This document discusses the findings of the ICPM Taskforce Report and their implications for contracting on complex projects. The report found that traditional contractual approaches can hinder effective collaboration, and identified several traits necessary for delivering complex projects successfully. These include having a flexible, outcome-focused organization; a systemic, portfolio approach; and contracting strategies focused on long-term benefits rather than risk transfer. The document argues that implementing the taskforce's findings could help maximize benefits through practices like earlier industry involvement, collaborative risk management, and incentives aligned with overall outcomes.

1. Contracting for Effective Collaborations in
Complex Projects
-what the findings of the ICPM Taskforce Report mean for
contracting in complex programs
NASA PM CHALLENGE 2012
February 2012
Bretton Ackroyd
COO ICCPM
Email: coo@iccpm.com
Phone: +61 406 420 642

2. Introduction
• Speaker – Bretton Ackroyd COO ICCPM
• ICCPM – who we are
• ICPM Taskforce Report – Overview
• ICPM KD2 and ongoing Research Agenda

3. Complicated vs. Complex
A Working Definition
Complicated – when you know what you have to do
Complex – when you don’t

4. Overview
• Introduction
• The Problem
• ICPM Taskforce Report findings
• Key traits for delivering Complex
Projects
• Giving effect to the Report findings
– Proposed Practical Contract and Organisational
measures

5. Summary
• To deliver the full benefits of complex projects and
programs requires the capacity to engage in effective
complex collaborations
• Traditional forms of engagement and risk averse
organisational cultures can often hinder or even
prevent effective collaborations.
• Research has identified some traits necessary for the
development and realisation of Complex Projects.
• To achieve best results organisations need to
reflect, promote and support these “traits” through
their practices policies and engagement agreements.

6. Modern Complex Projects Involve
Complex Web of Commercial
Connections

7. The Problem:
Traditional contractual/ engagement approaches
• Adversarial / Blame focused
• Inappropriate risk allocation Contracts & Process
• Lack of systemic view
• Lack of effective change and conflict management
Influence of Subject Matter Experts/ Dominant interest
groups in Contract Formation. Short term focus
• Short term focus of most SME’s and interest groups at contract formation
• Incentivises game playing
Dominance of Reactive Organisational Culture.
• Adversarial,
• Risk focused,
Culture
• Distrustful of others/change – not made here syndrome
• Process driven/process controlled

8. Problems: Traditional contractual / engagement approaches
Process Driven
Adversarial
Lack of Systemic view
No future vision
over regulated Blame focused Risk management?

9. Dominance of Reactive Organisational
Culture

10. Vicious Cycle: Lack of trust/over regulated, policy driven engagements
Vicious Cycle

11. ICPM Taskforce Report
Findings:
• Competition needs to be selectively applied and targeted to
provide effective outcomes and best benefit realisation.
• Processes that facilitate early supplier/industry
involvement essential for complex projects.
• Contracts need to acknowledge and support the iterative &
collaborative nature of effective risk management.
• Contracts need to promote and support the growth of both
strategic and tactical level collaboration.
• Need to develop commercial advisors and related key
subject matter experts that have the capacity to take a
systemic view to contract formation and realising long term
benefits benefits.

12. Contractual and Organisational Traits Required
to Maximise Benefits from Complex Projects?
• Flexible outcome focused Organisation;
Creation of entity with processes, people and leaders flexible
enough to address complexity and evolve throughout life of
the program
• Portfolio of Interrelated Projects; Systemic
approach look at the whole as well as the parts; addressing
the entire supply chain and beyond.
• Long Term Benefits Driven Contracting
Strategies; nuanced, targeted and Informed by clear
understanding of the benefits sought by Stakeholders.

13. Flexible Outcome Focused
Organisation
• Flexibility essential to delivering effective solutions and
realising total benefits. Must be nimble enough to address
Unknown Unknowns.
• Recognition of role as Steward/Champion of the capability
being developed.
• Processes and procedures that support collaborations and
the focus on benefits realisation instead of risk transfer.
• Leaders that develop and project the shadow of the future
and have cognitive flexibility to manage emergence.
• Transparent and efficient governance regimes that support
achievement of benefits not hinder it.

14. Portfolio of Interrelated Contracts
• Systemic approach – look at the whole as well as
the parts. Influencing the entire supply chain.
• Manage as an integrated program rather than
individual projects.
• Active Identification and management of
interrelationships to enhance overall benefits
realisation.
• Active promotion of cross portfolio knowledge
sharing and collaboration.

15. “Benefits Driven” Contracting
Strategies
• Multiple Contracting strategies applied to different
components of capability
– Nuanced, targeted and informed by clear understanding
of the benefits sought by stakeholders.
– Targeted use of competition as one of a range of
approaches underpinning value, not as a weapon.
• Recognition that the owner organisation (gov. or private)
cannot walk away from the program and risk is shared not
transferred.
• Mechanisms for collaboratively managing unknown
unknowns as they emerge.
• Iterative implementation – opportunities to pause, learn and
adapt.

16. Implementing the Findings
• Earlier industry involvement reduces risks increases
likelihood of realising benefits.
• Test commitment to collaborations through limited
risk, Project incubator programs and ECI arrangements.
• Develop and promote trust through being trusting.
• Active management of conflict for best results.
• Incentivise achievement of overall benefits over short term
profit taking.
• Secure appropriate rights upfront to minimise barriers to
future collaborations.
• Recognise that for some collaborations there is no such
thing as an Off Ramp – manage for the long term.

17. Two Limbs of Effective Complex Project Agreements
Clear Performance Baseline Collaborative Behaviours
Clear Proactive and Supportive of
understanding and Efficient Trust/Fluid
of customer Conflict Human
requirements Management Interaction
Appropriate
Performance Flexible &
Proactive Empowered
Management Cooperative
Change Decision
Measures Risk
Management Management Making
Integrated
Systems of
Delivery Team
Systems role
Incentives
Cross
for
partner
effective
Teamwork
Efficiency

18. Develop and Apply Systems of
Systems Contracting Strategy
Customer Networks
REGULATORS
Suppliers REGULATORS
Strategic Suppliers
Strategic Suppliers
Customer Networks
Customer Networks
Strategic Suppliers Suppliers

19. Recognise Multiple Functions
and Aims of Complex Project
Agreements
Risk
Management
Managing Social
Change Contract
Complex
Normalising Statement of
Project
Relationships Agreements Requirements

20. Realistic, Balanced and Cooperative
Risk Management

21. Establish Pro Active Dispute 3rd party
Management Process Litigation Dispute
Resolution
Proposed Dispute Managment Board Activities
Provide Dispute management Provide non
guidance and independent binding dispute
and advice to senior resolution
dispute management decisions
avoidance
advice
Informal Formal DRB
Conflict Avoidance Discussions & Negotiations
Stage Negotiations Assessment
Conflict
Project Staff and Management Project 3rd Party
Resolver
Senior management &Courts
Continual process Within 7 days 14 days 21 days
Time frame of dispute notice
Issue referred back to project for CEO
monitoring (Specific review period) Assessment
Resolution or

22. Performance Management and
Incentives linked to Partner Charter KPI BALANCED SCORE CARD
Demonstrate Accountability
Risk reward KPI’s +
Non risk /reward KPI’s
Compliance Did it happen? PARTNERING
• Process metrics KPI Performance Scorecard
• Audit CHARTER
KPI Weight Targets Actual
Identification & Type Score
Assessment Did it work?
• Business case Agreement on
• Informal review of Long Term
• Anecdotal data
Benefits Sought
Evaluation Did it really work?
•Focus on proving
• Control groups
• Longitudinal
•Capture what did happen Cost and profit transparency
Outcomes How well is it working?
Measurement • Focus on improving Risk/Reward Curves
•Timely data analysis
•Actionable reports
Deliver impact •Capture what is actually happening

23. Contracts that Incubate Project
Collaborations & Support integrated
Team Work

24. • Flexible Outcome Focused PM/
Acquisition Organisation
• Holistic System of Systems Approach
• Nuanced Benefits Driven Acquisition
Strategy
• Effective Collaborations focused on
return of long term Benefits.

25. Questions