Why capital project managers should focus on predictability and disciplined collaboration above all else
One of my first jobs as a young engineer was working as a project analyst, watching capital project teams up close, documenting the gaps and the shortcomings of our industry’s business practices and learning what works – and what doesn’t. Soon after that, I spent years at the Advanced Work Packaging Institute studying the specific methods that capital project leaders can use to build high-performing, multi-stakeholder teams. I’ve been learning and thinking and writing about leadership in the context of capital projects, and with my early construction field experience, I felt abundantly prepared to take on a leadership project of my own.
I left academia to co-found Concord Project Technologies, and I set about building my own global team. The task: To build the core operating system for a capital project delivery platform designed to serve an industry in which start-ups are rare and the stakes are high.
I quickly realized that talking about leadership and practicing it are two very different things.
Leading is hard.
The costs of failed capital project leadership
Not only is leadership hard, but failing to lead well in capital projects can be extraordinarily expensive. McKinsey reports that mega-projects with budgets over $1 billion are typically delivered a full year behind schedule, and a whopping 30 percent over budget. Leadership is critical – IPA says leadership turnover can impact a project cost growth by up to five percent.
Top companies invest heavily in establishing best practices and managing processes, but experts say that “soft” skills like leadership and organizational culture have too long been neglected. In the years to come, it is the cultivation and execution of these softer skills that will separate the winners from the losers. Tim Swenk, an advisor on Capital Project Effectiveness at Endeavor Management, says companies working in capital intensive project execution need to take clear steps to address the shortage of leaders with these key skills.
“A lasting leadership development framework must be anchored from a business strategic intent, with unwavering commitment from top organization leadership,” he told me in a recent interview.
Why predictability and disciplined collaboration matter most
For capital project managers, effective leadership boils down to results. I believe success comes from linking soft skills to action and that could be measured by two specific outcomes: the ability to achieve predictable project results, and the ability to develop a highly collaborative team.
1 | The ability to drive predictability
Unlike many enterprises in an Industry 4.0 world, capital projects remain rooted in hard, physical assets and their concomitant scopes of work — but only on the project side. On the business side, the organization acts like most modern, virtual organizations where most members spend their time negotiating their share of the value produced. This has become a major challenge for capital project managers, who must bridge the gap between the two, and deliver predictability from the project team to the business.
As Mihnea Moldoveanu and Howard Stevenson write in the Harvard Business Review, “the need for predictability is not a need for guarantees.” Leaders must be honest and upfront about the challenges the project is facing, detail possible paths and their attendant outcomes, and then proceed with confidence. As Winston Churchill once said upon becoming the prime minister of Great Britain in 1940: “I have nothing to offer but blood, toil, tears and sweat.” Forward-looking capital project managers could say the very same thing today.
2 | The ability to drive disciplined collaboration
To start, what is disciplined collaboration? Morten Hansen provides a good definition in his book, Collaboration: How Leaders Avoid the Traps, Create Unity, and Reap Big Results. He writes that disciplined collaboration is “the leadership practice of properly assessing when to collaborate (and when not to) and instilling in people both the willingness and the ability to collaborate when required.”
Here’s the question every capital project manager needs to ask: Is your team willing and able to collaborate when required? Here’s an equally important follow-up question: Do they have the enabling tools and information to do so.
Martina Asbury is a change management expert for capital projects. She says leaders usually address technical interfaces well, but internal organizational alignment is often dysfunctional — a problem that becomes exponentially bigger when dozens or hundreds of contractors and suppliers are involved. “Breakdowns in communication, decision-making, and conflict resolution undermine the ability of the owner team to meet its production promises,” she told Velocity. “In the simplest terms, alignment must happen on three fronts: project objectives, project execution plans and clear roles and responsibilities.”
An approach to Disciplined Collaboration
Here at Concord Project Technologies, we talk a lot about how to build a project team’s capacity for disciplined collaboration. There are two key elements at play: your company’s decision-making protocol, and the flow of information through your organization. Both of these processes have an enormous impact on your ability to make timely decisions that are supported by up-to-the-minute project data and information.
Most capital project organizations don’t have digital systems that support intense multi-stakeholder disciplined collaboration. However, in 2018, it is possible for hundreds of stakeholders all over the world to have access to the same platform and the same data, and for each of them to update that platform with the current status of deliverables from office to field, from the first gate to the last. Technology is an enabler to disciplined collaboration. Make the most of it!
This is the next frontier, and this is where forward-thinking capital project managers will be headed in the months and years to come. To make it happen, Owner and EPC companies will have to invest in developing and empowering the kind of leadership skills and enabling tools that make this level of predictability and disciplined collaboration possible. Let us start today!