A couple of interesting things happened on the 1st July, the first was being invited to a wonderfully old-fashioned business lunch by Ashurst Lawyers with Champaign and fine wines – a far too frequent event in these days of OH&S liabilities…… The second was attending the preview of the Bell Shakespeare’s interpretation of Henry V. You may wonder what the connection is.
Henry V has a number of memorable speeches focused around battling insurmountable odds to overcome adversity…… ‘Once more dear friends unto the breach let us block the gap with [engineering] dead’, ‘We few, we happy few, we band of brothers. For he to-day that sheds his blood with me shall be my brother …..’. Stirring stuff given the character assassination most of the Plantagenet Kings suffer at the hands of the Bard. Which brings me back to the lunch.
Ashurst were launching the fourth report in the ‘Scope for Improvement’ series looking at the management and delivery of mega projects in Australia. And unfortunately it really was a case of ‘once more dear friends……’ The title of the original 2006 report was derived from its major finding that scope was routinely omitted from tender documentation for mega projects. The second report 2008 identified the consequences from scoping inadequacies. Survey participants attributed cost overruns (61%), delayed completion (58%) and disputes (30%) to scoping inadequacies. Further, scoping inadequacies had resulted in 26% of the $1 billion+ projects surveyed being more than $200 million over budget. In 2006 and 2008 there was definitely ‘scope for improvement’; in 2014 the situation remains fundamentally unaltered.
The research for the 2014 report used a qualitative approach starting with discussions over lunch with some 130 executives (primarily from the organisations involved in the Australian Contractors Association), the discussions were documented and the emerging hypotheses tested in focused one-on-one interviews. This methodology has undoubtedly generated some interesting and important insights to the challenges faced by the major projects industry; but unfortunately the methodology prevents a precise trend analysis on this major area of concern. All we know for sure is it remains a major area of concern.
Probably the most telling insight in explaining the reason for the continuing omission of scope is the imposition of unreasonable time pressures to complete the work. This pressure comes in part from the lack of any overall strategy on the part of the clients that defines the need for the project, meaning there is no ‘master plan’ to provide a framework for developing the project’s scope in a sensible timeframe. This is a fundamental governance failure – very few mega-projects need to undertaken in ‘panic mode’.
The second insight is the effect of perceived ‘political imperatives’ that push governments and/or organisational executives to simply demand the work be accomplished in an unreasonably short timeframe. For some reason a completely unnecessary need for speed seems to have come to dominate executive decision making. This demand for excessive speed will always drive up cost, increase risk and reduce quality. This is equally true of a small $50,000 IT project as it is of a $multi-billion infrastructure project such as the National Broadband Network.
The only option to achieve excessive speed without compromising quality too much is to employ highly skilled people with direct experience of the work. But as another section of the ‘Scope for Improvement’ report highlights, skills are in very short supply and only half the people in any group can be ‘above average’ – you simply cannot achieve ‘above average performance’ all of the time.
Certainly there will always be a limited number of projects where speed is an imperative, for most a combination of better strategic planning so the work is started at the right time and/or simply allowing adequate time will produce far better quality outcomes at a significantly reduces cost. Getting this balance right, and requiring management to have the right systems in place to avoid unnecessary ‘time pressures’ is a key governance imperative.
Simply having an immovable deadline is not an excuse. The London Olympics infrastructure was started ‘early’, properly resourced from the beginning, used appropriate procurement systems and finished a year ahead of the opening ceremony with no fatalities. Contrast the success of this project to similar ones in New Delhi and Rio de Janeiro where strategic decisions were not made at the right times, pressures to ‘increase speed’ developed and cost, quality and safety all suffered (or in the case of Brazil, are suffering).
The current ‘Scope for Improvement’ report identifies a range of solutions to this problem:
- Clearly identify the project objectives.
- Education on the importance of scoping.
- Allow sufficient time allowed to prepare the scope
- Employ sufficient personnel of the right quality to prepare the scope. Including providing adequate training for the personnel involved in preparing the scope.
- Choose the right delivery model and the right method of describing the scope (performance based where appropriate).
- Get the right people involved, with a collaborative process to obtain input from key stakeholders (including the end users).
Another area of the report that will be discussed in a later post is the interlinked topics of productivity, innovation and training. In the meantime, the Scope for Improvement reports can be downloaded from: http://www.ashurst.com/publication-item.aspx?id_Content=10561&langId=1