The origins of site-based capital project improvements often take a similar form: projects take too long in the funnel, schedules are overly optimistic, endemic understaffing of key disciplines limits a site’s ability to apply Best Practices, and alignment between organizational stakeholders is absent, hindering efficient execution. All of these issues were present at one site with which IPA partnered to drive improvements.
The site had already identified the need to develop competent resources (and to ensure that sufficient key personnel were available), recognized the capability limitations of local engineering and construction contractors, and, further, acknowledged that existing performance measurement was inadequate to drive performance. Taken together, these issues served as the impetus for the site to make the first step on their continuous improvement journey, and to engage IPA’s site-based project expertise.
What follows is a high-level look at how IPA has supported a site’s leadership team through the first few years of a project performance change effort. We adopted a collaborative engagement model with this client—whose primary areas of focus involved measurement and data-focused change. Our work with this client has resulted in significant progress toward goals, as well as positive feedback. One stakeholder stated that IPA “reinforced and solidified site-based project Best Practices with data,” and added that “Our own in-house learnings align with IPA studies.”
Year 0—Baseline Performance Measurement (Expert Review)
In some instances, companies consider performance benchmarking to be IPA’s exclusive role in continuous improvement. However, IPA has a strong record of helping clients navigate through their improvement journeys. After recognizing the need for change, site leadership (who understood the importance of an independent, data-centered approach) partnered with IPA to define the best approach to drive meaningful, sustained performance improvement. The first order was an unbiased current state appraisal, which came in the form of a site-wide benchmarking evaluation of projects, processes, and systems.
A strong case for change is the foundation upon which transformational change is built. In addition to what the site had already recognized as problem areas, building the case for change required an independent appraisal of the site’s performance across its portfolio of projects. This initial measurement constituted the baseline upon which all future improvements would be referenced, and included both quantitative and qualitative measures. IPA and the site leadership team collaborated in selecting the projects and programs to be measured.
IPA led conversations with key site stakeholders (including executive management), conducted project team interviews, and completed an extensive review of project documentation. This client-provided data served as the basis for IPA’s performance analysis. IPA evaluated a suite of both leading and lagging performance measures, reviewed industry trends, and provided insights from our work with Industry’s best-in-class performers. The culminating activity was a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis of the site project portfolio and projects organization to kick off an action planning and change implementation effort.
Years 0 to 2—Action Planning and Implementation of Change Program (In-House)
Based on IPA’s recommendations, the site team developed a focused and realistic improvement plan with particular attention given to the key levers of best-in-class performance. At this site, the development of strong project teams and the routine, systematic use of Front-End Loading (FEL) practices were the primary focus. Most of the site’s capital projects improvement journey utilized in-house resources; a side-benefit of this approach was that this provided the opportunity for growth, training, and improved job satisfaction.
Specific actions to strengthen weak practices and introduce Best Practices were taken; first and foremost, these included addressing resource gaps, which IPA had identified and quantified. Secondarily, inhibitors of performance identified through the IPA-led benchmarking effort were removed and enablers of performance instituted. Finally, a suite of bespoke key performance indicators (KPIs) proven to drive project performance were put in place. This work coincided with a site-wide reorganization effort begun at the start of year 2, with the objective of fostering better integration across functions to improve asset availability and performance.
Year 2—Site Improvement In-Progress Review (External Review)
While many companies wait 3 years to re-benchmark site portfolio performance, the site wanted a real time appraisal of progress. In partnership with the site, IPA conducted a “health check” review to assess initiatives and actions undertaken and progress made by the site following the baseline benchmarking evaluation. Far from being an “audit,” IPA’s work with the site took the form of extensive stakeholder discussions, document reviews, an anonymized survey, and a site walkthrough. The suite of KPIs adopted by the site was independently rated by IPA, and areas of disconnect highlighted. Site leadership reiterated the vision of future performance, and IPA provided updated, actionable recommendations to enable the site to reach its goals.
To augment IPA’s performance benchmarking approach, staffing levels were quantitatively assessed, using the new organizational framework. This analysis highlighted base staffing needs, provided comparisons with Industry’s top performers, and, importantly, highlighted potential areas of contextual risk, such as expected portfolio volatility and the implications on “right sizing” the site based organization. In addition to identifying functional resource gaps, IPA highlighted the need to clarify the remit of certain functions to improve project and portfolio delivery.
Years 2 to 3—Refine and Implement Additional Change Efforts (In-House)
With a number of improvement initiatives solidly in place and demonstrable improvements in KPIs, the site turned its focus to additional areas of improvement: project initiation, portfolio management, and resource management. The site partnered with IPA to develop tools and templates for new processes. These tools were championed by in-house resources. Meanwhile, new employees were hired to fill specific roles where IPA had identified staffing gaps, and to ensure appropriate resourcing across the site’s newly instituted organizational framework.
In conjunction with these efforts, learning and development efforts were initiated with the IPA Institute. IPA partnered with the site’s learning and development group to develop learning objectives for specific project functions, and to reinforce the use of site-based project best practices. As one participant said, “Training was effective at communicating data-supported Best Practices. In an every-changing process improvement environment, it was refreshing to see what changes could be made that are truly value-added.”
Year 3—In-House IPA-Led Training, and Repeat Benchmarking (External Review)
The IPA Institute offered slightly adapted training courses on selected topics to the project professionals at the site. The IPA Institute offers both in-house and public courses, and builds on IPA’s research and experience.
IPA also conducted a repeat benchmarking of the site projects portfolio, based on a selection of more recent projects. The results were compared against the baseline performance to show areas of improvement or gaps.
The site can expect the results from the repeat benchmarking to refine its improvement planning and identify focus areas for the next 3-5 years. Further continuous improvement efforts already being pursued include accelerating the team project performance culture and improving capital efficiency.
Our work with this customer has enabled effective decision making, adaptability, and tailored implementation of their change management and improvement efforts. IPA has also provided our in-depth expertise in industry Best Practices to their teams through collaboration and training. The site’s leadership remains committed to improving and has identified consistent measurement as an important enabler of achieving efficient project delivery and operational excellence.
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*Case study by Katherine Marusin, IPA Product Development Leader, Site & Sustaining Capital