The trouble with top management

What you need to know about the executives who determine your fate.

By Greg McMillan and Stan Weiner

Greg: I have had a long-term, productive and enjoyable relationship with Walt Boyes, a former editor in chief of Control. Walt encouraged me to be innovative and to start my Control Talk blog. Walt is the voice of the Insider, published with his longtime friend and associate David Spitzer as part of Spitzer and Boyes, LLC, which provides services and seminars. I had the honor of reviewing Walt’s Instrumentation Reference Book Third Edition and appreciating David’s technical accomplishments and his book Industrial Flow Measurement Third Edition.

My wife Carol and I had the pleasure of a dinner meeting with Walt and his wife, Joy Ward, who is director of research at Spitzer and Boyes. Joy is a journalist and a well-known consumer market researcher and technical writer. Joy has interviewed many executives. I thought, what a combination of talents sitting with me whose insights I should gain and share. I am realizing an increasingly important topic is what we need to know about the managers and executives making decisions that affect our profession. I mostly just had to listen to develop this column—I didn’t get past the first question due to the wealth of information.

Do the people making the decisions on what plants must do have an understanding of automation and process control?

Walt: In industry, many of the people making decisions on plant operation, projects and goals are not engineers or chemists, let alone process control engineers. They typically spent their whole education in business schools ending with a MBA. They consequently tend to believe manufacturing enterprise is a black box and out comes a product. If you set the right inputs and schedule the outputs per business analysis, you don’t need to know what is going on in the box. One of the many problems like pulling teeth is getting executives to do something meaningful about cybersecurity. Computer systems experts say privately that it is going to take a major incident, like shutting off the grid for a year, to get the attention this threat deserves.

Joy: MBAs without any engineering degree may think the business principles are the same no matter what industry you are in. As long as the plant does not adversely affect this quarter’s business results, everything is OK. It is really difficult for industry to have a long-term view and to make large investments in equipment, and even small investments in better automation and process control. The main route easily visualized to improving the bottom line is to cut people and services.

Walt: While this is perhaps seen more in terms of people doing the day-to-day work, particularly instrumentation and process control engineers, it is now occurring throughout a company. For example, an ultimatum was given to 12 vice presidents (VP) that if the business goals for the 4th quarter are not made by Christmas by layoffs of 1,500 people, there will be no bonuses. One VP said this was wrong and resigned. The other 11 VPs did whatever was necessary to get their bonus.

Greg: A production unit I once worked in was quickly sold for an absurdly low price to meet quarterly business goals. In fact, the price was so low the buyer thought it was a trick and there was something strangely wrong. The sale went through and the plant has had an annual profit for the past 30 years that is several times larger than the purchase price. The total profits are orders of magnitude larger than the purchase price. About 20 years later, a series of plants were sold for a price less than the current yearly profits and less than 1% of the cost to build these plants.

Walt: People are not rewarded for integrity. It is hard to tell your spouse you quit for moral reasons. Executives are locked into seeking bonuses.

Greg: I have heard the philosophy is to cut people until something goes wrong. Of course, this may be too late. I know one plant that had to shut down because there was no one left who understood the process and its unique problems. Most people who were given incentives and/or ultimatums to leave were not given time to document even a tad of their essential knowledge, often gained the hard way over decades of plant experience.

Walt: At the plant level, people have to act defensively with no control over what to do. Fundamentally, to get control at the plant level, you need control at the enterprise level. Say a plant engineer asks for 3/4 million to increase process performance from advanced process control (APC) with an additional $50K per year in expenses to cover technical support. What determines the fate is the independently-set enterprise numbers. The numbers are not coming up from the bottom, but down from the top. If you do better by 15%, you better see the result soon and next year you need to do 20% better. The enterprise numbers can also be shifting a problem from plant A to plant B, so you better hope you are not plant B.

Greg: We see this within plants, where reducing variability and improving performance in one part of the plant hurts another part by the transfer of variability or the reduction in utilities or feeds. Each unit operation has an operating point of maximum efficiency and capacity, and is upset by changes in utilities or feeds.

Walt: A company in Greece that is a collective of people who were running the plant took over a plant that was going to be shut down. The plant is doing well. As engineers and technicians, what we need to realize is that the plant is no longer our plant. What is ours is the knowledge, and we should use that to our advantage.

2017 State of Technology Report: oil & gas applications

Joy: Automation leaders are self-driven, and want teams and are into the group thing. They do not want to be the dictator. They are very sharing people with a realistic bottom-line emphasis and motivation to advance knowledge. I saw this in the Insider interviews with Peter Martin, Peter Zornio, Chris Lydon, Andy Chatha, Eddie Habibi, Peggy Koon and Charlotte Hill, to name a few. It is very hard to make sure the enterprise level attracts people like these, with both business and engineering expertise.

Greg: There are many executives in refining, petrochemicals and pharmaceutical industries, and with suppliers of automation systems, who are very enthusiastic and appreciative of technical opportunities and achievements. I expect most of these have a degree in engineering or science.

Nearly all of the industrial chemical plants at Monsanto were built during the first half of my career, when the CEO was an engineer. From that point on, we pretty much stopped capital expansion in the chemical industry, and we were relegated to pushing what we had. Even the highly successful corporate-wide program to increase process performance by means of opportunity sizing, assessments and quick hits, as documented the June 2012 Control Talk column, “The Human Factor,” stopped just before I retired.

Joy: Engineering changes lives. Engineering changes the world for the better. This is what drives engineers. You don’t have to have a PhD to accomplish all that you need and want to do. PhD just means you were able to withstand the baloney piled higher and deeper. Unless you are going to teach, a PhD is not needed.

Greg: Engineers need to be more outspoken about their contributions, build their teams and teach what is learned and achieved. This is the heart of the August 2017 Control Talk column, “Getting the best APC team.” Right now, this is not coming from the universities. The greater financial pressure on departments means the emphasis is more on securing research grants and inventing new algorithms than teaching engineers what they need to know on the job, and how to make the most of the incredible power of industrial measurement and control systems and software, which is greatly underutilized.

Walt: It’s difficult for executives with no technical training to know what’s happening on the front line. This lack of understanding makes artificial intelligence (AI) attractive. They think all activities are repetitive, and like in parts manufacturing, can be replaced by robots. They also fail to realize the AI results are correlations rather than cause and effect, and the input data cannot just be dumped into the system, but must be screened. The results must also be analyzed based on process knowledge and first principles.

Greg: The “lights out” plant forecast in the 1970s has not materialized. While much more can and must be done to maximize the synergy between the operator and control system, as extensively detailed in the August 2017 feature article “Virtual plant virtuosity” and the August 2016 Control Talk column “The dynamic world of modeling and control,” there are the inevitable unexpected scenarios that the operator must address with the help of an intelligent operator interface and alarm management system, as discussed in the Control Talk March 2017 column “Advice on implementing ANSI/ISA standards on operator interfaces,” July 2016 column “The dynamic world of alarms,” and June 2016 column “Alarm management is more than just rationalization.” Also, continual close and intelligent conversations between operations and technical support are needed for continuous improvement, and to address equipment degradation and changing operating and market conditions.

Joy: The bottom line is that engineers are fundamentally altruistic and want to make a difference in the future. The question is how they can do this when told to do as told. What are we going to do with the engineers in their 20s, 30s, and 40s who don’t have the mentors due to continual retirement and the hiring freeze in the 1980s? How do we enable engineers to do what they really want to do? If the executives do not understand process control or automation, what can we really do?

Greg: Our December column will describe what we think is the solution. In the meantime, check out the August 2017 Control Talk blog, “Motivating management and millennials (M&Ms).”

“Top 10 things you don’t want to hear from an executive” 

  • 10. What have you done for me lately?
  • 9. Can you do the project in half the time for half the money?
  • 8. What we need is cost control, not process control.
  • 7. I hear IIoT in the cloud eliminates the need for automation engineers.
  • 6. Just use AI to set all of the process inputs.
  • 5. Make sure all the process inputs and outputs stay constant.
  • 4. Process control is invisible.
  • 3. The quarterly financials tell me all I need to know.
  • 2. How many people do we need to cut to meet this quarter’s goals?
  • 1. Do something today to increase my stock bonus.