PMI Global Insights

We often think of risk management as primarily a technical project management discipline, but the last decade of research from the Construction Industry Institute (CII) paints a very different picture.  Implementing formal risk management practices, with an intentional focus on maintaining team alignment and establishing a culture of transparency and trust, is critical to achieving predictable performance in capital projects.

Cultural and human behaviour factors have a significant impact on the effectiveness of our risk management practices.  It is simply not enough to have a well written standard operating procedure and a great risk register template.  When we equip our project leaders to address both cultural and human behaviour factors, formal risk management becomes a game-changer to achieve predictable project performance.

The Challenge

It takes tremendous skill to consistently deliver a large portfolio of capital projects that meets the expectations of your sponsors.  Predictable project performance is the name of the game. 

“Do what you say you will do.” 

For capital projects, predictable performance translates into “on time, on budget, at the required level of quality, and delivered safely.”

The Construction Industry Institute (CII) has studied predictable project performance extensively.  Team alignment is the most influential factor, and a key component of maintaining alignment is transparency and trust among your project stakeholders¹ .

One of the biggest derailers of team alignment is when transparency and trust are compromised.  For example, when a team member doesn’t share their knowledge of a challenge or risk that could have a negative impact on the project, team alignment and ultimately project predictability suffers.

In a world where every Project Management Professional (PMP) is educated in risk management, how does this keep happening to our projects? 

• Do team members intentionally keep secrets? 
• Are project leaders suppressing their voice? 
• Is there more at play if we look deeper?

You Can’t Manage a Secret

It was a pivotal moment for me this summer when Alan Mulally, former CEO of Ford, shared his turnaround story at the Global Leadership Summit in Chicago. Mulally explained how he arrived at Ford in 2006 when the company was fighting for its life.  Changing the product line or the organizational chart wasn’t going to save the company.  He had to tackle a deeply ingrained cultural issue.  “You can’t manage a secret,” were Mulally’s words. 

When he first started, he shared that his weekly meetings with divisional chiefs walked through management dashboards that were lit up with “green” status updates. It just didn’t add up for Mulally.  How can there be no problems that his leaders were willing to acknowledge when they were forecasting a $16B loss?   The culture at Ford had evolved such that leaders buried problems.  Ford couldn’t solve those problems until their leaders stopped living in fear that the company will shoot the messenger.

My first co-op job in University taught me that valued employees don’t bring problems to their manager – they bring solutions!  As an individual contributor, this is a rational principle that serves us well. But as the size and complexity of our responsibilities increase, so do the problems and risks that we have to manage.   Herein lies the challenge with risk management in capital projects.  Complex projects have complex risks, and we can’t realistically address many of these risks without collaboration from the diverse group of experts that form our “project team”.

Just like Mulally had to tackle Ford’s cultural issue, as project leaders we need to establish a culture that is accepting of risks and changes.  If we want to improve project performance, our stakeholders must feel safe to identify risks, and confident that and we will not shoot the messenger.

Summary

If you are focused on achieving predictable project performance, formal risk management can be a game-changer.  However, the greatest impact requires a leadership commitment to place an intentional focus on maintaining team alignment and establishing a culture of transparency and trust.

Reference
1.  Construction Industry Institute, “Four-casting for Early and Accurate Predictability,” Implementation Resource 291-2, 2013.

In a previous post, a person asked Michelle Stronach: "Is PMI Global Congress worth the money?"  To which Michelle replied positively and constructively.

I am adding this infographic for congress participants and anyone questioning the value they get from PMI Global Congress. The value of PMI Global Congress for you is what you make of it during and mostly, after attending.

Take the following actions post congress and reap the best value from your congress participation.

The download link in point 4 is this: https://app.getresponse.com/site2/postpmicongress?u=Bn6WN&webforms_id=7741203

I’ve always said the most interesting things learned while at conferences, often come from conversations.  Yesterday I had one of those conversations - or rather this lesson came about from a number of snippets of conversation with the same individual, and a sleep following that. (My aha’s come when I’m sleeping - always!)

So, I’ve asked permission, and Larry was quite happy for me to share his name - Lawrence Cooper is one of my fellow experts attending the conference to answer your questions.  

Our conversations revolved around strategy and alignment, and I noticed throughout, every time I mentioned something about bringing projects in alignment with corporate strategies, he would "casually correct” me to say that projects are driven by strategy, initiated to achieve a set of outcomes - creating alignment isn’t something we should need to do.  If the outcomes weren’t driving the project initiation, then it wouldn’t be there to begin with.

Now, I absolutely agree with Larry - strategy should drive projects - portfolios of them, really.  And those projects within a portfolio should align and complement each other to bring the strategy to realization.  

But I was talking about another form of alignment, and that is when projects already exist, and do not work to support other strategic initiatives of the organization. Because we all know that organizations NEVER have only one strategic goal.

I’m not saying these projects necessarily push in an opposite direction of these other goals (although I have seen examples!), but that no effort is made to support achieving more than one goal, and I think that is a recipe for conflict, mixed messages to stakeholders, and overall reputation of the organization.

Our conversation made me realize that I’m not making myself clear enough on this matter.  Let me give an example from the industry I have worked in - mining (that is, resource extraction - not data mining, as many have assumed).

Most mining organizations will have a primary strategic goal around growth, such as increasing production by 10% by 2020, or double production by 2030.  As such, many projects are initiated to investigate, and further explore various potential deposits around the world.

In contrast, these companies will also likely have strategic goals around reducing their footprint - carbon emissions, environmental impacts, use of water, etc.  They may choose one or make efforts in all of these areas.  Projects that arise from this strategy might look like water recovery and recycling systems, energy efficiency improvements, or the introduction of waste management technologies - all applied to existing operations.  

Now, isn’t working on a new development altogether going absolutely in opposition to the footprint reductions initiative?

In my world, this is status quo, and it seems there are several projects that will be working towards growth in production, expansion of operations, and more.  So it has been my job in the past to get those project teams to not just think of that production target, or even just the goal of getting a new system built to support that goal.  But to also have them draw in the targets of these other strategic goals within the organization.

To at least support making the new developments as efficient as possible, to be proactive in prevention of environmental impacts, to make the physical footprints as small as is practical.  And to align with any other initiatives that may be present.

This can often be a challenge to make happen - if the project manager has missed these critical stakeholders who can and should be involved to help identify such risks and opportunities.  To ensure these aspects become part of the approved scope and plans.

As a project manager, do you ever ask what all of the corporate goals and targets are? 

Do you discuss which of the targets the sponsor would like to integrate?

Do you look for and engage the stakeholders who might inform you of these other initiatives (and what else other projects might be doing to support them?) 

And do you open the dialogue with your team and other stakeholders to find where the opportunities lie, to align your project with these other initiatives?

Attending the PMI Global congress in San Diego?  Come meet me with the “Ask an Expert” booth in the Solutions Center (exhibit hall).  There are several experts here to answer your questions on a variety of topics - I'm the one focused on risks and opportunities that can be investigated in planning, particularly for industrial projects like mining - that, and sustainability integration too!  I hope to see you!

How do you add flexibility and iteration into a rigid system? A defined management structure?  How do you manage stakeholder risks?  And how do you avoid the downfalls of assumptions?

I sat in three different sessions yesterday, each on different topics, and somehow all three came together quite obviously for me.  Maybe it will make sense for you as well.

So I will start with a great analogy I heard in the first session that rang true for me, as it relates to exactly how we might go about shifting to adaptability.  The session, delivered by Joy Beatty of Seilevel, was about the challenges of introducing Agile into Large Enterprises.  A bit of a mix around Agile methods and change management issues.

"Find your rocks in the river, and let the water flow around them."

The rocks, of course, are those non-negotiable aspects. Those required checkpoints, the gates, or those points where dependencies come into play when particular requirements need to be met.

The water? The process of how to get there, how to continue to move forward with processes that might require a bit more flexibility.

When we are thinking about adding adaptability and iteration into our PM structures, we need to understand how that may impact our stakeholders, and the dependencies that can kill agility.  We need to map out our processes, and explore how those tie in to other processes within our organization. 

• Which other teams might need information from us (or the system being altered), and what information that is, when,
• What impacts our changes might have on others' activities or capabilities, and
• What cannot be changed at all for those groups - sometimes full systematic change cannot be done all in one go, and we need to be aware of that.

From there, we mark those rocks in our system - lock them in, and ensure that the boat will not be rocked (excuse the pun).  Everything else that can be managed around those...let them flow.  Keep people informed of plans, progress, changes, etc., but let it flow. 

But be careful.  Make sure that map you've developed is whole, holistic.  Have you found all of your stakeholders? 

I listened next to a talk about stakeholder engagement, delivered by Rick Furino of Microsoft.  He spoke of all the categories of stakeholders to consider, their differing priorities and perspectives and why those exist, and how to better engage them.  And he did it in a way as to draw the audience in - a perfect demonstration of engagement processes at play!

Be sure you've worked through the many categories of stakeholders, and asked enough questions to flesh them out.  Ensure you understand what their needs and priorities are, how influential they may be, and how that might impact your project.   

Because guess what - there are likely silent stakeholders you might have missed.  Or you assumed they didn't matter, that you weren't upsetting anything for them.

Those are the ones that will come out of the woodwork after you have made a change that you assumed would not matter, would not impact anyone.

The last session of the day was delivered by Beth Spriggs.  Beth had the audience fully engaged throughout the entire session, asking questions, making statements or posting pictures up, and asking for our assumptions.

Helping us to understand just how many differing perspectives there might be in just one room. 

And then she would change the context for the same discussion, and ask us to reflect on our assumptions just made.  To demonstrate just how easy assumptions might change or can be wrong. 

She suggested several things we can do to reduce the risks of assumptions, and I would suggest that these strategies can be applied also to looking for and assessing other risks as well.

1. Always 'zoom out' - context is everything, particularly when dealing with conflict!

2. Explore your own assumptions - what are you taking for granted, put it in writing.

3. Share your assumptions and ask for feedback.

4. Ask for different perspectives, ask lots of questions. 

5. Ask others for their questions.  Q-storm...

6. Ask people what other people are saying - not to assume there isn't trust or things not being said, but to see how others' view others' stories - it may shed light on more potential risks.

7. Perform a 'checking assumptions exercise' - live collaboration where a list of assumptions are reviewed by all - if everyone is aware of one, it isn't necessarily a risk...but if only one person is aware of it, put it on the risk register to ensure it is addressed!

So, if you want to achieve success in introducing changes, whether they are agile-focused or something else, make sure you have a clear understanding of your stakeholders, their issues or concerns, the potential barriers to success, and any assumptions you or your team may have!

Attending the PMI Global congress in San Diego?  Come meet me with the “Ask an Expert” booth in the Solutions Center (exhibit hall).  There are several experts here to answer your questions on a variety of topics - I'm the one focused on risks and opportunities that can be investigated in planning, particularly for industrial projects like mining - that, and sustainability integration too!  I hope to see you!  

Are you with us in San Diego or following along with PMI Congress at home? Check out our highlights from day 1 here!

Be sure to follow along with us on social media using the #PMICongress hashtag! Want to have your photos included in our day 2 highlight video? Tag us in your photos! @ProjectMgtcom