For the past five years, Carl Howk has been trying to get me to attend one of his PlantSuccess conferences. Howk holds three a year-- one in the Northeast, one on the Gulf Coast, and one in Canada this year. Next year's conferences will be April 16 at the Hilton Houston NASA Clear Lake, September 2009 at the Hotel Arts in Calgary, and in November at the Hotel DuPont in Wilmington, DE.

Oh, for the good old days! The Hotel DuPont is part of the DuPont world headquarters building in downtown Wilmington, and is still owned and operated by the DuPont company. It is one of those hotels that I'd only stay at if I was attending a conference there, and the conference had a good rate. But what a luxurious hotel!

And the conference delivered as promised. This was, I think, the best single day conference I've attended in the last 10 years. Carl manages to get not only as speakers, but as attendees, plant managers, vice-presidents, chief engineers, and a whole host of leaders from the process industries. Notable among the attendees was Jocelyn Scott, vice president of engineering and facilities for DuPont, Deborah Grubbe, vice president of safety change management for BP Products North America, both Gary Lipson and Tom Strang from Hercules (soon to be part of Ashland Chemical) and Tom Archibald of Rohm and Haas (now part of Dow). Another significant attendee and presenter was John Voeller, the DHS representative to the National Science and Technology Council, and a White House Fellow, from Black and Veatch Engineers.

The conference was about operational excellence. While I've attended other conferences with that theme, I've never been at one where the speakers were speaking to their peers. Hermann Ortega, formerly of Air Products, now vice president of the Integrated Supply Chain for Honeywell Specialty Materials (what was once Allied Chemical) was the keynote. Hermann has global responsibility for operations, engineering, and safety, health and environmental.

From the beginning, Ortega pulled no punches. Operational excellence, he said, is about being best in class in safety and environmental-- being a good neighbor; being competitive and keeping your customers satisfied, and lowering costs. To be excellent, he said, you must have a passion for manufacturing, and a duty to share what you know. That's what he believes, and he shared "the things that have worked for me consistently."

"There is," Ortega went on, "a simple formula for operational excellence."

It is a pyramid, with LEADERSHIP as the foundation, then Execution, next Productivity and at the top of the pyramid, Q for Quality. Productivity has to be built into the fabric of the organization, and Quality, in essence is taking care of the customer.

Leadership, though, is the most important element. It drives results. Without leadership, execution, productivity and quality simply won't happen. Leadership creates the culture that will sustain performance. So, he asked, how do you build a culture?

"You must paint the future," Ortega answered his question. "Describe the path to get there. Without a path, the future remains a nice picture." You must communicate thoroughly, he went on. It isn't enough to say it once or twice or even three times. You must set performance expectations, drive employee involvement and teamwork, and especially, you must hold your employees accountable for performance with rewards and also consequences. You must finally measure and communicate progress. Without all those things, your leadership is doomed to failure.

Execution defined: Best In Class Work Processes + 100% Adherence = Flawless execution.

Execution requires discipline!

What's a work process? A series of activities that working together deliver value to the customer. "If it doesn't add value," Ortega said, "flush it!"

Every work process has to have an owner. Engage the proper people in creating them. Clearly define roles and responsibilities. Standardize work processes across the entire organization.

Pay particular attention to the interfaces where work processes and ownerships meet.

When I told my people at Honeywell what we were going to do, "it was like I shot the Pope!" Ortega admitted. This is not easy. It takes discipline. "Establish performance metrics, which you must document and keep current. This is a continuous improvement process. You must audit over and over to make sure your people get it."

Achieving 100% adherence is not easy. You have to communicate the work processes you want employed, and train your people to do them. Here's where leadership is critical, Ortega noted. You have to set expectations for adherence and drive accountability. This discipline must be part of the culture.

"Audit!" he declaimed.

And you must investigate breakdowns and implement corrective action, or you're sending a signal that it is all right to not have 100% adherence to work processes.

Productivity must become part of the culture. Executioin drives it. We train on Six Sigma, Lean, and other productivity technologies and insist on continuous improvement.

Other productivity tools include work redesign, maintenance, automation, process technology, and attainment/OEE, he said. (It was interesting to see the order in which he put those tools...clearly automation and process technology are important, but Ortega feels you can get more bang for the buck with work process redesign and maintenance right now, especially in brownfield plants.)

Flawless execution, he said, drives Quality performance. It must be part of the culture of your company that we exist to satisfy customers. "Everybody must know this," he said. Perfection is the standard, nothing less. You must apply root cause analysis and Six Sigma tools to drive improvement, he went on, and you MUST measure your results.

Then he got to the hard part. The first part of his talk was reasonably standard. Ortega then began to discuss actually implementing his "simple formula."

"Implementation is not easy," he admitted right away. "You are the driver, and you make it go."

You have to build alignment from the top down and from the bottom up. You have to focus on building culture. You can't just sit in your office and wave your hands. You have to develop a "road show" to take your culture on the road and transmit it to your teams. You have to have managers who are in alignment with your goals. YOU model the behavior, YOU set the example.

You must be RELENTLESS on your expectations. Communicate them. Do it again. And again. Set goals and measure progress. Decide on what quality of leaders you want. And when necessary, make changes. Do it sooner, rather than later.

So, does Ortega's simple formula work?

Honeywell has:

--reduced OSHA recordables by 60%

--Lost Time Injuries (LTIs) by 70%

--environmental excursions by 80%

On time delivery is up 3.5%, defects are down by 89%, attainment is up 9% and all of this while reducing staffing by 18% and increasing production by 5%/year. In all, the formula has delivered 10%/year volume/cost productivity.

About RIFs (reductions in force), Ortega noted, "You must do work redesign before eliminating people, or you will lose capability you may never get back."

Honeywell Specialty Materials has grown to $5.5 billion in sales in 2007, with a $650 million profit.

"This is a journey," Ortega declared. "It is not once-and-done. We never arrive. We just get better as time goes on."

Honeywell Operating System, which is the formal name for Ortega's simple formula, is based, like many others, on the Toyota Model. It isn't quick, and it isn't a quick fix. "It takes a year at each plant," Ortega said, "and three years to fully implement throughout the organization."

"But the bottom line is there," he said. "In four years, we have increased revenues by 20% while increasing profits by over 200%."