Nov 9, 2019
The ultimate outcome of capital investment is an operating Production Facility that exceeds the desired return on investment (ROI). This is a great statement, but, does the project leadership and execution team truly know the ROI and more importantly, what assumptions are being made to achieve this outcome? They likely know the success criteria of the project, the assumed scope, cost, and completion schedule. However, for each of these success criteria, there are underlying assumptions for the innovation, productivity, safety and quality standards needed to achieve investor return.
So, if the assumptions made in development of the desired ROI were reasonable and realistic based on the external market conditions, then why do projects continue to face headwinds, obstacles, and execution challenges resulting in cost overruns and schedule delays?
One of the key fundamentals that must be considered is that the assumptions in developing the ROI are interconnected by human performance and human experiences. A team member’s innovative actions and mitigation responses affect the quality, safety, and productivity, which in turn impact each of the critical success factors; scope, cost, and schedule.
Focusing on Human Performance and Human Experience in an Integral Approach impacts the success criteria that ultimately results in High-Performance Projects
The original ROI assumptions used to obtain financial backing and to progress with the capital investments for a new asset, are critical to understand, not just at a superficial level but at a detailed interconnected level.
Intersection of Safety, Quality, Productivity and Innovation
A decision or action around a quality issue could positively or negatively affect the safety and productivity of the workforce. A safety incident affects morale and people’s actions and reactions, which will also negatively or positively affect quality and productivity. A workforce productivity issue, whether that is in engineering or in construction, forces decisions, and thus, the actions and reactions taken tend to affect quality and safety in either a positive or negative way.
Safety, quality, productivity, and innovation all operate in conjunction with each other much like a rubber band. When one part of the rubber band is moved in a certain direction, it affects and moves the other parts of the rubber band.
What is the foundational elastic thread that connects quality, safety, productivity, and innovation?
The common thread is the people, their actions, and reactions, using their functional processes and critical technology systems. Looking at Figure 1.0, people utilize their processes and technological tools to affect the safety, quality, and productivity on a project, many times in innovative ways. And because project execution strategies are never linear or static, people need to be flexible. They must think about their actions integrally. Adapting and committing for excellent execution will determine whether a safe and productive culture and environment is created, and quality work is accomplished. You can have the most efficient process or the most leading-edge technological tools, however, if the people using these tools and processes are misaligned or acting functionally and not integrally, the outcome will not be what is required for the financial return on investment of the asset.
Imagine an engineering quality issue. This incorrect design or specification has a knock-on affect throughout the entire project life cycle, not just for quality of the equipment or fabrication of the module or installation in the field, but it also can affect the safety of the operating facility during start-up, or the safety of the welders in the fabrication shop, or the site safety of the construction workers. How the project team reacts to the quality issue will determine the impact to the possible safety and productivity of the workforce. Imagine a construction near miss or even worse a loss time incident. The craft workers become distracted, productivity drops, and the quality of the work is affected.
Wouldn’t it be better to focus on achieving Nirvana; zero incidents, high productivity, and perfect quality? There have been numerous articles written on the cost of quality, with many techniques like six sigma and process improvements implemented to prevent poor quality. However, many of these approaches and processes to achieve high standards in quality, safety and productivity are often looked at independent of each other. Project leaders fail to consider how each of these success factors impact the other.
Quality, safety, productivity and innovation are inextricably linked, affecting each other dramatically, because the underlying elastic thread between them is people.
The keys to achieving success is leading a team, whereby people are aware of the interdependencies and are engaged and committed to continually thinking beyond their individual functional role and looking at how their actions and reactions affect the whole project throughout its entire lifecycle.
Five Steps to Achieving High Performance and the ROI through Human Performance
For High-Performance on complex major capital projects, the decision making and committed actions taken throughout the lifecycle of the project must be based on the interconnectivity of quality, safety, productivity and innovation. Five recommended steps to achieving financial return on your investments are:
Keeping the rubber band taught and balanced requires leaders that have the foresight and understanding that systematic ROI planning cannot supplant the human factors needed to achieve the flawless execution of the project. Good leaders get the planning right, great leaders deliver the asset return with outstanding human performance.
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