Guide to Good Practice in the Management of Time in Complex Projects

Wiley and the Chartered Institute of Building have just published a new book, the Guide to Good Practice in the Management of Time in Complex Projects. The primary purpose of this Guide is to set down the standards necessary to facilitate the effective and competent management of time in complex projects. It defines the standards by which project schedules will be prepared, quality controlled, updated, reviewed and revised in practice and describes the standards of performance which should reasonably be required of a project scheduler.

Delayed completion affects IT, process plant, oil and gas, civil engineering, shipbuilding and marine work contracts. In fact it affects all industries in all countries and the bigger the project, the more damage delayed completion causes to costs, to reputation and sometimes, even to the survival of the contracting parties themselves.

In simple projects, time can be managed intuitively by any reasonably competent person, but complex projects cannot and a more analytical approach is necessary if the project is to succeed. Although much has been written about how to apportion liability for delay after a project has gone wrong there was, until recently, no guidance on how to manage time pro-actively and effectively on complex projects.

The Guide has been developed as a scheduling reference document capable of wide application. It is a practical treatise on the processes to be followed and standards to be achieved in effective management of time. It can be used in any jurisdiction, under any form of contract, with any type of project and should be identified as the required standard for the preparation and updating of contract programmes, progress reporting and time management.

I may be biased, my partner was part of the team that developed The Guide and it recognises the importance of involving stakeholders in the development of the schedule, but I feel it has a lot to offer project planners and schedulers on any type of project.

For more information;
in Australia see: http://www.mosaicprojects.com.au/Books.html#CIOB_Guide elsewhere, http://eu.wiley.com/WileyCDA/WileyTitle/productCd-144433493X.html

Using a Risk Management approach for Assessing Claims

One of the more difficult management decisions is how hard to pursue a contract claim. The claim will inevitably have a deleterious impact on a key stakeholder relationship and any significant claim will have proportionally high costs associated with legal and other expenses. Balancing the inevitable costs against the possible gains is a difficult but necessary decision before moving forward. Usually, the potential yield of a claim is given as a subjective assessment based on experience.

Dr. John Lancaster of Hill International has recently published a paper that seeks to remove the subjectivity from the assessment of which claims are worth pursuing (see 1 below). Lancaster proposes using a risk assessment approach to determine the likely range of outcomes and which claims contribute the most to the likely settlement. He suggests using the following factors:

• Entitlement confidence:
  • The strength of the contractual argument for entitlement; and
  • Contractually compliant notices.
• Magnitude confidence:
  • The quality and quantity of supporting records;
  • The quality of the project schedules (and any necessary corrections and/or repairs), cost records, etc; and
  • The certainty with which the effect/s of each event is known.

Applying a percentage weighting to these factors and using Monte Carlo analysis the likely range of cost and time outcomes can be assessed and the key claims identified.

It is important that the right people complete this assessment: the entitlement confidence categories should be assessed by counsel and the magnitude confidence categories assessed by the domain experts with input from the project staff.

The results of this analysis will identify:

• The likely outcomes under the prevailing entitlement and magnitude confidence ratings;
• The probabilities of securing different outcomes; and
• Identifying the claims that are the most important to the overall claim and which ones require more work.

Based on this assessment and after factoring in the costs and consequences of making the claim, pragmatic decisions can be made on:

• whether or not to pursue a claim;
• where to set negotiation limits (see 2 below); and
• which of the claims, with more work on establishing entitlement and/or substantiation, could contribute the most to a robust claim.

In an ideal world effective stakeholder relationship management would remove the need for contractual claims. When they become necessary, Dr. Lancaster’s ideas will help remove much of the unnecessary ‘heat’ from the assessment process and provide a pragmatic baseline for managing any claim in a professional and business like way.

1. Lancaster, John, “The use of risk analysis techniques to evaluate potential delay claim outcomes,” Project Control Professional: The Journal of the Association of Cost Engineers, February 2010. The full article is available on request from johnlancaster@hillintl.com.
2. For more on dispute management and negotiating see: http://www.mosaicprojects.com.au/WhitePapers/WP1049_Dispute_Management.pdf

World Expo Shanghai 2010

I have just finished a week in Shanghai; the main purpose of my trip was to participate in a panel session at the CIOB International Construction Conference. For more on this see Patrick’s post CIOB Shanghai Meetings. However, the highlight of the trip was a day spent at World Expo.

The Expo is simply enormous. The site covers a total area of 5.28 square kilometres spread along both sides of the Huangpu River in downtown Shanghai; it includes gardens, wet lands, paved walkways and 100s of new and renovated buildings.

In the two months since opening the Expo has hosted over 20 million visitors and expects over 75 million before closing in October. On busy days over half a million visitors are on the site. Everywhere you look on the site there are queues but the organisers keep things moving, the officials are polite and helpful and the crowd rubs along without friction, maybe even enjoying the experience. From a stakeholder management perspective, expectations are managed and information is readily available, particularly if you speak Mandarin – international visitors are not likely to exceed 5 million.

The China Pavilion dominates the site and is a wonderful experience. For locals to visit the pavilion, someone has to join the queue outside the gates at 6:00am to so when the gates open at 9:00am they can be near enough to the front of the next queue at the China Pavilion to receive some of the 50,000 tickets issued daily to allow them join another queue for 2 to 3 hours to get inside to see and experience the exhibits.

I was more fortunate, the hosts of the CIOB conference were able to arrange VIP access but I can understand why the Chinese pavilion is worth the wait. Its exhibits really are wonderful. There are over 200 countries and international organisations represented, ranging from Tuvalu to the USA; the World bank to the International Council of Museums, as well as numerous major corporations and most Chinese provinces. Almost every pavilion had its queue! In a long day I only managed to see a small section of the total experience but could start to appreciate the overarching purpose of this great festival.

My visit to the Expo was a once in a lifetime experience. If you can’t make the trip personally, you can be a virtual tourist on line at http://en.expo.cn/. Either way World Expo 2010 is well worth the visit.

Confronting Soft Skills

I never cease to be amazed by the number of people holding leadership roles in the project management community who denigrate ‘soft’ skills. The latest attack on ‘soft’ skills is in a letter to the editor in the May edition of Project Magazine published by the APM, UK.

The Honorary Secretary of the APM Contracts and Procurement SIG, Gerry Orman states ‘soft skills are merely a form of manipulation’; and suggests including them in the knowledge framework for the project management profession will result in the dumbing down of our emerging profession. He also asserts the role of the project manager is to fulfil a contract, not deliver the project so apparently people leading the delivery of internal projects within organisations are not project managers!

Apart from the difficulty of defining projects in terms of one sourcing methodology, writing contracts, Orman seems to conveniently forget the thousands of contracts that end up in the courts each year because of the breakdown in relationships within the contract. Stakeholder management is a key skill for project managers, including identifying, prioritising the project’s stakeholders, and then developing effective communication within relationships that work (for more on this see WP1007 The Stakeholder Cycle). The success of the construction phase of Terminal 5 at Heathrow was largely due to BAA’s focus on the ‘soft’ skills needed to develop and sustain the integrated delivery teams that created the success. This was a revolution in procurement and supply chain management and led to this project being celebrated as the most successful construction project in the UK (for more on this see my presentation to the CIPS Australasia Strategic Procurement Forum in Auckland).

The same argument applies to most project management artefacts. The most perfectly developed schedule is totally useless if the information it contains is not communicated to the people who need to work to the plan; communication is a ‘soft’ skill. But communication on its own is not enough! The people receiving the communication need to understand the message and agree to use the schedule in the coordination of their work. This is unlikely to happen if the people have not been involved in the schedule development which requires more stakeholder engagement and communication, consensus building and a range of other ‘soft’ skills (see: Communication in organisations: making the schedule effective).

Putting it another way, developing an effective schedule that is useful because it is actually used to manage time on the project demands the project manager and/or project scheduler engage effectively with the people who will be responsible for implementing the schedule. This requires interpersonal, contextual and behavioural competencies.

Orman also states professional skills should be unique to the professions, examinable in a written exam and uses the medical profession as an example. Two members of our family recently completed a multi year journey to become qualified anaesthetists. Over the years there were many written examinations but there were also searching interviews and clinical assessments along the way and years of ‘apprenticeship’ under the direction of more senior professionals to ensure they were competent as well as knowledgeable. If medical professionals need more than book learning and written examinations why should project managers be any different?

Project success is achieved by persuading people in the project team to enthusiastically and collaboratively work together to achieve the contracted output. Developing a motivated team capable of achieving this requires a range of ‘soft’ skills including leadership, motivation, communication and conflict management to name a few. Organisations cannot do work; it is the people within the organisation that do the work and management is about directing and leading people!

Answering the question, what is more important, the ‘hard’ skills of scope management, scheduling and cost planning or the ‘soft’ skills of motivation, communication and leadership, is difficult. My feeling is the synergy of ‘hard’ skills powered by ‘soft’ skills will create a far more powerful engine for success than the sum of the two parts in isolation. Successful project managers need both capabilities either within their person or within their leadership team.

If we ignore stakeholders and the ‘soft’ side of our project management skill set we severely reduce our ability to meet our client’s requirements for on time on budget and on scope delivery. ‘Soft’ is not a synonym for easy!

Dispute Avoidance & Resolution

One of the most combative industries world-wide is the building and engineering industry. Many legal systems have dedicated construction law courts and others have enacted legislation designed to specifically manage construction industry disputes. In Australia alone, it is estimated the construction industry could save AU$7 billion through better stakeholder and contract management processes that minimise or eliminate avoidable disputes.

Research in reducing theses excessive costs has resulted in the publication of The Guide to Leading Practice for Dispute Avoidance and Resolution. The Guide recommends management strategies to avoid contractual disputes between clients, contractors and other stakeholders, and where disputes cannot be avoided, to manage disputes effectively. Whilst this research was developed by the Australian building and construction industry it has a much wider application and is recommended reading for any manger involved in establishing or overseeing a major project.

The Guide was developed by the CRC for Construction Innovation prior to its closure in 2009. To achieve a balanced view, the CRC-CI engaged with a cross section of organisations in the built environment industry supply chain including the Association of Consulting Engineers Australia, Australian Constructors Association, Australian Procurement and Construction Council, Civil Contractors Federation, Queensland Dept. Transport and Main Roads and Main Roads Western Australia in the work leading to this report.

The CRC for Construction Innovation completed its work on the 31st December 2009 and has closed down. To keep these valuable reports in circulation we have created a repository on the Mosaic web site. The following publications and documents are available to download from the ‘Legal Papers section of the Mosaic site:
– Guide to Leading Practice for Dispute Avoidance and Resolution
– Guide to Leading Practice for Dispute Avoidance and Resolution: An overview
– Dispute Avoidance and Resolution (literature review)
– Causal Ascription of Disputes (report)
– Strategies for Dispute Avoidance (report)
– An exploratory study of project dispute pathogens (journal article)
– Causal Modelling of Construction Disputes (refereed conference paper)

Download The Guide and associated reports

CIOB stocks our Stakeholder Relationship Management book

Construction Books Direct, the official bookshop of the Chartered Institute of Building (CIOB – UK) has selected Stakeholder Relationship Management: A Maturity Model for Organisational Implementation, for inclusion in its range of construction and building books and contracts.

To purchase in the UK see: http://www.constructionbooksdirect.com

To preview the book’s contents, see:
http://www.mosaicprojects.com.au/Book_Sales.html

The Value of your PMP Qualification

Over the years there has been a lot of discussion on the value of credentials such as PMP; frequently triggered by the failure of a ‘qualified’ person to perform in the workplace.

There are essentially two ways to assess a person from a credentialing point of view. Testing what they know or assessing what they do. Competency based assessments (what they do) tend to assume knowledge based on performance. You cannot perform a complex task such as managing a project without knowledge. However, competency based assessments have two disadvantages:

• Competency is demonstrated in a specific a time and location. There is no guarantee the competent person will perform as well in a different setting with different people, cultures and relationships.
• The assessment of interpersonal competencies tends to be subjective and project management is very much focused on directing and leading people. Assessing behavioral competencies goes some way towards solving this dilemma but the assessment is still subjective.

Knowledge based assessments are empirical. The person had sufficient knowledge to pass a defined test at a defined point in time. However, the passing of a knowledge based assessment such as PMP or for that matter an MBA only shows the person has a predefined level of knowledge. The disadvantages of knowledge based assessments are:

• There is no indication the person can apply the knowledge effectively in the workplace.
• The knowledge tested in any exam is only a portion of the overall domain knowledge.

Given the problems with either assessment process, assessing the value of a qualification is complex and is differs depending on who is making the value judgment, an employer or an individual.

The value of a qualification to an individual can be measured in at least three areas:

• The advantage it offers in the job market;
• The recognition governments and other licensing authorities give to credential holders and
• Its recognition by other entities offering higher qualifications through credits or advanced standing.

The value of a qualification to an employer is in part a function of the credentials reputation and in part, what this tells the employer about the credential holder. Whilst the PMP is a uniquely valuable industry based credential, no single assessment is ever going to provide a guarantee of a person’s suitability for employment in a particular organisation. Being a PMP provides one point of assessment; the PMP holder had the knowledge needed to pass a difficult, quality controlled exam. However, employers also need to look to other aspects of a person’s overall capabilities as well.

My feeling is the lack of undergraduate/baccalaureate degree courses in project management has given PMI’s PMP and other similar project management certifications a solid value in the job market. This is quite different to many other credentials issued by professional bodies. The UK based Chartered Institute of Building’s MCIOB credential requires a degree, several years experience, an examination and a professional interview; in most respects at least equal in its rigor to PMI’s PMP requirements. Both credentials should be assessed as being at a higher level than a degree but at least in the Asia Pacific region, the construction industry and governments focus on building managers holding a University construction degree, not MCIOB.

Similarly, higher degree courses in project management routinely offer some level of advanced standing for PMP holders. I am unaware of any advanced degree in construction or the built environment that offers similar advanced standing for MCIOB, although some other professional credentials do achieve a level of advanced standing in some higher degree courses.

This unusually valuable status of PMP as been built up over many years; however, the value also creates a number of challenges:

• Employers may have expectations of PMP holders not supported by the credential.
• But, credential holders need to live up to the reasonable expectations of their employers, and current credential holders also have the challenge of maintaining the worth of the credential for future generations of PMs.
• PMI needs to ensure the examination process remains both credible and effective.
• Training organizations such as ours need to ensure their PMP courses are relevant and interesting.

We have chosen to focus our training on the PMI range of credentials because they are a defined package, we know if we have done a good job as soon as a trainee passes their exam. The subjectivity of competence assessments lacks the clarity of pass/fail. However, look 5 to 10 years into the future and I expect the credentialing process will have change substantially to blend aspects of workplace assessment (competency) with the formal testing of knowledge. The Program Management Professional (PgMP) credential is a start along this route, my prediction is most other credentials will follow.

Construction Stakeholder Management

Wiley-Blackwell has published a new book on stakeholder management in the construction industry, edited by Ezekiel Chinyio from the University of Wolverhampton and Paul Olomolaiye from the University of the West of England. This book is designed to map the current state of stakeholder management in the construction industry with input from a range of well known academics and researchers.

Our chapter on Mapping Stakeholders can be previewed on our Interesting Book’s page with links through to the publisher’s web site.