IDENTIFY AND MANAGE PROJECT SUCCESS SUMMARY. Report of seminar 161 held on 20th January 2011 at Hallam Conference Centre, London

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1 IDENTIFY AND MANAGE PROJECT SUCCESS Report of seminar 161 held on 20th January 2011 at Hallam Conference Centre, London SUMMARY KEY CONCLUSIONS Create confidence and control. This will lead to success. Top strategic KEY risks CONCLUSIONS are regulation (uncertainty stalls decision making), access to credit, the slow economic recovery, and access to and managing talent. The new normal is market variation, economic volatility, pressure on margins and stakeholder confidence (this is critical for project success). Confidence in the delivery team is more important for project success than the business case. In the military world success is achieved through expectation management, remote delegation, reliable logistics, simplicity and leadership. Demonstration of successful delivery attracts follow-on expansion, but if possible do not allow changes and concentrate on value for money. A dedicated team focusing solely on communications with stakeholders obtained overwhelming support from 10 local authorities and coordinated an approved design. Reduce complexity. If you cannot simplify it you have not understood it. Big themes which should achieve success for government projects going forward are greater transparency and full proactive reporting, breaking down megaprojects into smaller contracts, holding a Starting Gate assessment before commitment, more frequent milestones rather than a final completion, continuity of effort (same staff) throughout, identify failure early and stop bad projects, creation of a Major Projects Authority with capability, oversight and authority to build on lessons learned. Success can be defined as a project to be proud of for many years to come. These are the views of Malcolm Noyce, Executive Director, MPA 1

2 INTRODUCTION This half day seminar concentrated on the less tangible aspects of identifying and managing project success. Project success is clearly aligned with delivery to time, cost and quality, but success can sometimes be realised in other ways, and may change over time, or from the individual s perspective. However, it can still be captured, and remains transferable. The seminar set out the criteria by which successful projects have traditionally been judged and then examined how these criteria are aligned on two very different cross-department programmes. Whilst diverse in nature these projects have a number of features in common, particularly as both were implemented in an operational environment. Both were also heavily reliant on human factors and effective systems integration to underpin their successes. The proceedings concluded with the Government s perspective regarding major infrastructure projects. DEFINING PROJECT SUCCESS Following the disruptive macroeconomic events of the last few years, conditions remain challenging and uncertain in today s business environment. The first presentation, from Ernst & Young, looked at what corporate businesses have been concerned about over the last 12 months, and how that has affected initiatives on projects and programmes. It outlined the results of recent research carried out by Ernst &Young, which examined the top 10 strategic business risks in 2010, identified by various industry sectors worldwide. These risks fall into four major categories: financial, compliance, operational and strategic, with the number one risk focusing on issues of regulation and compliance. Looking forward to , companies believe that growth will be much more competitive, and expect a return to an altered economic climate termed the new normal (as noted in the key conclusions above). The 2011 business model will be about enhancing business within this new normal environment. The research looked at what a range of high-performing companies were doing in relation to four key drivers for success: customer reach, cost competiveness, operational agility and stakeholder confidence. For instance, as regards cost competitiveness, successful companies have an agenda for reducing costs and increasing performance of supplied goods and services. The presentation considered the success or failure of a selection of major projects, and reflected that, in hindsight, there may be factors other than time, cost and quality by which to judge success. It posed the question of how to bring in some new thinking about what defines success and how to increase the chances of success in this wider context. For example, there might an excellent business case, but this does not necessarily convey an ability to deliver the overarching objective, which may be judged retrospectively. 2

3 ROYAL ENGINEERING EXPEDITIONARY CONSTRUCTION CAMP BASTION, AFGHANISTAN This presentation from the Royal Engineers looked at the background to the establishment of Camp Bastion in Helmand, Afghanistan, highlighting some of the aspects of project management in a remote location. Constructed over the last five years, from bare desert, Camp Bastion is now a thriving operational hub with its mix of tented accommodation alongside a world-class field hospital, and supplied by the region s busiest airport. It involves delivering multiple infrastructure projects, to UK standards and with a limited contractor base, with materials being delivered from the UK over a varied and volatile 5,800km supply chain. Three specific major projects within the infrastructure development were described, detailing the way in which risks were identified and expectations managed in order to achieve overall success. It was explained that the definition of the success of military infrastructure is measured in the impact to operations on the ground, all of which focuses the delivery to time and quality. Key factors in identifying and managing military project success include: Expectation management: understanding the client, in this case the force on the ground. Remote delegation: being empowered to making decisions on discrete operations. Reliable logistics: prioritising the demands on the logistics chain is vital. Simplicity and first principles: keeping design and contract delivery mechanisms as simple as possible. Management and leadership: managing internally and externally across the project, i.e. civilian contractors as well as the military environment. DELIVERING MANCHESTER METROLINK NETWORK EXPANSION Greater Manchester Passenger Transport Executive (GMPTE) is currently delivering a 1.4 billion investment in Metrolink, Greater Manchester s tram network, in conjunction with their delivery partner, Parsons Brinckerhoff. Building on the existing Manchester tram system, the investment programme will see the network triple in size by 2016 to provide a high-quality, frequent public transport service to more communities in Greater Manchester. It will also see the transformation of the existing network, for example new trams, service enhancement projects and new ticket vending machines. In this session, Parsons Brinckerhoff outlined the scope of the investment, the company s role as delivery partner, and how a programme of this scale requires much more than delivering to time, cost and quality. continued 3

4 delivering continued Effective communication with stakeholders, local communities and existing passengers is a key factor in delivering the individual schemes and determining the overall success of the programme. For example, streaming stakeholder coordination is fundamental in developing the design, and is linked to securing necessary consents and approvals. An essential feature is a robust programme management approach, to enable effective management of the complex interfaces and associated risks between the different projects. Another key to success lies in requirements definition and constraints analysis. In the case of Metrolink these factors are largely adherence to the rail industry s standards and the limits of cost and time, therefore the overall aim is to reduce complexity by careful value management and managing risk. A GOVERNMENT PERSPECTIVE WHAT WILL MAKE MAJOR PROJECTS SUCCESSFUL IN THE FUTURE? The business of government generates a vast range of large, unique, complex and challenging projects and programmes. In this concluding session the Cabinet Office outlined improvements to government project management capability over the last decade. Examples include the work of Sir Peter Gershon in introducing the Gateway Programme, in which projects are reviewed on a periodic basis, and the Office of Government Commerce s 2005 publication entitled The Common Causes of Project Failure. The presentation then went on to consider some of the factors and initiatives involved in making sure that major projects are successful in the future. One of the most significant initiatives is the proposed introduction of a Major Projects Authority, which will establish and mandate a stronger yet flexible approach to integrated assurance and approvals for major projects. This integrated framework will include Starting Gate, a measure introduced under the previous Government to provide a review in the early stages of a policy-to-delivery project life cycle. CONCLUSION The Chairman, Ian Brown CBE, noted how important it is to think carefully about what is meant by the successful delivery of a project. For instance is success to be judged just in terms of time, cost and quality of the physical construction, or the benefits that the asset will continue to deliver in five or ten years time? Through a well-balanced programme interspersed with lively discussion, this seminar provided delegates from a wide cross section of the Major Project Association membership with useful insights into how success might be viewed across both the public and private sectors. 4

5 PARTICIPATING ORGANISATIONS 3G Communications Limited Advance Consultancy Ltd AECOM Aedas Architects Arup BBC Projects BG Group Bircham Dyson Bell LLP Cabinet Office CH2M HILL CJ Associates Defence Estates EDF Energy Ernst & Young LLP Freshfields Bruckhaus Deringer Herbert Smith LLP Highways Agency IBM (UK) Ltd Kellogg Brown & Root Major Projects Association Manchester Business School Mott Macdondald National Audit Office NATS PA Consulting Group Parsons Brinckerhoff Prendo Ltd Raytheon Systems Limited Royal Engineers Saïd Business School Siemens UK plc SKEMA Business School The Nichols Group Transport for London Turner & Townsend Winckworth Sherwood 5