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Cbanging Paradigms

... with leadersbi p and ex p ertise

It is paramount for leaders to align the organization so that all are working together to achieve the same objectives.

Peter Wickens, Author.

Author: Mahen Das

Location: 2.4.1 Medium-Sized Semi-Complex Petroleum Refinery

Background

The refinery received its compensation on a cost-plus basis, i.e., it received all its operating cost, plus a fixed percentage of that cost. Each partner paid a sum in proportion to the amount of crude processed for it. In such an arrangement, there was no motivation for the refinery to function cost effectively. In fact, the higher the cost, the higher was the fixed percentage of compensation, i.e., the profit.

Over the preceding decade, the refinery had undergone a major expansion. As a result, it had focused on new construction and start-up activities, not maintenance of assets as a business process. Although the people were generally well educated and competent, expertise and leadership for maintenance of assets had been lacking.

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