Capital programs and projects are indicators of economic progress and set standards of living for the lives connected to them. Large program/mega-project implementation is a complex business with many controllable and uncontrollable factors causing value loss and project failure.
Managing controllable factors offers the dual advantage of adequate readiness to deliver programs/projects and maintaining preparedness to address dynamic risks and challenges before they emerge. Cost-effective digital technologies, predictive analytics, improving construction methods, and greater awareness around governance, oversight, and ESG, have enhanced the ability to better manage and control these factors.
Ten fundamental principles have been compiled, that can serve as a litmus test for stakeholders to assess the likelihood of capital program and project success. Each principle is worthy of being a larger subject and it’s the intent of the author to expand these principles with work steps and industry examples in future blog posts.
- Clear vision and implementation strategy: A program and its group of constituent projects are designed for success when driven by a clear vision, unambiguous objectives, implementation strategy, and preferred delivery methodologies. Setting up this big picture in clear and high definition upfront takes effort, patience, and investment. At times, organizations shy away from this effort and investment, and impatiently insist on starting early leading to ambiguity or convenience-based planning during project delivery.
- The right team and culture: The core program/project team should be picked carefully, assigned clear responsibilities, and unified by a project-relevant culture. Getting the core team right and creating the right culture across the entire team, are usually outsourced by the owners/sponsors as added responsibilities to a single project director. Culture building gets underprioritized as this core team is formed later than required and other project ‘fires’ are accorded higher priority.
- Building capability and capacity: A core team, however experienced and determined, can achieve only so much. Large programs and projects require sizeable and often multiple teams to create the requisite delivery capacity and deliver the successful outcomes. While outsourcing can be beneficial and a dependable method to bring in specific skills, know-how and capability, and even basic team augmentation, the need to create internal capabilities to manage the outsourced agencies remains a requirement.
- Thinking it through: A large program or mega-project is like a war; it’s first won in the mind, and then on the battlefield. The likelihood of success increases when the core team can think through the planning and delivery cycle, essentially: winning the project in the mind. It involves thinking through all the pre-requisites, interdependencies, and step-by-step actions to complete the project, and prepare for the surprises and potential scope creep that occur during execution. Today’s technology has made this easier and more accurate by offering “digital twinning” on cloud based and collaborative platforms.
- ‘High’ but achievable targets: Project sponsors and owners often use targets to motivate high performers and teams to extend themselves and achieve breakthrough results. This works well in a cohesive and high-performing team, but an over emphasis on targets can create burnouts and less favorable results.
One level of goal setting should define the owner's expectations, and another should define day-to-day achievable targets, accompanied by a strategy that matches the expectations as closely as possible. The basis for both levels should incorporate the total cost of ownership to avoid short-term cost-cutting decisions that lead to a long-term increase in operational costs.p
- Being fair and smart with risks and opportunities: Risks and opportunities should be tracked and incorporated into the implementation strategies. Assess risks for their potential impacts and likelihoods as well as their interconnectedness to other unknown elements and for the time to impact. Track opportunities to help ensure their full potential has been extracted on a total cost of ownership basis, and after adjusting for any other diluted project outcomes.
A good approach is to enlist possible risks and uncertainties upfront and distribute responsibilities across the project stakeholders based on source and ownership. It is important to agree to adhere to principles of fairness and equitable distribution across teams.
- Using the right technology: The advent of improved engineering and construction technology and digital tools has provided program and project teams with numerous alternatives, each offering strong business cases and expected benefits. It is critical to test the technologies not only for specific business cases but also to gauge and understand previous implementation experiences and determine how the implementation can be the most effective for each project.
- Use of incentives and penalties: Incentives and penalties are often used to motivate enhanced performance and outputs. Successful programs and projects leverage a good mix of both with incentives being applied tactically and dynamically to steer the performance on specific indicators. Many projects have suffered from being unable to conceptualize and/or implement incentives effectively.
- Governance and oversight: Large programs and projects consume significant capital investment and carry the potential to underpin the successful realization of strategic initiatives. Adequate governance standards go a long way in striving to ensure major programs and projects receive requisite management support, direction, and oversight. The use of approval stage gates to control capital investments progressively is a reliable method to help drive program/project implementation while maintaining governance and risk appetites.
Leveraging independent agencies to validate assumptions, scope changes, assess performance against baseline plans, and encourage compliance with policies and procedures are dependable and time-tested practices.
- Rhythm and harmony: Programs/projects carry the potential to create or erode significant value for their stakeholders. Over their lifecycle, they are often buffeted by risks and uncertainties and worse still, changing stakeholder priorities and expectations. It is critical for the core team to maintain a sharp focus on the approved outcomes, managing both head and tailwinds in rhythm and harmony. Program/project leaders and core team members face a rewarding challenge in determining the optimal level of intensity and performance to help maximize the outputs to stakeholders.
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