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Making Project Management Discipline Integral to Corporate Culture
Dutch Holland,
 Holland & Davis LLC, and Pradeep Anand, Seeta Resources

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 career-bending transition?

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 that happen.

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 organizational pushback.

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 processes.

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 several industries.

Pradeep Anand is President of Seeta Resources, a Houston-based consulting firm focused on improving business performance in the oil and gas industry. Contact:pradeep@seeta.com

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