Aug 8, 2019
Recently, I spent a week in Houston, Texas, United States meeting with multiple Engineering, Procurement and Construction (EPC) contractors working both in the United States and around the world. What struck me was the ever-increasing complexity of today’s Major Capital Projects (MCP). Even the best projects can end up in a tailspin, based on the growing number of contractors, multiple Joint Venture owners and global work sites.
If you ever have admired a Monet painting from afar, the harmony of colors blended together creates a spectacular vision. Stepping a bit closer, you’ll find that each is an individual brush stroke that works in concert, to vividly bring a scene to life. Contrast Monet’s impressionist style to that of Picasso’s cubist style. Monet has a holistic look compared to a Picasso which is compartmentalized.
Integration on a high risk, Major Capital Project is much like a Monet painting – where alignment across thousands of workers, hundreds of contractors and multiple owners are on the critical path for success. The complex, long term mega project, requires leaders focused on the holistic masterpiece versus the amalgamation of independent strokes of the paintbrush. There are three essential elements to project leadership success:
Like any corporate merger or acquisition, the priority is the integration of teams, processes and technologies. Akin to integrating a small company, EPC Contractors face similar challenges, when there is a dominant Joint Venture partner with multiple players. The business landscape is littered with failed merger and acquisitions, and the same can be said of projects. To assure success, a defined project vision, common culture and agreed upon goals are paramount. Alignment is needed at the outset for understanding, operating standards and agreeing on how to handle issues when things go awry. Alignment is also needed throughout the execution phase when critical issues arise in order to achieve a united solution versus independent and sometimes incongruent ones.
Consider the fundamentals of world-class manufacturing, where immediate actions on quality, safety and operations are preventative verses reactionary to ensure an on-spec product.
Major Capital Projects also produce an asset expected to be on-spec and on-time. Therefore, projects must be managed with a just-in-time, daily production approach. This is a shift from today’s management of independent Work Package progress reviews.
An individual work package may be on track, however, if it’s not in sync with the project as a whole, a single misaligned work package can create a ripple effect across budget, scope, schedule and/or quality. By breaking down project execution the way a manufacturing line operates, immediate quality and safety actions can be achieved across the execution of the project. Work package reviews then become an iterative process and are acted on daily with a view to see what’s ahead.
When project execution involves multiple worksites and includes thousands of workers in geographically dispersed fabrication yards, many contractors and Joint Venture companies find themselves operating in areas of the world that they are not accustomed to. What plays out is differing expectations for work, communications and contracting approaches with multiple trade organizations.
In addition, many major project investments in the United States, are being led or jointly owned by non-US companies, some for the first time. There is a learning curve of how US-based projects are approached and executed, from contracting to engineering. What construction contractors expect in the United States, differs from contractors operating outside the United States in the content and approach of the engineering design packages. Culture and operating norms are an unfactored complexity that is sometimes overlooked. These complexities when layered with multiple trade specialties, intensifies the execution risks of failing to integrate the entire execution team early-on. The certain outcome is constant blockages and costly rework.
Today’s project leaders need to be the Monets of our era by aligning individual contractors and owners – much like the stroke of a paintbrush, then stepping back and taking a holistic view of production. With this shift in mindset, the masterpiece project will come into view.