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Journey Towards Superior Project Performance: De-risking Projects & Setting Up for Success December 2015

High Performance Projects

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R E S U L T S

Now

Performance Drift

Past Future

Management Predict/Forecast

VALUE JUMP

Leadership Generate/Inspire

Business as Usual

Project 1

Project 2

What we Want

Managing Learning and Innovation

   “In order to be able to generate exceptional added value to their shareholders, a company should be able to learn better than competitors and use that knowledge wider and faster than them. Everybody in our company has a function in the creation and distribution of knowledge for the company to generate benefits. We do the same things repetitively. Our philosophy is simple: Every time we start something we need to do it better than last time.”

Sir John Browne, CEO BP

 

As substantiated by Ernst and Young, the Society of Petroleum Engineers, IPA & the Offshore Technology Conference;

Ø  We know that over 60% of the factors that make a project successful do not relate so

much to technical content, they relate to human behavior – the human factors that drive individuals and teams actions, decisions & performance.

Offshore Technology Conference Take Away’s:

Ø  65% of project failures were due to softer aspects; people, mindset, culture,

organization and governance; (Leadership) Ø  A further 21% were caused by management processes and contracting and

procurement strategies; (Management)

“CULTURE EATS STRATEGY FOR BREAKFAST”

World-Class Performance:

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Why Address Operating Culture? The Facts

The reasons most often cited for these failures are:

The Human Dimension (company, project & individual mindset/culture) is a key determinant to de-risking projects & intervening in the 66% failure rate.

Resistance to change (not seeing how to succeed) Limitations of existing systems

Insufficient alignment of targets & how project is to be managed

Lack of continuous and effective engagement with all stakeholders

Missing value-adding board support

Unrealistic expectations and insufficient FEL

Lack of fully integrated project team

Inadequate team skills/lack of sufficient resources

Over-Optimism (Myopia)

Lack of inspiration/engagement; Project vision too narrow

When we speak about culture we do not mean regional or country culture, although there is that influence as well. What we mean by culture is the ”Operating Culture” or the “Operating Context”. The Operating Context is the background frame through which people view the situation in front of them e.g. their view of their tasks, their leadership, their project, their targets, the actions they take or do not take and most importantly - their view of what is and is not possible in any given situation. Context shapes peoples thinking; “Who can I talk to”, “who should I not talk to”, “do they really want me to focus on safety or is it just time and cost”, “do I really have permission to honestly raise issues or will I get in trouble.”

Context is the highly influential backdrop that shapes the thinking, action and ultimately the

results themselves. Companies either have a context they intentionally design, roll-out, engage people into and embed that is consistent with a desired future state of performance, or they end up with a default context that merely builds up over time, an extrapolation of the past, without thought or intention. §  It has become common knowledge among many Project Organizations & IOC’s that the

performance of individuals and groups is shaped by paradigms or contexts; that is, the background that a group inherits and operates inside of; their unexamined views, attitudes, beliefs & assumptions that form the highly influential operating culture (background context) through which they view their leadership, their people, their initiatives and their work.

Operating Culture/Context: The Human Dimension

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Without addressing these significant influences on people’s thinking, acting and performance, one cannot be optimistic about achieving superior results or even results that are outside of business as usual. §  As stated earlier, the 65+% failure rate is business as usual. §  The contexts (shaping the thinking, actions and performance) that produce “business as usual”

results are different from the contexts that lead to “high performance”.

Successful projects invest the time to the intentional formulation, roll-out, engagement & implementation of World Class Operating Cultures that powerfully addresses these Human

Dimensions.

Operating Culture/Context: The Human Dimension

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High Performance Projects

8

R E S U L T S

Now

Performance Drift

Past Future

Management Predict/Forecast

VALUE JUMP

Leadership Generate/Inspire

Business as Usual

Project 1

Project 2

What we Want

How It Is Done Creating Ownership for Effective Target Improvements

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P ER FORMANCE

Bankable Benchmark

Committed Excellent

Aspirational Superior

Must be Co-Created

Performance Scale based on Key Performance Indicators

Management Routine

Leadership Non-Routine

How It Is Done Capabilities for Leading Beyond the Benchmark

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Non-Traditional Leadership C

apability

Management Technical/Routine

Creating Agendas & Timetables

Risk Identification and Mitigation

Planning & Budgeting

Resources Discipline Management

Contractor Management

Establishing Rules, Procedures & Processes Controlling and Problem Solving

Risk & Uncertainty Modelling

Leadership Transformational/Non-Routine

Passion & Vision

Leading & Managing Critical Conversations Integrity/Authenticity

Engagement

Motivating & Empowering

Authentic Ownership for Stretch Targets: Promise vs Commitment Establishing New Work Practices

Leading into Difficulty Trad

ition

al P

roje

ct M

anag

emen

t Tra

inin

g

How It Is Done Process to De-Risk Projects for High Performance

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Establish Project Vision &

Performance Culture

Define Conditions for

Success (Goal

Achievement)

Align on 3-Month

Performance Challenges

Identify Gaps between What Is

Predictable and Vision

Identify Pitfalls

Invent Actions & Embed

Practices

Accountability Reporting (Gamify)

World Class Inspirational

Engages the Workforce

Breakthrough for Industry

Project Goals Defined

Ownership Established for Benchmark to Best Possiible

KPI’s Articulated Implementation

Plan

3 Month Leadership & Performance Challenges

Measure Effectiveness &

Develop Interventions

Gap Analysis How to get from “Where we Are” to “Where we Want to Be

Focus Areas

Realism

Account for

anything that can pull project

off track (Known &

Unknowns)

Move into

Action Invent Work Practices to

Resolve Pitfalls & Keep 3 Month Challenges on

Track

Establish Reporting

Structure for Practices & Progress Rewards/

Consequences

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XLT (Rep) PDB & PMT

Fully Integrated PMT + Main

Contractors & Key Vendors

Wider Project Workforce Roll Out & Activate

Ø  Align the Leadership – Hard & Soft Dimensions Ø  Realistic, Committed & Aspirational Project Goals Ø  Align on the behaviours, communications and work practices Ø  Proposed Scorecards & actionable project KPIs to Drive Behaviours Ø  Address Incentivisation Ø  Build Leadership Capability & Superior Collaboration

Ø  Operate Effectively inside the Projects Vision, Strategy & Goals & Build a Culture of Reliability

Ø  Accelerate Project Startup & Achieve Results Ø  Rapid Resolution of Project Obstacles Ø  Cascade Ownership Ø  Establish a Performance Based Culture at Site Level

Ø  Develop Fully Integrated PM Team & Ownership of Project Goals Ø  Key Contractors/Vendors Ownership of KPI’s Ø  Plan Quick Wins & 3-month challenges Ø  Procurement & Systems Integration Ø  Functional Teams Setup – Alignment & Commitment Ø  Establish Performance Champions Ø  Embed new practices to effectively coordinate work Ø  Capability to engage work force

How It Is Done Structured Groups & Areas of Activities

Gro

up I

Gro

up II

G

roup

III

Who What needs to happen

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What Happens in a High Performance Project Deliverables and Outcomes

DELIVERABLES: Ø  PMT fully integrated to

achieve the Project Vision Ø  KPI Ownership Ø  Plan for Quick Wins Ø  Idea generation for

procurement, systems, processes and integrations

Ø  Coordinate work/decisions

Build powerful integrated PM team.

Develop ownership & mind-set for the

breakthrough targets & program.

DELIVERABLES: Ø  Develop business case Ø  Benchmarks Ø  Breakthrough business

goals and value jumps Ø  Proposed Scorecards

and KPI’s Ø  Incentivisation Scheme

Develop the business case, performance

measures and specific desired value

to be added by stakeholders

Develop Executive Alignment and Buy-in

Phase 1

Launch Project Management Team

Phase 2

DELIVERABLES: Ø  Detailed plans for KPI

achievement Ø  Alignment and

commitment of functional teams

Ø  Performance champions at functional levels

Ø  Integrated project plans

Forge integration, establish project-wide breakthrough culture, communication skills and plans to produce

value jumps and increase productivity

Full Project Organization Launch

Phase 3 Establish capacity to

turn learning into explicit knowledge.

Coaching to ensure the project matures,

strengthens, produces robust value.

Support and enablement structures are created, coaching relationships

are matured

Implement Evolve/Coach

Phase 4

DELIVERABLES: Ø  Achieve results Ø  Idea generation and

implementation Ø  Project obstacles resolved

with new velocity Ø  Knowledge captured Ø  Leadership capability

accelerated