IPA-Webinar-Coping-With-Resource-Limitations-on-Capital-Projects.pdf

IPA Webinar: Coping with Resource

Limitations on Capital Projects

Lucas Milrod

Research Team Leader, Organizations and Teams

2 INDEPENDENT PROJECT ANALYSIS

Outline

• Introduction to the Problem

• How to Cope with Resource Limitations

• How to Improve Long-Term Outlook


• Everyone agrees that they do not have all of the people resources they need

• True of capital project teams - 75% do not have adequate resources

‒ Missing critical owner functions

‒ Inexperienced leaders

‒ Understaffed

• Demographics suggest the problem is here to stay

The Problem – Not Enough of the Right People


World Population is Nearing Retirement Age at Increasing Rate

0

5

10

15

20

25

30

1980 1990 2000 2010 2020 2030 2040 2050 2060

World population aging 2013. 2013. United Nations, Department of Economic and Social Affairs, Population

Division.

% o

f W

orld

Popula

tion

60 Y

ears

Old

or

Old

er


What Is a Project?

Something you build on a budget and schedule?

Budget Schedule


A Project Is the Flow of Information

FEL 2 and FEL 3

Detailed Engineering

Startup

Construction

Authorization

Just one-third of the life cycle is typically spent building anything

About two-thirds of the project cycle is spent producing, using, and moving information from one information producer/consumer to another


• Information is at the core of capital projects:

‒ Accurate and timely production

‒ Smooth flow

‒ Correct use

• People are information consumers/producers

• Teams are units of people working in concert

Building Something Physical Is the Result of a Complex Information Production Process


Without Adequate Staff Capital Project Teams Struggle (1)

25% WORSE COST COMPETITIVENESS

22% WORSE COST GROWTH


Without Adequate Staff Capital Project Teams Struggle (2)

5% MORE SCHEDULE SLIP


Outline





• Get the right skills and abilities on the team

• Form the team early

• Organize the team to cope with limitations

• Retain institutional knowledge

Basic Approaches to Coping withResource Limitations


• When faced with resource limitations

‒ The team members that are there must be the right fit

‒ Key positions on the team must be filled

• Business must be involved to ensure the right people are on the team

‒ When business sponsors are involved in a project, the team is twice as likely to have owner personnel in critical functions

Get The Right People In Critical Functions


Types of Project System Organization

Full FunctionalControl

Weak Matrix

(Function-Centered Matrix)

Strong Matrix

(Project-Centered Matrix)

Pure ProjectControl

Most project systems tend to fall in the middle


• Project team organization often reflects the organization of the project system

• Teams that cope with resource limitations best reflect a project-centered matrix

• Function-centered systems are more complex and team integration is difficult

• Project-centered systems simplify the flow of information

Project Team Organization In Resource-Limited Environments


• Forming the team during FEL 2 offsets some negative consequences of resource limitations

‒ Team that experience resource challenges, but are formed early, achieve significantly better definition

• Teams that are formed early have a head start in the planning process

Resource Limited Teams That Are Formed Early Achieve Success in Definition


• Use retirees to fill short-term gaps in the project team

‒ Set-up to mentor others

• Establish and maintain long-term relationships with contractors

‒ Promote the retention of organizational knowledge (i.e., standards, processes, etc.)

• Develop and support inexperienced personnel through mentorship and communities of practice

Leveraging Knowledge Allows Teams to Get the Most Out of What They Have


Outline





• Thoroughly define each function or functional group involved in capital project execution

‒ Responsibilities, duties, knowledge, skills, abilities, scope of management

‒ How does the role change across project types, sizes, locations, etc.?

‒ What does success in the function look like?

Step 1: Define and Understand Core Capital Project Functions

Ste

p 1 Define

Core Functions S

tep

2 Assess Current State S

tep

3 Assess Immediate Needs S

tep

4 Identify Immediate Gaps S

tep

5 Short-Term Action Plan

Ste

p 6 Identify

Long-Term Needs S

tep

7 Long-Term Action Plan


Step 2: Assess Current State of Project Resources

• Leverage job definitions to determine competence of existing resources–where do current employees fit when compared to definitions?

– Development and application of formal tools and/or assessments of personnel based on identified position criteria

– Survey of past work and performance and compare against responsibilities and scope of management outlined for each position

Ste

p 1 Define

Core Functions S

tep


tep


tep


tep


Ste

p 6 Identify

Long-Term Needs S

tep



Step 3: Assess Immediate Project Management Resource Needs

• Conduct workforce assessment based on corporate strategy and target portfolio

• Identify the type and level of necessary resources based on the amount of immediate project work and the specific characteristics of the work

– Identify the competencies required to achieve immediate objectives

– Determine the right mix of project personnel necessary to address the competency requirements

Ste

p 1 Define

Core Functions S

tep


tep


tep


tep


Ste

p 6 Identify

Long-Term Needs S

tep



Step 4: Identify Gaps in the Current State and Immediate Needs

• Compare the current state and immediate needs of the project management resource to identify gaps

• Probable gaps include:

– Competency gaps in existing resources

– Need for additional resources at specific positions and competence levels

Ste

p 1 Define

Core Functions S

tep


tep


tep


tep


Ste

p 6 Identify

Long-Term Needs S

tep



Step 5: Develop a Short-Term Action Plan (1)

• Use the report to develop solutions to bridge the identified short-term gaps

– Competency gaps in existing resources: Create individual development plans to foster the development of competence in targeted areas

Internal/external training, developmental work assignments, certification attainment, etc.

– Need for additional resources: Develop internal and external recruitment and selection standards, tools based on job definitions

Ste

p 1 Define

Core Functions S

tep


tep


tep


tep


Ste

p 6 Identify

Long-Term Needs S

tep



Step 6: Assess Long-Term Project Management Resource Needs

• Conduct workforce planning based on long-term corporate strategy and target portfolio

– Forecast the long-term workforce requirements based on planned project work and/or capital expenditure

• Identify any risks to the development of key functions over time

Ste

p 1 Define

Core Functions S

tep


tep


tep


tep


Ste

p 6 Identify

Long-Term Needs S

tep



Step 7: Develop a Long-Term Action Plan

• Establish the support necessary to address the identified resourcing needs and risks, and to set your company up for long-term strategic management of key project functions

• Efforts may include:

– Staffing plans and contingencies

– More sophisticated recruitment and selection tools

– Establishment of functions and career path, linked to development plans

– Compensation strategy

– Performance Management System

– High Potential program

Ste

p 1 Define

Core Functions S

tep


tep


tep


tep


Ste

p 6 Identify

Long-Term Needs S

tep



Goals for Improvement

• Identify the amount and type of people required to meet project/portfolio requirements

• Match the competency proficiency of resources with the competency requirements of projects

• Hire internally and externally in a manner that targets specific needs

• Develop people in a way that cultivates the needed competencies as people retire or leave and projects become more difficult

• Measure and manage performance against a solid standard

• Engage and retain the best people


IPA’s Organizations and Teams Work

Lucas Milrod

+1 703.726.5493

[email protected]

• Research that covers:

‒ Project organizations

‒ Organizational design

‒ Project team staffing and structure

‒ Functional competency

• Assessments / Products:

‒ Organizational Effectiveness (Site and System)

‒ TeamOp

‒ Team and Site Functionality

mailto:[email protected]

Documents

IPA-Webinar-Coping-With-Resource-Limitations-on-Capital-Projects.pdf