In this presentation given at the Industrial Project Managers group in Paris in March 2019, Project Value Delivery exposes the challenges of organizational transformation from small simple projects to large complex projects

1. Project Value Delivery
© Project Value Delivery, 2019
w w w . P r o j e c t V a l u e D e l i v e r y . c o m
How to Manage the Transition
from Small, Simple to Large
Complex Projects
Industrial Project Managers Group
March 2019

2. Contents
© Project Value Delivery, 2019
w w w . P r o j e c t V a l u e D e l i v e r y . c o m
• What is the issue?
• Tools & practices specific for
complex projects
• Specific challenges for large
projects
• Challenges for transformation
• Summary and thoughts
How to Manage the Transition from
Small, Simple to Large Complex Projects

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Who are we?
Our observation basis
• Multiple industries
• Owners &
contractors
• International
vision

4. Section
1
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From small to large projects:
what is the issue?

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Specifics of Large, Complex Projects

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Specifics of Large, Complex Projects
• What is the difference between day-trekking and
climbing Mt Everest?
ORGANIZATION /
TEAM
SYSTEMS /
EQUIPMENT
PROCESS

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Why you can’t scale from simple to
large projects

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What is a Large, Complex Project?
• Complex System = System with many independent
components and strong interactions

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65%
Failure rate of mega-projects
Source: Industrial Megaprojects, Edward E. Merrow
• New Technology
• Remote site
Main failure factor: operability
+8%
+10%

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Failure of mega-projects
Source: Industrial Megaprojects, Edward E. Merrow
Mega Projects either
• Succeed
• Fail miserably
There is no in-between
… It is not just chance!

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Complex Systems Properties
• Unpredictable outcomes
• “Long tail” distributions – much higher probability of
outcomes away from expected
– A single project outcome can be disastrous for
the organization
– Law of portfolio average does not apply!
• Single freak events can significantly alter outcome

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Specifics of Large, Complex Projects
Running a Successful
Large, Complex Projects
Company is
fundamentally
different
from running a Successful
Simple Projects
Company

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How organisations end up dealing
with large, complex projects?
1. Organisation growth strategy
– Successful organisations dealing with smaller
projects move up the food chain
2. The organisation product become larger or more
complex by natural evolution…

14. Section
2
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Tools and practices for
Complex Projects

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So, is your organization ready for
complex projects?
Key indicators:
1. Strength of project managers vs department heads
2. Office lay-out – really integrated, co-located
teams
3. Project governance maturity
4. Convergence focus
5. Cost mindset vs investment mindset at
management level
6. Risk management transformed: prevent freak risks
7. Strength of IT systems for project data
management

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1. Integrated Teams
• An integrated team
– Geographically
regrouped
– Team effectiveness
• Direct report to top
management
• Functions support project
– Resourcing
– Processes and tools
No Part-time job!
Integrated team
away from
departments!

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2. Office Lay-Out
• Most people are allocated full time to
a project
• The project-team is collocated in an
open-plan space to facilitate
communication
Minimizing
Complexity…!

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3. Project Governance
• Proper project governance is often missing on large projects
– Project sponsor does not understand specifics of large projects,
project sponsorship weak
– Steering Committee not effective in taking decisions
– Project execution strategy and decision-making key points for
management not well defined
– Too low authority level of Project Manager!
– Lack of clarity regarding utilization of contingency reserves
– Lack of will to invest to prevent future costs or manage risks

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3. Poor Project Governance

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4. Convergence process
• Simple Project • Complex Project

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For Complex Projects, the focus needs to be on
convergence

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4. Convergence process
Project Performance Driver
(or, what kills a project)
Simple project Large project
Efficiency Convergence
Potential upside/
downside±10%
+20%
- 30, -50, -100%

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4. Convergence planning – the
TOYOTA way
2,5 years
6 months
T-2 years
Supplier late by one week
Production line
and ready suppliers
Start of Production
• on time
• on cost
• on quality

  
New vehicle Project
Visit of the
Toyota President
 fire fighting mode
 team of engineers sent
from Japan to rectify !

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Most
Projects fail
because of a
small piece
missing…

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Convergence process5. Success requires investment =
additional cost upfront:
Very different project management focus &
process than Simple Projects

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In a large
complex
project,
unexpected
things will
happen!

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6. Advanced Risk Management
approaches
• Industrial Risk Management
– Specific methods to prevent major catastrophic events
(low probability, high consequences)
• Portfolio risk management
– Manage dependencies between projects (resources etc)
and consequential effects
• Complexity minimization
• Ensuring there is a way to escape the project if it goes bad –
contractual T&C
– Limit of liability, termination clause etc
• Proper contingency calculation and Senior Management
ownership

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7. Systems and data management
• Large project = lots of data to control
– Manual systems are overwhelmed, high error rate
• Need to:
– manage inter-office remote work, remote sites
– guarantee data correctness and accurate reporting
• What minimum systems?
– Document control & Correspondence control
– Cost control (different from accounting)
– Commitments & approvals
• SCM
• Logistics
• Travel, HR
• Timesheets
– Scheduling & convergence planning
– Dashboard/report generation

30. Section
3
© Project Value Delivery, 2019
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Specific challenges for Large
Projects

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Specific challenges for Large
Projects
1. Making sense of vast amounts of information
2. Remaining flexible in execution
3. Specific roles and organisation

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What information?
How do we make sense of it?

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What is Project Controls?
Project Controls is about building
information sensors, and making
sense of the information that is
generated so as to pilot safely the
project to its ultimate destination.

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2. Remaining flexible in execution
• Eisenhower: “In preparing
for battle, I have always
found that plans are
useless but planning is
indispensable”
• Have a sound baseline
and remain agile and
flexible
• Need to have an integrated
schedule for the project

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2. Remaining flexible in execution
Schedule Management
• Stuff I heard and saw for real
– EPC projects with 10,000 up to 15,000 lines
schedules (not updated)
– (Project Director, 800M$ project) “I haven’t
looked at the project schedule for 6 months. I
don’t understand it anyway” (a project with a
10,000 lines schedule)
– (usual) “we can’t show what’s really happening
in the schedule, because then the Client would
know it”
– (on site) “The schedule is something for the office
people, I know what I have to do”

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2. Remaining flexible in execution
Project detail level (planning/cost)
Project planning/cost detail
Too little detail
will not allow
to grasp
the project drivers
Too much detail
drowns the team
and removes agility
Effectiveness
Optimal
Planning
Detail
Range

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Convergence
Plan
MOREDETAILS
MOREFOCUS
Master
Document
Register /
Engineering
schedule
Procure-
ment Plan
Suppliers’
Sub-
Contractors’
schedules
Construction
detailed
schedules
© Project Value Delivery, 2013
Simplified Project
Schedule
200 – 400
activitiesMaster Integrated
Schedule
1,500 – 2,500 activities
2. Recommended Schedule Hierarchy
for Large Projects
Commissioning
& start-up
schedule

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Project Control traps
Too much detail!
Not enough time for analysis

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2. The schedule strategy must be defined
as a team

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3. Large projects typical
organization
Project
managerProject
Control
manager
Package
Manager 1
HSE, Q
Package
Manager 2
Package
Manager 3
Engineering
Manager
Procurement
manager
Construction
manager
Commissioning
Manager

42. Section
3
© Project Value Delivery, 2019
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From Small, Simple to Large,
Complex Projects:
Challenges for the
transformation of the
organisation

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Transformation challenges 1/3
• Mind-set shift required = long-winded transformation
– Change management to be considered from the start
– Benefits from external input
• External hires
• Consultants
• Transformation of the physical office setup (often taken as an excuse)
– open-space project office required with,
– people moving from department offices to project office
• Implementation of a matrix organisation (transformation from silo’ed to
matrix)
– Substantial explanations required as it impacts people’s identity,
career etc
– Departments’ role changes to process, training, resources
management, career management
• Giving proper authority to Project Managers

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Transformation challenges 2/3
• Accounting for the full lifecycle challenges of the
project requires an integrated team and a strong
mind-set shift

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Transformation challenges 3/3
• Problem of co-existence of small, simple and large, complex
projects in the same organisation:
– Split the organisation to avoid cross contamination risk
• Small projects run like large projects won’t be competitive
• Large projects run like small projects will kill the company
– At least understand clearly that processes, organisation,
governance needs to be different

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Specific for Owners
• In many instances projects are not the main focus of the organisation
– Owners are typically ‘production/operations’ driven
– Other organisations may be ‘manufacturing’ driven
• Project obey different mindset, tool, competencies
– HR policies may not apply
– Governance participants may not understand the risk and the
issues
• Projects may not report at the right level
– Project may not be the best career path – not the A team
 Implementation of Owner’s organisation for managing large complex
projects becomes a major challenge

47. Conclusion
© Project Value Delivery, 2019
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Summary and thoughts

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YOU DON’T WANT TO TRY TO
SALVAGE A LARGE PROJECT
IN A STORM
BE PREPARED!

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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

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Moving into Larger, more Complex
Projects
• Management by “efficient”
hierarchical departments
• Purely rational approaches
• Following an immutable baseline
plan
…DON’T WORK

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• Be Focused on the right
things – Convergence
Monitoring
• Be in Control while
remaining Agile
• Leverage integrated
Teams
LEAD!

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THANK YOU!

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Project Soft Power
Unleashing Value
from Your
Large, Complex
Projects
Project Health Check
Project Coaching
Organizational maturity
Team effectivenessIntercultural leadership
Advanced project trainingProject Startup support
Project Recovery
Advanced risk management
Project Control and Reporting
Support systems integration
Convergence planning
Remote sites integration
Leadership development