The Association of Cost Engineers
ACOSTE CONFERENCE 2011
50th Anniversary
www.acoste.org
The Role of the Cost Engineer during
the Early Stages of Design within the
Aerospace Industry: An Organisational
Behaviour Perspective
Lucy Bolton
Socio-Technical Centre (STC)
Leeds University Business School
The Association of Cost Engineers
Introduction Case Study Organisation
• Multi-national engineering organisation
• Aerospace industry • Long term collaborative relationship with Socio-Technical Centre (STC) over 10 years. • Only group of social scientists in the world working as part of their academic network.
Case Study Project • Runs until Spring 2012
• Part of a wider change initiative which aims to redesign the New Product Introduction process:
‘Pre-work, not Re-work’
• Focus on the cost bidding process during the early stages of design
• Working closely with Cost Engineers involved within the process
Socio-Technical Centre
• Leeds University Business School
• Multi-disciplinary research centre
• Experts in Socio-Technical Systems Theory
(STST)
• Bringing together engineering components and
components of human behaviour within systems
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“We aim to make Leeds leader in the field of socio-technical systems design, to create processes and environments that are a
result of marrying an understanding of human behaviour with technical expertise” (Prof Chris Clegg – Director)
The STC Approach • Systems function at their best when social and technical aspects are
jointly optimised.
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Technology
Systems &
Procedures
Goals &
Metrics
Work &
Structures People
Culture
STST → Organisational Change
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• Though sometimes framed differently, socio-technical principles are shared by organisational change theorists
Clegg’s Socio-Technical Principles
1. Design should reflect the needs of the business, its users & their managers 2. Design involves multidisciplinary
education 3. Design is an extended social process 4. Design is Systemic: All aspects of a
system are interconnected; thus none should take precedence over another in system design.
5. Systems & their design should be owned by their managers & users
Guidelines for Successful Organisational Change
1. Diagnosis of an organisation’s problem is
key for any change programme 2. A multi-disciplinary project team should
be involved throughout the change management process
3. Change should be managed as a continuous process
4. A systems approach to change, encompassing all major business, human, organisational & technical issues
5. End-user involvement with users owning, leading and managing change initiatives
See Clegg (2000); Clegg & Walsh (2004); Antoni (2004); Meyer & Stensaker (2006); Axtell, Pepper, Clegg, Wall & Gardner (2001).
The Application of STST
• Although there is support for STST, the uptake and application of these
principles and practices has been poor.
• Organisations often find it difficult to develop
an integrated approach to change.
• The STST approach maintains that the systems
and their design should be owned by their
managers and users.
• Another key feature of socio-technical design involves multi-disciplinary
education, bringing together people from different roles and disciplinary
backgrounds that have different skills, experience and expertise to offer the
design process.
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Create a “pull not push” with a change initiative (Clegg & Walsh, 2004)
Push
Change
Initiative End-Users
Pull
Change
Initiative End-Users
End-User Ownership
• Change is pushed upon end-users
and handed over only during
implementation
• Resistance to change
• Ineffective at meeting goals
• Change initiative is pulled through
and owned by the people who will
manage and use new ways of
working
• Requires proactive environment
Clegg, C., & Walsh, S. (2004). Change management: Time for a change! European Journal of Work and Organizational Psychology,
13 (2), pp. 217-239.
Multi-disciplinary Approach
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Knowledge
Management
Practitioners
Modellers
Cost
Engineers
Computer
Scientists
Organisational
Psychologists
Technical
Engineers
Socio-Technical Systems
Technology
Systems &
Procedures
Goals/ Metrics
Work &
Structures People
Culture
• When designing an engine an organisation may be very good at looking at
the different systems and considering how they will impact on each other if
changes are made.
• However, a company may not do the same when implementing changes
within the organisation e.g., roles, culture, attitudes, behaviours, working
practices etc.
Objectives 1. Analyse current “As-Is” cost bidding process
with a focus on the ‘social’ aspects e.g., roles,
responsibilities, goals, organisational design,
engagement and information flow.
2. Capture requirements for a new, improved process.
3. Provide a description and associated
process map of the “To-Be” cost
bidding process.
4. Develop a change programme plan to
manage the transition to new ways
of working.
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Methods
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• Participants are at all times end users and their managers
Traditional
Methodologies
• Literature reviews • Questionnaires • Interviews • Focus groups • Observation • Diary methods
Non-Traditional
Methodologies
• Process mapping: Plexus Planning
Process Modelling Tool
• Lessons Learnt
Process Modelling Tools
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Technique/Tool Summary of Feasibility
Plexus Planning Modelling Tool Process models can deal with large networks of dependency; Multi-dimensional
views; Easy to use & understand
P3 Signposting (or CAM) Can create large, complex models; Very academic & training required
ARIS Useful for bringing whole systems together; Complex programme to learn & use
MEGA Strong in design & simulation; Complicated toolset requiring training
Role Activity Diagrams (RAD) Focus on responsibility of roles and interactions; Easy to use & intuitive to read &
understand
Social Network Analysis (SNA) Maps relationships & flows between people; Easy to view and understand; Limited in
representing process
Scenario Planning Strategic planning tool to consider future scenarios; Enables participants to consider
role designs and responsibilities; Encourages participation/engagement; Easy to use
Soft Systems Methodology (SSM) Supports and structures thinking about, and interventions in, complex organisational
problems; Not a very structured approach
Organisational Modelling Tools Effective at visualising organisational systems and increasing their transparency;
Very subjective and can be open to biases.
Process Modelling Tools
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Technique/Tool Summary of Feasibility
Plexus Planning Modelling Tool Process models can deal with large networks of dependency; Multi-dimensional
views; Easy to use & understand
P3 Signposting (or CAM) Can create large, complex models; Very academic & training required
ARIS Useful for bringing whole systems together; Complex programme to learn & use
MEGA Strong in design & simulation; Complicated toolset requiring training
Role Activity Diagrams (RAD) Focus on responsibility of roles and interactions; Easy to use & intuitive to read &
understand
Social Network Analysis (SNA) Maps relationships & flows between people; Easy to view and understand; Limited in
representing process
Scenario Planning Strategic planning tool to consider future scenarios; Enables participants to consider
role designs and responsibilities; Encourages participation/engagement; Easy to use
Soft Systems Methodology (SSM) Supports and structures thinking about, and interventions in, complex organisational
problems; Not a very structured approach
Organisational Modelling Tools Effective at visualising organisational systems and increasing their transparency;
Very subjective and can be open to biases.
“As-Is” System Overview
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Technology •Cost Modelling
•Tools
•Innovation
•New Technologies
Systems & Procedures •The Bidding Process
•Pre-work
•Cost Information
•Cost Optimisation
•Data Reuse
•Iteration
•Systems Thinking
•Long-term Strategy
•Process Management
•Risk Management
•Lessons Learnt
Goals & Metrics •Cost Targets
•Changing Requirements
•Timescales
•Deadlines
•Reviews
•Tracking Cost
Work & Structures •Organisational Structure
•Engagement between teams
•Project Priorities
•Nature of cost
•Global Location
People •Roles & Responsibilities
•Communication
•Cost Ownership
•Commitment/Buy-off
•Team-working
•Resource
•Skills
•Meeting Effectiveness
Culture •Cost Culture
•Openness
•Customer Pressures
•Risk Averse Culture
•Improvement Efforts
Key Findings
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Pre-work
• Too much “invention on the hoof” • Vicious cycle
• Need for off-the-shelf solutions for Engineers to work with
• Pre-work/earlier engagement would also make timescales
more manageable
Risk Averse Culture
•New Technologies can make it difficult for Cost Engineers
to tie down cost
•Commitment issues
Cost Culture
• Cost tends to “come out at the end”
“...It is very dynamic...it
can be hard to try &
keep up...”
“Sometimes you have
to take a leap of faith,
and there is that lack of
faith...a lack of belief”
Key Findings (2)
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Lack of Early Engagement
• Pre-warning for those putting together the cost for a bid
•Difficult to allocate resources
• Better communication of changing requirements
• More engagement and sharing of information
„Over the Wall‟ Communication
• ‘Waterfall method’
• Various disciplines work on
their areas of design before
throwing it ‘over the wall’ to
another function.
• Little integration between
Engineers and the phases in a
process.
• Benefit in recognising systems
as social systems as well as
technical entities.
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Clegg, C.W., Waterson, P.E., & Axtell, C.M. (1997). Software development: some critical views. Behaviour and Information Technology, 16(6): 359-362.
Issues Facing the Cost Engineer • Cost priority compared to other attributes
e.g., weight, reliability
• Cost ownership
• Complex nature of cost
• Recognition
• Established career path
• Systems thinking i.e., the ‘bigger picture’
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“It could be the best process
in the world...but it’s not
going to deliver anything
without the cultural &
behavioural changes as
well...”
Cost Behaviours =
function of (Capability x Motivation x Opportunity x Support)
The four elements of cost behaviours:
• Capability (i.e., involving training, skills, competencies)
• Motivation (i.e., reward, recognition, pay, career development)
• Opportunity (i.e., empowerment, autonomy, role)
• Support (i.e., cost culture, role models, group norms, leadership)
Strengths of the Process
• Awareness of engagement issues
• Co-location
• Team-working ability
• Roles and responsibilities lie in the right place
• Adequate skills
• Improvement efforts evident within the organisation
• Everyone has a desire to get it right
• Cost is slowly becoming more a priority
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Process Mapping
• Issues around the
engagement points
• Need clearer launch
and sign-off points for
cost
• The need for more
consistency and stability
throughout process
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Workshops
• A number of workshops held
following “As-Is” Analysis
– Interactive
– End-users present i.e., cost community
– Bring together key stakeholders
– Validate findings & highlight key issues
• Process mapping:
– Add in activities/actions using post-its
– Iterate
• Requirements capture: – Summarise the key requirements for an improved
cost bidding process
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“To-Be” Requirements • Requirements reported include:
o Earlier engagement -> reduce silo behaviours
o Improve the ‘pass’ between groups
o Improved communication within organisation & with customers
o Pre-warning/improved visibility
o Long-term balance for off-the-shelf solutions
o Further co-location
o Establish the role of the Cost Engineer
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Practical Implications This work will help to: • Ensure that changes are based on genuine business needs • Create practical rather than faddish solutions • Sustain new ways of working through involvement of end-users
• Produce a more efficient cost engineering system • Familiarise the organization with the socio-technical approach so they may
apply this in future change projects
• Create a learning organization that can be more globally competitive
• Put socio-technical design principles on the map in commercial organization change projects
The Association of Cost Engineers
The Association of Cost Engineers
Job
Crafting
Communication
Effectiveness
Social/Organisational
Networking
Sub-cultures
Organisational
Change
Socio-Technical
Systems Theory
Process
Modelling
Theoretical Implications
• Possible areas of investigation:
Summary • Clear problems with integration, standardisation and
communication due to the existence of several sub-cultures.
• Indicative of systemic problems.
• However, starting to think in a systemic way.
• Reactions very positive as people begin to see potential of the socio-technical approach.
– Showcasing the value of a socio-technical agenda to commercial organisations.
– Cementing socio-technical theory’s place on the academic map.
– Promoting the application of organisational psychology in non-traditional areas of application and amongst other disciplines such as Engineering.
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