How to Overcome the Curse of Excessively Detailed Specifications

In a number of industries or organizations, excessive growth of the formal technical specifications requirements fueled by risk prevention has led to deep non-competitiveness, with not only dramatic consequences on individual organizations, but also wide-ranging consequences on public welfare. Yet, it is extremely difficult to reverse this situation, as public outcries of excessive risk taking and very high personal and collective liability immediately looms. In our new White Paper 2015-06 ‘How to Overcome the Curse of Excessively Detailed Specifications Leading to Uneconomic Infrastructure Projects’ we examine some ways to overcome this situation.

Trying to find the right paragraph in the midst of detailed specifications

Consequences of excessive specifications are dramatic, ranging from substantially higher costs for a comparable reliability and safety, conservatism and resistance to new technology, and significant variability of requirements from different Owners leading to additional Supply-Chain costs for vendors working for different projects.

Specifications generally grow together with bureaucracy and often reflect organizations where responsibilities are progressively diluted.

Simplification endeavors cannot be executed by the same people who make a living working with ever more complicated and arcane requirements. They need to result in a cultural shift in the organization, with higher responsibilities delegated further down, and higher competency of the decision-makers. Actually the only way to obtain simplification is to start by changing the organization’s culture.

In general, and contrary to intuition, complicated specifications are not the best way to increase control of complex systems. In a context where technical systems become ever more reliable, behavior and organizational culture become key to safety.
It is thus possible to simplify the formal specifications while increasing safety at the same time by re-establishing competence and accountability in the organization, resulting in a more cost effective situation. The key to this transformation is the adhesion of the organization to the new paradigm, and the permission to exercise judgment on each particular case. Read our new White Paper 2015-06 ‘How to Overcome the Curse of Excessively Detailed Specifications Leading to Uneconomic Infrastructure Projects’ to understand better that pervading issue and how to resolve it.

Project Value Delivery’s Golden Rules for Opportunity and Risk Management

Project Opportunity and Risk Management is a specific discipline that requires following a set of principles. We have distilled those principles down in a set of Golden Rules that can be easily be used as a reference – and as a way to check if your Project Opportunity and Risk process and setup indeed responds to the basic requirements that will ensure that your projects remain protected. Discover these Golden Rules in our new White Paper 2015-05 ‘Project Value Delivery’s Golden Rules for Opportunity and Risk Management’.

What is really important to understand is that the main objective of Opportunity and Risk management is to enable the Project Manager and its management to take decisions derived from the organization’s current knowledge and understanding of reality.

Based on this, Opportunity and Risk as a process needs to be fully geared towards decision-making.

Discover our 16 Opportunity and Risk management Golden Rules in our new White Paper 2015-05 ‘Project Value Delivery’s Golden Rules for Opportunity and Risk Management’.

Why Contingency Reserves Need to Be Owned by Senior Management

Proper contingency management is essential during project execution and contingency should not be released too early. In our new White Paper ‘Why Contingency Reserves Need to Be Owned by Senior Management’ we elaborate on the ownership of Project Contingency, and the fundamental reasons why it needs to be owned by an authority above the Project Manager.

The word ‘contingency’ can be used in different ways depending on the industry or the cost management standard that is followed. In this paper, contingency is a single amount of money that is designed to cover the entire project risk, at least the Known Unknowns. It is sometimes called ‘Management Reserve’.
It is different from other cost elements that are managed by the Project Manager, including risk elements sometimes also called “contingency” that are sometimes allocated to the project cost on a line-by-line basis by some organizations (we believe that reserves to cover risk should be a single amount at the project level and should not be distributed among the different project cost elements to ensure effectiveness and reasonableness of the protection afforded).

Contingency needs to be owned by Senior Management simply because:

• contingency when it is used needs to be used massively,
• contingency engagement needs to be a significant management decision as it may well decide on the outcome of the project.

The engagement of contingency is a key decision that needs to reside above the Project Manager, because it is similar to engaging the reserves in the battle. Engagement of contingency when it happens must be massive, focused and coordinated to ensure the maximum effectiveness. We recommend setting up a task force at the Project Management Team level to manage this engagement, drawing on the reserves that will have been made available through a proper start-up process (which will have created space to lead) and sufficient available reserves in the Project Management Team itself.
Proper contingency usage can make or break your project. Use contingency properly! Find out how in our new White Paper ‘Why Contingency Reserves Need to Be Owned by Senior Management’.

This new White Paper complements White Paper 2014-09 ‘How to Manage Properly Your Project Contingency Throughout Project Execution’. 

Why ‘Embedded Consulting’ Delivers Better Results for Enterprise Transformation

Different consulting models are implemented when it comes to Enterprise transformation, be it limited or very comprehensive in scope. The issue is to seek maximum effectiveness in these projects: realizing effective, deep and sustainable change with the minimum expense in time and money. In this context we believe that the best approach is to set-up a team comprising mainly employees and complemented with a few external resources with differentiated skills and expertise to foster disruption and bring new ideas and methods on key aspects. Our new White Paper GDM-PVD-2015-02 ‘Why ‘Embedded Consulting’ Delivers Better Results for Enterprise Transformation’ written in partnership with GiDuMo explains the rationale of this approach and how it can be implemented in practice.

The two extremes when it comes to consulting interventions regarding enterprise transformation are:

1. The ’embedded consulting’ with one or two ‘trusted advisors’ to Senior Management, most of the work done by employees temporarily assigned to the project and a very limited number of specialized consultants focused on specific capabilities that are lacking in the organization,
2. A large team of consultants coming in and doing most of the work , delivering finished products (typically the business model of large consulting firms).

Should the consultant be the player or the person supporting the player?

There are a few intermediate options still in general it is possible to recognize the pattern of one or the other extreme.

The first approach is by far superior when it comes to sustainable results in the organization.

The reasons for this are actually quite straightforward:

• In option 1, the organization shows actual commitment by assigning resources to the transformation project. It shows commitment of the top of the organization, that management walks the talk and this can only be favorable to actual implementation,
• The employees directly involved in devising the transformation are the best spokespersons for what they have setup. As they are demobilized from the transformation project and come back to their usual position they instantly become a strong network of proponents of change embedded in the organization,
• As changes are devised by employees for the benefit of the organization, they are in general more pragmatic and closer to the needs of the organization.

Option 2 remains valid in cases in other projects where the organization’s DNA and culture is not directly touched. For enterprise transformation projects it does not seem to be the best solution, although it might appeal to the senior executives through the power of the brand of some large consulting companies.

If you have a project to transform or upgrade your organization, it is preferable to organize your transformation project around your employees supported by a limited number of senior and specialized consultants. And make sure that it is actually driven by someone from the organization and not by the consultants themselves! Actually, the prime responsibility of the client organization is to frame the required work, structure the Business Case, setup the Governance Model, hold the consultants to that frame, and make sure that the organization’s particular culture is embedded in the final deliverables. With the ’embedded consulting’ approach, your transformation will be sustainable, much better accepted and overall much more successful. Read Our new White Paper GDM-PVD-2015-02 ‘Why ‘Embedded Consulting’ Delivers Better Results for Enterprise Transformation’ to understand better how you should structure you next transformation project.

What System Do You Really Need for Correspondence Management?

The ability to manage, track and archive the correspondence issued and received throughout a Large, Complex and Long Project can make a difference in the outcome and beyond, in case of claims. Dedicated tools (in-house customization or off-the-shelf products) and relevant processes are required. But before being able to select and implement the right solution, expectations need to be clarified, and priorities addressed. Our new White Paper 2015-03 ‘Implementing a Correspondence Management Tool for your Projects: what System do you Really Need?’ explains the main issues that need to be considered.

Correspondence management does not need to be antiquated!

The requirements for a project correspondence management tool shall be agreed and carefully documented to allow the selection of the solution best adapted to one’s business. The more the system can do and the more automated it is, the more complex it will be to implement and roll-out. So keep the right balance and focus on YOUR business priorities.

A first issue it to decide what ‘correspondence’ should encompass in your particular case.

From must-have features such as archiving, assignment and tracking of actions and search capabilities, additional features can be added such as automated correspondence transmission and reception, integration with other systems (company directory etc.), and general sophistication of the implementation.

A correspondence management tool is a must; it can take various shapes and complication levels. Find out what you really need and the parameters you must consider in our new White Paper 2015-03 ‘Implementing a Correspondence Management Tool for your Projects: what System do you Really Need?’

Why Portfolio Level Opportunities and Risks Management is So Essential

While most project-driven organizations nowadays implement some level of Opportunity and Risk management process, portfolio-level processes are often non existent. We find that it is a striking issue that greatly impedes Opportunity and Risk management processes to reach an acceptable effectiveness.

Portfolio-level processes are extremely important when it comes to the overall performance of the organization, in particular because the organization shares resources across projects. Much more structured portfolio-level Opportunities and Risk management processes should be implemented. Our new White Paper 2015-02 ‘Why Portfolio Level Opportunities and Risks Management is So Essential in Project-driven organizations’ describes what are the issues that need to be covered, and in general how to implement such process.

At portfolio level, in principle, except in the case of rare catastrophic risks, the Opportunities and Risks of different Projects should tend to average out. This is the way most businesses manage their risks. However there are some instances where it is not the case – in particular, because the averaging out supposes that the Projects in the portfolio are independent. All possible dependencies, which are in effect managed by the organisation, are sources of Opportunities and Risks for the organization.

Portfolio-level Opportunity and Risk management processes are essential for the sustainability of any project-driven organization. Structured processes are rarely implemented and portfolio-level decision-making such as resource allocation between projects and the decision to take or not a new project as part of the portfolio are often left to the feel of the senior executives.
We believe that a much more structured approach can to be implemented, adding a lot of value to the organization, in particular with regard to common resources and to the monitoring of the diversification of projects. Our new White Paper 2015-02 ‘Why Portfolio Level Opportunities and Risks Management is So Essential in Project-driven organizations’ gives principles which, if they are followed, will greatly improve the resilience of organizations.