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Courtesy of RLG International's Rick Heyland, below is a transcript of his speaking session on 'Capital Project Transformation' to Build a Thriving Enterprise that took place at BTOES in Oil & Gas Live Virtual Conference.
What do we need to do to change the performance of our capital projects? Learn how to change typical overruns on mega capital projects with our top 10 list for success such as:
In today’s current environment, the proficiency and long time practice of our remote work regime has been promoted to the forefront. In collaboration with our digital visual management partners, we will also share insights, processes of optimized schedule improvements by 20% both virtually and automated.
Rick Highland, New, Long Sun and Kurt Gibson, They're going to join us to talk about Capital Project Transformation. So welcome, gentlemen, I'll start with Rick Highland. He's the EVP of Global Client Solutions. He has been with ... International for 31 years. Our ... is a performance improvement company who has done results oriented implementation work in the oil and gas industry for more than 30 years. Rick lives in Salt Lake City, Utah with his wife, Carol. And there are six kids and 14 grandchildren. So if you've thought you're busy, you go, Rick, very good and that Rick is accompanied by Neo longson and current Gibson. They are joining record this presentation, and also on the Q&A. There, both vice-presidents and business unit leaders and with ... International, Kirk, lives near Pittsburgh, Pennsylvania and New lives in ...
Kazakhstan, Both are leading ... implementations on their clients, mega-projects, Gentlemen, real pleasure to have you here. Very much looking forward to your presentation.
OK, can you see my presentation?
Yeah, It looks great. OK, Very good.
So thank you, Jose, for this opportunity. We're excited, and Netherland, and Kirk will join me later in the presentation to share some of their thoughts.
There actually, onside leading some of our largest implementations around the world with our largest clients with large teams, so their insights will be invaluable on this topic, grateful for this opportunity to talk about capital projects.
You see my slide, I'll advance here?
OK, there we go. So four things we want to talk about real briefly. one is just a little bit of background very briefly on ... for those, if you have not heard of us before.
Then we want to spend the majority of our time talking about some of the lessons learned, that we've seen both our benchmark research and others in major capital projects. And as Josie said, introducing this, are closing the last session.
The track record has been great. So we're going to share some lessons learned and some how tos, if you will, for strategic ideas on how to change the profile for success of major or mega capital projects. And then I'll ask Neil and Kirk to share some of these success stories that we're experiencing with our clients around the world. And then some Q and A So, first, a little bit about ... International. We've been consulting company, we've been in business for over 35 years. You can see some of the industries that we work. the majority of our work today is in oil and gas upstream, mid-stream Downstream, and Cam.
And then, this just gives you a little bit of a picture for how large we are, where we work. Some of the areas that we're trying to implement excellence in around safety, capital projects, turnaround, operational excellence, et cetera. Some of our clients, not an exclusive list, but some of our clients that we work with, our largest for clients around the world, are Shell, Chevron, Conoco, Phillips, and Noble Chemical, Just to give you an example of that.
So as I mentioned, ours, as Joseph mentioned, we do on-site performance improvement, work, results oriented work.
And in our experience, we want to share some of our lessons learned around capital projects, and how to be profitable and achieve the objectives of these projects, mega-projects in definition, or our projects over one billion dollars.
Most of them are much bigger than that that we're going to cite and share with you today.
And the track record hasn't been great. I didn't put the slides in here from the McKinsey Studies, and the APA studies, et cetera.
But, you know, roughly, depending on the study, you look at, we're achieving the objectives approximately 20% of the time in the industry.
And, as Joe said earlier, that's been a problem for a long time. So, there's many people thinking about how we change that, but first, let us understand some of the nature and challenge when you have no thousands, and thousands of people together, and billions and billions of dollars being spent, And you can see the list there. I won't read all of them, you know, workforce readiness, Incapability, Jennifer, touched on that relative to in general. That's a huge issue in capital projects, and I'll talk about, specifically at the frontline integration is a massive issue. You've got all these contractors and honored groups of stakeholders involved around the world, and then, of course, the complexity of the interfaces. And we'll talk much more about that. But those are some of the reasons for the challenge, and why we're struggling a little bit. Before we jump to some of the solutions, I love this slide. It's pretty self explanatory.
It's a piece of research by K Remington in her book, Leading Complex Projects, but it talks about just the complexity and all these discrete interfaces.
And if you were to ask the question about, you know, what?
one thing, we do to change the curve on success of capital projects, and I think it, representative of that quote, their lack of proper and accurate information, is consistently seen as the top reason for project failure.
And with all these interfaces and all the stakeholders happening, to get the accurate, granular, one version of the truth, not 2 or 3 not contractor owning one, owner, owning one, but accurate, granular, one version of the truth could be that one thing to change the profile. So if there's anything, if there's one thing you take out of today's presentation, maybe, to think about that as, as you work together as a team.
So this piece of research here is what we see in our last tsar LG's Insights and our last 20 megas. And most of these, over $5 billion, on some of the reasons that were underperforming. Obviously, at the top there, you've got feed quality below average.
A lot of times, owners are rushing through, and not getting at very accurate estimates, and accurate feed work, we're not bringing in contractors fast enough, earlier enough, because it is expensive. But, the, our experiences, the, the benefits far outweigh the costs, were missing deadlines. You know, if you miss you, start get behind an engineering already. It's very difficult to get ahead on construction. And then you see kind of the box things that we're going to talk about today. The importance of Schedule, you know, and turnaround maintenance. We've got really good at following a P, for Schedule A, level four, schedule and P six.
And today, in capital projects, we're not where, because of the complexity, we're basically progressing work and what's open and what's available. And we think that the most efficient and productive ways to follow schedule, we're going to talk a lot about in this presentation. We need better leadership. These are $40 billion, 25 billion, $6 billion businesses. And we need the type of leadership necessary to lead, not just project experience, but real leadership. We're going to talk a lot about that.
And the Big four, we're going to highlight today is really the importance of the right leadership to turn the curve for project success, making the effort one team. Contractor alignment is so critical with the owner group, and all the subs including so this idea of one team and Kirk and and Neil are going to share some experiences around that.
Making time for optimization. You know, when you've got thousands of people out distributed on different work fronts, it is difficult to get the frontline together to optimize the work, but it is that critical.
As good as the engineering has been as good, there's still opportunities for the frontline to optimize 10, 20, 20, 5, 30% on that schedule if we make the time and we have an organized effort around that, so we're going to share some success stories around that. And then finally, to overcome the interfaces and the complexities, it really tight, disciplined operating rhythm and you can kind of see that on the bottom picture on the right. So those are the four areas. We're going ahead and hit hard in the presentation.
So, first of all, around leadership, and, again, this is a breakdown on the chart on the front and where we see the largest gaps in leadership, adequate or below average. And it's coming back to the capability at the frontline. These are frontline leaders that are very good at their craft.
But ill trained ill prepared with the right information to lead performance at the frontline. And we're going to make some high recommendations on what to do there. And you can see that, you know, leaders matter, and some of the areas that they matter on along the left-hand side, I won't read all those items, but the point is, better leadership is needed.
This is a piece of research and research now by Edward Marrow and his book, Leading Complex Projects are really, really, really good book.
You can kind of see here the importance now, we're starting to bring together the importance of one team, having all the integrated team in place early and often on a project. You can see on the right-hand side, if the leader is not performing leadership tasks there in the details in the weeds on management tasks, not listening to all the stakeholders. You have a 33% chance of getting the integrated team, the one team, and we know that that's, you know, incredibly important for the success of a project, all the way on the left hand side of the scale, when the leader lessons, when the leader doesn't perform management tasks, but true leadership tasks.
You have a 100% probability of having an integrated team.
And that's backed by a piece of research on their last 48 mega projects, omega capital projects. And I'll share more of that research here in a second. So, the importance of real leadership, listening, integrating, pulling all the stakeholders together, as illustrated there, What same book. Same piece of research, kind of pointed a slightly different direction. If you look on the left-hand side, complexity, these interfaces that, we talked about by Kate Remington piece of research, their cries real leadership not management.
And you can see that on the seven out of the 48 capital project mega capital projects, they looked at the seven that were successful.
The overriding success was the leader and leadership characteristics, and you can see some of those characteristics on the top of that graph. Generalized open personality.
High emotional Intelligence was the last time we hired for emotional intelligence and a varied experience, not just project, experience.
And then, subsequently, on the bottom half of the projects that weren't successful now, mind you, in smaller capital projects, a project manager mentality is still can still be done. You can put your hands and fingers and all around it and be more detailed oriented. It's not recommended. But that's some of the complexity that we're having as well. You know, on the $100 million project, we're able to do it this way, But on the five billion, no longer.
And so, on the top, and, again, you're looking at leaders, and they're focusing on people, and co-operation, tasks, and best practices, that's how you get to successful results. And then, of course, the opposite is true.
We find, still, too many times, the bottom that they're hired because of their technical skills, and their control skills, and it's their way and the communication skills have to be on Omega capital. Projects just have to be in the top quartile.
And this piece of research illustrates that as well as our own.
So this one is an actual success story that Kirk was part of.
A fantastic leader called chilling Terps Dre with Shell.
And I'd like, Kirk, can you jump in and just share some of the highlights of one team and shillings work here?
Yeah. Absolutely. Rick, thanks. So, you know, transitioning from our four principles that we've put out, the first one is selecting the right leader, like we just went over. And what's so critical about that is you have to do that. At the very start. You can, a lot of times, projects change leaders, and then it's, it's a little tough to restart the culture of that work sites. So what she did that was so good. And he sat down as they were before very early vendor selection, even.
And they assess the quality of the people that came up from each vendor that they had. And I'll, you know, I'll name names on this one, because it was, it was a great success story, and that they deserve to be recognized. So showing sat down with it was Turner Construction and and Jacob's Engineering at the time. And both of those organizations put forth the kind of people that really wanted to be on a one team site, and they put together an alliance that was based on four principles you see there on the slide. The first one was openness, and, you know, that's the transparency we hear about you know, here's what Jillian was OK. with their suppliers as the owner team, he was OK with the suppliers making a profit, making money. They have to survive to. And that was OK to talk about the business terms, but it was more important that they're engaged in the success of the project.
So don't let the transactional nature jeopardize that collaborative. They were willing to share risks, they were willing to raise problems and solve them together. Maybe there's someone on the owner team who had more experience and someone on the constructor team, and that person was worth listening to. Versus siloing and letting a builder try to solve it all on their own.
There is trust, you know, they showed up in service to one another. And that came from, again, selecting the right leader, with the right emotional intelligence to get the ego out of the way and say, you have a problem, I'm here to help you in service to you And they learn to trust each other and then empowering. That was delegation and support, you know, they said, OK, you're trusted to go run with this. And We're gonna help you along the way. It wasn't delegate, and try not to fail. It was delegating support.
And those four principles, anytime there was a rift, anytime there was a problem, sure, there was some tension, but they came back to this charter. They referenced, How do we want to behave through this problem right now? And they all know, re-assessed. and they got back together, and they showed up as that one team aligned in service to the project. And what was great was, when you talk to a man or woman on the project site, when I was there kind of embedded, They said, This was one of the best projects they'd ever been on. It was a mega project, it was just as complicated. It had a lot going on, but they really enjoyed it, and, you know, I can tell a different story of probably unfortunately, a more common story of a site. I was on where after a monthly performance review meeting, I could, you know, that everyone leaves a conference room having looked at the exact same slides and the same handouts and I'll go talk to the owner team and they'll say, this is a disaster we're going off. The Rails builder doesn't want to work with us on this one.
Know, I'm so disappointed. And then I'll go talk to the build A team and they'll say, Oh, the project's find, the owner team. They just don't understand it, they don't have the experience we have, So they left after. You know, this happened month after month after month, there was not a shared view of Project Health, and that came from not having this alliance declared upfront. This is how we're going to have conversations and work through things together. So Rick, did I miss anything on that from previous Tellings? Know that that's great, Kirk, appreciate you jumping in there. I think, you know, for the listeners, you know, this is common sense type ideas.
It's just not yet common practice. So for us to highlight where it is working and share those learnings across, because as an industry, we all acknowledge that we need to do something better and different.
And here's one example, this idea of one team, which everybody's talking about, but they were able to actually execute and work on it. And that doesn't mean that.
You don't, you can't say no, And you don't have to still make tough decisions, but if you do it with the interface or with the understanding that it's open, collaborative, trust, and empowering, and supportive of every everybody's best interests, it's a powerful combination.
OK, next slide.
It's not advancing for me.
There we go, OK, So the number one point there was around improved leadership, leadership selection, leadership execution of those principles and practices we talked about, including emotional intelligence and being able to handle bad news from different parties, still follow the principles of one team. The second area that we'd like to focus on is making time for optimization activities.
And as I mentioned at the front time, you just don't have, and you're given the schedule, and you're expected to work it. But we find that if you can carve out in your operating rhythm a weekly time or a time 90 days before a piece of work, Neil will share a couple of examples here. To make optimization activities, it is hugely beneficial for the project. This is our particular tool that we use our approach to optimization. I guess one of the things I'd point you to is this middle of these two charts in the middle of the traditional approach. And T and P stands for Theoretical Maximum Performance. The idea and this is the idea of connecting the frontline to the schedule and getting them to optimize the schedule. The traditional approach is putting all your inputs from the different parties into a project manager schedule, project manager, And they put together the schedule.
What we're asking for after that is the opportunity to then put our fingerprints on that schedule, and have each of their subcontractors given opportunity now that they see the whole thing together to optimize. It is a very powerful opportunity if you can make it, and, of course, what we're looking for is not that, what happened last time, because on a cable capital project, you may not know, these are new groups, new parties working together, But what if, what a perfect happened? What if we had all the cranes, all the infrastructure, what can we do, how can we optimize this activity? And when you open up people's minds and thoughts with a clear schedule in front of them, it can be very powerful, and we're going to share some examples of that this next couple of examples, Neil, do you want to share your insights on this? You were part of this one.
Sure, So we really look at optimizing the schedule, as Rick talked about it. It really, it's getting the people that are going to do the work in about 90 days, advance the work that's going to be done, sitting down and saying with the conditions on the ground, with the equipment and the labor force they have in front of me, is this really the best way I can build it?
There's some good, This is where your experience of your project managers come out, and they fine tune or tweak that schedule, and I've always seen them be able to prove it, and then it drives the ownership and commitment to that schedule, because then it's theirs. And they're than probably against it. And with that, if, if you then have something come up, it's unexpected, You've got float in the schedule. He's been able to still maintain it, and around something that happens, if you go to the next slide.
I guess this was talking about how we do it remotely. Do you want to take the lead on this, right? Yeah, so, this is one, this is actually very recently with a chemical client, Eastern Canada, and with Covert 19, of course, we're having to do a lot more remotely, but this is also automated. And on purpose, you can't see that screen, but let me describe what you're looking at there. On the left hand side.
Is the actual schedule for the different system, water systems, and sewer systems, and everything that they're looking at.
And then on the right hand side is the automated action items that people are committing to. So, we facilitated this session in automated software called .... It's a piece of our visual management remote work, and they're looking at the schedule and then everybody can add their action items to improve. And you can see, on the right-hand side, quite a number of different action items to improve. And the results of this session are quite outstanding when you give frontline people, as Neil talked about, the opportunity to look at their schedule and optimize it.
The results can be dramatic And you think, well, how can that be? We put all our best ideas into the schedule and out tend to schedule well.
When you give people a chance now that they see it all integrated together, and you challenge them with the opportunity to find 10 days to find opportunities for alignment, when they see it all integrated together, they always come up with amazing ideas. And that's what you see here as facilitated and aware.
So, the other point that we really wanted to hit home is the idea of the importance of a disciplined operating rhythm, and all we're talking about there is this cadence.
What metrics are reviewed on what regular basis, and with whom? So, what daily, weekly, monthly cadence, you set up with the right, leading and lagging metrics to get one version of the truth in front of the team so that they can really stay on, point, hold each other accountable. And be super clear on what the next critical activity is, and what the next critical action is to deliver you, can see that it's a high visual management, high, inclusion, high involvement. And as Neil already mentioned, on the optimization side, this allows a lot high degree of ownership when you put P six schedule in front of people, and just expect them to follow. Or just the formatted then, handout work. It is not as powerful as you can use your visual management tools to get everybody looking at one version of the truth at six AM in the morning before they go out to understand what the critical path items are to execute and deliver.
This is an example, Neil, let me ask you to talk about the next couple of slides on cascading expectations.
So if you look up the, the lower quadrant, you can see, it's the timing of daily, weekly, monthly, and coming up the left-hand side, or the vertical side, to see that it's more senior leadership coming down towards the forum. And so you're the top right corner. You've got your project cost and business reviews that are going on, where you can get the senior leaders together that are looking at probably or 90 days on the project.
And then when you start getting into the weekly is that we have these boardwalks, where you'd have engineering, construction, quality teams, all reporting out on their metrics, how they're doing.
So that each group knows where they have to help each other and so that we use as a boardwalk KPI.
The third thing is you're developing what we call it would be gameplan. There's an expectation that every supervisor has a plan for the work that he's going to do a week in advance of the work and it's not just the schedule, but it's I ordered the right applies, construction, purchase materials. Have I set the crane in the right place? It's getting them to think in advance so that they actually can communicate that to the frontline.
And then Daily, that's what they have, is they have a plan for the week.
They share it with the crew of a Daily Performance Board where they track with the crew, they really talk about, you know, how did we do yesterday?
What are we going to do different today? What are the risks around that work? How do I mitigate those risks, and how do we go have a successful day, and the more successful days you start, spring together, drives performance? And it's operating rhythm ups, cascading expectations, drives results across the project.
Go to the next slide. Kirkley, or Neo, let me just add one insight, and then I'll let you share that example, this next that. So people always ask us, When's the best time to set up this operating rhythm?
And it's not in the middle of construction, where you're already behind or not even in detailed engineering.
It's in the feed process. This is the time to set up your performance management system, your operating system, What's the one version? What's the metrics we're going to track, and what's the operating rhythm cascade?
Look, like, if you can get that all as part of your one team, alliance and lined up in feed or late feed that, that just really helps the team get into synchronicity and and on one page.
OK, well, let me let me turn this one then over to Kirk, because he's got a lot of passion about getting one version of the truth out there and, And how to describe that so everybody can be on the same page.
Go ahead, Kirk, extract. So if you remember in earlier slide, Rick showed it showed from the survey we did on our 20 projects, 20 mega projects that 95% of frontline workforces were rated as adequate or sub at or below adequate for the work they were in.
So that's a huge amount of people that aren't able to, that are barely able to do their jobs is what the survey respondents said.
And you know that they have kind of rubs me the wrong way thinking of that many leaders blaming the workforce, right, that they're not good enough to make me successful. But that said, let's ask, why aren't they adequate or better at their work? And a lot of it is because they don't really understand the business element of what they're there to deliver that, every decision they make as a frontline leader turns into a number. And it turns into a score that's part of the Project Health. So every discipline superintendent out there has a slice of the pie that is Project Health. And very often, they just don't understand that. So they may think they're doing a great job or even be rewarded for what they're doing, but it could not necessarily be in the best interest of the project.
So, what we do, is, we take that one, Health, one version of Project Health that is so important at the top of the house, at the top of the project team. And we try to drive that conversation all the way down to the discipline level, at the construction work front. And we do that through visual management through, you know, telling the square visually through coaching and training these leaders of here's how that here's how your decisions turned into numbers. And here's how those numbers aggregate. So they kind of understand.
They're They're part of the picture, and You can't quite read it on here, but there's three line graphs on the left of this scorecard, and this is shown weekly in front of Multi-discipline superintendent, Sometimes, General Form, and show up there, so you can see those color coded in the box is just to the right at the middle of the scorecard. But we look at, OK, for our team, how did we do? And the first graph at the top is, How much work did we Do? So every week, they put in the schedule that says, I'm going to earn you 15, 20,000 hours, Whatever their commitment is.
And then, that's what the Green dotted line is, so they look at how much of that work that they get down. We've got 75% of it. The next graph in the middle there, is: How efficiently did we work, and that's the PF. That's their productivity factor. That says, for every hour, we earned zero point 75 hours where we spend point $75. So that's pretty common Earned Value Management, CPI, SPI. You know, did we earn the work? And how well did we do, but? What's missing in that conversation is, did we do the right work?
So very often, what will happen is, let's say, a civil superintendant, his schedules, I'm gonna pour, you know, 400 yards of concrete, over these 15, 20 foundations on this work front. That's what I'm gonna go do. It turns out that work front wasn't available. It turns out a crane was blocking the trenches in the way that something couldn't get it. So they go, and they pour the same amount of concrete over different foundations. At the end of the week, just looking at those top two grass, they did the right amount of work.
They might have done it efficiently, so their call, it's called a win. But the reality is, the work that they put in, their schedule, that's the plan, the commitment they made to the owner team for the work they're going to do, didn't happen. And in bulk construction, that's often, well as bulk construction, It's OK. And that's true. Maybe there's a reason that they had to go do other work that wasn't in their schedule, but in the end, if you don't sort of hold them accountable to, well, why didn't, you know, do the lessons learned? Why didn't? Why weren't you able to do those foundations while someone dug a trench there? Well, why didn't you work with your civil counterpart to make sure he knew that was the work front you can be at? Well, I just didn't, OK, How about next week? I'll do a better job talking to at that through. So when you measure, how much did you do? How well did you do it, and wasn't the work that was actually in your plan? They start to find ways, and they have to present this, and they have to stand up and present their piece of this in front of their peers, and it brings a lot more integration together. It's, it's a positive accountability. It's not something you don't pick them up for, not integrating.
But it's part of that every week. We learn how to do this better, and they get better and better at doing this, and they, you know, they tend to enjoy the work more and feel that they're tied to the bigger picture.
Break anything further on that one? No, that's great, thanks Kurt.
Neel, those at work with operating rhythm and without what's the difference?
Now, this is just an interesting project that we were on. We, this is commissioning at the time, and we had the electrical group that we're starting. And we also had the instrumentation and control group.
And you can see that the instrumentation control group, you know, had the opinion of, no, we've got this, we have our own way of working. I just have a meeting once in the morning with my supervisors and I'm good to go.
And so logical group came in a couple of weeks later, and they this operating rhythm that we talked about. They started it when they came up the learning curve, much faster within two weeks, as opposed to about six weeks.
But they actually ended up being 70 to 80% more productive towards the end, over the six month period, just because each supervisor had a plan every day, and they had roll it out across the project and done very well. So it just goes, shows the difference with a strong operating rhythm, one with not This is an example of a single contractor on the project.
Thank you. Great example.
OK, so we've got a couple of minutes left, we wanted to share an integrated story of what good looks like and bringing all these ideas together. Neil. Australia every day is Game day.
Yeah, this is the LNG project and it was a rich and energy which was working on the upstream part of that. And they had this Dan Lok here, who's a fully champion who was there, Safeties Ambassador and spokesmen. And they built a whole brand around that. And they decided to go through this one team approach, so that you had one combined team of the owner, and the contractors that they only had one set of meeting, was the one team met.
They created this operating rhythm, where every single team, on every crew, including the ones in the office, as well, as the ones in the field, had to report out on four key initiatives, And it was really around safety, quality, environment, and progress, and every team would have had different metrics for those, all reported out across the project on that, And they had conversations every day, and it was even expected that senior leaders did this.
What's interesting is, when you go back after this project, which was very successful, and you talked to senior leaders, they spent more than 50 to 60% of their time on this, engaging with people, in these interactions, working with the team. That was the focus. It really was leadership.
If you go onto the next slide, I think we'll talk about some of the key ingredients that made this successful.
So, that was common goals of contractors and suppliers. So, that was around around four pillars. And that's the next thing they talk about, is you've got to have, what are the core things that will make the project successful?
The creation of a work teams. So, every single team on the project was created a team. They got to create their own funny names and they they tracked scores and that was tracked daily.
They had the leadership team develop KPIs for each of the individual teams that would have to be different from a trenching crew versus a commissioning organization.
And they then rated themselves every day on A, B, or C, so, A, they were above planned, made the site say, for me, it was a normal day. We went as planned and see something didn't happen. and safety was the overall driver. If, if you've got to see on safety, the crew got a seat for the day.
They built a reward system around it where they gave a really big prizes.
So the top 2 or 3 teams every month, were highly recognized in the Head and recognition program, Had large screen TVs across the project showing how each team was performing and how they were accumulating for the month.
They have this very strong operating with. We've talked about where every team met every morning, and built this weekly gameplay, and when we can advance, and as well as they had leaders come up to the field, share their plans for the week, and how they were doing against their scores.
There's very clear behavioral expectations on the project. How do I act? How do I show up?
Is it OK to bring things up, criticized constructively on how things are being done?
And they kept this very important thing, and everybody follows the same rules.
And then we had coaching. So they kept working to continue to make all of those leaders, better leaders across the project.
So there was, I think, a relentless commitment of the entire management team, from the beginning to act as one team, and how to work this way.
And the results were incredible, Iverson, incredible turnaround by achieved the results that they wanted. I think there was over $75 million in savings attributed to this program. So a really great example of this one team approach put in place by a team that branded it around how they wanted to act and work together.
Very good. So in conclusion, these are the four ideas.
There's, you know, obviously lots of things we need to do to change the curve on successful mega capital projects. But these are the four themes that we find are big levers and levers that are doable.
one version of the truth, making one team, choosing the right leaders, taking time to optimize it, and of course having a disciplined operating rhythm with the right metrics. So hopefully you've seen value or value or an idea that you can take home to your project either large or small.
And Josie. With that, I'll open it up to you and questions.
Very well, great stuff. Great presentation, Rick, New and the end, Kirk. Great Teamwork, It's like, do you show the 1 1 team project approach here? That's which is fantastic. Great collaborative leadership. So, the questions have come in as as you're speaking and the and I encourage everybody to still continue to send me your questions and I will try to get to as many of them as possible. one of the very first questions and for any one of you is it has to do with the impact of the pandemic on projects but specifically omega projects. There is a perception that construction has been a little bit insulated from the overall effects that have been devastating and a lot of different segments. And, I, and you know your work with a lot of this organization. So, curious about what you see on the field on the impact of the pandemic, on the mega projects.
So, I'll jump into, to answer this. I think it depends, first of all, in what country you're operating in it, because if you've seen on the news, there's various different stages or waves going through.
But we haven't done so mega projects in some countries with a very high infection rate, and if the community is part, in other words, they live at home and they traveled to the site, then you're you're dealing with whatever's in the local community. If you're in a camp environment, then you almost have to protect and create that environment. And then you're having to put in all the rules and processes to keep those teams safe, and you have to have the ability to separate them. Should you have an infection breakout.
Quarantine them so much different, things need to be considered a much higher impact when you're having to manage. I can't burn.
And North American project, the experience I had, it's actually neat to see the team come together maybe better in the crisis moment than they were on the construction moment.
They, they got together, they put a tremendous amount of protocols in place. They shut down the side, they standardize. It, really invested in and finding a way to be successful. A lot of people still working remotely. So everyone, just like we all have gotten pretty good at teams and online interfacing, And, you know, I guess they're also doing a great job of leading by example, of, you know, it's, it's annoying to wear a mask, but it's hard, you're working, and you're, you know, it's annoying to be six feet away from everyone all the time or sit at the lunch table by yourself, when you used to sit with your five friends for an hour during that lunch break. But the leadership has done a great job on that, and I think that's probably set the tone for the entire workforce on being able to keep going forward, and a lower and reducing risk.
There's also a tremendous investment they've made, The site that I was familiar with, They brought in their own testing facility in their own physicians demanded so that everyone who comes in within for everyone who knew is new to the site within four hours as a test result. So that's a significant investment. And then they've also had to work quite a bit with the community to demonstrate that they are safe. They can work safely and do this. So the PR campaign has been significant as well.
Breaks, is there any perspective you want to add on that, or you're good just that? I think, you know, I think there's a portion of remote work that's here to stay.
Everybody says, Well, we'll get back to normal, Well, it's going to be a new normal.
And, that, we will have to be highly optimized and efficient at remote work, and we shared with you a couple of examples of visual management reviews and optimization activities that can be done remotely. So, I think, you know, in covert, and even after, I think we're going to have to be much more efficient at not just being able to see and talk to each other, but actually look at a schedule and rip it apart across all the geographies around, so.
that's here to stay. And we're going to have to become better and better at that rather than waiting for something to pass.
Yeah, and it's interesting, because some of the factors that you talk about it with respect to mega projects, which is a, I will consider stress the version of a normal project, to, a certain extent, we are a nice dress, that mode now. And some, I think the concepts that you mentioned are critical for success may be the.
Same, like the collaborative leadership approach versus the project management approach right now, those skills and capabilities to become even more, more important and pronounced on that. Another question that we had had to do with someone who has experience on mega projects asking a little bit about your approach related to project scoping. And, of course, you all know about the optimism bias. There exists sometimes related to a mega projects. And then the project Sculpin being a key factor for mega projects success, Curious about your work on, on, on the scoping and on the beginning and of that, of the front of definition.
Yeah, I let me just make a comment that, and maybe Neil and Kirk have 1, 2, like, bringing in the partners. The contractors often an early, even though it's expensive to get scoping and estimating right is absolutely critical. In that near the end of the feed stage, when you have all your, if you can have all your parties at the table to help optimize scope, optimize estimates makes factor, I didn't even want to guess it's a huge factor effect on the success of your project. Even though, if you look at the dollars, it's expensive to actually bring people in that early.
And then, as I mentioned, you know, to get your operating rhythm and your performance management system set can actually help you better collaboration, better scoping, early days on the project. So I, I always coach leaders, too, often, and early, you'll get the payback promise, even though it's a little bit more expensive to do.
So, you'll get it in, in improved scope, improved ownership, and all the benefits that we know relative to that. Neel, Kirk, anything to add on that? It's a good question.
I think some of the clients, we've seen that have had great success as they start a lot more around looking at what's the form fit function first? That has to be done from engineering design and bringing Scrum teams into to work through that and then every single thing beyond that, which may be a nice to have, it will lead to make it better. It has to be financially justified. And they're getting a much leaner and more efficient use of capital by doing.
And, you know, a client we worked with pretty regularly, where we were typically brought in during execution, and we would see these things and bring up the lessons learned, and, you know, the building team was stuck, modifying designs. Or then the supply chain was stuck re-ordering different materials for design accommodations later on and just cause all this ripple effect. They said, you know, we do need to work, earlier, to Rick's point, and we were asked, OK, for the next project, they were going to do their design work in India, they were going to source their module fabrication in China or Mexico. I don't remember where they asked us to go in and help support those Scrum teams and support that one team approach and support the interfaces very early on because they saw the value in it.
It will say just one more thought on that and Kirk's alluding to it, they're getting the integrated team on time together.
Makes a huge impact on scoping. If you're missing Ops in the conversation, because Office doesn't have to worry about it until the actual piece of equipment is Commission, you're missing the boat on scoping. I mean, if, if it's just the engineering team looking at it, you're gonna build this big massive, beautiful.
That may not be foremen fit as the team is talking about. So get that integrated team.
Oh, well, you know, it's busy and they're and they're doing something else, and they've got other priorities.
Well, that, and that has a huge impact if they're not, Together, is an integrated team early and often looking at that so that they can voice their concerns. Whether it'd be a safety concern, environmental concern, or That's not really how it's gonna work. That's, it will work a lot better if we have the equipment position this way.
So integrated team in on time, Very good. Going to propose a challenge. You have about two minutes. So 32nd answers to questions that I want to, I want to fit in here. And, Rick, I'll direct this to you. The first one is from Anthony, the Carrier, who is with an energy company, and he mentioned, you show the dollar savings from the approach, has about $75 million on that one example. What percentage of that was savings over expected cost? And do you expect this sort of percentage on all projects with this approach?
Yes, we do expect that type of savings, and it's all over baseline.
So wherever they were tracking, those savings are improvement when we started improvement over that baseline when we saw it's an actual savings, not something they were achieving already.
Very good. And the next question comes from Boston here. Arizona, a bad question for you, Rick. On the project schedule, Do all project stakeholders internal and external such as our LG and contractors? Do they measure progress using a single version, project, plan, and schedule?
Yes. That's the ideal.
Too often, though, we see owner and contractor have their own version of the schedule, which is incredibly inefficient and really de optimizes the one team approach. So, yes, let's all get on one version and usually in the contract that says the contractor version, so you have to ask and trust that you've got the granular truth in front of you, but yes, one version of the truth is absolutely critical.
Gentlemen, terrific presentation. Terrific insights, a real demonstration of collaborative leadership, Global union here with Pittsburgh, Salt Lake City in Kazakhstan all coming together. So thank you for sharing your expertise. It's, it's been a real pleasure to have you.
Thank you, Joe, and thanks very much.
Ladies and gentlemen, so this brings us to the conclusion of the segment in our next segment. We're going to be bringing in, directly from Rio de Janeiro Brazil Bruno, folks, who is the operations manager for Modec. And bruna's going to talk to us about knowing your team especially during a crisis and how we can save your operations. So he's gonna talk about good leadership and people management looks like in driving operations to the next level in times of uncertainty and rapid change. So we'll see you back here at the top of the hour with Bruno folks and the presentation on Leadership in times of uncertainty. So see you soon.
Executive Vice President Global Client Solutions,
RLG International Inc.
For over 30 years, Rick Heyland has consulted businesses of all sizes to improve performance in a variety of industries across nations. As Executive Vice President Global Client Solutions for RLG International, Rick is driven by his passion for coaching clients to achieve peak performance both individually and collectively within their organizations. Among his significant accomplishments are the establishment of five business units: Aerospace, Alaska, Offshore Oil and Gas, Capital Projects and Lower 48, and has been influential in developing RLG’s leadership tools. Today, Rick leads new business development for RLG and runs his personal development company, CI4Life, helping leaders achieve peak performance, sharing learnings and best practices of continuous improvement. Also, from RLG, co-presenting and assisting with Q&A, will be Rick’s colleagues and subject matter experts whose expertise on Capital Projects span the globe, Vice President Eurasia, Neil Longson and Kirk Gibson, Vice President, Regional Mega Projects.
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