Making Project Management
Discipline Integral to Corporate Culture
Dutch Holland, Holland & Davis LLC, and Pradeep Anand,
Journal of Petroleum Technology (JPT), March
2003, Society of Petroleum Engineers Publication
Today's oil and gas industry reflects a dynamic transformation of tools and processes that
is nothing short of breathtaking when viewed through a century's worth of change. Who
could have imagined 4D seismic, global online project collaboration, and the sprawling
worldwide scope of offshore E&P?
Yet, "the more things change, the more they remain the
same." Relegated to the past are legendary wildcatters running companies by the
proverbial seat of their pants. For entire generations, oil and gas companies have instead
thrived on the expertise of educated legions of professionals ranging from geoscientists
to engineers to financial experts with MBAs. It is an evolution filled with business
models, probability calculations, and all the other sophisticated strategies that would
seem to fit right in with Project Management taking a seat as a highly respected
discipline at the corporate conference table. That hasn't been the case--but watch closely
as this changes, too.
Project Management's Growth
Breaking with the traditional view of Project Management as being
"helpful," but outside the parameters of a genuine discipline such as
engineering, many companies are moving toward creating a culture not only more supportive
of Project Management, but one that gives it more credit as a legitimate work process and
discipline. Project Management revolves around formal management methods and systems for
completing single time-bounded unique initiatives on target, on time, and on budget. This
discipline has to call on technical professionals within the organization to use their
core expertise, their scientific knowledge, their technological savvy within a
"business box" having specific dollar targets, resources allowed, and time
limits, and to add that to their skill set. In other words, individual expertise must be
applied to business.
Project Management focuses finite resources on the
completion of unique assigned work, and it identifies project activities needed to ensure
project success. It needs to be done in a similar fashion across projects to enable top
management to understand the overall status or progress of the complete set of company
initiatives. Failure to adopt a uniform method ensures a poor job of major initiatives. It
also means that major projects running simultaneously will not be comparable, making
overall enterprise management practically impossible to do well.
Therefore, technical professionals have to change their
mindset from the more accustomed scientific endeavors toward new directions that address
concerns at the project level. These include creating work breakdown structure, assigning
resources to tasks, producing project deliverables, achieving quality, controlling time
and resources, and managing to plan.
This gravitation toward legitimizing Project Management is
pivotal for engineering careers because, for the most part, it requires a quantum shift in
thinking and orientation within the work environment. Specifically, most engineers are
used to working within departments, divisions, or regional offices and being primarily
responsible for their functional work as technical professionals. Only occasionally are
most engineers assigned to projects.
It's time for a reality check, because this
project-oriented shift is exactly where the engineering community must land to keep pace
with the future. When engineers are assigned to projects, naturally it is vital to bring
scientific disciplines to bear on the project. But, as engineers' involvement in project
work continues to grow, they must add another work discipline to their professional
toolkit, and that discipline is Project Management. So, how do engineers make this
Heading Toward the Project Management Mindset
The long and short of this is that engineers must figure out how to do engineering in the
future in a way that is both good engineering and good project work. Right now, two forces
are moving organizations toward a more formal performance management culture. The stronger
of these are disciplined professionals who understand the importance of Project Management
disciplines and principles and are pushing their companies to do things more rigorously.
And the second force is the organizations themselves saying that their projects are not
coming in on time, on target, or on budget and that they need to push something to make
These two forces are converging to move organizations
toward a more formal performance management culture. This coincides with a more widespread
movement toward valuing processes across the enterprise. This growing movement contains
several messages for newcomers getting their collective arms around the appreciation and
formalizing of Project Management. First, a company's work processes are major corporate
assets that should not be allowed to remain dormant. Rather, these work processes must be
developed, protected, and exploited just as managers and leaders within the company would
handle any other valuable asset. But, second, remember that some processes are not as
valuable as others. Each work process is only as good as the way it fits into the
company's strategic direction. In energy companies deploying billions of dollars in
exploration and production (E&P) processes, Project Management becomes a critical and
core process. Third, the company's performance will literally be limited by how well its
work processes are designed and executed. Working more effectively delivers better
results, higher efficiency lowers costs, faster work lowers cycle times, and working
smarter produces fewer recurring errors.
Yet none of these changes will occur unless everyone is on
the same page. Success is only possible when effective process performance is required,
not suggested, on all core processes, and information technology (IT) tools must focus on
valuable corporate processes instead of being ends unto themselves.
The Fork in the Road
Making the transition to the process mindset has become more appealing primarily
because more companies have become increasingly aware of the tangible benefits of changing
how their business works. But, when companies reach this fork in the road--whether to
proceed spontaneously or to take a planned approach toward formal Project
Management--quite a few wrecks still occur.
Here's why. With the unplanned approach, wrecks happen in
any or all of three phases (early, middle, or late) because being well organized is not
the top priority. For example, in the early phase, the whole idea of formalizing the
process is so intriguing that the details appear overwhelming. Into this jungle jumps the
IT guru with all the answers about how to do great Project Management with the latest
"gee whiz" software. After some floundering and confusion, an urgency develops
to do something (anything) toward getting to formal Project Management.
And that's where the bright promise of implementing a
formal process starts heading downhill. Instead of having an organized "method to
this madness," the newest technology is brought in with the wholly impractical idea
of tackling all the management processes and subprocesses immediately. Not surprisingly,
the formalization initiative leads to overload and saturation, which quickly results in
Finally, in the last phase of the unplanned approach toward
making the transition to formal Project Management, it's like watching the worst of an
old-time silent movie. Everything moves faster than real life, but nothing ever really
gets accomplished other than another pie in the face, another damsel about to be run over
by a train, or a hapless good guy dangling from a flagpole.
In other words, the entire "process opportunity"
bursts at the seams. Many systems are implemented, but (in the best technological
traditions) few are actually used, and chaos reigns with virtually everyone wondering what
was supposed to be happening anyway. Meanwhile, the plaintive cry arises about why the
company is getting nothing for all the money it's invested in Project Management
The Planned Approach
At this point, it is imperative to restate why any company should get involved in
making the transition to process thinking in the first place. It's to derive value by
making processes perform better to get better company results.
Success in formalizing Project Management will most likely
come from taking three methodical steps in the right direction rather than the haphazard
approach of simply lurching ahead. Phase 1 of a planned approach involves building
awareness and educating employees on what the process mindset is all about and how it
might apply. Phase 2 involves conducting initial trials of the process concepts and
techniques on the processes. And Phase 3 involves integrating process thinking and lessons
learned and making the actual transition to a formalized approach.
In more detail, Phase 1 means that a concern for Project
Management must be instilled within the company. That requires communicating what the
process movement is, developing an awareness of process thinking, and developing the
rationale for formalizing the process. Also, a transition framework must be created,
assessments conducted, and a business case developed for the next phase.
Phase 2 is an important turning point because it is the
initial trial of process concepts and techniques regarding how the company puts the idea
into practice. This phase includes formal assessments of needs, pinpointing targets for
improvement, developing pilot improvement projects, and ensuring that improvement results
are put into action. Then, based on needs, other improvements are launched within the
company, and a business plan is developed for Phase 3: implementation.
Phase 3 is where it all comes home, integrating process
thinking and transitioning to formal Project Management. Implementation plans, timetables,
measures, and goals must be developed; process measures and objectives must be
incorporated into the way the company manages performance; tools must be formalized and
integrated; the company must support the new formalized way; work processes must be
modified; and results must be measured to see how well goals were achieved.
Effectively Changing the Business
What all this comes down to is that, to be prepared for the future, companies
must effectively change their business. Clearly, the "Three Horsemen" of
effectively changing a business are Program Management, Project Management, and Change
Engineering. Each of these is relevant to all company personnel, including engineers, and
not just upper management. As noted earlier, engineers increasingly must appreciate
constraints imposed by projects and learn how to complete projects through both good
engineering and good project work.
Program Management focuses on formal management methods and
systems designed to manage a company journey to its vision. It is accomplished through
development, governance, and coordination of multiple systems. The second key is Project
Management. And the third is Change Engineering (or Operations Integration), which centers
on formal management methods to ensure that changes called for by the vision are fully
integrated into the company's daily operations.
Build to Blueprint
How do individuals and the company actually arrive at the desired destination? In
management parlance, it's described as "building to the blueprint" that has been
mapped out. It's also the engineer's new learning curve.
In a complementary way, Program Management is used to
oversee the sets of projects by focusing on several important issues as it achieves the
organization's long-term interests. For example, it identifies necessary steps, ensures
that key resources are in place, ensures that the necessary coordination and cooperation
are also in place, includes formal risk management, and flexes projects around highs and
lows to keep the right amount of energy on the tasks at hand.
For decades, engineers and other technical professionals could essentially work in a
vacuum within oil and gas companies, apart from the company's larger objectives. That is
no longer practical or advisable as organizations are rapidly moving toward a Project
Management mindset and culture.
Today, technical professionals must become part of the
company's teamwork approach to accomplishing projects on time and on budget. Not only does
this better serve the company, it also serves the interests of the technical professional.
By learning and becoming immersed in the discipline of Project Management, the engineer
adds a valuable skill to the scientific one as this new discipline becomes more respected
within the industry. The oil and gas industry contains a lower percentage of Project
Management professionals than other industries that have increased their productivity by
using this discipline for decades. Therefore, the more involved technical professionals
become in Project Management, the better the possibility of enhancing value and
productivity companywide and throughout the industry.
Dutch Holland is Chairman of Houston-based Holland
& Davis LLC, a management consultant firm specializing in project performance across
Pradeep Anand is President of Seeta Resources, a
Houston-based consulting firm focused on improving business performance in the oil and gas