Survey of Leadership Trust
at Millstone
David Collins
Albertus Magnus College
Cohort 99/54
Business Case Project BE 396M
September 20, 2001
STATEMENT OF CONFIDENTIALITY
This project, titled Survey
of Leadership Trust at Millstone, contains confidential materials. It is to be
held in strictest confidence and is not to be released to any individual or
organization for any purpose other than for verification of academic
requirements for graduation and for evaluation.
David M. Collins
______________________________
Signature of Student
Date
_________________________
TABLE OF CONTENTS
EXECUTIVE SUMMARY 4
INTRODUCTION 5
Purpose 5
Scope 5
Limitations 6
Assumptions 6
Definitions
of Terms 6
BACKGROUND 7
METHODOLOGY 15
Research 15
Results
and Analysis 16
Findings 22
CONCLUSIONS 22
RECOMMENDATIONS 23
WORK CITED 24
APPENDICIES 25
EXECUTIVE SUMMARY
Trust and Value-centered
leadership, important to the continued success of any company, is especially
important for companies in industries that affect public and environmental
safety, such as Petroleum, Chemical, or Nuclear related industries. In 1996 all
three Nuclear Plants at the site in Waterford, Connecticut were shut down for
an extended period, costing the parent company Northeast Utilities in excess of
one billion dollars. The root cause of the extended shutdown was identified as
a loss of trust in leadership.
An expert in organizational
culture, Dr. John Carroll of the MIT Sloan School of Management in Cambridge,
Massachusetts, was brought in to assess
the safety environment at Millstone. Carroll believed there was weak
understanding of the safety culture at Millstone, and a weak understanding by
the leadership at Millstone as to what actions must be taken to understand the
safety culture.
In his report “Safety
Culture as an Ongoing Process: Culture Surveys as Opportunities for Inquiry and
Change” Dr. Carroll cautions that safety culture self-assessment should not be
managed as a one-time “snapshot”, but as a repeatable culture initiative.
Carroll suggests there should be an institutionalization of the dialogues with
regard to the safety culture, and a standard criteria established for judging
the health of a safety culture. Carroll suggests that it may be appropriate for
new communication pathways and forums to be considered.
This report investigates
whether a new survey design, a Trust in Leadership Survey, might be a viable
model for a new communication pathway and forum to judge the health of the
safety culture at Millstone. The new design would judge health by evaluating one
of the critical success factors of a safety culture: Value Centered Leadership.
INTRODUCTION
Purpose
Famous
college football coach Lou Holtz, now a popular public speaker, stresses in his
talks the importance of each person’s deeply held values to the continued
success of a person or business. Holtz suggests there are three questions that
can be asked to reveal these personal values:
1)
Can I trust you?
2)
Do you care about me?
3)
Are
you committed to excellence?
At
Millstone, a loss of trust that leadership was operating the plants safely was
considered the root cause of the order issued by the NRC to halt operation of
the three units. Within the employee staff at Millstone, there was a perception
that leadership could not be trusted to operate the plant safely, but also that
leadership showed a lack of care and respect for employees, and was not
committed to excellence in operations. The purpose of this paper is threefold.
First, to evaluate the level of leadership trust, care and excellence reported
in a typical department at Millstone using a survey developed from the Lou Holtz
questions. Second, to interview the leaders surveyed to determine if the
information had value to them and to their organization. Third, to make
recommendations as to whether there is value in institutionalizing this type of survey at Millstone.
Scope
An
entire department at the Nuclear Plant was surveyed. The department consisted
of 41 employees - 36 workers, four supervisors, and one department manager. The
manager reported to the SVP (Senior Vice President) also referred to as the CNO
(Chief Nuclear Officer). The CNO was the only leader outside of the department
who was part of the survey. The survey
looked at a vertical slice of worker trust in leadership from the first line
supervisor to the most senior plant manager. Since trust is not developed
instantly, but through a large number of leader-worker interactions that occur
over an extended period of time, results were tabulated and analyzed with
consideration for the amount of time the leader held the position.
Limitations
The
survey was limited to one department. The survey was administered with the full
knowledge, consent, and support of the entire management of the department.
Assumptions
It is
assumed the participants of the survey answered all questions truthfully. It is
assumed the participants completed the survey voluntarily.
Definition of Terms
Critical Success Factor – a factor or variable upon which the continued
success of an organization is dependent.
INPO - The Institute for Nuclear Power Operations, the industry organization formed after The Three Mile Island (TMI) accident to promote excellence in nuclear plant operations.
Leadership Trust Survey – a survey that evaluates how workers perceive various attributes of a leader including, but not limited to, the degree to which the leader is trusted.
NRC, Nuclear Regulatory Commission - the Federal Agency that regulates the Commercial Nuclear Power Industry. The NRC ensures that individual plants operate within the minimum safety requirements established by the US Department of Energy.
SCWE - Safety Conscious Work Environment. A term coined by the NRC to describe a work environment at a company where:
· Safety and quality are valued above cost and schedule;
· Employees believe they can bring any concern to management and feel safe from harassment, intimidation, retaliation and discrimination;
· Employees believe that management will act appropriately on their concerns;
· An employee concerns program offers a legitimate alternative to bringing concerns to management; and
· There are mechanisms to monitor and maintain those characteristics. (Carroll, 2001, p.71)
Value-Centered Leadership – Leadership that considers human values such as trust, care and respect for individuals to be an essential part of the organization’s mission, objectives and strategy.
In 1996
Northeast Utilities (NU) received an order from the Nuclear Regulatory
Commission (NRC) that all four Nuclear Plants in Connecticut were not to be
operated until safe operations could be demonstrated. The four plants were the
Connecticut Yankee Plant in Haddam, and the three Millstone Units in Waterford.
When the NRC was satisfied and the order was lifted approximately two years
later, over one billion dollars had been spent on recovery. Only two of plants
survived: Millstone Unit 2 & Unit 3.
The Connecticut Yankee and the Millstone Unit 1 Plants, both previously
world leaders in energy production, were permanently decommissioned.
NU
Nuclear leadership had made a conscious decision to spend the absolute minimum
on safety requirements at the plants. The message from leadership was: “if it
is not necessary to do it, then it is necessary not to do it”. Resources were
cut severely, and an enormous backlog of work grew. It is not that the plants
that were decommissioned were in such bad shape physically that they could not
be salvaged. The major problem was a loss of configuration control. Management
had decided one of the ways to save money was to reduce the resources required
for rigorous and timely updates of plant documentation. In a few years, the
accuracy of information deteriorated to the point that it became impossible to
demonstrate compliance with regulations and safety analysis to the satisfaction
of the NRC.
To
understand the problem, assume there is a document containing a lot of
information that is required to be accurate to verify the safe operation of the
plant. If several items are found to be inaccurate, the validity of all the
information on the document becomes questionable, and questionable safety
information is not acceptable at a nuclear power plant. Usually the only way to
prove the information accurate is through a walkdown - a physical verification
of the equipment in the plant. At Millstone this was called reconstruction of
the plant design basis, and was where the lion’s share of the recovery expense
was incurred. To gauge how large a task this was, over a thousand contractors
were brought in for approximately two years each at a budgeted hourly cost of
$75 per hour. Add that to the lost revenue from power generation, and the total
was over one billion dollars.
Loss of Excellence
The
design basis reconstruction was only part of the problem caused by the cutbacks
in resources. Resources were reduced beyond the level that many employees felt
prudent. In many cases the impact on safety was difficult to assess - all that
employees knew was that a lot of work that was supposed to be accomplished was
not being done, and a lot of it had some significance to safety. This created a perception that leadership
was not committed to excellence. Many workers argued that the
documentation had become insufficient to adequately and safely maintain the
plant. Many contentious arguments occurred between management and workers.
Management defined teamwork as aligning with management expectations, which
were to cut costs, and employees became fearful of raising any concerns that
demanded resources, including concerns affecting safety. The NRC OI (Office of
Inspection) later discovered that workers who raised safety concerns were
downgraded in teamwork and communications in their performance appraisals.
Loss of Care
The CNO
(Chief Nuclear Officer) was not sympathetic to the concerns of employees. At
one employee meeting the CNO reportedly commented: “It is a tough, competitive
business, and if you don’t like it, you can leave - there are 100 people
waiting in line to take your place”. When an employee then asked “what about
company loyalty to employees?” it is reported the CNO responded: “If you want
loyalty, get a dog”. It is hard to overestimate the widespread feeling of a lack
of care that these statements generated among employees. The one statement
“If you want loyalty, get a dog” had a major impact on employee perceptions,
and even today is remembered by almost everyone who was with NU Nuclear at the
time.
Loss of Trust - RIF
In 1995,
in spite of enormous backlogs of work, and promises made to the NRC to reduce
the backlog, NU Nuclear force-ranked employees and reduced staff. Rather than use past performance evaluations
for the ranking, it was performed using a matrix of employee attributes
developed by management, attributes that management argued were needed for the
future survival of the company. “Teamwork” and “communication” were weighted
heavily. By sitting down and filling out the matrix, a supervisor could
determine who in his group would stay or go. In January, 1996 104 workers were
terminated from NU Nuclear, and over 40 workers complained they were laid off
because they had raised safety concerns.
Many of those workers filed complaints with the Department of Labor and
the NRC. These events created low trust in leadership in the eyes of
employees (both terminated and active employees) and the NRC.
Loss of Trust - Political Forces
The NRC
was receiving approximately 50 allegations of HIRD (harassment, intimidation,
retaliation and discrimination) each year from Millstone, the highest in the
industry. When the problems showed up as a Time Magazine cover story in April
1996, this put a media spotlight on Millstone, and more importantly, on the
weakness of the NRC enforcement. This resulted in political pressure both
internal and external to the NRC, which resulted in the shutdown order. It also
ultimately resulted in the replacement of the top leadership at Millstone, NU
Corporate, and the NRC (Carroll, 2001, p.71).
The root
cause of the extended shutdown was identified as a loss of trust in the
leadership of the plants. At that time, employees, the local public, and the
government regulators all had low confidence that the leadership at Millstone
were taking the actions necessary to operate the plants safely.
Assessing SCWE
One of the conditions the NRC placed on
Millstone for restart approval was that Millstone develop a survey capable of
verifying that a safety conscious work environment (SCWE) existed at Millstone:
On September 16, 1996, the
review team issued its report; "Report of Millstone Independent Review
Group Regarding Millstone Station and NRC Handling of Employee Concerns and Allegations,"
which included a statement that more sophisticated methods appeared to be
needed to accurately measure the workplace environment. The team recommended
that the NRC develop expert resources to establish and monitor performance
indicators that could effectively measure licensee employee trust and
confidence in its management's ability to resolve employee concerns without
fear of discrimination. (October, 1996)
The NRC
never developed the expert resources, or indicators for evaluating the
workplace environment themselves.
Instead, the NRC instructed Millstone to accomplish this task. One of
the experts that Millstone brought in for this purpose was Dr. John Carroll, a
professor of behavioral and policy sciences at MIT Sloan School of Management
in Cambridge, Massachusetts. Dr. Carroll helped develop the first Millstone
Culture Survey. In a report based on his review of one of the department
surveys, Carroll made the following comments (underlining added):
The plant ultimately managed the safety culture self-assessment as a
one-time “snapshot” of Engineering rather than a repeatable culture
initiative. The VP and Plant
Manager were reassured that existing communication mechanisms had given
an early warning signal, and the team’s investigation had revealed the overall
health of the safety culture with some issues that could be dealt with by existing
practices and revised routines.
Thus, there has not been an institutionalization of the dialogues
exemplified in the group interviews. We believed that the use of a safety
culture survey for diagnosis, lacking a series of prior surveys or other
benchmarks, was inherently equivocal. It is difficult to interpret the
meaning of simple rating-scale responses.
Further, the team agreed with the consensus at the plant that there were
no standard, established criteria for judging the health of a safety
culture. Management continues to
employ existing communication processes such as routine stand down
meetings, enhanced by heightened awareness of their significance to a healthy
safety culture. Other companies in
other circumstances might have decided to create new communication pathways
and forums; the response in this case was to investigate and “stay the course.” There is a weak
understanding of the safety culture.
Direct threats are recognized.
However, related conditions such as inappropriate schedule pressure
are not always recognized as influencing our safety performance. (Carroll,
1998)
What was written in Dr.
Carroll’s 1998 report might have been written today. Only a few weeks before
this paper was written, a report evaluating the same Millstone department that
Carroll evaluated several years ago identified that inappropriate schedule
pressure was causing widespread frustration. The report pointed to poor
leadership communications as the root cause. A second INPO-based survey
report of the same department, drafted only a few weeks before this paper was
written found various significant organizational issues in contrast with the
positive results of the 2001 Culture Survey. Is the Culture Survey as currently
designed able to indicate significant organizational culture issues?
The non-specificity of the Culture Survey questions, and shallow interpretation of the results may be masking organizational issues. One of the questions the Culture Survey asks if employees would be willing to raise a safety concern. The results typically show that better than 95% would. This is much like asking employees if they would be willing to drive within the speed limit on the access road when entering or leaving the plant. Most might report they would be willing to drive the speed limit, but few in fact do drive the speed limit. The specific question that needs to be asked is then: “when you drive on the access road to the plant, do you consistently drive within the speed limit?” The question the Culture Survey needs to ask is: “when you detect or suspect an unsafe condition at the plant, do you consistently ensure that the concern is adequately addressed?” Why ask the question this way? Because there are issues other than fear that may stop and employee from acting safely. It may not be a fear of reprisals or a lack of trust in leadership that stops an employee from raising a concern. It might be that employees feel leadership does not care about their concerns, or is not committed to addressing them. Culture Survey results often indicate a major concern of employees is that concerns are not being adequately addressed. One employee commented:
The difference between the Old Millstone and the New Millstone is that the Old Millstone got rid of people to avoid addressing concerns. The New Millstone says, “thank you very much” for identifying the concern, then the concern disappears into a black hole called backlog.
This perception of employees must be thoughtfully managed. Some leaders may feel handling the major issues well is enough to maintain employee trust. Millstone Recovery indicates it is not sufficient. Recovery put Millstone through the fine-toothed comb of third party assessments. No level one or even level two safety violations were found. The major safety systems were properly designed and functional. It was hundreds and hundreds of minor issues that created a loss of trust among the employees, the public, the media and the regulators. There is no question that Millstone leadership must address both the major issues and the minor issues. Not all the minor issues, but the ones of great importance to employees. Leadership must continually address the perception that employee concerns are being ignored as resources are being reduced. The first step is to identify areas where employees feel the organization is not addressing these “low priority” issues that are important to the company.
The New York Phone Book
The Culture Survey report has been described by one department manager as “The New York Phone Book”. There are 81 pages of charts that slice and dice the data in various ways. Upper management may find the information valuable to spot major trends in department culture, but most leaders do not find the data useful. Ask a supervisor at Millstone what actions the Culture Survey suggests for improvement in his group, and very often the answer is, “I have no idea”. If the culture in the workgroup does not improve, why expect the culture in the department to improve? If the culture in the department does not improve, why expect the work environment at Millstone to improve?
Watching a Forest from a Distance
The Culture Survey is like looking at clumps of trees in a forest once a year from a distance – “Anything burning? Any damage visible?” The Culture Survey may not be able to identify any “burning issues” until after there is significant damage to the forest. The Professional Development group reported no “burning issues” identified in the 2001 Culture Survey, yet a recent report in one department indicated “various organizational issues in contrast with the positive results of the 2001 Culture Survey”.
Comparison of the Culture and Trust Survey Designs
The Trust Survey was designed to resolve some of the weaknesses in the Culture Survey identified by Dr. John Carroll of MIT. The Culture Survey is more of a yearly snapshot, whereas the Trust Survey is more of a repeatable cultural initiative. The Trust Survey is designed to “step into the forest” every three months and look at the trees. The Trust Survey provides a series of results from which improvements can be trended. It is designed to provide criteria for judging the health of a workgroup culture. The Trust Survey is designed to provide a new communication pathway and forum where leaders and workers can communicate and resolve cultural issues. It is designed to improve the weak understanding of the safety culture. Perceptions of whether leaders can be trusted, care about employees and are committed to excellence to a large extent determines worker perceptions of both the work environment and safety environment.
This research project uses data from surveys administered to 36 workers in what is assumed to be a typical Millstone department. Participants were asked to respond “high degree, no opinion, low degree” to the following three statements:
· I trust this leader;
· This leader cares about me;
· This leader is committed to excellence.
One SCWE question was asked of leadership in general:
Do you have confidence that leadership at all levels in all areas at the plant ensure that timely and effective corrective actions are taken when necessary to ensure the safe operation and maintenance of the plant.
Participants were not asked to provide any demographic information such as name, age etc. The survey was anonymous. Each survey form was numbered to protect the validity of the results. The supervisors were given instructions to distribute the surveys to their group. To ensure anonymity was maintained, the supervisors did not see which numbered form went to which employee. Completed forms were returned to a large brown envelope out of sight of the supervisor.
The information was analyzed
for each leader by totaling the number of reports who responded “high degree”
“no opinion” or “low degree” for the trust, care, commitment questions. For the
SCWE question, the information was analyzed by totaling the department responses.
Supervisor 1 |
High Degree |
No Opinion |
Low Degree |
|
I trust this leader |
5 |
3 |
|
|
This leader cares about me |
5 |
2 |
1 |
|
This leader is committed
to excellence |
3 |
2 |
3 |
Analysis
Supervisor 1 has
been in the position longer than any of the supervisors. In response to the survey 57% of the group
reported a high degree of both trust and care. The staff average was 75%. In
response to the survey 38% reported both a high degree of excellence and a low
degree of excellence. The staff average was 69%. This leader needs to work on demonstrating a stronger
commitment to excellence.
Supervisor 2 |
High Degree |
No Opinion |
Low Degree |
|
I trust this leader |
5 |
|
|
|
This leader cares about me |
4 |
1 |
|
|
This leader is committed
to excellence |
5 |
|
|
Analysis
Supervisor 2
has been in the position about one year. In response to the survey
100% reported a high
degree of trust and excellence, 80% reported a high degree of care. Results are
exemplary; this leader should stay the course and look for
opportunities to coach other leaders.
Supervisor 3 |
High Degree |
No Opinion |
Low Degree |
|
I trust this leader |
2 |
2 |
|
|
This leader cares about me |
2 |
2 |
|
|
This leader is committed
to excellence |
2 |
1 |
1 |
Analysis
Supervisor 3 is very new in the position, less than
one month. Already 50% reported a high degree of trust, care and excellence.
The results were good for a new leader, this leader should stay the
course.
Supervisor 4 |
High Degree |
No Opinion |
Low Degree |
|
I trust this leader |
8 |
1 |
|
|
This leader cares about me |
8 |
1 |
|
|
This leader is committed
to excellence |
8 |
1 |
|
Analysis
Supervisor 4 has been in the position several years.
In response to the survey 89% report a high degree of trust, care and excellence. Results are
exemplary; this leader should stay the course and look for
opportunities to coach other leaders.
Supervisor Staff |
High Degree |
No Opinion |
Low Degree |
|
I trust this leader |
20 |
6 |
0 |
|
This leader cares about me |
19 |
6 |
1 |
|
This leader is committed
to excellence |
18 |
4 |
4 |
Analysis
The supervisors range from being on the job a few
weeks to a number of years. The staff average for a high degree of trust was
77%. Not one worker reported a low
degree of trust which was excellent. The staff average for a high degree of
care was 73%, with only one worker reporting a low degree of care which was also
an excellent result. The average report for a high degree of excellence was a
little lower at 69%, with four employees reporting a low degree of excellence.
Three of the reports went to one supervisor, so the result was localized.
Overall, 73% or the workers reported a high degree of confidence in the staff,
which is a very good result.
Manager |
High Degree |
No Opinion |
Low Degree |
|
I trust this leader |
11 |
10 |
9 |
|
This leader cares about me |
11 |
13 |
6 |
|
This leader is committed
to excellence |
12 |
14 |
4 |
Analysis
The Manager has been in the position for about one year. Results are mixed. About 40% of the department reported high confidence in the three areas. In response to the survey 28% reported a low degree of trust. The percentages are better with care and with excellence, but all areas need some work. A goal should be for at least half of the department (>50%) to report high confidence in each area. This leader needs to work on trust and work on care.
|
Senior VP |
High Degree |
No Opinion |
Low Degree |
|
I trust this leader |
11 |
18 |
1 |
|
This leader cares about me |
7 |
22 |
1 |
|
This leader is committed
to excellence |
14 |
15 |
1 |
Senior VP Analysis – This leader is new at the
plant, having transferred from another plant about six months ago. It is
understandable that over 50% have no opinion. In this short time he has
developed a high degree of trust in 37% of the department, 23% feel this leader
has a high degree of care for them, and 47% have high confidence this leader is
committed to excellence. Only 3% report a low degree of confidence in any
category, which is excellent. This leader is winning over a very high
percentage of employees. This leader needs to remember to show care, but mostly
just needs to continue to interact with employees.
|
Department A |