Introduction
So, you’re about to close the deal on a mega project with all the potential in the world. Everyone involved is ready to sign on the dotted line, jump in, and start tackling the deliverables on the project schedule. Before you do, here are three lessons from the capital project trenches. They are straightforward, actionable, and can save a great deal of time, frustration, and guesswork.
#1: Be aware of best practice versus best process.
A strength of the project management community is that project managers consistently look at their history and draw conclusions about lessons learned and how to avoid certain issues and obstacles the next time around. In a sense, people capture best practice as a form of risk management. If a project fails horribly, they put a “best practice” in place to prevent that kind of failure in the future. For example, you should have X percent of engineering completed before you can begin construction; you must not make any changes in your design beyond point Y; and it should take Z amount of time to contract with vendors, perfect the data, complete the engineering process, etc.
In fact, you could say that most project management guidance is the result of past failures. Consider the analogy of legal contracts. Most contracts we sign are full of restrictions and caveats that don’t apply to our particular situation at all. And while there’s a certain value in vigilance, when it comes to megaproject best practices, those standards are actually based on a fear of extraordinary failure, as opposed to a commitment to extraordinary performance. I would go so far as to say that the prevailing context of major capital projects is one of avoiding failure versus a context of extraordinary success.
Too often, my colleagues and I have encountered projects in danger of failure where people feel resigned because they’ve fallen too far behind the pace dictated by best practice and conventional wisdom. And if they follow all of the rules, doing everything in a precise order and keeping to established time frames, there is no way for them to succeed.
The only way to succeed in such instances is to innovate and take the next steps with freer thinking. We think of this as “best process.” It requires veering from best practice in thoughtful—often bold—ways, albeit with risk awareness.
For instance, my colleagues worked with a federal agency that won a high-profile US$800 million road upgrade project, then turned around and did something unexpected. They decided to share the risks and rewards in a first-ever alliance approach. The agency had always executed contractor projects according to conventional best practice, but in light of steep challenges—including a six-month delay in breaking ground, tough environmental restrictions, and drought-ridden terrain—the organization broke with tradition and assembled the alliance. They established a “fix-it-first,” “no-blame” culture and came up with unparalleled innovations such as using recycled water from a nearby paper mill, introducing advanced traffic management techniques, and insisting on environmental standards above and beyond legal requirements. By developing and implementing these best processes, they delivered the project ahead of schedule and US$40 million under budget, with award-winning quality and environmental results.
This success was possible because the people involved decided that a balance between risk management and opportunity is what would lead them to an unpredictable win, versus predictable defeat.
#2: Have the missing conversation.
I was leading a session recently and when it was time for the first coffee break, I asked everyone to be back in their chairs in 15 minutes. But it was at least 20 minutes before everyone was back. At the second break, I said, “I need each of you to make a promise to me to be back in 15 minutes. Do you promise?” Everyone said yes. And within 12 minutes, every single person was back in their chair. The only thing that was distinct between the first and the second break was that I had a conversation where I asked people for their promise—their commitment.
It’s something my colleagues and I see with clients working on major capital projects. The conventional way to manage these huge undertakings is to have a project manager take in all kinds of inputs, then produce a project plan and schedule with literally thousands of details, dates, and deliverables. And the conventional way for project teams to relate to that plan is the way people related to me before the first coffee break: They understand there’s an expectation, but they don’t own the plan as their own. The only person who really feels on the hook for the plan is the project manager who produced it.
There’s a missing conversation that can help leaders translate a project plan into a set of commitments. It’s a conversation about people committing to the project plan as their word. It’s a basic, yet powerful, thing. Most people place a lot of value on their word, and if they consider something to be a promise, they want to honor that. In certain lines of work that factor heavily into megaprojects (for instance, engineering), we’ve found this is a fairly new concept. People tend to view the schedule as an estimate or forecast because they know there are so many variables at play. On the other hand, when they are clear they’re giving their word about a deliverable, it means something to them and has power.
One pitfall we’ve seen is that when people start giving their word they can be very protective of it, so they only want to promise what they can guarantee. But that’s still a decent starting place. There’s also a distinction between keeping your word and honoring it. The reality is that we can’t keep our word 100 percent of the time; it’s simply not possible. But we can always honor our word, even if our commitment is challenged. That means acting consistent with your word and being proactive. If you realize there’s an obstacle, you communicate about it, deal with the ramifications, and come up with mitigating plans.
For instance, an engineering team I was working with recently called an emergency meeting when one of their minor deliverables was in jeopardy. And they weren’t overreacting. With their commitment in mind, they knew they should immediately deal with the impact of the near-term delay so that it did not translate to a longer-term delay. From a project management perspective, this is much better than learning of a problem after the fact and being in a reactive stance. When the project manager starts managing commitments versus managing the schedule, you know you are on a path to success.
#3: Think—and talk—transparently, beyond the contract.
There’s a myth that a project contract full of caveats will cover everything that could possibly go wrong. But the contract is essentially a document that assigns risk. You could even say that with all of its provisions for penalties and remedies for non-performance, the contract probably does more to set up partners as adversaries than as allies.
Despite what looks good on paper, in practice, all kinds of problems can surface. For instance, in a low-margin project, as soon as deadlines start slipping and penalty clauses are invoked, a contractor is likely to react with immediate action to protect its interests. And that’s where the real trouble can start. It’s not unlike a marriage: When you have to start defending yourself for something, you’re not looking out for the whole of the relationship.
If you take a step back, you could say the bulk of the contract essentially serves as a pre-nuptial agreement, with remedies to invoke when things go south. Quite often, after a contract award has been announced, months are spent honing the contractual details—most of them addressing specific risks to the parties and corresponding penalties. It’s more about planning for failure. It isn’t going to create a successful marriage.
But partnering can be about so much more than risk mitigation: It’s a real opportunity to fulfill something much bigger. If you want a relationship that benefits the whole of the partnership, then you need something different. You need a mindset of: “I can’t be successful unless we’re both successful.”
It’s not about saying you care about the partner’s success and the greater good of the project; it’s understanding what that really means. Take safety, for example. I’ve never met anyone who isn’t committed to safety. But for one organization, that might mean less than 0.1 total reportable injury frequency on a million hours; for another, it might mean 5.0. You have to air these things out. If you do, you can open up possibilities for operating in a richer way on all fronts. If you’re interested in working at a higher level of engagement and performance, and ultimately boosting reputations as well as bottom lines, it will be time and energy well spent.
Conclusion
To recap:
1. Be aware of best practice versus best process; the former can restrict you unnecessarily, and the latter can set you free.
2. Have the missing conversation. When people give you their word and feel on the hook for how things go, it makes an undeniable difference.
3. Think—and talk—with your partners about priorities beyond what’s in the contract. A contract may make you partners in theory, but how you work together determines if it can be a true partnership in practice, capable of delivering the best performance possible.