Project A vs. Project B: Why a forward-thinking approach is essential for major capital project success
Two major capital projects with a lot in common and some very big differences.
The future is hard to predict for major capital projects, they are more complicated, more global in scale and need to be even more competitive. Take a look and see how these mega capital projects differ in addressing complex challenges and how they are driving project performance.
Two major projects with lots in common and some very big differences
- Pre Front-End Engineering Design (FEED), with months remaining until FEED
- Billions in total installed cost
- No cutting-edge technology involved, however, plenty of project challenges, including joint ventures, contracting strategies and plans all likely to be based on a fixed price
- Challenging cost hurdles, tight timelines through FEED and execution
- Global supply chain, global Engineering, Procurement and Construction (EPC) contractors, fabrication yards and licensors
- World-class standards and requirements for safety and the environment
| Project A | Project B |
| Already in a schedule-driven mode. | Taking the time to gather “execution contractors, licensors, line managers” and align on the “Why”, “What is most important to the joint venture and the project”, what would be a win-win for all”. |
| No time for coordinated execution meetings; silo’s reported. | Aligning companies, bridging cultural and language differences, discussing contracting and partnering alternatives. |
| People report lack of knowledge of the big picture, poor understanding of cross-project issues, no organizational synergies noted in the planning to date or preparation of FEED deliverables. | Exchange of expectations accelerating the deliverables in FEED; improved clarity of roles and speed of decision-making and acceptance. |
| Traditional approaches to contracting, top-down, owner-to-contractor driven decisions and information. | Cooperative approaches reducing the RISK in execution. |
| Safety and quality dictated from contracts and requirements. | Safety and quality are proactive strategies, not stale requirements: E.g., ‘How can hazards and errors be eliminated, prevented, engineered out, long before a potential incident occurs?’ |
| Final Investment Decision (FID) cost hurdle is at risk for owner-operator. | FID cost hurdle broadly shared, addressed from top down and bottom up. Project campaigns are being conducted to reduce execution risk, and drive down project cost. |
On both projects, everyone says, “safety”. However on Project A , the reality revealed a different story. The relentless pursuit of schedule, driven by phases like “We have to get licensor packages out,” showed safety wasn’t truly valued. Already the project team complains of long hours, and endless fire-fighting. The reality of day-to-day on Project A is that ”safety” is only a slogan.
Tensions in the project management team are regularly on display, with visible disagreements among key managers, long email strings without resolution, and distracted managers disrupting important meetings by taking mobile phone calls.
On Project B, the time taken to gather people face-to-face has infused a vision, inspiration and effectiveness into the team. Videoconferences are more effective, language differences better-understood, clear expectations exchanged. People reach out to solve problems, taking responsibility for the big goals, not just their area’s tasks.
On Project B the leaders began with a commitment to extraordinary safety performance – one that calls for beyond-business-as-usual leadership, contracting, engineering and more. Having identified the largest hazards and risks: transportation, worker housing and health, large spills and leaks, work at heights; the leaders inspire cross-company and cross-discipline teams to eliminate them. Addressing safety proactively drives project planning and future performance, rather than weighing it down with burdensome requirements.
A forward-looking approach to quality comes to the fore in Project B. Rather than “inspected later”, early engagement of licensors, fabrication yards and sub-contractors in the design is underway. Instead of health, safety and environment (HSE) being left to HSE and quality assurance functions, company general managers share their lessons learned, requirements and ideas for preventing delays, errors, design flaws, construction accidents. They align on high-level strategies and give new direction to their respective organizations. As supply chain and construction risk goes down, so does total cost.
A recent workshop titled “Starting Strong” engaged off-project managers in the operating company: among them the corporate counsel, HR, Commercial, general services, and the managing director. The discussion began with a personal one, “What does safety mean to me, as a father, brother or son, or a mother, daughter or sister?”. Making safety personal shifted the context from, “safety happens on the job site years from now, to safety begins with me… today… in my role”. This relevance then infused their conversations as professionals overseeing policy, requirements, long-term resource planning, budgeting and more.
A third discussion was an eye-opener. “What will be the largest hazards and risks to the project… the workforce… the community… the environment… to the future of the operation? What could the corporation do in direct support of the project to take bold action today on these?! How can I contribute from my desk and role?” This dialogue breathed life into the corporation and into the leadership team. They left the meeting with plans to engage their professional teams, to inspire them to find ways to meaningfully contribute to the success of the project.
Project B above is addressing today’s challenges head-on by inspiring proactive, committed leadership, calling for owner-licensor and contractor integration, seeking innovation, and putting safety, quality, innovation, productivity and environment at the forefront of their quest for business success.
Ready to transform your megaproject outcomes? Contact us today for a consultation on how JMJ can help you implement these strategies: