megaprojects white paper

Keogh Consulting MegaProjects WhitepaperAugust 2014 0

Mega Projects White PaperResearch and discovery of the critical factors that determine mega project

successBy

Brenda Turnbull & Allan Keogh

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Keogh Consulting Mega Projects White PaperAugust 2014

TABLE OF CONTENTS

EXECUTIVE SUMMARY...................................................................................................2

ACKNOWLEDGMENTS....................................................................................................2

INTRODUCTION.............................................................................................................2

OUR RESEARCH APPROACH...........................................................................................2Step 1: Auditing the Current Literature.......................................................................2Step 2: Distilling Keogh’s Current Insights..................................................................2Step 3: Distilling This Input to Identify Key Functions to Manage.................................2Step 4: Developing the Questionnaire.........................................................................2Step 5: Conducting the Questionnaire Interviews........................................................2Step 6: Analysing the Data.........................................................................................2

KEY FINDINGS...............................................................................................................2ORGANISATION OF FINDINGS......................................................................................2

Seven Key Functional Areas:.......................................................................................................2Ten Recurring Critical Themes:...................................................................................................2Four Foundational Principles.......................................................................................................2

KEOGH CONSULTING’S APPROACHES.............................................................................2The Findings..............................................................................................................2Seven Key Functional Areas........................................................................................2Ten Recurring Critical Themes:...................................................................................2

1. Clarity and agreement of project focus – vision, project definition, risks, deliverables.......22. Agreed project philosophies and approaches decided upon at outset (including values)....23. Key internal stakeholders are aligned and understand their role/part................................24. Every project is unique – project teams must be constituted and empowered to get on

with the job of addressing challenges in uniquely/locally effective ways............................25. Systems are important but it is people who make them work............................................26. Alignment & integration across project interfaces..............................................................27. Project leadership is passionately committed and ‘walks the talk’......................................28. Expect chaos, disruption, problems, conflicts of interest, creative tensions – It’s how these

are addressed that matters................................................................................................29. Embed and sustain a culture of accountability....................................................................210. The right people on board, with the right skills, at the right time.......................................2

Foundational Principles..............................................................................................2

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1. Coherence, Alignment and Integration...................................................................................22. Embracing & Working with the Dynamic, Evolutionary Nature of Mega Projects....................23. Perpetual Striving for Balance.................................................................................................24. Fit-for-purpose Leadership......................................................................................................2

KEOGH CONSULTING’S INSIGHTS & CONTRIBUTIONS:......................................................2Lens 1 – Structure......................................................................................................2Lens 2 – People..........................................................................................................2Lens 3 – Culture.........................................................................................................2Lens 4 – Power...........................................................................................................2

CONCLUSION:...............................................................................................................2

REFERENCE LIST...........................................................................................................2

GLOSSARY OF TERMS....................................................................................................2

APPENDICES.................................................................................................................2Appendix A – Data Trends Analysis..............................................................................2

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MEGA PROJECTS WHITE PAPEREXECUTIVE SUMMARYBy Brenda Turnbull & Allan Keogh

Mega projects of the scope, size and complexity that we see today are a relatively recent phenomenon. The first decade of this century has seen more of these projects executed than during any earlier comparable period. Increasingly, they are organisational tours de force, with an experimental, ground-breaking bent.

They exhibit not only technical but social complexity, and consequently their failure rates (in terms of missed targets) are high – 65 per cent is reported by some. Their cost over-runs can be crippling, their schedules often slip so that early year operability is frequently very poor, significantly affecting profitability. Some continue to have issues with functionality well into their early years of operation. The challenge for these human systems to effectively self-organise in order to deliver their technological feats and economic returns is enormous.

At Keogh Consulting, our aspiration in conducting this research has been to shine further light on the factors most critical to delivering mega project success. Throughout our 30 years of involvement it has too often seemed that the prospect of success has been akin to snatching victory from the jaws of defeat.

The challenge for these human systems to effectively self-organise in order to deliver their technological feats and economic returns is enormous.

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We are interested in contributing to the collective wisdom, knowledge and approaches so that success, not failure, can be anticipated more generally as the likelier outcome. Our question, therefore, is ‘what needs to be better understood and enacted’ for this to be the case?

This paper explores that issue. We conducted a review of the literature to identify currently cited success factors, and in conjunction with insights derived from our own experience, developed a quantitative and qualitative-based questionnaire.

This provided the basis for our in-depth interviews with a representative cross-section of executive managers with extensive mega and major project experience (26 in total).

What we discovered may surprise you. It certainly did us. Not so much in the focus, but in the consistency and conformity of the focus.

Our participants concurred that the difference between success or failure with Mega Projects, when reduced to its essence, lies in the management of the non-obvious, the less seen – what we have termed ‘the relationships’ between the many aspects.

This includes not only between the project ‘parts’, or the teams, or the people – but between project drivers, phenomena, data sets, intentions, values and the emergent political/social/economic dynamics.

This is because the trajectory of these projects typically resembles that of a spiral, not a train track. Therefore they manifest the characteristics of dynamic, iterative and chaotic systems, and much of what needs to be managed resides in the arena of shadows – never being able to be definitively measured or calculated.

This therefore suggests there is as much artistry as science involved in their management. At the very least, it requires a different set of understandings and approaches (to the conventional) in their internal organisation, and this, we believe, has not previously been well understood.

In this paper, we lay out an integrated framework for addressing this new reality – for facilitating a holistic responsiveness to and management of the ‘invisible’ and

‘less seen’ (as well as the obvious and seen).

A significant component of this is through the building of alignment and integration across the many facets. This is to a

degree not usually experienced in other arenas of human enterprise.

However, unless this is planned for and executed, it is unlikely to happen.

The prospect of success has too often been akin

to snatching victory from the

jaws of defeat

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As Peter F Drucker often commented, the only things that evolve by themselves in organisations are disorder, friction and mal-performance. This is no more apparent than with mega projects.

There are other components as well, which we identify and provide input on. Our intention in laying out this framework of organisational and management processes and leadership actions is to assist mega projects in maintaining their

momentum throughout all their phases of development - sailing through the smooth patches, but as importantly, maintaining optimal progress during the rough patches.

We hope the insights we offer will make a difference to how these projects are brought to life.

ACKNOWLEDGMENTS

We feel privileged to have been able to conduct this research and grateful to all those, many of them former clients and colleagues, who very generously gave of their time and hard-earned insights to enable us to produce this paper.

We trust you will find it of value in whatever role you may play, past, present and future, on mega projects.


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INTRODUCTIONIt is widely reported in the current literature and published writings on mega projects (typically identified as projects worth in excess of $1 billion) that they have a failure rate of 65 per cent, while major projects (typically identified as up to $1 billion) have the considerably lower rate of 35 per cent.

This is a significant difference and poses the question: ‘Why is the rate so high for mega projects?’

Failure is generally defined within the literature as:

1. Running over time by 5 per cent or more, AND/OR

2. Going over budget by 25 per cent or more, AND/OR

3. Having significant operational problems into the second year of operation, or later

Given the scope, scale and sheer complexity of factors that define mega projects, perhaps we should not be surprised that any or all of these eventualities might come to pass. In fact, we might pause to regard with some measure of awe, the coming to life at all of these great beasts, given their requirements for often unprecedented levels of coordinated planning, innovation, relationship management and construction.

But nonetheless, this is a question that has vexed Keogh Consulting for some years, given our long history of involvement on these projects. So we set about to find some answers to build on the body of knowledge already established by our colleagues.

What we found may surprise you. No, it’s not the level of technological challenge these projects invariably present. Nor is it the sheer complexity (political, cultural, and environmental) of their contexts, although these are without doubt very challenging aspects and require skillful management. So is it a deficiency in realistic, well-founded processes for scoping projects, or the failure to adroitly manage the market’s expectations or those of other key stakeholders? Well, yes, sometimes, but that is not what we found to be most fundamental.

We found that the one enduring factor that underpins all of these and the many other challenges confronting mega projects is the quality of relationships: relationships between people – of all levels, constituencies, locations, accountabilities; relationships between project sub-units, or what we term ‘project parts’; relationships between data subsets and variables, and so it goes on.

We have come to the conclusion that the quality of relationships determines almost everything else – the degree to which the project vision is palpably shared, the levels of alignment and integration across the project organisation, the trust by financiers and head offices to let project teams get on with it, the motivation for contractors to build in collaboration with operators, the shared appetite for finding solutions, the constructive management of real conflicts of interest, the pro-active identification of performance deviations that are significant … and so the list goes on.

So there it is – it’s as easy and as difficult as that – relationships!


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OUR RESEARCH APPROACHStep 1: Auditing the Current Literature

We undertook an audit of the current literature and published findings identifying key success factors for both mega and major projects (please see list of references).

From this we distilled a list of key factors that writers and practitioners consistently referred to. Please note, it was found when reviewing the literature that the authors had identified and explored key factors that ranged across varying levels of strategic and tactical altitude.

By this, we mean some factors identified were of a high-level strategic nature, some of a mid-level tactical nature, and some of a ground-level technical nature. Because of this, it was not possible to universally apply any form of generic or systematic ranking in regard to their significance in determining project success or failure.

As well, much of the data we accessed was case-study based and qualitative in nature, thereby adding to the difficulties of ranking identified factors in order of agreed significance


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Step 2: Distilling Keogh’s Current InsightsWe also reflected on Keogh’s own substantial experience of working on multiple mega and major projects to identify the hard-earned wisdoms from our own sweet and bitter experiences. Some of the projects we have worked on include:

Exxon Mobil’s PNGLNG (2009 – 2014)

WMC Olympic Dam expansion (1998 – 2000)

GLNG (Santos and PETRONAS)

QCLNG upstream with QGC and BG

Woodside, Browse and James Price Point

APLNG (Conoco Phillips)

Apache - Western Australia - JV projects

Bond University

Shell - German Creek Open Cut Mine

Saraji & Norwich Park Mines, Dysart Town Development, Utah Development

Gallery Gold

Intrepid Mines (2010 – 2012)

Bathurst Resources (2010 – 2014)

Step 3: Distilling This Input to Identify Key Functions to ManageFrom the combined input of Steps 1 and 2 we distilled a number of what we have termed ‘key functional areas’ that writers and practitioners consistently referred to, and which we also have consistently identified in our own practice. We have borrowed the terminology for classification of six of these key areas from research completed by SBC Capital projects in 2012. We added a seventh: ‘Front end loading, project shaping’.

These are: 1. Front End Loading, Project Shaping

2. Governance

3. Project Management Processes

4. Contracting & Procurement

5. People & Organisation

6. External Stakeholders

7. Technical Challenges

Image: Mega Project Seven Key Success Factors Model


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Step 4: Developing the QuestionnaireThese categorisations of function were then developed into a two-part questionnaire. Part A of the questionnaire identified a total of 37 significant items across these ‘Seven Key Functional Areas’, and asked participants to rank each one on a 10-point scale according to its significance (re project success). Participants were also invited to provide an additional open-ended commentary on each item as well as on each of the ‘Seven Key Functional Areas’.

Part B of the Questionnaire asked six open-ended questions:

1. On the basis of your experience with mega projects, what do you think are the three most critical factors for ensuring the success of a mega project?

2. What is the most powerful advice you could give to someone who is stepping into an executive/senior project manager’s role on a mega project?

3. What, in your opinion, are the most important mechanisms for achieving integration across all parts of a mega project? (i.e. they could be particular systems, processes, tools, a style of leadership, key behaviours, specific values, other levers)

4. What do you think are the emergent issues and trends over the next five to 20 years that future mega project managers will have to embrace/deal with?

5. If you have had association with Keogh Consulting within your project experience, what were the most useful aspects of Keogh Consulting’s contribution in supporting project success?

6. From your association with Keogh Consulting, what have you personally and professionally

retained that continues to be of value?

Step 5: Conducting the Questionnaire InterviewsOver thirty individuals were invited by Keogh to participate in the survey interviews. As noted, these were predominantly former or current clients/colleagues with in-depth experience representative of a diversity of executive-level roles on mega or major projects (or both).

Twenty-six of our invitees subsequently agreed to participate in an hour-long interview where they were systematically taken through the questionnaire and their answers recorded. They represented the following cross-section of mega/major project roles:

Chief executive officers

Project executives

Managing directors

Executive vice presidents

Senior vice presidents

General managers

Directors

Senior project managers


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Step 6: Analysing the Data We have analysed the data and identified key findings. We then overlaid these findings with

Keogh’s own insights to distil another level of new understandings. We present these to you.

KEY FINDINGSORGANISATION OF FINDINGSAll our findings from both the quantitative and qualitative data sets are organised into:

1. Seven key functional areas

2. Ten recurring critical themes

3. Four foundational principles

Image: Mega Project Critical Success Factors

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Seven Key Functional Areas:

1. Front end loading, project shaping

2. Governance

3. Project management processes

4. Contracting & procurement

5. People & organisation

6. External stakeholders

7. Technical challenges

Ten Recurring Critical Themes:

1. Continuous clarity of project focus – vision, project definition, risks, deliverables

2. Agreed philosophies and approaches underpin all functioning (including values)

3. Key internal stakeholders are aligned and understand their role/part

4. Every project is unique – project teams must be empowered to get on with the job of addressing challenges in uniquely/locally effective ways

5. Systems are important but it is people who make them work

6. Integration across project interfaces

7. Project leadership is passionately committed and ‘walks the talk’

8. Chaos, disruption, problems, conflicts will occur– it is how they are addressed

9. A culture of accountability is actively sustained

10. The right people on-board with the right skills at the right time

Four Foundational Principles:

1. Coherence, alignment and integration

2. Embracing & working with the dynamic, evolutionary nature of mega projects

3. Perpetual striving for balance

4. Fit-for-purpose Leadership

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KEOGH CONSULTING’S APPROACHESThe Findings

Seven Key Functional AreasAs previously noted, these were identified as a result of auditing the current literature to extract

what writers and practitioners identify as the key success factors for mega projects, in conjunction with a distillation of Keogh’s own experience.

Table 1: Key Function Responses

The table above depicts the average score across the seven functions, as a result of participants ranking the importance of significant items within each function on a scale of 1-10.

As you will see, the key function definitively ranked as being of greatest importance is ‘governance’, closely followed by ‘people and organisation’. It is of little surprise that these two areas have both been given a priority ranking as, in reality, they importantly overlap in form and function.

Just to clarify what we mean by each in this study, we have defined ‘Governance’ as being: the degree of clarity and alignment regarding project vision/objectives/strategy by key internal stakeholders, the resolution of conflicts between stakeholders regarding such, and their clarity/agreement in respect to each other’s roles and accountabilities.

Front End Loading

Governance

Project Management Processes

Contracting & Procurement

People & Organisations

External Stakeholders

Technical Challenges

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00

8.75

9.14

8.05

7.82

9.06

8.43

8.53

Key Functions Responses

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We have defined ‘People and organisation’ as encapsulating: Project leadership, the alignment and integration between project parts, and the expression of shared values and behaviours.

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The seven most highly scored items out of all 37 items across the seven Functional areas (which participants scored on a 10 point scale) is further revealing. Please refer to Table 2. What becomes immediately evident is that there are two items only that have been scored in the ‘critically important’ category by every interviewee.

These are:

Seven Most Highly Scored Items from across the Seven Key Functional Areas (of the possible 37 items):

Functional Area

Average

%’age 1

1.Project leadership is passionately committed to delivering on time, on budget, operationally ‘fit-for-purpose’

People & Organisation 9.79 100%

2.Leaders consistently model and reinforce values/behaviour’


There were 5 other stand-out items which attracted a high ranking. These were:

3.Leaders are good at managing relationships, energizing teams and individuals


4.Key values embedded from the outset and inform decisions/practices throughout project


5.Project risks are clearly understood during project shaping/front-end loading

Front End Loading 9.46 93%

6.Rigorously clarify project vision and definition during project shaping/front-end loading

Front End Loading 9.25 86%

7. Key internal stakeholders are clear and aligned Governance 9.36 86%

Table 2: Seven Most Highly Scored Items across Functional Areas

Image: Seven Key Functional Areas – 7 most highly scored items

1 % refers to number of respondents who rated this particular item as being ‘Critically Important’ to Mega Project Success (a 9 or 10 ranking on the 10 point scale)

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9.46 9.36 9.79 9.43 9.36 9.64

Table 3: The seven most highly ranked items across the seven Functional Areas

We think it is significant that four of these seven most highly ranked items are from the Function ‘People and Organisation’. This lends further support to our broader finding that relationships, interpersonal as well as organizational, are key to everything.

9.25

FRONT END LOADING GOVERNANCE PROJECT MANAGEMENT PROCESSES

CONTRACTING &

PROCUREMENTPEOPLE & ORGANISATION EXTERNAL

STAKEHOLDERSTECHNICAL

CHALLENGES

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Ten Recurring Critical Themes:These emerged from our analysis of all the data, quantitative and qualitative. Comments made by

participants in response to our open-ended questions aligned with and expanded upon how they had scored items in Part A of the questionnaire. These identified themes were referred to consistently by participants in their anecdotal input. The meaning and significance of each is outlined in the following pages.

1. Clarity and agreement of project focus – vision, project definition, risks, deliverables

2. Agreed project philosophies and approaches (including values)

3. Key internal stakeholders are aligned and understand their role/part

4. Every project is unique – project teams must be empowered to get on with the job of addressing challenges in uniquely/locally effective ways


6. Integration across project interfaces


8. Chaos, disruption, problems, conflicts will occur– it is how they are addressed

9. A culture of accountability is actively sustained

10. The right people on-board with the right skills at the right time

Image: Ten Recurring Critical Themes

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1. Clarity and agreement of project focus – vision, project definition, risks, deliverables

The project vision, definition and objectives need to be rigorously clarified and agreed upon by the time the project gets to FID (final investment decision). Until then, there was agreement amongst participants that there should be flexibility for re-focusing and adjustment, and that the process is really one of a progressive firming up. However, by and following FID, these markers must remain immutable. They also should be embraced by key stakeholders at that point, particularly venture partners, the board, the project owner (head office, project executive), and key external bodies etc.

Participants regularly sounded a note of caution against excessive optimism when shaping project definition, objectives and cost/schedule commitments prior to FID – driven by enthusiasm for successfully convincing the market of a project’s commercial viability. It was highlighted by many that this frequently sets up a project for failure when teams subsequently struggle to meet unrealistic commitments. Many noted that the market’s perceptions of a project’s value are highest at FID, undergo an immediate decline immediately afterwards and for the greater part of the project’s duration (as the realities of risks and challenges are thrown into higher relief), and increase again when nearing project completion.

2. Agreed project philosophies and approaches decided upon at outset (including values)

Participants agreed that strategic decisions be made from the outset about the most

appropriate ‘fit-for-purpose’ philosophies, principles and approaches for guiding and shaping strategies and processes across all functional areas of practice e.g. risk, contracting & procurement, construction, commissioning, operating, stakeholder management, Health Safety Environment (HSE), employment and industrial practices etc.

They emphasised that unless there is a strategic rationale and coherence to these, decisions are at risk of being made in an ad hoc or misdirected fashion, along lines that may not best support achievement of project outcomes. As well, there was robust consensus that core values should also be agreed upon from the outset to inform and navigate decision-making and collective behaviour across all dimensions of the project for its duration.

Core values should be agreed upon from the outset

.

3. Key internal stakeholders are

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aligned and understand their role/part

This includes owners, the board, corporate/head office, project executive, the broader project team, contractors, and operators. They all need to be continuously clear and aligned around the vision, objectives, strategy, business plans, implementation plans, and the part they play in its achievement.

While participants identified this alignment as being fundamental, they collectively commented on how challenging it is to achieve. This is because a mega project is a different beast to a large stand-alone project with its one identified management structure. In effect, it is a ‘colony’ or ‘program’ of projects, which together constitute ‘the project’, thereby demanding uniquely new ways for achieving role clarity, coordination and integration across its many arenas. To exemplify this complexity, see the image (Complexity of Alignment) below.

Image: Complexity of Alignment – highlighting intricacy of alignment and integration within and

across project parts

4. Every project is unique – project teams must be constituted and empowered to get on with the job of addressing challenges in uniquely/locally effective ways

Participants consistently commented on the need for early role clarity regarding the differing responsibilities of the head/corporate office and the executive project team. They frequently referred to the fact that one of the greatest aids as well as impediments to project success is previous mega project success. For while this means there will be a retention within the company of in-depth mega project knowledge and skills, there is also the increased risk of reduced adaptability to the different challenges of the new project – ‘we’ve done this before, we know what we’re doing’. They agreed that the project team must be free to get on with establishing new norms, protocols, solutions, and adaptations.

Further comment was made that in recent years, the functional/structural model has grown in ascendancy, correlating during this time with a significant decline in mega project success rates. It was posited that because functional people are often based in the head/corporate office reporting to their head of function also located there (rather than to the on-location project executive), that the focus and priorities are not as strongly project-centric, and that this can result in reduced effectiveness.

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The general consensus in relation to this surprised us. Because there is much written about the importance of standardised management systems and processes for systematising the array of project functions (for example: capturing, managing and disseminating information; dashboard alerting for cost-schedule control and risk management; streamlining communication; procurement tracking, and so on), we thought participants would give this a high ranking of importance.

While they concurred that good management systems and processes are critical to success, they emphasised that of even greater importance is the performance capability of the people operating them. As an example, one participant commented that while there are data-capturing systems that can track copious quantities of information, ‘it’s the wisdom to know what information is fundamentally significant, and most of it isn’t, and it’s people who discern that’.

6. Alignment & integration across project interfaces

This and leadership were the most consistently identified issues of importance by participants. There was violent agreement amongst them that vertical and horizontal alignment/integration (up/down through management levels and across team/provider interfaces) is fundamental.

Participants identified it as being achieved through a variety of mechanisms and indicated there is ‘no cookie-cutter model’ for achieving it. Most commonly, they pin-pointed ‘leadership’ that aligns people/teams with project plans as being most critical. A significant number of participants suggested that this best occurs through routinely bringing executive team members together (ideally in the same physical space,

otherwise virtually), with immediate access to new information/data at whatever level of altitude required (high level and broad, or deep and specific), to nut out issues and agree on solutions. These should then be cascaded through their teams.

Other mechanisms variously identified included; communication, creating a spirit/culture of collaboration and partnership, clear and aligned accountabilities, integrated systems for information distribution and analysis, and workable structures with requisite accountabilities.


This means the project leadership has a heart-felt passion (as much as head-based knowledge) for the project’s vision and purpose, and for delivering on time, on budget, and operationally ‘fit-for-purpose’. One participant explained it like this: ‘Relationships between people in the project leadership team must have twinkle, passion’. Another commented: ‘The project leadership team must live the project’.

However, they emphasised that this passion and commitment needs to be pragmatically, practically actioned. Having words and actions match also came through as being fundamental. One participant explained: ‘The strength of a project’s purpose comes from constancy of focus and consistency in behaviour’.

The strength of a project’s purpose

comes from constancy of focus and consistency in

behaviour

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8. Expect chaos, disruption, problems, conflicts of interest, creative tensions – It’s how these are addressed that matters

Mega projects are typically undertaken within complex, dynamic, challenging environs – geographically, politically, culturally. As well, they are multi-faceted, multi-dimensional and multi-segmented entities – projects within Projects. As such, they exhibit complicated matrices of conflicting and competing interests, of creative tensions and influence-based jockeying, of winners and losers. To put it most simply, they are moving feasts of political maneuverings.

Therefore the attitude and skill sets that best support success in this environment embrace this reality of dynamism with flexibility, agility and responsiveness. The focus then is not on the pursuit of perfection, for no such thing can exist in such a context, but on striking an optimal balance when off-setting gains and losses, one set of interests against another, risk exposure and cost savings, schedule blowouts, longer-term functionality, and so on. In saying this, participants recognised that some things on the table such as safety protocols or systems for ensuring fiscal rigour should be non-negotiable.

9. Embed and sustain a culture of accountability

Participants agreed that this should be established from the outset. They identified that a culture of accountability is importantly driven by values and the behaviours that explicitly demonstrate it.

They also expressed that these should be consistently modelled by the project leaders, and supported by structural mechanisms such as clearly defined roles/accountabilities, and a standardised process for performance management.

Participants strongly expressed that lapses in accountability should be immediately addressed, including the

removal, in some instances, of co-workers and/or contractors from the project.

10. The right people on board, with the right skills, at the right time

Because the lifespan of a project is relatively short compared to the lifespan of most companies, it is important to short-circuit this process by importing quality people from the outset. That is, those with the required knowledge and technical expertise/experience, necessary broader skill set, desired leadership aptitudes, and culturally-aligned values and attitudes.

However, participants also recognised that a project’s needs for differing fields of expertise morph over time through different project phases, and that this should be accommodated by the colleague & contractor recruitment philosophy/strategy decided upon at the outset.

They also commented that the skills of the project leader whose role it is to get the project scoped and through the FID gateway are different to those required of the project leader required to steward the construction of the entity to completion. Most thought that a project leader rarely had sufficient adaptability of approach to successfully stay the entire journey, but that more commonly, the baton of executive manager should be passed at least once.

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Foundational PrinciplesThe data was subjected to another level of analysis to identify the following foundational principles.

1. Coherence, alignment & integration

2. Embracing & working with the dynamic, evolutionary nature of mega projects

3. Perpetual striving for balance


Image: Four Foundational Principles

1. Coherence, Alignment and Integration

This is typically understood as the process of bringing the actions of the project’s many parts (business units, support functions, contractors, and the people working across these) into line with the project’s strategy, planned objectives, business model/processes so that all efforts are focused – and doing so in a manner congruent with core values and elected standards of behaviour.

However there is much evidence, written and anecdotal, to suggest that the reality of achieving such coherence, alignment and integration falls far short of noble intentions. It is interesting to note that in the Project Management Institute’s (PMI) Pulse Report of 2014, their findings reveal that ‘58 per cent of projects are not highly aligned to the project strategy, resulting in a finding that 44 per cent of strategic initiatives across projects are unsuccessful’.

Why is this figure so high? Based on our Keogh experience, we know that using conventional thinking and mechanisms to drive awareness of strategy across the many parts of the project organisation is done with variable success. What we do even less well is enabling people everywhere to palpably understand the strategy and their direct/indirect role in its

achievement. Consequently, the even greater challenge of coordinating the inter-related actions across multiple interfaces is addressed least well.

Despite our participants’ collective agreement about its significance, they universally conveyed that achieving coherence, alignment and integration for strategy execution remains one of the most elusive and challenging aspects of mega project management. As one participant commented: ‘There’s no one-size-fits-all recipe and the danger is you can end up with a strange soup of initiatives.’

58 % of projects are

not highly aligned to the

project strategy

Generally, participants referred to single item mechanisms for achieving

http://www.pmi.org/~/media/PDF/Business-Solutions/PMI_Pulse_2014.ashx

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it, such as ‘through shared vision and goals’; or ‘there needs to be clear roles and accountabilities so everyone knows their part’; or ‘cascade it through the top three echelons’; or ‘have an integrated dashboard and scorecard so everyone can access the important data’; or ‘have integrated plans and subset meetings with visual graphics, and have the one integrated schedule’.

So why is it so challenging? Firstly, we contend that while executive project teams might well spend days, weeks, even months devising well-crafted strategies, the mechanisms for inculcating strategy into the human operating system of the project (the hearts and minds of the people) frequently reflects a lack of understanding of how to collectively engage, make meaning with, and motivate people. Also we contend that the mechanisms most commonly used reflect a top-centric approach. By this we mean that the ‘cascade’ is seen as most appropriately and primarily occurring from top to bottom, with less emphasis placed on ‘dispersing’ across and throughout. We believe both require equal attention.

We further observe that the process of coordinating actions and responses across business unit/functional boundaries is likewise driven by a top-down impetus, and that the value of an across-through impetus is frequently underrated or overlooked.

We will address these issues further in the following section on ‘Keogh Consulting’s Insights & Contributions’.

We simply assert here that achieving cohesion, alignment and coherence is, in our view, the most fundamental of principles for achieving mega project success. Of course, its successful achievement is fully reliant on the relationships between project parts and between people. This has been our assertion from the outset of this paper. Building these requires the use of both ‘soft’ and ‘hard’ approaches! We will explore in the following section too.

Mega project success is

reliant on the relationships

between project parts

and people

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2. Embracing & Working with the Dynamic, Evolutionary Nature of Mega Projects

Because mega projects are, as we’ve noted throughout, dynamic, fast-changing, high-pressured entities, they call for an approach of ongoing vigilance, responsiveness and agility-of-response to continuously emergent issues and challenges.

In the Pulse Report by PMI, only 15 per cent of organisations reported high organisational agility – a concerning statistic. PMI comments: ‘High performers demonstrate successful organisational change management, which is more effective with actively engaged sponsors’. While most mega projects are set up adequately in the early phases, many of them fail to adapt over time to changing requirements and challenges, thereby leading to poor governance, control and management.

Resilience in the face of continual perturbation

Working to embrace the changing nature of circumstance and need most particularly requires a distinctive ‘mentality’ supported by a specific body of skills. Participants in our study commented on the importance of a mindset that is open to and comfortable with uncertainty (one participant termed it ‘being comfortable with operating in the grey zones’), while creating reference points and structures/systems for enabling logical, systematic progression within this uncertainty. Participants also talked about knowing which things can/should remain ‘grey’, and which should be locked down. A number suggested that rather than having specific targets which can produce rigidity and loss of perspective, it is more helpful to think about ‘target ranges’.

Operating in this way also involves having a healthy level of self-belief. Participants described this as ‘the ability to back yourself in decisions, not second-guessing’. One went on to explain: ‘Sometimes you won’t be able to access all the data you’d like, or you decide not to when you’ve done your cost/benefit analysis’. This view was reiterated by a number. What emerged was a view that optimal performance in these environments requires a curious mixture of science, art, fact, insight, knowledge, experience and creativity, the basis of which is a strong capacity for holistic, systemic, and integrative thinking as much as for rational, deductive analysis.

Agile processes were also identified as requiring highly collaborative networks of relationship and interaction to ensure meaningful communication and collaboration across multiple levels, constituencies and teams.

In terms of internal team functioning, participants were keen advocates of self-organising teams, but definitively rejected the notion of a consensus-driven culture or process. One participant’s comments echoed the sentiments of a significant number: ‘A generalised agreement should be efficiently achieved – and then the leader must make the final decision.’ However, they emphasised that this can only work when the right people are at the table.

In summary, these processes are frequently iterative in nature rather than pre-determined, yet they maintain sufficient form and process for effective organisation. All of these features afford resilience in the face of a process of continual perturbation. We have identified this principle as critical to mega project success and yet it is a feature that is frequently not well understood or emphasised.

3. Perpetual Striving for Balance

This principle flies directly in the face of conventional attachments to ‘best’ or even ‘perfect’.

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Instead it invites us to embrace the infinitely more liberating notion of ‘optimal’, which we define as ‘the best in the circumstances’.

So why this distinction?

Mega project management often loses solid ground whenever the quicksands of differing interests, opinions, expectations and imperative play out, resulting in disruption, sometimes impasse, and causing project parameters to be diluted and sometimes confused.

Worst of all, achievement of project outcomes may be obstructed. In commenting on the interplay of these cultural, political and interpersonal complexities, Louis Klein (SEgroup 2010) puts it succinctly: ‘Once we leave the world of Newtonian physics and engineering, as soon as requirements grow beyond the linearity of the technical blueprint, the success rates of projects collapse ... certainties take a tumble and, with them, the entire project’.

So how do projects regain stability in the face of such real conflicts of interest - fiscal, market, political, operational, cultural, professional and personal. Our participants universally responded: ‘By recognising that essentially everything is a judicious trade-off – the skill is in the balancing of specific losses and benefits for overall gain.’

In fact, there was general agreement that conflict is, apart from being inevitable, actually healthy. Participants frequently referred to it as ‘creative tension’, and made comments such as: ‘Of course you’re going to get tensions and conflicts, like between your projects team and your operations team, one wants to get the thing built as quickly as possible, the

other wants the bells and whistles because they’ll have to operate it’; ‘you’ll always have the contractor trying to exploit every little loophole, you know that, and you’ve just got to stand your ground’; ‘look, the community has to live with it for years to come so, of course, it pays to make concessions, you’ve just got to weigh it all up’; ‘you continually have to decide, is it worth blowing your costs and schedule to stop and fix it or not’; ‘the owners are reacting to the market, there’s huge downward pressure from them, but in the end, you’ve got to make sure it’s operable’.

Perpetually striving for balance on the costs/benefits ratio (i.e. ‘what’s optimal?’) is a uniquely different approach when, more broadly across business, we are used to operating according to the mantra of ‘world best practice’.

The arena of mega project management can seduce with the assumption that complexity is explained primarily by the number of inter-relating project parts, but, in reality, it also describes a complexity beyond that – the complexity of interests. This shift in attitude and approach we believe is fundamental, and that is why we have identified it as the third of our four underpinning principles.

Perpetually striving for balance is a uniquely different approach

http://www.systemic-excellence-group.com/sites/default/files/121023%20Social%20Complexity%20in%20Project%20Management_0.pdf

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Other than the issue of alignment and integration, leadership was the other issue of particular significance commonly identified by participants (reflected in both our quantitative as well as qualitative data).

This is not surprising – participants said leadership is the glue that holds everything else together.

So what is it about leadership that they emphasised? Essentially, it is what breathes life, passion, purpose and direction into the mega project marathon – that sustains and navigates it through to the finishing line.

In this they identified multiple dimensions. But, the unique distinction of the leadership function, in contrast to the management function, is best summarised by Roman emperor Marcus Aurelius in his statement ‘the secret of all victory lies in the organisation of the non-obvious’ (Marcus Aurelius AD 121-180)

‘The secret of all victory lies in the organisation of the non-obvious’Marcus Aurelius

John Kotter’s (Kotter, 1990) distinctions between effective leadership and

effective management provide further insight. Briefly, he defines effective leadership as embodying three key roles:(1) to establish shared

vision/purpose/focus/destiny

(2) to help people make ongoing meaning of the vision/purpose/focus/destiny

(3) to keep people motivated and mobilised along the way, particularly in the face of setbacks and challenges.

He defines effective management as embodying three key roles:

(1) to strategise/plan for the realisation of vision/purpose/focus/destiny

(2) to organise systems/processes/structures for executing strategy/plans and

(3) to problem-solve along the way.

Participants typically referred to both leadership and management capabilities when referring to ‘good project leadership’ – this is not surprising as both skill sets are interdependent and mutually reinforcing.

Quite commonly they referred to leadership as being the shared responsibility of members of the executive project team. They believed that an effective leader did not try to do it all on their own, but leveraged the abilities, insights, observations and expertise of their team members, without slipping into the limitations of a ‘consensus-at-all-costs’ mentality.

In other words, the leader should be a team player without abdicating their role as penultimate decision-maker. This more inclusive approach also involves delegating responsibilities and putting in place the necessary

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elements, including support and autonomy, for others to be successful.

They emphasised that a project leader must also be able to hold the big picture and give constant surveillance to the project terrain as well as knowing when to deep-dive for specific detail. They made regular reference to the importance of the leader being visible, engaging with people, and acting as a cipher/translator to make real the meaning of trends, challenges and decisions.

Leaders need to be visible, engaging with people and making real meaning of trends, challenges and decisions.Finally, participants emphasised the importance of what can be best termed

‘fit-for-purpose’ leadership, suggesting that the skill set required at the outset to shape and drive the project to a

successful FID is different to that required for the long and tumultuous haul of construction. We have already made mention of this when discussing ‘Having the Right People On Board at the Right Time’.

The skills most highlighted as important at the outset are those of flair, enthusiasm and persuasion. Those required during the body of construction are resilience, flexibility and grace in the face of persistent challenges, and strategic/systematic doggedness.

Image: Fit for Purpose Leadership

So, these are the four principles explicated. In identifying and exploring these, we have posed a number of challenges regarding their application.

The following section provides some insights from Keogh Consulting’s perspective on how to address these.

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KEOGH CONSULTING’S INSIGHTS & CONTRIBUTIONS:As a means to present these, we have developed a model (below) for organising our suggested initiatives.

This model is a synthesis of Bolman and Deal’s 4 Frames Model and Kenneth Wilbur’s 4 Quadrants Model (’A Theory of Everything’).

Image: Four Lenses Model

It consists of four quadrants, or ‘lenses’ as we shall refer to them. Two of these are above the waterline, so they are ordinarily more ‘visible’. These are:

(1) Structure (e.g. systems, processes, and organisational design i.e.

the usual artefacts of internal organisation) and (2) People (e.g. aptitudes, capabilities, skills).

Two are below the waterline, meaning that while their impact is palpable, they are less easy to ‘see’. These are:

(3) Culture (e.g. values, unspoken agreements, norms, behaviours) and(4) Power (e.g. formal power, informal networks and channels of power, who has influence).

Our experience tells us that the successful application of the four principles (identified in the previous section) requires a coordinated and simultaneous implementation of actions from across all four lenses – this is the key!

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We will address each of the four principles through the perspective of each of these lenses, to offer some examples of various strategies/mechanisms for coordinated implementation.

For more information about Keogh’s full suite of integrated interventions and how to apply them, please refer to our white paper Mega Projects – the Matrix of Transformational Methodologies.

Lens 1 – Structure The point about aiming for optimal organisation on mega projects is that ‘the whole’ becomes greater than ‘the sum of the parts’. This means that better synergies between the parts occurs so that costs and time wastage are reduced, and operational functionality is improved. In essence, more value is extracted. When the right hand knows what the left is doing, resources (technical, people, informational, networking) are usefully shared, work schedules and approaches are better coordinated so that processes dovetail, and duplications are reduced – the jigsaw pieces fit together more easily.

In our experience, a fundamental mechanism in facilitating this is to establish at the outset a Transformation Plan. What is this? It’s not a strategy plan or even a business plan, nor is it a change management plan. It is a detailed scoping of coordinated and integrated initiatives specific to ensuring the achievement of ‘coherence, alignment and integration’ across all parts of the project.

Therefore, the transformation plan sits in parallel with the project’s strategic plan, business plans, and operational plans, and identifies a matrix of ‘alignment/integration’ interventions ranging across the broad arenas of business structures/systems, people performance and cultural norms.

Transformation plans will always have a ‘change management’ component to them as the dynamic nature of projects ensures they are in a process of continual change (Principle 2).

The 7S +2S Model (an adaptation of McKinsey’s 7S Model) is a useful aid for identifying the specific arenas to address in a transformation plan.

Image: 7S +2S ModelAs you will see, these arenas are:

StructureStrategySkillsStaffStyleSystemsShared values/culture SpaceSociety

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Another initiative we advocate is to ensure the ‘transformation processes’ falling out of this transformation plan are implemented through a ‘dispersed’, not a ‘conventional’ model (structure). By this, we mean that a central organising hub (or ‘steering group’) is established with overarching accountability for the implementation of the transformation agenda.

This transformation hub is allied to the project executive, and is supported by a structure of interconnected, activity-themed satellites with accountability for progressing different transformation strategies/actions.

Image: Coordinating Hub

Creating roles with the sole purpose of ensuring ‘coherence, alignment & integration’ across identified team and business-unit interfaces is another powerful yet relatively under-utilised mechanism. These roles report directly to the project executive as well as to the central organising transformation hub (mentioned above). For example, an ‘alignment role’ might be created to support the interface between the project and operation teams, another to

support the interface between upstream and downstream teams.

Image: Hub & Satellite Model

The art of using structural mechanisms to help the project organisation to work with the dynamic, evolutionary nature of mega projects (Principal 2) is another issue. Because mega projects are on a trajectory of changing requirements in form, nature, and practice, we know that it is vital that their organisational structures remain adaptable. Team sizes quickly expand and contract, and critical capabilities morph and change as the project traverses its different phases. At times it can seem like a moving feast. The project structure needs to remain open to fluxing and flexing while the project culture needs to remain constant, an anchor for shaping behaviour. This is the challenge!

In our experience, there are key junctures during the project cycle when the whole enterprise is more vulnerable. This is at the time of transitioning between project phases, and in our experience, this is often not addressed well. Let us explain more.

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We think of mega projects as having four key phases in their life cycle: Phase One – Front End Shaping (conceptualising, analysing options and selecting, defining); Phase Two – Detailed Design & Procurement, Phase Three – Execution & Construction; Phase Four – Commissioning & Operations

Image: Mega Projects 4 Key phases

Planned project management processes are required to address the critical demands of these transitions (the spaces between the parts) as much as the phases themselves. This includes pre-emptively identifying their key elements, including challenges and opportunities, and instigating strategies for ensuring that departure from one phase and entry into the next is done efficiently and effectively.

A good transformation plan will include mechanisms for mobilising the relevant people/parts to do this. For example, the loss of time which can extend to months when transitioning from FID to procurement/construction can become significant if it results in the project forever playing catch-up with its schedule. Likewise, the loss of project efficacy when transitioning from construction to operations can be similarly disruptive. Establishing transition teams to oversee these gear changes is another structural solution to support this.

Principle 3, the need to perpetually strive for balance to secure overall best outcomes, also benefits from interventions through the structural lens. Being able to effectively weigh up and balance gains and losses when making decisions requires having the right,

accurate and timely data to hand. Project teams now have access to reliable and well-tested data collection, management and dashboard alerting systems – none of our respondents identified a need that is not currently being met by these, and none could identify any new system capability they’d put on their wish-list. In fact, many commented that they often feel they are drowning in data.

However, good data analysis for effective decision-making requires more than having the ‘hardware’ for its collection. It is also dependent on being able to discern what data is meaningful (and should be collected), knowing the deviations in data feedback that are significant, and making strategic and operational meaning of them. It also means being able to interrogate data from many angles to uncover the system drivers (design elements, assumptions, habitual practices, unchallenged norms).

This may sound simple, but it’s not so easy to do. Developing this level of system self-awareness is a sophisticated skill.

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It starts with a values commitment – of wanting to push beyond band-aid solutions and devise sustainable ones, or at least when recognising the choice, to weigh up the pros and cons of each vis-a-vis the project’s longer-term interests (schedule, costs, operability).

This requires an approach that is holistic in nature, not short-term or compartmentalised, and it requires strategies for developing and/or recruiting project leaders with this values base and capability. This lands us in the arena of the fourth principle - leadership.

It is important for project teams to discern and identify the particular model/philosophy of leadership that will be ‘best fit’ throughout the duration of project. Leadership approaches, and more specifically thinking capabilities, will necessarily vary from phase to phase.

For example, during the Front End Shaping and Design phase when project conceptualisation, analysis, definition and design are being undertaken, the thinking skills required involve negotiating complexity and ambiguity, and evaluating the grey zones of possibility. This demands thinking which is divergent – that is, systemic and integrative, so that the dots can be joined in the absence of data that might make these connections explicit or irrefutable.

Image: Divergent Thinking Style

However, once into the action-oriented phases of construction and commissioning/operations, a different thinking style is required which is logical and deductive – convergent. The wisdom required is in anticipating and planning

ahead for the leadership skill sets needed at different phases, and smoothly transitioning to these in a timely fashion – usually through leaders transitioning to new roles where their aptitudes can be best utilised. However, as we’ve previously emphasised, the underpinning principles and values remain constant throughout.

Image: Convergent Thinking Style

As well, we cannot over-emphasise the importance of a leader’s relationship-building skills in order to manage the complexity of relationships inherent in mega projects. To be able to bring out the best in people, teams, business partners and communities requires a high level of emotional intelligence. Again, we believe this should be both recruited for at the outset as well as developed during the project’s life.

Leadership approaches and capabilities vary from phase to phase within the life of the project

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Lens 2 – People As noted earlier in the paper, it is important that leaders understand the difference between ‘communicating’ and ‘meaning-making’. Just what do we mean by this?

We have referred to continuous change being a fact of life for these projects. This is Principle 2: ‘embracing and working with the dynamic, evolutionary nature of mega projects’. While this does not necessarily require implementation of a formalised ‘change management program’, it does require that the psyche of the leaders throughout the organisation reflects this understanding – that they are collectively engaged on a journey of managing continuous change. It is especially important that members of the executive and senior management teams have this awareness.

This means that the same basic tenets of a formalised ‘change process’ will need to be applied by executive/senior leaders. This includes overseeing: identification of emergent challenges and the necessary changes for addressing them; making the case across the project organisation for these changes; building the organisation’s capacity for embracing the changes; monitoring implementation of the changes (initiatives); reviewing their impact/success and re-setting the focus

Project leaders are collectively engaged on a journey of managing continuous change

Image : Key Stages of Managing Change

Therefore executive and senior leaders must necessarily adopt a ‘change management’ mentality to managing these ongoing shifts and re-positionings. This especially involves being able to regularly make the case for change with colleagues (be that of a structural, strategic, tactical, technological or people-resourcing nature).

Too often we encounter an assumption amongst leaders that this is taken care of if they have a good ‘communications and engagement’ plan. We say it involves much more than this. Yes, a good plan is a starting point for identifying and organising the range of activities necessary for getting the information ‘out there’.

However, the real power in mobilising people in a positive involving way lies in directly engaging with them.

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This requires making meaning of the ‘why’ in changes – framing the issues and identified solutions in ways that enable people to see the impact and relevance to them personally – their role, their contribution, their success. Then hearts as well as minds become engaged.

When teams see their and other’s unique roles in creating something of meaning and worth, then a project will take on a focus and commitment of almost unstoppable momentum.

When acting through the ‘people’ lens in relation to the principle of ‘perpetually striving for balance’, we encourage executive and senior managers to think more broadly about who they place in which roles. Some roles will be better served by a risk-averse, black/white thinking approach and will suit people who innately work from this base.

Image: The Why of Change

However other roles will require an approach that flexibly finesses the subtle trade-offs associated with risk/benefit, short-term/long-term, and give/take analysis. These roles are best filled by people who thrive in the world of ‘grey’, who demonstrate thinking ‘outside the square’, and understand the drivers/systems within which others operate, including their scope for flexibility. From this platform, they are able to engage and negotiate with others to extract optimal value for their team and the project.

When genuine alignment

occurs, a project will take on

unstoppable momentum

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The principle of leadership when viewed through the ‘people’ lens is well supported by a careful choice of the organisation’s structure. We have previously referred to ‘hub/satellite’ and ‘dispersed’ structures as alternatives to or in conjunction with conventional top-down silo structures.

With these, leadership is more likely to emerge from within the organisation. This is because there is more licence for people to take responsibility for initiating and working their relationships across the boundaries of these satellites, rather than relying on a ‘hierarchy of authority’ for doing so.

The real power in mobilising people in a positive way lies in directly engaging with them.

This can be accelerated by promoting opportunities for people to give input and feedback for innovation and problem-solving through additional mechanisms such as think tanks and issue-specific meetings.

In the end, we want everyone to take up the mantle of leader/influencer within their field of expertise and responsibility – if they are aligned to the greater vision and broader strategy.

Image: Hybrid Organisational Structure

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Lens 3 – Culture For behaviours to become a way of being within a project organisation (part of the culture) they need to be genuinely valued by the organisation’s decision-makers – then they will be given expression through action. The lived values are the leader’s tools of alchemy for shaping an organisation’s character.

Take for example Virgin Airlines Australia. One of its core values is ‘we think customer’, with an explanation: ‘our customers are at the heart of everything we do; we are passionate about creating an outstanding flying experience; we deliver consistently high service internally and externally.’

To fly with this airline is to consistently experience a high level of care for passengers through the assistance that is willingly offered, the bright, breezy and comedic interactions of flight attendants, and the pride and celebration when landing the aircraft on time. Another airline with, for example, a values set focused primarily on internal efficiencies, competitive pricing or superior industrial conditions will deliver a different flying experience – obviously one that reflects their unique emphasis.

Image: Virgin Australia Culture & Values

The point is, values are power.

The degree to which a project’s leaders collectively believe that coherence, alignment and integration are key to a project’s success will determine how much the behaviours which facilitate this will be seen in action – if there is strong belief in its necessity, then collaboration and partnership will be pursued, time and effort will be taken to ensure everyone is on the same page, conflicts of interest

and differences of opinion will be actively addressed.

Likewise, if leaders believe that agile responsiveness to emergent challenges is fundamental to project success, then the behaviours which reflect this will be clearly seen – lateral and diverse ways of thinking will be encouraged and leveraged, pre-emptive problem-solving and action will be in evidence, and an attitude of ‘we make our own future’ will prevail.

If striving for balance is considered core to success by leaders, then this too will be reflected through actions that focus on winning the war rather than triumph in the skirmishes. An attitude of enlightened flexibility will prevail, wherein there is an element of discretion exercised when flexing and flowing. This attitude derives essentially from a commitment to ‘fitness for purpose’ – that is, whatever is developed and instituted must meet the changing demands of unfolding circumstance, no more, no less.

Values are powerThe adage then is ‘be careful what you value, for this you will bring to reality’.

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Of course, in many instances we have observed, executive teams are not always cognisant of the vast array of actions possible for enacting their values. Their starting point is to establish crystal clear clarity and heart-felt agreement as to what their values actually are (real, not assumed). We work extensively with executive teams to identify the many opportunities in the course of their daily work to model and exemplify them. The key is: the most powerful embedding of values occurs when normal, everyday tasks are undertaken in a manner which expresses those values. Values are not nebulous concepts meant to be superimposed on the ‘real’ work – they are the way in which the real work is done.

One of the conundrums that can challenge project leaders is when their focus, approach and culture differs to that of their corporate/head office. This can result in frustration and stand-offs that affect the efficiency and effectiveness of decision-making. Making explicit these differences can be a huge relief to all concerned, enabling both groups to understand the other’s pressures, priorities and lived values, and to find ways for moving forward together. Unless they are an aligned voice on the big issues, it is challenging for the rest of the project organisation to achieve alignment and integration.

Image: Keogh Consulting – Culture by Design

Values are not meant to be

nebulous concepts

superimposed on the ‘real’ work

Sometimes there are professional certainties, conventionalities and biases that need to be challenged because they limit a project’s capacity to respond to dynamically changing needs. This may involve making explicit the often unspoken assumptions that underpin an industry’s ‘taken-for-granted’ assumptions that can lead to rigidity in decision-making. Challenging these can open the project’s culture to new possibilities of decision-making and action.

It is really through the ‘Culture’ lens that a project’s leadership framework comes alive. This is because leadership cannot be successfully developed and embedded if it remains a formulaic or mechanical imperative – the passion, desire, and appetite for it must live in people’s hearts through key influencers throughout the organisation believing in and expressing its value, and as importantly, ‘walking their talk’ of good leadership.

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These symbolic methods of fertilisation are worth far more than all the policies and programs could ever effect. ‘Walking the talk’ of leadership happens more consistently when people aspire to lead well because they’ve been on the receiving end of good leadership and they have a ‘felt’ experience of and belief in its value. In other words, leading well has become a strongly held personal value for them, and is not simply a pragmatically oriented ‘means to an end’.

Be careful what you value, for this you will bring to reality

Another aspect of this lens is the challenge of blending differing cultures of leadership. We’ve already referred to the potential impacts when there are significant differences in approach between the project executive and head/corporate office, but there are other entities where differences can become problematic.

This includes contractors, upstream/downstream teams, the functions, venture partners. Sometimes it helps to develop a behavioural memorandum of understanding (how we will behave, particularly in circumstances of conflict) when other ‘softer’ approaches have little impact.

Leading well is a strongly held personal value for good leaders,

not simply a pragmatically oriented ‘means to an end’

This is a structural solution to a cultural issue, but it may be the best that can be achieved when underpinning values and other pressures make alignment in more fundamental ways impossible.

We encourage and support project teams to set up these memorandums at the outset if significant differences in approach are anticipated. They should be negotiated part-way through the project’s life if habitual stand-offs arise that cannot be resolved in other ways.

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Lens 4 – Power

Success requires insight into formal AND informal lines of power

We’ve already referred to the importance of structures flexing and fluxing in response to the unique demands of each phase of development. Ensuring that the organisational design is streamlined for efficient decision-making as issues rapidly unfold is important, but this needs to be balanced with provision for adequate levels of review and scrutiny. Roles and accountabilities should always be clearly defined to enable the formal powers inherent within them to be exercised effectively.

We also work with teams to help them identify their informal avenues of power and to work these pre-emptively. As is usually standard practice now, stakeholder maps and an engagement strategy are developed at the outset to identify the differing needs and concerns of key stakeholders and the most likely arenas of support/dissent. An important aspect to this is facilitating an interdependent mindset and driving for win/win outcomes for sustainability. By building trust over time rather than at the point of conflict, many breakthroughs have been pioneered that otherwise might not have been possible.

When seeking to influence in this manner, it is important to know at what level to pitch and what arena to play in. We have

often seen managers and team leaders pitching their interests at too low a level within their own and/or their stakeholder’s organisation where there is insufficient decision-making authority to influence outcomes. This often results in a situation of prolonged impasse, and sometimes the demise of critical relationships.

Knowing the most judicious level at which to influence requires knowledge of the organisational structures as well as the power politics of stakeholder organisations/groups. This includes having insight into their formal and informal lines of power to mobilise the involvement of critical people sooner rather than later.

At a micro level, paying attention to the details of discussions such as where meetings are conducted, how to dress and what language to use can also make an important difference. It is well documented that Nelson Mandela took time to deeply study his ‘adversaries’ prior to meeting them so that he understood their values, passions, aspirations and pressures. He crafted his input to conversations accordingly. He is known to have even studied Afrikaans poetry to develop a deep understanding of the thinking processes of his white compatriots. He argued the need for this depth of inquiry when accused by his black brothers of ‘crossing to the other side’.

In our experience, it is critical for leaders to develop their knowledge and understanding of the needs and world-view of their constituents – this is

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fundamental for building the trust that is usually necessary before others open up to being persuaded and thereby changed.

Another mechanism for influencing through the lens of power is to engage key influencers within and outside the project organisation to take on an auxiliary role in support of the project’s strategic agenda. It is important that these influencers are well placed as authoritative voices in their localised arenas if they are to have impact.

Some leaders encourage an element of ‘constructive irreverence’ across their project’s culture. What this means is that the voices of challenge, contrarian inquiry and creativity, disagreement and resistance are given a vehicle for expression, exploration and problem-solving. If they are driven underground, we all know how easy it is for them to gather force and drive wedges between teams at times when there needs to be agreement, coherence, alignment and integration.

The wisdom to embrace and work with disagreement and resistance in this fashion is borne of the realisation that all voices have a relevance and a contribution to make, especially those which are in dissent. Often it is those moments of impasse or contrarianism that, if worked with, deliver quantum breakthroughs in thinking and problem-solving that can elevate project functioning to a qualitatively new level of effectiveness.

There is wisdom in recognising

that all voices have a

contribution to make, especially those in dissent

In summary, managing the political dimensions of project life is an integral part of effectively leading and managing. Every aspect of project life is, in a sense, a political activity, involving differing if not conflicting levels of interest, power and influence for potential gains and costs.

A skilled leader understands and embraces this reality, and seeks to master the many opportunities this awareness throws up, for constructively opening up and shaping the pathways to

moving forward.

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CONCLUSION: The successful delivery of mega projects is the exception, not the norm. It is often assumed that if good structures, systems and processes are instituted from the outset, and highly skilled teams and individuals are allowed to get on with the job in the best interests of the project, that success should ensue. This frequently is not the case. Our research tells us that it is in what happens in the spaces between the ‘parts’, that is ‘the relationships’ (be that between people, concepts, policies, plans, systems, data, interests) that success or failure is most likely determined. Mega projects require that these relationships be not only forged, but continuously re-worked in the cauldrons of challenge, difference and need for their greatest value to be extracted.

Image: Relationships

We have sufficient mega projects ‘hardware’ available to us now (i.e. technologies, systems, processes, methodologies) to cater to the needs and challenges which mega projects typically throw up. Yet the facts on mega project failure rates tell us this is not sufficient. It is in what brings these to life – that is, how people organise these and themselves over time – that determines how successful they are in their collective endeavours. For mega projects are really one of society’s grand-scale experiments in collective human self-organisation. Real brilliance only results when a critical mass of ‘the collective’ attains a state of performance- that of ‘inter-dependence in motion’. For this to be achieved, it demands a palpably shared commitment to the same vision, goals and values, and that the parts (including people) remain dynamically in relationship with each other.

There is no silver bullet – except the realisation

that bringing all parts together as ‘poetry in motion’ is as much an

act of artistry as scienceThe real question then, is how to shape the Mega Project environment to induce this to happen. In the latter part of this Paper, we have posited that for this there is no silver bullet, except the understanding that the creation of such an environment is as much an act of artistry as a process of science, and involves multiple angles of coordinated intervention. We have identified some of these as examples.

The challenges of successfully delivering mega projects will only increase as we expand into harsher terrains, deeper waters, and more politically and culturally complex environments. Our participants acknowledged that the challenges 20 years from now are only beginning to be grasped – the burgeoning impact of social media, a more informed, engaged and expectant public, increasing levels of scrutiny, issues with accessing venture capital, the impact of the fast-pace of development in automation and robotics, just to name a few. These will only draw more on our human capacity to engage in collective innovation – through relationship.

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REFERENCE LISTPaper – ‘Mega Project Success Factors’ by Sue Dyer, International Partnering Institute, Livermore, Canada 2011 ‘Organizations and Leaders Make or Break Projects’ by Partha S. Ghosh, David E.A. Williams, Philip Askew, Vikrant Mulgund (sourcing SBC Capital Projects Research, 2012) http://www.sbc.slb.com/Our_Ideas/Energy_Perspectives/Summer12_Content/Summer%2012_Organizations.aspx Book – ‘Industrial Mega Projects – Concepts, Strategies and Practices for Success’ by Edward W Merrow, Founder and CEO of Independent Project Analysis Inc (IPA), Pub John Wiley & Sons, Inc 2011 Paper – ‘The Seven Deadly Sins in Industrial Megaprojects’ by Andrew F Griffith, Director of the IPA Institute Paper (Parts 1, 2, 3) – ‘How to Successfully Manage Your Mega Project’ 2012 Paper – ‘Challenges of E & P Megaproject Delivery’ by Carlo Procaccini, Andrew Lea-Cox, Willaim de Hoop Scheffer, 2012 Paper – ‘Executing Mega Projects and Key Lessons Learned’ by Azfar Shaukat, Mott MacDonald Ltd 2012 Paper – ‘Speed Kills – Megaprojects Around the World Fail by a Staggering 65%” Interview of Ed Morrow’ by Ali Klaver, 2012 “Megaprojects – Challenges and Lessons Learned” 2013 Procedia – Social & Behavioural Sciences (No 349-357) Youcef J-T Zidane, Agnar Johansen, Anandasivakumar Ekambarum Human-synergistics.com.au, (2014). Life Styles Inventory™ (LSI). [online] Available at: http://www.human-synergistics.com.au/Solutions/DevelopingIndividuals/LifeStylesInventoryIndividual.aspx [Accessed 29 Aug. 2014].

Virgin Australia, Culture & Values viewed Sept 2014 http://www.virginaustralia.com/au/en/about-us/careers/culture-and-values/Project Management Institute (PMI) ‘The High Cost of Low Performance’ Feb 2014 http://www.pmi.org/~/media/PDF/Business-Solutions/PMI_Pulse_2014.ashx viewed August 2014

A range of additional books and papers were also reviewed:“Big decisions, big risks. Improving accountability in mega projects” 2002 Transport Policy No.9. Bruzelius, N; Fkkyvjerg, B; Rothengatter, W.“Maximizing strategic value from megaprojects: The influence of information-feed on decision-making by the project manager” 2012 International Journal of Project Management (Vol 30 Is 6)“Transformational leadership in a project-based environment: a comparative study of the leadership styles of project manager and line managers” 2004 International Journal of Project Management (No 609-617) Keegan, A; Den Hartog, D“Assessment of most critical success factors for mega construction projects in Pakistan” 2013 Life Science JournalWilber, K. (2000). “A theory of everything”. 1st ed. Boston: Shambhala.Kotter, J. (1990). “A force for change”. 1st ed. New York: Free Press.Bolman, L. and Deal, T. (2002). “Reframing the path to school leadership”. 1st ed. Thousand Oaks, Calif.: Corwin Press.Klein, L WHITE PAPER Social Complexity in Project Management | SEgroup © 10/2012

http://www.pmi.org/~/media/PDF/Business-Solutions/PMI_Pulse_2014.ashx

http://www.virginaustralia.com/au/en/about-us/careers/culture-and-values/

http://www.virginaustralia.com/au/en/about-us/careers/culture-and-values/

http://www.sbc.slb.com/Our_Ideas/Energy_Perspectives/Summer12_Content/Summer%2012_Organizations.aspx

http://www.sbc.slb.com/Our_Ideas/Energy_Perspectives/Summer12_Content/Summer%2012_Organizations.aspx

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GLOSSARY OF TERMSAlignment: the extent to which individuals, teams, functions, stakeholders et al engage in coordinated activities and behaviours that are linked to the vision and strategic goals of the organisation/project

Business Plans: set of business goals, the reasons they are believed attainable, and the plan for reaching those goals.

Culture: The behaviours, ideas, stories and rituals of a group, team, organisation, community of society - ‘the way we do things around here’.

Deliverables: the actionable outcomes arising from strategic and operational plans – typically set to timeframe

FID: Final Investment Decision - determination made by directors and/or management as to how, when, where and how much capital will be spent on investment opportunities. The decision often follows research to determine costs and returns for each option.

Foundational Principles: the underpinning notions that serve to organise the themes and areas of data analysis in Keogh Consulting mega projects research analysis

Front End Loading (FEL): process for conceptual development of projects involving strategic project planning to shape the project

Function: a set of activities, performed by a business unit yielding specific results towards the project outcomes under specific business unit responsibilities.

Goals: The purpose towards which the project is directed (longer term)

Governance: degree of clarity and alignment regarding project vision, strategy and objectives

HSE: Health Safety and Environment

Implementation plans: documents that record and provide structured thinking/planning around how initiatives will be implemented

Initiative: a set of projects and activities that deliver outcomes and benefits related to strategic and project objectives

Key Functional Areas: the areas identified (via Keogh Consulting research) as significant factors to mega project success.

Mega project: projects worth in excess of $1 Billion

Major project: projects worth under $500 million

Objectives: the specific results of the project – to be delivered within a timeframe to achieve project purpose (mid to short term)

Recurring Critical Themes: the emergent themes related to mega project success that arose from Keogh Consulting research data analysis

Stakeholders: persons, groups, entities that have an vested interest in the project

44Keogh Consulting – Mega Projects White PaperAppendix A – Data Trends Analysis

APPENDICESAppendix A – Data Trends Analysis

The purpose behind the gathering of this basic data was to depict a general trend around the areas identified as critical to Mega Project success.

Description of Percentage Results – Table 1.

The Results were obtained by averaging the score for each functional area.It is important to note, that each Functional Area ranged in number of itemised questions – from 3-13. As we took an average of the score across 26 responses, this does not directly affect the averages across the items.The average scores are from 1-10.

Description of Percentage Results – Table 2.

Percentage results have been calculated on the grouped Likert Scale responses in Part A of the Keogh Consulting Questionnaire. We grouped the categories as follows:

Score of 1-2 on Likert Scale Not important

As we are diving into the success factors of Mega Projects, many of the questions

asked within our Likert Scale questionnaire received scores between 5

and 10 (typically higher on the ‘importance to success’ factor)

Score of 3-4 on Likert Scale Somewhat Important

Score of 5-6 on Likert Scale Important

Score of 7-8 on Likert Scale Highly Important

Score of 9-10 on Likert Scale Critically Important

These groups were then calculated into a percentage per itemized response under the “7 Key Functional Areas”.

For example – all participants interviewed classified the Item : ‘Project leadership is passionately committed to delivering on time, on budget, operationally ‘fit-for-purpose’ as either a 9 or 10 on the Likert Scale – thus providing 100% as ‘Critically important’ to Mega Projects’ success.

Appendix A :Data Trends Analysis

Front End LoadingGovernance

Project Management ProcessesContracting & Procurement

People & OrganisationsExternal StakeholdersTechnical Challenges

0.00 2.00 4.00 6.00 8.00 10.008.75

9.148.05

7.829.06

8.438.53

Key Functions Responses

megaprojects white paper

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