Large Complex Projects (PMI-MY presentation Sept 2012)

9,660 views

Published on

Large, Complex Project Management is Fundamentally different from smaller, simpler project management. In this comprehensive presentation for the Project Management Institute, we dwell into the details of what needs to be setup to be successful in these world-changing ventures.

Published in: Business, Technology
0 Comments
5 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
9,660
On SlideShare
0
From Embeds
0
Number of Embeds
4,707
Actions
Shares
0
Downloads
259
Comments
0
Likes
5
Embeds 0
No embeds

No notes for slide

Large Complex Projects (PMI-MY presentation Sept 2012)

  1. 1. Project Value Delivery Large, Complex Projects: a different ball-game Jeremie Averous September 2012© Project Value Delivery, 2012www.ProjectValueDelivery.com
  2. 2. Project Value Delivery Intercultural leadership Project Soft Power Team effectiveness Project Coaching Unleashing Value Leadership development from YourProject Control and Reporting Large, Complex Project Recovery Project Startup support Projects Advanced project training Support systems integration Project Health Check Remote sites integration Advanced risk management Organizational maturity Convergence planning We Empower Organizations To be Reliably Successful in Executing Large, Complex Projects Discover more on www.ProjectValueDelivery.com
  3. 3. Specifics of Large, Complex Projects© Project Value Delivery, 2012www.ProjectValueDelivery.com 3
  4. 4. Specifics of Large, Complex Projects• What is the difference between day-trekking and climbing Mt Everest?ORGANIZATION / SYSTEMS / PROCESS TEAM EQUIPMENT© Project Value Delivery, 2012www.ProjectValueDelivery.com 4
  5. 5. Specifics of Large, Complex Projects Running a Successful Large, Complex Projects Company is fundamentally different from running a Successful Simple Projects Company© Project Value Delivery, 2012www.ProjectValueDelivery.com 5
  6. 6. Specifics of Large, Complex Projects • What is a Large, Complex Project? • Convergence processContents • Organization • Survival • Project Controls • Systems • Project Soft Power: Project LEADERS • Conclusion© Project Value Delivery, 2012www.ProjectValueDelivery.com
  7. 7. Specifics of Large, Complex Projects What is a Large, Complex Section Project? 1 About size and complexity© Project Value Delivery, 2012www.ProjectValueDelivery.com
  8. 8. What is a Large, Complex Project?• What is complexity?© Project Value Delivery, 2012www.ProjectValueDelivery.com 8
  9. 9. What is a Large, Complex Project?• Complex System = System with many independent components and strong interactions© Project Value Delivery, 2012www.ProjectValueDelivery.com 9
  10. 10. What is a Large, Complex Project? In the Offshore Construction Industry• Complex ~ EPIC project • Sizeable Complex Procurement & Fabrication & related engineering (30, 40%+ of revenue)• Large – ~ 300 MUSD+ in offshore industry – ~ 200 MUSD+ in onshore industrial construction• Risk ownership varies – not important – lump-sum projects = risk & opportunity with Contractor = higher potential margins© Project Value Delivery, 2012www.ProjectValueDelivery.com 10
  11. 11. Large, Complex Projects Business Benefits – Leverage revenue / asset base – Lump sum – higher potential margins – Multi-year predictable activity / revenue / cash – Market premium & market leverage – Increased organization capabilities allows to tackle new developments© Project Value Delivery, 2012www.ProjectValueDelivery.com 11
  12. 12. Large, Complex Projects• MINDSET ISSUE• How do you recognize easily a company which mindset is only one of Simple Projects?© Project Value Delivery, 2012www.ProjectValueDelivery.com 12
  13. 13. Specifics of Large, Complex Projects Convergence process Section 2 The Key To Successful Large, Complex Projects© Project Value Delivery, 2012www.ProjectValueDelivery.com
  14. 14. Convergence processSimple Project Complex Project© Project Value Delivery, 2012www.ProjectValueDelivery.com 14
  15. 15. Convergence process Project Performance Driver (or, what kills a project) Simple project Large project Efficiency Convergence +20% ±10% Potential upside/ downside - 30, -50, -100%© Project Value Delivery, 2012www.ProjectValueDelivery.com 15
  16. 16. Convergence process• For Complex Projects, the focus of project management needs to be on convergence – Main driver: avoid standby of project & major assets – Project management is geared on timely delivery of all required deliverables – This might require investment = additional cost upfront• Very different project management focus & process than Simple Projects© Project Value Delivery, 2012www.ProjectValueDelivery.com 16
  17. 17. Convergence process• Real life examples – Africa, 2006: A late 0.5MUSD item causes a 60MUSD loss on a 800MUSD contract • Delay impacted First Oil: huge organizational disruption • Loses next contract with same Client – Numerous examples of lump sum projects finishing at cost x2 or x3© Project Value Delivery, 2012www.ProjectValueDelivery.com 17
  18. 18. Specifics of Large, Complex Projects Organization Section 3 Large, Complex Projects Require Specific Organization Patterns© Project Value Delivery, 2012www.ProjectValueDelivery.com
  19. 19. Organization• An integrated team – Geographically regrouped – Team effectiveness• Direct report to top management No Part-time job!• Functions support project Integrated team – Resourcing – Processes and tools away from departments!© Project Value Delivery, 2012www.ProjectValueDelivery.com 19
  20. 20. Organization• An experienced Project Manager of Simple Projects is not necessarily suitable to lead a Complex Project – Different skills required© Project Value Delivery, 2012www.ProjectValueDelivery.com ? 20
  21. 21. Organization • Different skills required also for Procurement Engineering© Project Value Delivery, 2012www.ProjectValueDelivery.com 21
  22. 22. Specifics of Large, Complex Projects Survival Section 4© Project Value Delivery, 2012www.ProjectValueDelivery.com
  23. 23. Survival • With a Large, Complex Project, the very survival of the company is at stake.© Project Value Delivery, 2012www.ProjectValueDelivery.com Mt Everest claimed 219 lives… so far 23
  24. 24. Risk Pattern of Complex Systems • In Complex Systems, freak events happen regularly Moon© Project Value Delivery, 2012www.ProjectValueDelivery.com Tornado intensity 24
  25. 25. Risk Pattern of Complex SystemsIN COMPLEX SYSTEMS• Freak events happen much more often than you would expect• Their intensity/ consequence is much greater than expected normal distribution range© Project Value Delivery, 2012www.ProjectValueDelivery.com 25
  26. 26. Failure rate of mega-projects 65% • New Technology +10% • Remote site +8% Main failure factor: operability © Project Value Delivery, 2012 Source: Industrial Megaprojects, Edward E. Merrow 26 www.ProjectValueDelivery.com
  27. 27. In Large, Complex Projects, one single project that gets bad can kill your company© Project Value Delivery, 2012www.ProjectValueDelivery.com 27
  28. 28. Project risk management iskey to understandthe current environment – Identify all relevant risk & opportunities – Prioritize – Take action © Project Value Delivery, 2012 www.ProjectValueDelivery.com 28
  29. 29. Minimizing Risk in Complex Projects• 2 specific ways of diminishing risk –Diminish Complexity –Diminish Natural Variation© Project Value Delivery, 2012www.ProjectValueDelivery.com 29
  30. 30. Minimizing Risk in Complex Projects• Diminish complexity – Minimize the number of contributors • Integrated teams • Integrated work package / subcontractors – Diminish the number of convergence ‘meeting points’ – Improve contributors’ alignment • Familiarization, alignment workshops • Incentive schemes© Project Value Delivery, 2012www.ProjectValueDelivery.com 30
  31. 31. Minimizing Risk in Complex Projects• Diminish the effect of Natural Variation – Start as early as possible the most variable activities and protect convergence point with a buffer – Minimize variation in the process© Project Value Delivery, 2012www.ProjectValueDelivery.com 31
  32. 32. Project Controls Section 5 Where are we? Where are we heading? From the past to the future© Project Value Delivery, 2012www.ProjectValueDelivery.com
  33. 33. Project Controlsis aboutavoidingtheCrash© Project Value Delivery, 2012www.ProjectValueDelivery.com 33
  34. 34. In projects, we are exploring new territories© Project Value Delivery, 2012www.ProjectValueDelivery.com 34
  35. 35. ProjectsIn projects,unexpectedevents happen© Project Value Delivery, 2012www.ProjectValueDelivery.com 35
  36. 36. A mega-project is always highly A project is disruptive DISTRUPTIVE The environment will FIGHT change© Project Value Delivery, 2012www.ProjectValueDelivery.com 36
  37. 37. We need toanticipateand react
  38. 38. What is Project Controls?Project Controls is about buildinginformation sensors, and makingsense of the information that isgenerated so as to pilot safely theproject to its ultimate destination. 38© Project Value Delivery, 2012www.ProjectValueDelivery.com
  39. 39. The Three Fundamental Questions WHERE ARE WE? (ARE WE ON COURSE?) WHERE ARE WE GOING? WHAT DO WE NEED TO DO TO BE BACK ON COURSE?© Project Value Delivery, 2012www.ProjectValueDelivery.com 39
  40. 40. In Manufacturing, the future is an extrapolation of the past© Project Value Delivery, 2012www.ProjectValueDelivery.com 40
  41. 41. In Projects, the future needs to be re-forecast© Project Value Delivery, 2012www.ProjectValueDelivery.com 41
  42. 42. Cost control is not accounting• TWO VERY DIFFERENT DISCIPLINES COST CONTROL ACCOUNTING / FINANCE- Focus on the future - Focus on the past- Understands the business - Same for any business- Follows commitments - Follows invoicing and payment- Fixed exchange rates - Variable exchange rates - Cash flow management- Focus on project end - Focus on reporting period point end point (PoC accounting)© Project Value Delivery, 2012www.ProjectValueDelivery.com 42
  43. 43. • Cost control is fundamentally about NO SURPRISES© Project Value Delivery, 2012www.ProjectValueDelivery.com 43
  44. 44. Organization• PVD recommends that Complex Projects be executed in a different Business Unit than Simple Projects – Complex Projects have different drivers compared to Simple Projects – It is a consistent mistake to try to manage both types of projects in the same organizational structure, with the same processes© Project Value Delivery, 2012www.ProjectValueDelivery.com 44
  45. 45. Project success is determined at the beginning. The first year Project Controls setup is critical© Project Value Delivery, 2012www.ProjectValueDelivery.com 45
  46. 46. Project Control key• Management of Change (and interfaces) is key to effective Project Controls© Project Value Delivery, 2012www.ProjectValueDelivery.com 46
  47. 47. • Lack of interface management can be a disaster © Project Value Delivery, 2012 www.ProjectValueDelivery.com 47
  48. 48. Project Control trapsToo much detail!Not enough time foranalysis © Project Value Delivery, 2012 www.ProjectValueDelivery.com 48
  49. 49. Specifics of Large, Complex Projects Systems Section 6 Large, Complex Projects Require Another Realm Of System Capabilities© Project Value Delivery, 2012www.ProjectValueDelivery.com
  50. 50. Large project = large numberof parameters to control© Project Value Delivery, 2012www.ProjectValueDelivery.com 50
  51. 51. The Three Fundamental Questions WHERE ARE WE? (ARE WE ON COURSE?) WHERE ARE WE GOING? WHAT DO WE NEED TO DO TO BE BACK ON COURSE?© Project Value Delivery, 2012www.ProjectValueDelivery.com 51
  52. 52. Summary Project Controls is about Navigation© Project Value Delivery, 2012www.ProjectValueDelivery.com 52
  53. 53. © Project Value Delivery, 2012www.ProjectValueDelivery.com 53
  54. 54. © Project Value Delivery, 2012www.ProjectValueDelivery.com 54
  55. 55. © Project Value Delivery, 2012www.ProjectValueDelivery.com 55
  56. 56. © Project Value Delivery, 2012www.ProjectValueDelivery.com 56
  57. 57. • T© Project Value Delivery, 2012www.ProjectValueDelivery.com 57
  58. 58. You can’t control a large, complex project with an Excel spreadsheet© Project Value Delivery, 2012www.ProjectValueDelivery.com 58
  59. 59. © Project Value Delivery, 2012www.ProjectValueDelivery.com 59
  60. 60. Systems• Manual systems are overwhelmed, high error rate• Need to: – manage inter-office remote work, remote sites – guarantee data correctness and accurate reporting – have sound forecast over project span© Project Value Delivery, 2012www.ProjectValueDelivery.com 60
  61. 61. Systems• What systems? – Cost control – Commitments • SCM • Logistics • Travel, HR • Timesheets – Scheduling & convergence planning – Document control & Correspondence control© Project Value Delivery, 2012www.ProjectValueDelivery.com 61
  62. 62. Systems• What Investment? – Systems: 2-5 MUSD – People© Project Value Delivery, 2012www.ProjectValueDelivery.com 62
  63. 63. Systems: the WBS is key COST CONTROL ACCOUNTING SCHEDULE 1 PROCUREMENT WBS TIME CONTROL© Project Value Delivery, 2012www.ProjectValueDelivery.com 63
  64. 64. Project Soft Power Section 7 Large complex Projects require Project LEADERS© Project Value Delivery, 2012www.ProjectValueDelivery.com
  65. 65. The FourthRevolution
  66. 66. More on the Fourth Revolution?• Book• Blog:www.TheFourthRevolution.org© Project Value Delivery, 2012www.ProjectValueDelivery.com 66
  67. 67. The organization transformation© Project Value Delivery, 2012www.ProjectValueDelivery.com 67
  68. 68. Industrial Age = rational IQ 1920’s© Project Value Delivery, 2012www.ProjectValueDelivery.com 68
  69. 69. Collaborative Age = EQ Emotional Work© Project Value Delivery, 2012www.ProjectValueDelivery.com 69
  70. 70. Project Manager vs Project LeaderDoing things right Vs Doing the right thing© Project Value Delivery, 2012www.ProjectValueDelivery.com 70
  71. 71. SOFTENTREPRENEUR TEAM COACHPROJECT SPIDER POWER KUNG FU PEOPLE MASTER CATALYST© Project Value Delivery, 2012www.ProjectValueDelivery.com 71
  72. 72. The SPIDER • Develop a specific network for your project • Cover relevant stakeholders / priorities • Maintain and develop… At an emotional level© Project Value Delivery, 2012www.ProjectValueDelivery.com 72
  73. 73. What wewant toachieve…
  74. 74. Discipline
  75. 75. Focus: Theory of constraints, 80/20 rule© Project Value Delivery, 2012www.ProjectValueDelivery.com 75
  76. 76. Project Control trapsToo much detail!Not enough time foranalysis © Project Value Delivery, 2012 www.ProjectValueDelivery.com 76
  77. 77. The KUNG FU MASTER• DISCIPLINE: run the project management processes against all odds• FOCUS: the 2+1 rule: – 1 medium term objective – 1 long term objective – Always enhance the teamWHAT ARE YOU READY TO STOP DOING? © Project Value Delivery, 2012 www.ProjectValueDelivery.com 77
  78. 78. Invest at the beginning© Project Value Delivery, 2012www.ProjectValueDelivery.com 78
  79. 79. The ENTREPRENEUR• Don’t hesitate to invest early – Systems and processes – Anticipate convergence early and invest if necessary© Project Value Delivery, 2012www.ProjectValueDelivery.com 79
  80. 80. TheTeamCoach
  81. 81. What makes an effective team?© Project Value Delivery, 2012www.ProjectValueDelivery.com 81
  82. 82. What makes an effective team?© Project Value Delivery, 2012www.ProjectValueDelivery.com 82
  83. 83. The TEAM COACH• Build an effective team – No divas – Emotional connection – Creative conflict – Tough discussions© Project Value Delivery, 2012www.ProjectValueDelivery.com 83
  84. 84. The PEOPLE CATALYST• Know the people• Use far more of people’s talents• Leverage on people’s talents© Project Value Delivery, 2012www.ProjectValueDelivery.com 84
  85. 85. Project Soft Power Skills can be learned
  86. 86. What does it take to become a GREAT project manager? TRAIN HARD© Project Value Delivery, 2012www.ProjectValueDelivery.com 86
  87. 87. GIVE A GIFT: Feedback technique1. Be present2. Ask permission3. State purpose and positive intention4. Share personal perception of performance or behavior5. Provide suggestions for improvement6. Ask open question to get remarks7. LISTEN attentively8. Jointly decide action© Project Value Delivery, 2012www.ProjectValueDelivery.com 87
  88. 88. Specifics of Large, Complex Projects Large Complex Projects Transformation:Conclusion Hard and Rewarding© Project Value Delivery, 2012www.ProjectValueDelivery.com
  89. 89. Specifics of Large, Complex Projects On average, people spend more than 1 year to prepare for an Everest climb More than 3,000 people have made it© Project Value Delivery, 2012www.ProjectValueDelivery.com 89
  90. 90. Tackling Large, Complex Projects• To tackle Large, Complex Projects – Transform the organization and its mindset / focus • Corporate and governance level • Project leadership level – Invest in the right tools, processes and people• It is possible to do it with the right process, organization and tools• It takes effort and practice• It pays off© Project Value Delivery, 2012www.ProjectValueDelivery.com 90
  91. 91. Tackling Large, Complex Projects• PVD recommendations – It is an investment over several years. Are you ready for it? – Change the organization’s mindset first – Change the organization structure: specific B.U. and career path for Complex Projects – Implement specific Processes for Complex Projects in particular in scheduling & convergence – Implement appropriate Systems that can also be used for other activities© Project Value Delivery, 2012www.ProjectValueDelivery.com 91
  92. 92. Specifics of Large, Complex Projects• Welcome to the top!© Project Value Delivery, 2012www.ProjectValueDelivery.com 92
  93. 93. Project Value DeliveryTHANK YOU! We Empower Organizations To be Reliably Successful in Executing Large, Complex Projects Discover more on www.ProjectValueDelivery.com
  94. 94. Project Value Delivery Intercultural leadership Project Soft Power Team effectiveness Project Coaching Unleashing Value Leadership development from YourProject Control and Reporting Large, Complex Project Recovery Project Startup support Projects Advanced project training Support systems integration Project Health Check Remote sites integration Advanced risk management Organizational maturity Convergence planning We Empower Organizations To be Reliably Successful in Executing Large, Complex Projects Discover more on www.ProjectValueDelivery.com

×