Why You Only Noticed When Something Breaks

Hey, and welcome back to another episode. Just weeks ago in Garden Grove, California, a simple cooling valve failure on a toxic tank of methyl carlate, and I'm pretty sure I'm butchering that, nearly triggered a catastrophic explosion, forcing 50,000 residents to evacuate. It was a stark reminder that reactive maintenance still puts people and plants at risk. Our guest today, Frank, all the way from Germany, is a maintenance and turnaround management expert. He is an operations-centered maintenance enthusiast and practitioner. He's a novelist and an angel investor. He was born in 1962. He started as a service technician, studied industrial engineering, and he earned a PhD focused on expert systems and maintenance. And in 1994, he co-founded T.A. Cook Consultants, and he grew it into a global leader in asset management before it sailed to Accenture. Frank's business novel, The Decision, shows exactly how operations-centered maintenance turns that kind of chaos into reliable performance. So Frank, welcome to the show.

Hey Tim, thank you very much for having me here.

I'm so glad we were able to make this happen. We all just heard your incredible intro and bio, but if you don't mind, in your own words, why don't you tell us a little bit more about yourself?

Sure. Well, I'm, I'm Frank, Frank Hess, and I was born in around 1962. And more important, maybe for the audience, in the east part of Germany. And as a little kid, I grew up the first 5 years of my life in Cuba. So, and as I turned 6, so my parents and I, we went back to Germany, and that was maybe my first change experience because from a blue sky and warm area, I joined to Germany. It was overcast, cold, rainy, snowing, really a hard, hard time for me. Yeah. And I would say my entire life I lived in Berlin in Germany. I worked everywhere in the world, but my hometown was always Germany, except for 5 years between 2017 and 2021. In that 5 years, so I worked and lived in Houston, Greater Houston, in the north of Houston, which was a very nice time. I enjoyed very much. But coming back to me about as a person, so yeah, I started my career as a maintenance technician. And actually, from the early beginning to the days from today, so I was always involved in some kind of maintenance work. Everything was related from my business life to maintenance. Later, after I finished my service technician education, so I went to college, I studied at the college, I finished up as a maintenance engineer, and then I started my business career at a software company called PSI, and they did control systems for process industry, and I was responsible to develop a Software for maintenance again. No surprise, right? And that was called at this time CMMS, which stands for Computerized Maintenance Manufacturing Systems, which is nowadays EAM, Enterprise Asset Management System. I did that three years, and after three years I left the PSI and I founded my own company with two partners together. And that was a consultancy, and the name of the company was T.A. Cook. And later, so we founded a conference company for maintenance conferences and a company for turnaround management, but not for business turnaround. was a company for large shutdown and outage projects in maintenance. So that was 3 companies. After 27 years or so, we received a pretty nice offer. That was during COVID from Accenture, and then we sold our company to Accenture. That was the exit. And then I stayed 3 years at Accenture, and there I was responsible as global lead for intelligent asset management at Accenture, and I was leading a team of around 400 people. 400, 4,500 people around that worldwide for maintenance projects. So, and last year summer, so then I terminated my contract with Accenture. And since then, so I was thinking about what's about my future because I don't like to stop. I like to continue. I'm now 63 years old and said, there's still a little bit time. I'm, I'm motivated to do something. And I started a new company. It's called Easy Asset Management. So I'm helping Again, companies to improve their asset management, their asset performance. And I also started as an author and I'm writing books. So, and I'm working as a keynote speaker. I'm also an angel investor, a little bit from the exit money. I invested in different companies and one is Wiser where I'm acting right now as a chairman. Awesome. So that's in a few words about myself the last 30 years or so.

So you're definitely not slowing down anytime soon is what I'm hearing.

Yeah, no, no, that's not my intention right now. I still have 3 kids, or not, I still, I have 3 kids. 2 kids have already graduated, but our youngest is still at school. She will maybe go next year to a boarding school to UK, and that will give my wife and myself a little bit freedom that we can travel more, relax a little bit more. But as long as the little one is going to school, so we have to stay home and to take care of her, right? You know that better than me, right? You have also 3 kids, I learned today.

Yeah, no, absolutely. Fully aware of all that and how that works. So, I kind of want to go back to early in your development, and let's talk about the difference between East Germany and West Germany if we can. And did you find any parallels as you were entering the job market when it came to maintenance and how there was a difference in how people were approaching it?

Hmm. Yeah, true. Sure, I can do that. That's pretty interesting, your question, because there are some major differences. So maintenance is always about repairing equipments, right? Fixing equipments which are broken. And that's the same in the west part of, in the Western Hemisphere, like it was in East. The main difference was, so in the East part of Germany, it was always hard to get the right spare parts, right? Because It was almost impossible. And one major focus was keep the assets up and running, and that means it was a lot of repair work. And we even produced our own spares. We never threw anything away. We kept everything. We were kind of collectors of everything, and we were pretty much able and pretty smart in developing something new or using different spares, but still running the same function. That's Quite different, and we never. I had an old VW Beetle from the 1950s, and I repaired the entire car from the engine up to the to the chassis, right? And everything was handmade finally because there were no spares available. The same happens in the industry in the east part of Germany, right? You have to be creative. And then when I worked for the first company in West Germany, that was actually in North Rhine-Westphalia. In the steel industry, so there was plenty of spare parts available, everything was available, and it was nothing about repairing. It was more about managing and administrative work in maintenance. But the question about getting the right parts was not a problem, right? So it was on a different level, different focus, and yeah, I would say that was a major difference. And I mean, that was new machines especially, right? And I was working with old machines as I was As I finished my vocation training, I also repaired dryers, washing machines, and all that stuff. And sometimes I had washing machines from the '50s or even from the '30s, very, very old stuff because there was nothing new available, right? And then the first machines I saw in the Western Hemisphere, there were everything, the washing machines was completely automated, a lot of electronic in, and when something was broken, you just replace the entire washing machine or you bought a new one instead of repairing the old one. So that's maybe one difference.

Yeah, and I like that because there's a lot of parallels with that today. When you were in the eastern part, you had to know everything in and out about that machine and the workings of how everything worked. You couldn't rely on, you know, somebody else's knowledge or somebody else coming up with a part to come in and save the day. It was on you. That's what I hear you saying. And Go ahead.

No. Yeah. And today, that's right. I just wanna confirm that. That's correct.

And today we are over-reliant on AI. We're over-reliant on our smartphones and having that data available and thinking that that data equates to skill. But just because you have access to data doesn't mean you have the knowledge. So over the years, what are you finding as businesses are progressing? How is maintenance being neglected? And how does it impact the operational function of a business?

Yeah, maintenance is maybe a very unknown topic for many people. They have heard, they understand the word, right? And it's, it's kind of, we all have to do maintenance for ourselves, right? You brush your teeth, you go to the, to the doctor, right? And for an inspection, sometimes you even replace, replace your teeth by veneers. So personal maintenance is very well known, right? But industrial maintenance, it's mostly Unknown. But we all rely very much in the modern industry on our infrastructure, on data, on automatization. And if something breaks, so then we feel, oh, it's not working, and then our entire life is not functioning, right? It's the same in business, but the same in personal life, right? If something breaks, the entire production can be interrupted, and it takes you 2, 3, 4 days, and you lose a lot of profit margin. Sorry, sorry. So, and coming back to that topic, the same is on our personal life, right? When you have flooding in Houston or there's an outage, and I experienced that several times, so you can't go to a grocery store or you can't even use infrastructure, right? Because it's several days flooded. So then you experience how important it is that everything works immediately again. So wireless LAN comes up, the internet is missing, so you want to have that back immediately. Or when you have an outage, your cooling is not anymore more working. You have no lights at home, so you need to have a generator. Then you need to start your generator, and in that case, you experience, oh, my generator is not starting at home. So it's all just a lot of trouble. Same in a hospital, right? You go to the hospital and you expect that the equipment is working. So they do something and test you. There are little machines and sensors, and all that machine and equipment needs inspection or calibration. If something is not exactly calibrated, maybe you get a wrong indication for your health. So maintenance is everywhere, and The more modern our life is, the more we depend on that technology, and it's quite a lot of value. It's very important for our personal safety, for our business safety, but it's also for a happy life important, right? Because when you sit on an airplane, you don't ask yourself anymore, is that a risk or not on an airplane, right? You just expect a safe flight.

Right.

And this, and, and to make that sure, you, you need to have a good maintenance system behind that.

Yeah, absolutely. And I was just gonna say that you always start to worry a little bit if you see the maintenance truck come out to the plane while you're on it and you're like, wait a second, what's wrong with the plane? Right?

Absolutely.

And that's when you start to second guess it, 'cause you otherwise you're like, nope, it works every single time, all the time. And in a business structure, how often do you see people proactively planning maintenance into their operations, into making sure That the account for maintenance, or is it more reactive? Like, oh, something's gonna break.

Coming back to your analogy, when you sit in an airplane, that, that, that's maybe one reason because nobody tells you we have a technical issue when you have to onboard, right? They always say there's a logistical issue just to make sure that the people are not worried about something is not working. And, and, and that's a major issue, they never tell you the truth why you have to change the airplane, right? They just say that's the weather or that's something logistic and that's the reason, or the other flight was not arrived at the right time. But many times there is a technical issue and they have to fix it, right? But they wouldn't share that with you just to make sure the people feel safe. Back to your question from the business. Yeah. So corrective maintenance, you will see many, many times, right? There's a lot of firefighting in the industry that depends on the type of industry, right? When you have, let's say, Food making fast, consumer goods making. So it's different to a utility company or to a nuclear power point station, right? So the the way how you manage maintenance differs by industries. So in some industries, it's pretty okay when something breaks. Then the strategy is let's let it break and repair it or just change the part because there is no business impact, not from the safety and also no profit margin loss. In other industries like oil and gas, right, there is safety issues. So you can have an explosion. We all remember on the Horizon project with the oil spill, or we all remember on the Texas City accident. So there are many, many, many examples which put the shares and the value of the shares over years down of a company, right? Because of major break-ins. So the safety issues is a major point. And then you have a different approach to maintenance. And you do where you have not only just one equipment, everything is doubled just to make sure when some equipment breaks, you can switch on the other one. And you have a lot of governance structures to make sure that everything runs pretty well and reliable.

Absolutely. I always say if you have one of something, you have none of something.

Yeah.

Because it's gonna break and when it breaks, you just don't know. It, it, you brought up a great point about the whole environmental factor and safety just recently out in California. I don't know if you heard about it, but there was this big tank that was under pressure that had a bunch of toxic chemicals in it and they were ev— they, I think they evacuated some like 50,000 people outta the area because the company said it's either going to explode or It's gonna like leak out slowly and get into the water and people are gonna get hurt. They were like dousing it with water and that, that was a maintenance issue that kind of, that kind of happened. So in your experience, what are the top 3 issues that you currently see that people either that are executives or they're in leadership that they overlook?

Yeah, I, I mean, in my industry where I have worked, so, and when I look back and sometimes I'm asking myself, I'm working since 35 years in that industry. And sometimes I have the feeling we are talking about the same problems since 30 years. That has changed a little bit, right? Because technology is different, the equipment is different, the processes are different, right? We have more governance, we have more manuals. That's all in place, right? We have a different organizational structure. We have even better skilled people. And on the other hand, so, the companies are still finding it's the same problem. That means one problem is to make sure that we have not unplanned lost time. Right, and downtime. They want to make sure that we have not too high cost in maintenance because that's also an issue. And the throughput is very important, right, that the throughput is on the planned capacity. These are the 3 major topics. And last but not least, also that we run and operate the equipments in a safety way. And over the last maybe 10 years, also sustainability was a major topic, right, which is for the environment very important. And that was maybe coming back to your first question.

Yeah.

Reusing equipment, repairing that, that's maybe one initial way of sustainable acting instead of changing equipment, changing machines, and just replacing it, right? Because that's not sustainable. But reusing it and enlarging the lifecycle time of an equipment, it's way more profitable for a company instead of investing every 3 or 5 years in new equipment. So, if equipment runs longer, still reliable, so that's always possible. Like I said, with my VW Beetle, it was from the '50s, and you guys in the US, you are big fans of classical cars, they look fantastic, right? They are pretty old, but they are reliable because they are very well maintained, right? There is no reason to buy a new car. And sometimes even people which collect classical cars, they even hate new cars because there's too much automation. They can't even repair the engine. There's so much software in. And I run, just to share between you and me, I have a Porsche 911. And last week it happened so that my battery runs empty. That's a new type of battery, and if it is that the charger was not working perfectly. And the funny thing was, as I tried to open my trunk, there is no lever anymore to open the trunk. It's electrical. But because my battery was empty, I was not able to open it. So I need to call for service, and then a company showed around, and I paid $800 just. that they restart my car. So yeah, there are some changes in that way.

Yeah. So what are your thoughts on that? Because I have a similar thought to that, especially when we come into everything being going more electric, especially with cars, electric cars all over the place. And then even the handles, like if you push 'em, they have to like pop out. That creates a safety issue. And you brought up safety, you know, that we operate in a safety way. Are people and organizations looking at this and going, we got them on the cool factor. So we won them over on the emotional, like, hey, you're saving the environment by going electric. But maybe we overlooked, like, you can't get in your trunk or you can't get outta your car, or you can't get in your car if it doesn't have any power.

Yeah. Yeah. That's maybe a very common problem nowadays, right? That we are kind of sometimes over-automated and we stick too much on digital stuff and On the other hand, the clients like that, right? They always want to have the latest stuff. Everything has to be digitalized. It's hard for the people, right? Because in many cases, so now we have not only mechanical engineers and electrical engineers, you also need software engineers, right, to manage it. It's hard for the people to skill up to be able to maintain a single equipment piece just on their own, like I did as I was a young guy. That was easier. Now it's— nowadays it's a Stronger challenge. But on the other hand, I mean, the equipment runs on a higher capacity. It's also reliable, right? It has failure. Software has always failure. It requires flexibility from, from the people. But I think this is the way how our life is going on right now. We have AI and you don't know what happens with AI. It, it, it will add just the next layer of complexity, right? Because—

Yes.

Meanwhile, nobody knows why is an LLM giving you a specific recommendation. Nobody knows that. The sources maybe are well known, but the logic behind it, it's like a black box. And just let's imagine when AI is now doing stuff for us, even physical stuff, and we are not that far away. So that's something we have to manage that we still have a safe environment. So that's, but that's part of our life. So we have to deal with the situation. I'm pretty sure we will be able to do that. So I found that funny as I, because I said I lived In Houston, and there's NASA.

Mm-hmm.

And I was first time visiting the Starships. So it's pretty to see how old that inside is, right? You have the mechanical handles, everything there. There was no software, nothing. Now Elon Musk is changing that, right? When you see the Starships from Elon Musk, you have screens, you have software, everything is digital. He's a brave guy, right? But what NASA did before was everything was tripled or doubled in minimum, and everything was mechanical, right? And just to make it reliable.

Yes. And it makes me think of Star Trek. I don't know if you've ever seen that show.

Yeah, I'm a big fan of Star Trek.

You know, you have the digital touchboards and I honestly think that's where we got like the iPads and all the other touchscreen stuff from, like the thought to do it. But everything is less reliable because there's no redundancy built in. It's like a single point of failure in almost everything. And it's almost like it's a business model. And as I look over the past of my career and I've looked at others, maintenance folks seem to kind of take a backseat to public praise. And even in business, I think that everybody knows it's a part of life. Everyone has to do the maintenance. Everyone's expecting that it gets done. But unlike the salespeople who get like, hey, yeah, you guys have met your quota, or the HR folks are like, oh, you guys are doing a great job, how often do you see organizations really highlighting maintainers? the importance of maintenance?

Yeah, the role of maintenance and the awareness for the CEO or CFO is almost pretty low, and the major focus is from the management. Because when I look, and that's a different, again, to maybe the '90s as I started my business career and to nowadays. Meanwhile, I would say from my experience in a large multinational company, a management position will be turned every 2 years, right? And then The, the maintenance manager before, or the asset manager before, or the, the operations manager, after 2 years, he's in a new position. And usually when a new manager shows up, so then he comes with a new initiative. And typically, so then he stops the initiative the organization was maybe running before. But maintenance is a long-term initiative, right? It's, it's not just a 2-year period. You have to maintain everything from a long-term perspective. And the focus of the management now is more short-term. And what can you achieve in short-term? You can't, you will not invest in lifecycle of an equipment. You are not looking for a 3 or 5 years improvement program. You want to achieve everything after 3 or 6 months. And the major focus is on cost cutting. So maintenance is more seen as a cost block instead of a value creator. So that's maybe one disadvantage for maintenance people, and they're only Getting attention when something breaks, right? Then everyone is in trouble. But if everything is silent, nothing happens, so then nobody puts the hand on your shoulder and say, well done, good job, guys, right? If everything runs, it's different to safety, right? In safety, you are missing, you are measuring near-by incidents.

Yeah.

Just to understand, so there was a risk. In maintenance, you are not missing that. If you could prevent a breakdown, nobody realizes that. So, and nobody talks about that. So you can run 150 days without any break-in. Nobody talks to you. Everything is going. It's just everyone is talking about cost. If something breaks, so then you are in trouble, right? So that's, that's a mindset, a culture topic we always fight in many organizations to change that and to have the right awareness. So changing maintenance from the cost reduction view to the value creator, it's very important.

Yeah. So I wanna talk about the value creator on, on that. So if you're in like a CMO or CFO position, how could you talk to the rest of your organization and say, this is how we are value creators?

The, the easiest thing is to talk about the profit margin loss, right? And especially in the process industry, in the industries where you have 24 hours, 7 days a week running equipment, and every hour maybe costs you $200,000, $500,000, or even $1 million on a large refinery. On profit margin losses. So then it's pretty clear for the top management, we need to do something. And then the second layer on the complication is we talk about it's environmental questions or safety questions when humans get hurt, right? Or when you have that spillout or this leakage. So because that can impact the share value of your company on the stock market very well. So then you have fully attention. You can talk with the management about that and they see the value. And I have talked with top management many, many times about that and they agree and say, Frank, everything what you said is perfectly, but First, we need to talk about cost cutting. So it's again a repeating topic so that they say cost is more important for me and they do not understand. So sometimes there's a so-called inverse C. The inverse C means so that you first need to invest more costs in maintenance to make your equipment reliable. And when you make your equipment more reliable, you improve your profit margin because it's not breaking down and you have not $10,000 for maintenance can save you a million on breakdowns, on profit margin loss. Making the right investment, and that's a hard decision because it's financial then, and financial has a different view to the engineering department, a different view to operations and maintenance. And it's all complicated today because the responsibility is a little bit split. It's not like in the '90s or at the military, you have one boss and he's taking All decisions. Now you have to talk to many, many different departments, and sometimes you even don't know who was taking the final decision and why was the decision taken. It's hard to find that out, right? Because it's a consensus decision and nobody wants to be responsible for the decision. It's a group of 10 people or 5 people, and they say, this is what we have decided. And when you ask who has decided that or why, you will not get any answer.

It's just, we have decided.

Yeah, we have decided and we are responsible and you have to make that. In a little bit aggressive way to say that. Yeah, that's a little bit over-signed, but it kind of expressing where the problems are.

No, that's a great point because, you know, you are, you have to clearly articulate what the risk is and what the cost is. And I remember I got in trouble one time 'cause I told my boss, like, you could either pay me now or you could pay me later. Either way, you're gonna pay me. You know, and it, it was important at the time that we had that conversation, but now you're echoing the same thing. You're pretty much saying you could either pay a lot and a lot of profit loss Or you could pay a little bit upfront and we can maintain it and avoid that loss. And then they always come back to, well, we gotta cut costs somewhere, so you're gonna be it. And that could be incredibly frustrating.

And the negative thing on that is, and let me reconnect it to our personal life and to our personal experiences. When you cut something, it swings back, not immediately, but maybe 1, 2 years later on a higher level. It's same when you do a diet, right? We know that you lose weight. Maybe 5 kilograms, and your weight was maybe 95 kilograms. And then 6 months later, you are arriving at 100, right? Or even 105, right? Because your body says, okay, you saved something, so I have to make sure I'm saving that because nothing bad should happen to me again in this way. And this is a fight about budget, right? When you start to cut budgets, so the people are smart on the shop floor, and they know, so the management will cut my budget maybe by 10, 15%, and I'm going to present my budget for maintenance next Let me add 10%, 15% as contingency on that, or even 20% that I have a little bit more. So that's management games we play nowadays because we don't work honestly together. We are not telling the truth to each other, and everyone is in a specific role but is not really connected to the real life, right, and say, we have to make something meaningful. And we have to take— and they are not encouraged enough to take the right decision sometimes.

No, absolutely. And I'm glad that you brought that up because oftentimes maintenance and maintainers can get lost in everything that's going on. 'Cause you talked about the guys on the floor, they're smart and they know what's going on. They, they see the writing on the wall, but they're still expected to perform and they want to perform. And I don't really hear too much talking about maintainers and maintenance and how it's going. So I really appreciate your perspective on that. My last question is, is there anything that we didn't talk about or something that I didn't ask you that you were like, you know what, I really wish that we had talked about this one subject.

Yeah, I was always thinking about, so why do we deal with the same problems over the years? And when you look, so many things have improved. We have more technology, we have better equipment, we have high-polished frameworks, we have methods and tools, and everything has improved. Even governance is better, the manuals are better, but still, organizations are too often firefighting and working on corrective maintenance or running out of budget. And what is the reason? And for all that break-ins, and I saw the— and slowing down the performance at the final end. We have still the same performance issues like we had 20, 30 years ago. So it's— and many companies have that. It's maybe 10, 20% of the companies are running well. The rest are struggling with the maintenance performance. So, and I learned, I think, over my business career that the biggest performance losses aren't hidden in the assets. So, In the equipment, and and that's a major focus from the maintenance people first because they are engineers; they are technically focused. They always look what's what is broken, but the hidden they are hidden in the decisions made around the assets. So it's the way how we manage that and the way how we take decisions. I think this decision making is getting more and more complex when you this when you make a distinction between complication and complexity. Then you see a watch. an irregular on equipment is complicated, right? But you can analyze a failure, you can exactly investigate and understand what was the reason, the root cause. In a complex environment, you can't do that. There are so many things involved, even humans, and maintenance is a complex situation, right?

Yeah.

And, and to manage that, that's always a challenge. And therefore, it's more and more important not to rely too much on frameworks, not to rely too much on digitalization, or not on AI or something. It's more to give the people the power to take the right decisions and train them to take decisions in different situations, right? Because the situation is always new. It's not written down in a procedure. It's not written down in a manual. So it has to be in the mind of the people. They need to understand what is now, from the value perspective, the right decision. And this is where we have to focus on, especially now with software and AI, right? The AI can give you a recommendation, but they're still a human. This human needs to evaluate, is that the right recommendation for the moment? Do I follow this recommendation or should I take a different This decision-making is very important.

You're absolutely right. And I appreciate you sharing that.

I'm not anymore working as a consultant or as a coach. I'm more working now as an author or keynote speaker. They can invite me, they can have workshops with me, I can run a speech in an internal meeting. And from a business perspective, I'm also invested in a company called Wiser, which is for performance management intelligence. So, this is an analytical tool which is able to analyze from wall to wall the maintenance performance based on 39 insights. And it comes back automatically and tells you, so, where are the hidden value gaps in your organization? Instead of inviting maybe an expensive consultancy and let them run a 4-week analysis, so we can do that, this tool is doing that in 2 days. And then you can focus your team to make an evaluation, say, okay, these are our hidden value potentials. How are we going to tackle that? And to set up the project and bring the power back to the shop floor people to do the change management instead of handing it over to an external company.

Which is incredibly powerful. So, for Everybody watching this and listening to this right now, take Frank up on his word. I, I've talked to him several times and every time I'm always impressed about the amount of knowledge he has and what he has to bring to, to the table about maintenance. And he's super passionate about it, if you haven't already, you know, taken that away. And so go to the show notes, you're gonna find the links to everything he has to offer there so that way you could reach out to him. So Frank, I appreciate you being on the show. And for everybody else watching and listening, thank you for stopping by and checking in.

Thank you. Thank you very much, Tim. See you next time.

Absolutely. Thank you.