How Predictability Thinking Reveals Invisible Threats to Capital Projects

How Predictability Thinking Reveals Invisible Threats

Imagine if you could reliably deliver your site’s revamp projects on-time and on-budget. How would that change your business? What if you could see all the invisible threats to capital projects — before they become problems? Would your ability to execute projects predictably be a potent market differentiator, distinguishing you from the crowd? Might it be a powerful competitive advantage? Could it boost the bottom line? Yes, yes, and yes.

Predictability is the new buzzword in capital projects: Old-fashioned, but more relevant than ever. Site-based revamp projects are notoriously complex, and therefore especially prone to seemingly unpredictable budget overruns and delays. Let’s look at how predictability thinking™ can directly impact your outcomes, and make it more likely that you’ll one day be able to say: “Our team reliably delivers on-time and on-budget.”

Invisible Threats

There are many invisible threats to capital projects, but we’re not going to list them all here because they manifest differently in every organization and, more importantly, because the threats themselves are not the problem. The petrochemical engineering and construction industry is replete with competent leaders who have the knowledge, skill and talent required to address threats and risks that they can see. You’re probably one of them.

The real problem is that standard capital project management paradigms render many risks invisible. Unfortunately for us all, these invisible risks to capital projects are often the most insidious.

Here’s an example. Imagine there’s a man named Brent working in your construction management department: he’s an old-school, 40-year industry veteran who worked his way up from the field. Now imagine a woman named Beth working in engineering: she’s a Stanford grad and Rhodes Scholar who was recently recruited away from your top competitor. They’re both seasoned professionals who command premium salaries and are charged with executing high-level, mission-critical work. The quality of their collaboration is central to the project’s success.

Your org chart will tell you their titles and job descriptions, it will tell you who they report to and who reports to them. Your Primavera schedule will tell you what Brent and Beth have been assigned to do (resource allocation), when it’s due, and it will show you how their work fits within the larger project plan in terms of engineering hours and construction milestones.

None of these standard project management mechanisms will reveal to you that Brent and Beth do not have a shared understanding of their respective roles and responsibilities, or that they do not have a shared understanding of their joint objective, or that they are not documenting and tracking their work effectively because Brent is a hunt-and-peck typist who can’t spend hours writing a 20-page construction work package, and because Beth refuses to be saddled with sole responsibility for project documentation on top of her engineering duties.

Standard capital project management structures and paradigms render all of these problems invisible; they won’t surface until the collapse of the collaboration between Brent and Beth has irremediable consequences, probably in the form of a significant delay and the concomitant increase in costs — not to mention the impact on the larger team.

There are countless Beths and Brents working in your organization, and there are hundreds of invisible problems like this one. The cumulative impact is debilitating for organizations and with the increasing technology-related distractions in the work environment, this may be one of the leading causes for poor capital project performance.

Standard capital project management paradigms render many risks invisible. Unfortunately for us all, these invisible risks are often the most insidious.

Surface Invisible Risks With Predictability Thinking

The solution is to set a Predictability Agenda™. Make predictability the cornerstone principle of your project management philosophy, and undertake a systematic effort to incent and support predictability across key project activities. Any project team can do it, and in some of our previous writing, we’ve touched on how.

Concord®’s one-of-a-kind Project Predictability Package™ applies our own proven methods and technologies to these problems, and it has been used successfully by some of the world’s leading owner companies. We apply the principles of Advanced Work Packaging and other proven formulas related to cost, schedule, productivity, engineering, procurement and construction, and we also leverage industry-specific change management principles. All of these come together in a scripted method to help a project continuously build the capacity to deliver a predictable project.

What does this look like in practice? For instance, the Project Predictability Package focuses in part on teaching executives how to engage in Predictability Thinking™. In part, this means studying the implications of some of the day-to-day decisions that all project executives and managers make. At one company, we may investigate workflow issues; at another, we may hone in on contract structure, new technology, or team tensions. Our relentless focus on the unique threats to predictability at each individual organization helps us to identify and mitigate those invisible risks long before they show up on the bottom line.

We have our ears to the ground.


Making It Visible: A New Line Item

Your team is ready for this. The invisible threats to capital projects can be made visible. Talk to your experienced project managers — the people with three or four major projects under their belts. They’ll understand intuitively that we need to expand our thinking about risk beyond just safety risk and market risk. We need to start thinking and talking about project management and execution risk.

To do that, you need a separate line item in your project management budget, allocated to predictability assurance efforts. When you do that, predictability suddenly transforms from a “nice to have” to a “key deliverable,” from wishful thinking to a team and company culture. That’s how you transform an organization.

If you’re ready to budget for conscious predictability efforts that follow a systematic, proven predictability script for capital projects, contact us here at Concord®. We’ll be happy to help.

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