appropriate controls in safety basis –Safety program implemented at facility level –Work release process adequate to control evolutions –Pace of activities gauged management’s ability to control and the facility’s ability to support Diamond wire saws were used to make initial cuts on the “Infinity Room”

EFCOG KAISER-HILL COMPANY, LLC Infrastructure that Enables Work (cont.) l Robust Safety Program Management and Implementation –Programs defined –Strong technical basis –Subject matter experts –Recognition that programs exist to support safe work execution –Training program complements procedure controls and supervision –Safety infrastructure must evolve as hazards change (Nuc  Industrial) B730 excavation

EFCOG KAISER-HILL COMPANY, LLC Balance Between Line and Staff Authority l Project managers must own safety and must have their own safety resources l Intellectual “firepower” must be equalized between line and central –Line safety must be capable of assisting work execution; central group must be respected l Project managers must have sufficient competence, judgement and experience to recognize and manage the hazards l Healthy tension must exist between line management and safety program management

EFCOG KAISER-HILL COMPANY, LLC Senior Management Involvement l Executives must have ability to develop organizations that can deliver predictable safety and production quality. This is the required platform for excellence and learning (Maslow) l Frequent floor level presence –Walk the talk –Not isolated from “real work” –Ability to gauge the workforce –“Why are we doing that?” Progress at B444

EFCOG KAISER-HILL COMPANY, LLC Senior Management Involvement (cont.) l Excellence in management allows timely involvement in continuous improvement –Daily presence at SAC –Executive Safety Review Board (ESRB) review and approval of all causal analysis, corrective action plans, and assessment plans –ESRB involvement in emergent issues l Excellence in management also allows rapid response to “events” and personal involvement in dissemination of learning Highly contaminated filter plenum following decontamination

EFCOG KAISER-HILL COMPANY, LLC Partnership Between Management, Staff and Labor l Quality of line supervisors (interface with hourly) is essential – Requires corporate financial and time commitment (training and access) –Line supervisors must not be overly burdened with administrative requirements; they must be on the floor, actively engaged with workers –Line supervisors are the eyes, ears, and mouth of the organization –They are the first line of defense l Active engagement of union in safety program –Safety committee –Assessments –Cross-project evaluations –Easy access to senior management, weekly interaction

EFCOG KAISER-HILL COMPANY, LLC Partnership Between Management, Staff and Labor (cont.) l Acknowledged respect for the workforce –Active involvement in hazards identification and work planning –Respected stop work authority –Part of the “what if”/ “why couldn’t we” culture –Spot awards for safety and production innovations (including awards for stopping work) –Share in corporate earnings/incentives –Advance communication on schedules, layoffs, etc. –Aggressive workforce transition assistance l Fail-safe mechanisms provide additional avenues of discovery –Safety hotline –Employee concerns program Environmental remediation of the Present Landfill

EFCOG KAISER-HILL COMPANY, LLC Accelerated Cleanup and Excellent Safety Go Hand in Hand l Excellent safety performance is required to enable accelerated cleanup l Constant vigilance is mandatory June 2000May 2005 Baseline Cost & Schedule Variance