1. Utilizing the VPP Process to Achieve Operational Excellence through Leadership and Employee Ownership

2. Background Rob Hill – NuStar Energy General Manager – West Region
30+ years in leadership roles
Refining – mechanical integrity, maintenance, projects, reliability
Liquid Terminal Storage – operations, multi-site management
Certification involvement with 8 VPP Star Sites – 2001 to present
Overview of my experience utilizing the VPP process in conjunction with the Bradley Curve and leadership to foster employee empowerment and ownership to build a model of Operational Excellence

3. Background
How many of you are first time attendees to a VPP Conference?
How many of you have at least one VPP Star Site?
How many of you have multiple VPP Star Sites?
How many of you are a management employee?

4. The DuPont Bradley Curve as a Model
The curve suggests that as culture moves from Reactive to Interdependent, ownership and accountability increase and incidents decrease – Outcomes become more predictable
Reactive – Lack of Mgmt support, Few established processes or programs
Reactive
Dependent – Mgmt ownership, Supervisor driven, Follow procedures for fear of reprisal
Dependent
Safety Performance
Injury Rate
Independent – Employee ownership, Practices, Internalized value
Rob
Independent
Interdependent – Mutual ownership and accountability, Brothers keeper, High expectations where variances not tolerated by team
Interdependent
Safety Culture
Weaker Safety Culture
Stronger Safety Culture

5. Early Years (Pre VPP)
Production goals often valued equal to if not higher than safety
Often, safety and environmental incidents are normalized as a “part of doing business”
Safety performance viewed as responsibility of Safety Department
Little ownership at employee level
Supervision more concerned with production
Incentives to work safely utilized to influence safety performance
Often drove reporting underground to maintain record (Gift Cards, Rewards Programs)
Disincentive to share near misses and promote learning
Emphasis on safety metrics
Focus on metrics and lagging indicators – reactive (Not much on near miss learnings)
Hazard recognition and improvements implemented after incidents
Management Systems developed by management and implemented by employees
Employees trained on systems and held accountable for implementation
Lacked shared ownership by employees
Expectations and accountability without ownership and authority
This approach lacked employee ownership. Safety results were measured by metrics and was often driven by incentives that drove reporting underground. Limited focus on true safety and employee engagement. Employees were expected to work safely or face discipline.

6. Early Years (Pre VPP) Continued
Often the “way we have always done it” model
Led to lack of critical thinking
Very little risk analysis
Limited root cause investigations by employees
Limited input from employees and lack of true lessons learned
Reactive approach to hazard recognition
Typically utilized following significant incidents
Limited preventive maintenance programs
Punitive approach to unsafe behaviors
Drove reporting underground
Limited recognition for positive behaviors
Lack of true employee ownership in processes
Generally Reactive to Dependent Culture on the Bradley Curve
This approach lacked employee ownership. Safety results were measured by metrics and was often driven by incentives that drove reporting underground. Limited focus on true safety and employee engagement. Employees were expected to work safely or face discipline.

7. Initial VPP Efforts
Often initiated as a management driven system that was implemented by employees
Utilized a “check the box” approach to “comply”
Often quickly implemented and lacked sustainability
Primarily focused on occupational safety
Lacked behavioral focus
Change in way of thinking
Shift from reactive and unpredictable to proactive and predictable
Early supervisor and employee buy-in was difficult
Change is often difficult (CAVE People)
Hazard recognition, procedures and employee involvement improved safety performance to some level

8. Initial VPP Efforts Post certification let down Sense of “arrival”
Winning the Super bowl effect
Unsustainability led to resumption of many former practices
Sense of “arrival”
False assurance of safe workplace (Guaranteed incident free)
Little incentive to continue to seek ways to improve further
Created structure and processes
Operating procedures developed but not internalized
Some employee engagement and ownership
Effort migrated the culture towards dependent and possibly early independent level
Lack of independent and interdependent ownership by employees
Often remained a “management system” that was expected to be implemented by employees

9. Modifying the Approach to achieve Operational Excellence and Interdependent Culture
VPP Process provided foundation for employee engagement but what strategy would result in Interdependent Culture and apply to all business functions in order to achieve Operational Excellence?
Overarching Strategy of Operational Excellence
Strategy all employees could align around and bring a sense of ownership, responsibility, accountability and authority
More than just safety – environmental, reliability, community support, employee knowledge, ownership, accountability
Adopt an “employee owned process mindset that was supported by management” vs “management process implemented by employees”
Leadership Commitment
Management at all levels had to be visible, approachable and fully supportive
Create an environment absent of fear of reprisal to build ownership and trust
Management required to empower employees – turn over the keys so to speak to truly achieve an interdependent culture
Foster a culture of teamwork – absent of fear – build trust and credibility
Set clear expectations around what success looks like – communication
Recognize and rewarded behaviors and successes to support ownership

10. Modifying the Approach to achieve Operational Excellence and Interdependent Culture
Employee Engagement and Empowerment
Employees needed to be given authority and responsibility of processes
Focus on the need for critical thinking and ability to analyze risk – not just identify hazards
Processes needed to be employee developed and owned
Employees needed a voice to be accountable for results
Employees must be given resources necessary to be successful

11. Safe, Stable, Reliable Operations that Result in Predictable Outcomes (SSRPO)
Strategy
Safe, Stable, Reliable Operations that Result in Predictable Outcomes (SSRPO)
Leadership alignment around SSRPO – Define it
Employee alignment and development support of SSRPO
Each task, job or decision should start with the end in mind – what does excellence look like – what do we expect the outcome to be?
Ensure that we have the proper tools, parts, PPE, information, communication, resources, parts and understand the risk and mitigation before we start
Employees are empowered to make decisions and stop work if necessary
Every employee is equally accountable for success as well as failure
Leadership Commitment
Senior leadership field visibility established as expectation (MBWA)
Senior leadership expectation to be open and transparent with employees
Employee feedback and ideas are valued and follow up is expectation
Culture driven by core values and metrics which are modeled and communicated often by leadership creating alignment

12. Safe, Stable, Reliable Operations that Result in Predictable Outcomes (SSRPO)
Employee Engagement and Empowerment
Employees involved in development of vision fosters alignment and ownership creating environment of trust
Ownership of processes transferred to employees – “See it – Own it – Solve it”
Employees have an ownership stake
Created culture absent of fear – employees free to bring items/incidents/ideas forward
Employee led committees and work groups established
Employee led Root Cause Analysis – drives critical thinking
Risk analysis utilized in addition to hazard recognition
Utilized the “Car and Driver” analogy to ensure that behaviors were incorporated into the strategy

13. Results of SSRPO
Safe, Stable, Reliable Operations that result in Predictable Outcomes is ingrained in the culture and is the basis for each task, job or decision
Accountability and ownership are intertwined through Interdependent Culture
Leadership and employees jointly own effort of SSRPO – it is who we are
Employees hold each other and leadership accountable – Interdependent Culture
Transparency and trust between management and employees
All employees are empowered with the responsibility, authority
and resources they need to pursue VPP and Operational Excellence
Stop Work Authority is ingrained in each employee – “Pull the Chain/Stop the Train”
Near miss reporting and root cause failure analysis increased resulting in shared lessons learned and reduced incidents
Improved critical thinking and risk analysis
Employees lead and take ownership in various committees
Culture absent of fear of reprisal – employees have freedom to bring concerns forward
Employee driven recognition programs (Great Catch, Star Performer, Bravo Award)
Operational reliability improvements due to ownership and accountability
Improved safety and environmental performance, reliability, financial stewardship, community support, employee morale and ownership

14. Actual DuPont Bradley Curve

15. Summary Used the Bradley Curve as a model
Success relies on the process being employee owned and management supported
Employees must be empowered to effectively manage the business
Employee driven committees and processes create ownership
Employees must be provided the tools, training and resources necessary to be successful
Leaders must be visible, approachable, lead by example and fully supportive – words and actions must be consistent
Focus on behaviors, ownership and accountability – What else can I do?
Analyze risk as well as hazards
Critical thinking is a requirement – “the way we have always done it” model is no longer effective
Look “Beyond Compliance” and continue to raise the bar
Develop culture around ownership and accountability of core values and track with metrics
Celebrate and recognize individual and team successes
Some may not get on board and may need to be removed from positions of control or from the organization entirely
Todd

16. West Region General Manager
Questions?
Rob Hill
West Region General Manager
9280 West Stockton Blvd, Suite 220
Elk Grove, California 95758