5 Rules to Avoid Project Disaster - Part 2

In this two-part series, Brandon Davis offers five rules for capital project success. Part 1, published last week, includes the first three rules. Read Part 2 below for the remaining two rules.  

To recap, Part 1 included the first three rules:

  1. Be Mindful of Early Budgets/Estimates
  2. Guard Against Overzealous Leadership or Board Presentations
  3. Define the Scope Clearly

Part 2 continues with the remaining two rules …

4. Define and Communicate Your Delivery Goals

Define the project’s mission(s). That is, what is the project accomplishing for the company, the team, or other stakeholders? Who benefits from success, and how? Is the mission to generate more revenue with a new product line? Is it improving profitability by optimizing operations? Or, is the mission simply to comply with a regulatory requirement or new industry practice? Knowing the project’s mission(s) and communicating it to everyone involved (internal, external, suppliers, vendors, etc.) helps ensure everyone is operating from the same playbook and with the same theme, purpose or objective in mind.

Also, understand and communicate the project’s drivers. Every project has its pulls, pushes, imperatives and flex points, and decisions usually come down to either cost or schedule. Nearly every owner says the same thing—that all drivers are equal in weight, relevance or priority. But that’s never really the case. The weight of priorities and imperatives differ, and properly distinguishing them up front is empowering. For example, is it most critical to get the project up and running within the schedule? Is advancing or shortening the schedule, even at a premium, worth considering? Or, is it most critical that the project come in on or under budget?

Obviously, great teams manage these concurrent priorities tightly, but it’s inevitable that when push comes to shove, and decisions must be made, often one of these priorities will drive the decision. When drivers are established and prioritized early in the project’s life, and then communicated widely, it helps everyone make good decisions and recommendations during project execution and it focuses on-the-ground project dialogs.

The question to ask, perhaps, is “if I can spend a little extra and get the project delivered faster, or spend a little less and get the project done somewhat later (or better quality), what decision would I make?” The answer might change at various points during the project—and circumstances on the ground may well justify a change in priority, and that’s ok. For instance, if budget is the critical element initially and weather impacts, design changes, and so on occur, allowing the schedule to slip makes sense. But, if late in the project the latest date possible to get production running and make it to market on time is pushed up, and the schedule then becomes critical, some project owners become willing to pay for timeline acceleration.

Circumstances change priorities, and noticing the change (i.e., being open to and wary of it), and being able to respond nimbly to it, is essential. This is ok—provided the changing driver is understood and communicated to everyone involved as the project unfolds.

5. Establish and Encourage a Partnering Environment

Like team dynamics within the workplace, when all players on a project feel part of something and like they’re working together as a team toward a common goal, performance is better. Approaches to leading projects vary and I’ve seen it all where this is concerned. In some environments contractors act (or are treated) as contractors—just getting done what’s expected without needing to know or being part of anything more. In other environments, owners/PMs treat contractors as though they’re dishonest, mere opportunists trying to make a “ton of money” off the project in everything they do (rather than making an honest living).

From the owner perspective, we’ve all had these thoughts about contractors from time to time, but from the contractor side its clear and commonly understood that contractor profit margins are thin. Even when a contractor makes “great profit” on a project, it usually comes nowhere close to the profit margins a major manufacturer or producer is making with their plant or product.

In some cases, though, real partnering environments are built in which team members, vendors, suppliers, contractors, subcontractors and owners all feel (and act) like they’re part of one big team working together toward one mutually beneficial goal. These environments produce absolutely amazing results.

Can such genuine project partnering be planned and organized? Can they be intentional rather than accidental? In my experience, the answer is yes, but they require leadership, excellent communication, and clear priorities. Does it cost a couple extra dollars in the initial budget to plan for, communicate about, and implement such an environment? It does, but in the end, we spend much less by minimizing changes, claims, delays and conflict.

I’ve witnessed subcontractors and suppliers in these “team” environments go out of their way to cut their costs on a project and get extra work done for free or at cost. When asked why, the answer was “I just really want this team and Matt (owner/PM) to be successful. This is a great project and a great owner to work for; we want to do everything we can for them.” That experience and interaction alone, for me, proved that the partnering environment is not only possible, but works and produces better results. I’ve had this experience more than once and believe it can be fostered through effective project planning, prioritizing and communication.

 

In many ways, projects are complex, but in a lot of ways they aren’t. Most of the time, over my 22 years of delivering projects, project failures originate from failures on the basics, on the blocking and tackling. That is why we take the consistent project execution process so seriously at The Austin Company – so we can consistently deliver results.

The above are five rules from our robust book of lessons that might help you keep your projects from being a disaster in 2018. Here’s to wishing you and your team great success this year!