PARADIGM SHIFT THE AIPM DIGITAL MAGAZINE
THE RISK EDITION
WINTER 2020
THE HARD WORK IS DONE
celebrate your project success Submit your project or project managers in this year’s Project Management Achievement Awards
TO LEARN MORE, VISIT: AIPM.COM.AU/AWARDS
Submissions deadline: 31 July 2020 2
MESSAGE FROM THE CEO ELIZABETH FOLEY 2020 has been a year like no other. It has shaken the economy and forced the entire nation to slow down and reassess. It has been a year where we have seen the incredible kindness of strangers, as communities come together to help one another. For project managers it has shown how incredibly important our role is in leading teams and stakeholders through change and managing the unprecedented risks that have come with COVID-19, and a shift to remote working. That is why for this edition, we are focusing solely on the theme of RISK. We have a range of articles contributed by our members, which cover everything from case studies that look at how teams have adapted to these challenging times, to lessons learnt from the current situation. I thank all contributors for their interesting and insightful articles. Cover image: Zinfra Gas Services field based employees working during the COVID-19 period. Read about this project on page 20.
Paradigm Shift is published quarterly. Calls for articles for the next publication will be made approximately 45 days before publications. Please see the back page for more details on how you can feature in our next edition.
Over the coming months, here at the AIPM we will be speaking to governments about how we can support the bringing forward of major infrastructure projects, in order to boost the economy. We will be advocating on behalf of our members, for competent, highly skilled project managers to be at the helm of these projects. Now is the time to plan for the future and hit the go button on major projects. Enjoy reading, Elizabeth Foley MAIPM MCom BBus FAICD CEO AIPM
CONTENTS
SPREADSHEETS ARE KILLING YOUR PORTFOLIO AND PROJECT MANAGEMENT. . . . 12
HOW ZINFRA GAS SERVICES COMBATTED COVID-19 CHALLENGES. . . . . . . . . . . . . . . . . . . . . . 20
MESSAGE FROM THE CEO. . . . . . . . . . . . . . . . . . . . . 3
ADAPTING YOUR PROGRAM IN THE FACE OF UNCERTAINTY . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
RESEARCH
IN THE NEWS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 INNOVATIONS AND INSIGHTS THE NEW REALITY FOR PROJECT AND PROGRAM MANAGEMENT . . . . . . . . . . . . . . . . . . . . 6 WHY PROJECT MANAGEMENT GREW OUT OF THE NEED TO CONTROL RISK. . . . . . . . . 10
PROJECT GOVERNANCE AND WHY PROMPT DECISION MAKING IS THE NEW BLACK . . . . . . . 16 PROJECTS IN THE SPOTLIGHT THE EMPLOYMENT OF RISK MANAGEMENT PRACTICES IN THE AUSTRALIAN DEFENCE FORCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
MANAGING RISKS: THE PROJECT “TOOLBOX” APPROACH . . . . . . . . . . . . . . . . . . . . . 22 FELLOWS FORUM TWO PROJECTS – TWO VERY DIFFERENT OUTCOMES. . . . . . . . . . . . . . . . . . . . . . 24 CONNECT WHAT EVENTS ARE COMING THIS YEAR. . . . . . 26
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MAJOR INFRASTRUCTURE PROJECTS AROUND THE COUNTRY
IN THE NEWS HERE IS A WRAP UP OF WHAT IS HAPPENING AROUND THE COUNTRY AND THE PROJECTS THAT ARE BEING BROUGHT FORWARD:
AUSTRALIAN CAPITAL TERRITORY In the ACT, works have started on a number of projects as part of the COVID-19 economic survival package. These projects include close to $9.75 million in works for upgrades to footpaths and cycleway networks, new pedestrian crossings, repainting of bus shelters and open space landscaping improvements.
NORTHERN TERRITORY As part of the second phase package in response to COVID-19, the Northern Territory Government is delivering a $65 million Jobs Rescue and Recovery Plan, which will include infrastructure fast tracking.
NEW SOUTH WALES NSW recently announced it is accelerating the assessment of 24 key projects, through the new Planning System Acceleration Program with a view to create almost 9,500 new jobs and inject a further $7.5 billion into the state economy. The Transport Minister has also flagged a second wave of mega transport projects adding to the list of current projects already underway or fast tracked. In Sydney, construction works have begun on the upgrade to Central Station – the first upgrade the station has had in decades.
Construction progresses on the new Sydney Metro Central Station. (Source: infrastructuremagazine.com.au)
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Architect’s impression of the new Docklands Primary School in Victoria, which is part of the government’s stimulus package. (Source: engage.vic.gov.au)
QUEENSLAND
VICTORIA
The Federal and Queensland Governments have agreed to bring forward 22 construction and upgrade works in their Roads of Strategic Importance (ROSI) initiative pipeline valued at $185 million. A $100 million Resources Community Infrastructure Fund (RCIF) has been finalised, which will support regional resource communities.
Victoria has established the Building Victoria’s Recovery Taskforce with a remit to “provide real-time advice to Government on issues impacting the industry, helping to remove barriers to building and development works, vital for supporting Victorian jobs, housing and infrastructure.” Premier Daniel Andrews announced a $2.7 billion construction program, that includes upgrades to schools, public housing and transport. The projects were targeted because they can commence quickly and stimulate the economy.
SOUTH AUSTRALIA South Australia will see more than $120 million in new infrastructure projects, with $52 million going towards targeted regional road network repair, $35 million to rehabilitate and resurface of the South Eastern Freeway and $15 million for Heysen Tunnel refits and safety upgrades. South Australia has also seen the bringing forward of applications for the Regional Growth Fund and has introduced its first independent 20-year infrastructure strategy.
TASMANIA The Treasury is conducting a review of the State’s $3.7 billion infrastructure program to identify projects that can be brought forward with a focus on affordable houses, maintenance on schools and government buildings, regional roads, bridges and dams.
WESTERN AUSTRALIA Western Australia is streamlining its construction contract approval processes in order to expedite $140 million of road and maritime projects and is in the process of finalising more major road projects as part of a $2.37 billion program. Mineral fertiliser company Agrimin Limited has also been granted Major Project Status for its Mackay Potash Project.
AIPM SUPPORTS THE BRINGING FORWARD OF SHOVEL READY PROJECTS The AIPM is advocating on behalf of our members to encourage governments to call on specialist project managers that have qualifications and experience behind them. Our goal is to assist in making sure governments and other organisations can deliver these projects to a high standard and on budget. Read our press release here
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INNOVATIONS AND INSIGHTS
THE NEW REALITY FOR PROJECT AND PROGRAM MANAGEMENT PETER SEXTON AND EELCO LIJDING FROM KPMG CONSIDER WHAT THE NEW NORMAL WILL LOOK LIKE FOR PROJECT AND PROGRAM MANAGEMENT. (Source: Canva)
The impacts of COVID-19 have tested the ability of organisations to effectively deliver projects and programs. Some projects and programs adapted quickly and effectively, with managers and sponsors able to pivot to remote working, while others have had substantial delays or cancellations. To prepare for this next stage, we sought to identify learnings and themes from a range of on-going projects and programs in different sectors to develop a view of what is needed across the multiple time horizons over which the Australian economy will emerge.
OUR OBSERVATIONS AND KEY LESSONS The COVID-19 pandemic has highlighted that our working environments are characterised by volatility, uncertainty, complexity and ambiguity. How each organisation is adapting to the current challenges differs, but there appears to be four common horizons of response and subsequent impact to effective project delivery. • Horizon 0: Reaction. The rapid and large-scale shift to working remotely caused significant disruption to on-going projects and programs, requiring sudden changes to the 6
way in-flight projects were managed. This often involved resetting the processes to govern delivery with some projects requiring significant changes to ways of working to remain effective. A clear differentiation of adaption effort is noticed in the different phases of programs, mainly driven by the required level of collaboration and governance. •H orizon 1: Resilience. Having adapted to the remote or disrupted modes of working, many projects are now faced with more fundamental questions around scope and potentially a reassessment of the underpinning business case as their sponsoring organisations react to the changing external business environment. •H orizon 2: Recovery. Having set the new direction, it is now in the hands of the program professionals to create ways and means to enable a stable and timely delivery of their adjusted program utilising the apparent drawbacks and benefits of the new reality. •H orizon 3: The New Reality. As we return to a new normal, it’s likely that a number of ways of working will be changed forever. The approach to selection and delivery of projects within organisations will likely be changed and the role of the project leader will need to adapt to this new way of working. There are six common themes when observing the delivery of projects and programs in response to the COVID-19 crisis.
THEME 1: PROJECT DELIVERY DISCIPLINES Projects with organised and defined scope, schedules and governance structures have adapted better to the current reality.
OUR OBSERVATIONS • Projects and programs with clear delivery structures, typically led by experienced and professional project managers, have been better able to pivot to the new operating rhythms as the documented scope, plans and governance regimes more effectively withstood the change impact. • Conversely, projects being led by project managers with limited experience, or those juggling other work, with ad-hoc plans and governance structures have struggled to withstand the changes. Such projects often require significant effort to establish engagement with stakeholders to enable effective decision making in remote working situations.
OUR PREDICTIONS: MORE AGILE, MORE DISCIPLINE • Momentum to increase the adoption of agile thinking in the project delivery world will increase as organisations recognise the importance of being able to pivot quickly and maintain focus on benefits delivery in achievable windows. • This will be accompanied by an increased emphasis and recognition of the importance of key project delivery frameworks and disciplines such as governance committee meetings accompanied by documented delivery plans, change management processes plus risk and issues tools. • The value of the professional project manager will increasingly be recognised as important to manage the complexities surrounding scope and in handling stakeholder engagements.
Actions relevant to the three horizons. (Source: KPMG)
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THEME 2: THE ROLE OF PROJECT LEADERSHIP Working remotely has highlighted the importance of clear accountability and outcome ownership structures supporting projects. Emphasis has also been placed on the need to have clarity of purpose to enable project activities to pivot quickly and appropriately when responding to uncertainty and change.
OUR PREDICTIONS • Increased adoption of project management and collaboration software to facilitate stakeholder communications, accompanied by documented delivery plans, change management processes and risk and issues tools. • Project managers will need to develop their communication skills and ability to creatively convey information to their stakeholders.
OUR OBSERVATIONS • Projects and programs that have struggled to adapt to the change in working conditions have often been met with confusion or uncertainty when confronted by the need to change direction or deal with limited access to key resources. • The imperative to establish good governance practices and executive involvement to provide support and guidance to projects is difficult to achieve on the run. • For many client projects, the role of the sponsor to assist the project or program manager has been decisive to provide guidance and assistance when dealing with significant changes in the external environment.
OUR PREDICTIONS • Organisations will invest more in defining, supporting and building capability within the role of the sponsor to make this more business-as-usual for the way investment projects are established and run. • We will see some form of accreditation for project sponsors/ business owners emerge to begin the professionalisation of this critical role. • Project and program managers will need a regular rhythm of steering committee meetings and related documents such as reporting tools and issues escalation processes built into the DNA of their projects, ensuring project leadership is fully informed and involved in the decision making.
THEME 3: STAKEHOLDER ENGAGEMENT The rapid adoption of collaboration tools has been critical in keeping stakeholders engaged and maintaining relevance of project activities. Unfortunately, not all projects have been able to pivot quickly enough.
OUR OBSERVATIONS • Remote engagement – quicker and better attended meetings but a loss of water cooler conversations. • More formal conversations online leading to poorer outcomes in terms of transfer of understanding. Having mechanical project reports and unengaging documents that fail to capture audience attention are redressing this problem. • E xperienced project managers who use layers of communication to convey information have kept stakeholders engaged and momentum. We have also seen projects where this engagement has been lost. •T he 2019 AIPM and KPMG Project Management Survey identified that 51% of organisations were using collaboration software to support project delivery. Emerging technology and collaboration tools have helped alleviate some of the stakeholder engagement issues, particularly within organisations where these tools were already in use, and we have observed a trend towards greater adoption and use. 8
THEME 4: MANAGEMENT OF PROJECT RESOURCES With the likelihood that increased remote working and virtual teaming is here to stay, we will see increasing importance placed on the ability of project leaders to manage – rather than direct – their team members more effectively.
OUR OBSERVATIONS • Remote working challenges the capability of the project or program manager to direct team efforts and removes the social controls of everybody pulling their weight in a team working environment. • Team stand ups have changed dramatically, meaning project and program managers need to find new ways of connecting with their wider project team. • Successful project and program managers are placing greater emphasis on individual recognition and scheduled, regular one-on-one catch ups with team members. They are also placing greater trust in individuals to deliver their outcomes, rather than managing their inputs.
OUR PREDICTIONS • The skill of facilitation will be increasingly of importance in the project and program managers skill set as they strive to coordinate outputs from across a dispersed team. • Agile practices involving regular virtual team stand ups will increasingly be the norm to keep teams aligned and maintain focus and structure across activities.
THEME 5: MANAGING PROJECT PHASES With remote working being the new norm, project leaders will have to apply different styles during different phases of the program, requiring flexibility of leadership styles, combined with the necessary adaptations in team composition and the use of collaboration tools to create successful outcomes.
OUR OBSERVATIONS • Every phase of a project demands a different collaboration approach due to its nature. In a waterfall program the design phase requires different interactions than a build phase, or a training phase. • These different approaches happen more naturally in an office environment where project team and business team are all within meeting room distance or collaboration happens due to the fact that you can see each other and the person in front of the room is clearly giving the instructions. • Remote working and distributed teams demand a new leadership which is adaptable, driven by the collaboration needs of the project activity/phase of the moment.
• New leadership styles, combined with a thorough reflection of meeting composition, the type of collaboration tools and a clear agenda will drive to successful outcomes.
Optimising, not cancelling the project portfolio
OUR PREDICTIONS
When confronted with uncertainty and the need to conserve cash, it is natural for organisations to place immediate halts on on-going transformative investment programs. However, there are areas where, more than ever, critical investment will be needed to help ensure the business can remain competitive in the new reality.
• There will need to be an adaptation of leadership styles during different phases of projects and programs. Project leaders who seize the opportunity to utilise the right collaboration tools and devote time in thinking about these operational aspects will find their programs continue to make progress.
Such areas will include embedding business transformations to enable the business to pivot towards new operating environments, accelerating digital transformation initiatives in light of the increased take up of online activities and other technology and automation programs that promote greater business agility.
• The adaptive leader who recognises that not only the goal is important, but so is the pathway towards it, will emerge successful.
We are already observing increased infrastructure investment due to underlying population changes and as a mechanism for governments to stimulate the economy. There will likely be emphasis on progressing projects to shovel ready and into delivery in the short to medium term.
• However what works in the initiation phase, will need to be adapted during the testing phase.
THEME 6: MANAGING PROGRESS AND DEPENDENCIES How do we track the delivery progress of projects, while maintaining insight in the dependencies in a changing reality? We are seeing a shift from tracking deliverables and artefacts to an awareness of progress.
OUR OBSERVATIONS • W ith the new operating rhythm the need to have insight into the team progress is greater. • This will require closer attention to progress with less focus on the actual end deliverable. We hear more questions like “are you on the way?”, “do you make good progress?”, complemented with the “what help do you need to get there?”. • Again this requires a different leadership style, where deliverable trackers were the thing to do, it is now focussing on progress trackers, creating more awareness on improvements and the potential of slipping timelines.
OUR PREDICTIONS • The time of walking into a project room and hearing there is a problem, is gone. Finding ways to deepen your knowledge of how teams are tracking and how they can be supported to reach their goals is becoming more important. • Finding a way to get a feel for your teams’ journey towards a deliverable will continue to be more important. Going beyond the percentage complete and asking questions, which show understanding of the teams’ work and effort becomes the new reality.
IMPLICATIONS FOR THE PROJECT MANAGER We have seen the value of the experienced and professional project manager enhanced through this crisis. The core skills of the project manager in managing risk and rapid scope change to determine a clear schedule for action, combined with organising structured engagement with stakeholders have been in demand. Leaders of projects and programs – both those managing the day to day delivery and those charged with execution strategy and governance – will face a range of challenges in maintaining delivery pace and momentum in project and programs that will not dissipate in the short term.
The challenge for business leaders and those charged with delivering projects will be how to get better results from the reduced investment portfolio. Ensuring improved “connectedness” from the needs of the front office business operations to the back office support functions and the project delivery team will be increasingly important to ensure the project portfolio is dynamically aligned to the business needs. Improving focus on benefits through the business case and throughout the delivery cycle will be important to ensure every investment dollar is spent optimally.
Remote leadership We recognise there are areas for project and program management professionals to focus their development – these relate predominantly to improving and enhancing those skills involving work with remote and disconnected teams, such as communication skills and leadership abilities to compensate for the reduced opportunities to informally engage with and direct project team members.
Get better results with collaboration tools We have experienced a shift to the use of online collaboration tools to support project team engagements. It is important that project and program managers continue to leverage these tools and enhance their utility. This will be particularly relevant to specialist software tools – and we expect to see momentum to more effective utilisation of the data in these tools, coupled with artificial intelligence tools, and see a trend toward the virtual reporting Program Management Office.
Disciplined Agility The agile practice elements of regular team stand ups, and flexibility in altering schedules to accommodate changing needs has been integral during the COVID-19 crisis. These agile practices will become increasingly commonplace. However, we have also noted the importance in many projects and programs of having a clear, well documented and agreed set of program schedules, planned outcomes and governance structures. We believe it likely that establishing Disciplined Agile practices will become important for the project and program management profession. This requires an appropriate balance between flexibility in outlook on project activities and establishing the certainty provided by clear documented plans and associated project control documents. Authors: Eelco Lijding, Partner, KPMG & Peter Sexton, Partner, KPMG
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INNOVATIONS AND INSIGHTS
Consider the recent news headlines –
WHY PROJECT MANAGEMENT GREW OUT OF THE NEED TO CONTROL RISK
Banking, Health, Infrastructure, Transport,
HOW MANY ORGANISATIONS HAVE YOU SEEN THAT DO NOT MANAGE RISK WELL, ESPECIALLY PROJECT RISK?
Governments, Travel. They’ve all experienced failures in risk management. Most organisations have a corporate risk management framework, but this tends to be targeted at controlling executive level risks. And where safety is involved, they can be great at handling the operational risks. Unfortunately, when it comes to projects, people tend to be poor at evaluating risk. Part of this is down to our brains not being good at probabilities and reacting intuitively when presented with risks. Because of this, risk management tends to play a supporting role in projects, which is a concern as risk management is why project management exists. Along the way, we have lost sight of the Why of project management, and the What and the How have gained prominence. Long before project management, the management of risk grew and matured out of the desire to invest in new ventures. The success (although some say failing) of the human race comes from the ability to innovate, change and do things differently. This requires investment in people, time, resources and money. But true success comes from understanding and assessing the risks of a new venture – what are the opportunities and threats?
When risk isn’t considered, we put success down to luck, and failure to lack of common sense – and the extreme consequence of this as “Darwinism in action”.
(Source: Canva)
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When risk isn’t considered, we put success down to luck, and failure to lack of common sense – and the extreme consequence of this as “Darwinism in action”.
Risk does have roles in PRINCE2® as a Theme and an Aspect but it is not one of the seven Principles. But read these again and you will see they are all controls for risk.
So how did project management get to where it is today, and what does risk have to do with it?
1. Continued Business Justification 2. Learn From Experience 3. Defined Roles and Responsibilities 4. Manage by Stages 5. Manage by Exception 6. Focus on Products 7. Tailor to Suit Project Environment
When risk isn’t considered, we put success down to luck, and failure to lack of common sense – and the extreme consequence of this as “Darwinism in action”. Project Management started to develop as a discipline to manage certain types of risk in the late 1800s, and evolved over the next 100 years, mainly driven by passionate practitioners from the disciplined background of engineering where there was a focus on increasing precision and measurement – Gantt charts, PERT, EVM, WBS, Monte Carlo Simulations, etc. From these, the project management standards of today came to the fore and risk was put into a supporting role. Consider PMI®’s PMBoK® with a focus on the Triple Constraints of Time, Cost, and Scope. Risk is lucky to be listed at number eight in the PMBoK top 10, just above procurement. PRINCE2® “PRojects IN Controlled Environments, 2nd edition”, another heavyweight, was released in 1996 and built on the earlier PRINCE method, which was announced and developed in 1989 by CCTA (the Central Computer and Telecommunications Agency), a UK government support agency. The purpose of the PRINCE2 approach was to design a framework for managing projects in well-controlled environments, but people tend to focus on the word “Projects”, rather than “Controlled Environments” where risk is a key factor.
Critics of approaches such as PMBoK and PRINCE2 also point out the Project is positioned as the be-all and end-all – a bit like the Big Bang at the start of the Universe, total chaos before and total chaos after – given the performance of many projects, they could argue there is only a marginal improvement between. The custodians of project management standards recognised these limitations and reacted by extending products to consider Programs and Portfolios, but Projects are still at the core. In a paper called “Existentialism, Evolution, and the matter of project management enquiry” at the 2011 AIPM Conference in Brisbane, Jon Whitty observed that these embedded standards can objectify “the Project” and constrain the industry, preventing evolution and change. Over the past 20 years or so, these constraints have led to increasing dissatisfaction in how projects are managed. At the core is inappropriate controls being applied to manage investment risk. Take software development as an example, the traditional waterfall approach does not provide controls for the high level of uncertainty in the design. Or the perceived excessive administrative overhead when project management is applied to incremental change in operations. This has seen the emergence and evolution of competing ways to manage delivery of investments – Agile, Scrum, SAFe, Lean, etc. The tension between these has drawn battle-lines between the different camps. This undermines the profession and returning the focus to risk is a way to reunite practitioners. We need to get back to why we even consider doing projects. At the end of the day, project management can be summarised into continually asking “Where’s the risk?” to make sure the right controls for risk are in place to: • Understand why an investment is needed • Clearly define the expected outcome from the investment (this will enable the benefits to be defined) • Assess what could impact/enhance the outcome (risks) •W ork out the most effective way to deliver the change (traditional, agile, lean, hybrid, etc) taking into account the risks • Regularly check controls for risk and make sure other factors have not changed, which could change the risks and outcomes Author: Gary Yorke’s day job is Associate Director with MetaPM providing advice and assurance on strategy implementation and capability development. He is also an active volunteer member of the AIPM. When he can find time, he pursues his interest in genetic genealogy. 11
INNOVATIONS AND INSIGHTS
SPREADSHEETS ARE KILLING YOUR PORTFOLIO AND PROJECT MANAGEMENT CONSIDERATIONS BEFORE YOU KICK OFF YOUR NEXT PROJECT WITH A SPREADSHEET.
(Source: Canva)
There is no doubt that the entire Project Management industry from project owners, managers, contractors and suppliers, rely on spreadsheets. While spreadsheets are a powerful tool for statistical, engineering, and financial data management and analysis, the spreadsheet was not designed to be collaborative or customisable to specific industry use cases. As such, spreadsheets are not an environment in which the planning and delivery of projects can thrive and innovate. The current world of Project Management professionals could never have imagined one in which they deliver projects without spreadsheets. Hence many consider spreadsheets an industry standard tool. However, just because there is a critical mass of acceptance across the Project Management industry, does not mean that spreadsheets should be used for the most important aspects of project and portfolio management. In the Project Management of capital works projects, the efficient and effective management of cost tracking, requires accurate, meaningful and real-time reporting. This involves multiple internal and external players, frequent updates, and the need to manipulate data and report. Key decision makers are no longer satisfied with the incomplete, inaccurate, and confusing data represented by Project Managers using spreadsheets. 12
The issues are exacerbated as spreadsheets are passed up the chain – creating a hair on fire issue that spreadsheet information can no longer represent the business cases to the strategic detail necessary to move projects or decisions forward. Just as Forbes reported to the finance industry in 2013 that “Excel might be the most dangerous software on the planet”, the Project Management industry should be feeling the same way with 90% of all spreadsheets having errors. What’s worse, University of Hawaii has research that reports 99% of spreadsheets that link more than 10 cells, 10 times, have errors. If you consider the complexity of some spreadsheets produced to manage projects today, the amount of risk being carried is astounding. To help, here are four considerations before kicking off your next project with a spreadsheet.
1. DON’T TELL YOUR CLIENT YOU USE SPREADSHEETS Owners, clients and key decision makers are no longer satisfied with spreadsheets being the primary system for Project Managers. The question being asked often by clients is “What systems are you proposing to handle this complicated project?”. If your answer is spreadsheets, you are setting yourself up for embarrassment and reputational damage.
3. SPREADSHEETS ARE EASY TO MESS UP AND BREAK Good project and program reporting require accurate information, particularly financial. From typos to ‘SUMIFs’ and forgotten negative signs, it’s easy to miss errors and inaccuracies, especially when there are multiple linked or unlinked spreadsheets and workbooks. It was not long ago in the US that Fidelity Investments was forced to cancel a $4.32/share year-end dividend distribution. The problem? A missing negative sign in a spreadsheet calculated the wrong return. As the data and complexity of spreadsheets grow over the life of a project or program, probability of an error increases exponentially as there are many calculations that depend on precedent cells. No human is sufficiently skilled to check every cell in a spreadsheet once they grow, so why take a chance?
4. SPREADSHEETS LACK SECURITY Since spreadsheets are commonly shared through email or data storage devices, this puts client data at risk of broad, unintended dissemination. There is no way to track or control this dissemination/download and there is no way to know if security breaches have indeed occurred. With many files shared across many users, spreadsheets lack visibility as there is no built-in audit trail and no way to record who made the changes or why. While it is possible to password protect worksheet or workbook elements, this doesn’t prevent wilful abuse accessing confidential or sensitive data.
Clients have such great software in their personal life that they are starting to want the same in the office. And why not? Better to impress clients by identifying systems that can provide live dashboards, boost productivity, and increase transparency without touching a single spreadsheet.
2. DATA AND INFORMATION TRANSPARENCY ARE KEY We’ve all been there and clicked on that spreadsheet cell to reveal a giant formula or macro that magically gives us the value in a cell. Clients are left with little but to trust that the spreadsheet has been quality-assured and checked for errors across every formula and data point. What’s worse, spreadsheets are great information silos and record no time-series information, which is the exact opposite of what we need to create transparency and datadriven decision making. With spreadsheets locked away in drives and data trapped behind giant macros, this makes it difficult or impossible for interested parties to access the value of that data for lessons learnt, analytics, insights, benchmarking and more.
There’s also the threat of losing critical information if spreadsheets or workbooks are hacked, infected by viruses, experience data corruption, or aren’t properly backed up or otherwise protected. For Project Managers, moving teams off spreadsheets and into centralised, secure cloud based software with detailed audit capabilities greatly mitigates the majority of data security risks. To reduce organisational risk and build an environment in which the Project Management industry can thrive requires organisations to move off spreadsheets and into fit-for purpose software. These considerations for Project Managers relying upon spreadsheets should serve as a wake-up call that project and organisational data is currently rife with human error, limited visibility and confidence, complex and unwieldly files and high risk of security/audit issues. Author: Doug Vincent is co-founder and Managing Director of Mastt, a fast-growing tech start-up that provides a realtime and data-driven capital works portfolio management system. Doug is a thought leader in ConTech (construction technology) and the future of digital project management. Before founding Mastt, Doug was a CPSPM and program manager delivering capital works for government and private sector organisations.
Organisations need to move off spreadsheets and into a bespoke software system to unlock the value of this data across the organisation to deliver never-before possible levels of data insights. 13
INNOVATIONS AND INSIGHTS
ADAPTING YOUR PROGRAM IN THE FACE OF UNCERTAINTY ALL PROJECT MANAGERS ARE USED TO DEALING WITH UNCERTAINTY TO VARYING DEGREES.
(Source: Canva)
As we all know 2020 has been a major
What does an average day look for you?
year of unpredictability, and we remain
Right now it looks like a lot of Zoom meetings! I’m programmanaging a large change initiative called Enterprise Service Management, leveraging ServiceNow where we are making it easier to make and fulfil requests for services for our staff and students.
in the woods. So how can project managers and their organisations face the upcoming months of uncertainty, and keep their projects on track? We spoke to Ian Sharpe, former AIPM Chairperson, and Associate Director, Business Transformation at Western Sydney University about his current digital transformation program, how it has changed as a result of COVID-19 and what his advice is to others facing uncertainty with their projects.
You have been in the project management profession for 22 years – what have been some of your career highlights? Over the years, I have been involved in several projects and programs, from consulting to delivery, with a range of organisations around the world including Banking, Defence and Aerospace. I’ve had the great fortune in my career to work with a number of organisations like Sydney Trains and NASA and am now working at Western Sydney University. 14
SUCCESS IS GOING TO COME FROM YOUR TEAM How have you had to adapt the program due to COVID-19? If you had said to me in September 2019 Australia is going to encounter the following things, ‘fire, floods and a global pandemic in the next few months’ I would have said you’re talking doomsday, and yet all of us are in that circumstance. You can’t possibly think of all scenarios in advance, but you can help the team to be resilient and adaptive to them. Getting the right people, in the right roles is really important as success is going to come from your team. If you don’t have the right team in place and delivery partners, working well together, no matter how technically ready you are, you will not succeed. It’s important on this kind of program to be able to adapt quickly and I’m proud of the work the team has done.
which all projects are having to navigate, and you just can’t handle it in the same way. There are so many influencing factors, such as what is happening overseas that nobody can say day to day, what is going to happen, so you’ve got to consistently watch the horizon and adapt accordingly. David Snowden’s Cynefin framework is the best guide here. Now you might say that’s not a mindset difference for a project manager. A good professional project manager will always have a plan B and C in their pocket, based on the possibilities they are seeing around them. The challenge is that it’s easy when there is high uncertainty for stakeholders to try to stick to one plan because it’s comforting (even if wrong). It’s our jobs as project leaders to help calm and focus the team and our key stakeholders on what really needs to happen, through high uncertainty. That starts with ourselves. If I don’t look after my own team and make sure that we’ve got our oxygen masks on first, we cannot possibly look after others. Project controls are essential too. I’ve seen many a project attempted to be delivered by a charismatic person who didn’t have their ‘stuff’ together and it falls over. The organisations that will come through this are those with the project managers that instil both disciplines in the team.
PEOPLE MAY ACCESS ROLES THEY NEVER THOUGHT THEY WOULD How do you think workplaces will change as we exit the COVID-19 period? Being able to shift to remote working was easier for my team in the University, as we had already designed the program to work that way. We’ve also had the right leadership for which initiatives make sense to do now, and which we should pause in the current climate. Within the projects themselves the actual build of work is done via Agile. While Agile does the technical work, it doesn’t do the stakeholder engagement and broader risk management which is part of the project and program management journey. Having both has allowed us to adapt and manage expectations throughout our program.
ALL PROJECTS ARE AT THE VERY LEAST COMPLICATED What advice would you give to other project managers who are currently dealing with uncertainty? Firstly, I would like to acknowledge and pay respect to those who have lost their jobs – who have not had the opportunity to remain in their position – hang in there, we’re a core discipline that the world really needs to help stand back up, and you’re already experienced at delivering real change. All project managers are used to dealing with uncertainty to a degree. The difference is the context we are sitting in. If I think about the complexity vs complicated, all projects are at least ‘complicated’. COVID-19 has created a complex environment,
Technology has always been an accelerator of change, and our ability to work and collaborate has fundamentally changed. Organisations that already had capabilities underway via online collaboration, teaching and/or support services are much more able to adapt, and be resilient under the post COVID-19 period. A lot of organisations that weren’t sure about working from home, are a lot more comfortable with the idea. It’s been a forced experience, and the circumstances are terrible, but if some good is to come out of it is there is more trust that remote working can work very well. And you can work in this way with people all over the world – not just here. This will help some businesses adapt and widen their workforces – while providing new international roles from home. I worked in one such role for the last three years. In the future we will see people access roles and work that they never thought they would possibly be doing, or able to do – with transferable skills. That’s now a real possibility. Author: An international program director, Ian Sharpe has worked with Fortune 500 organisations and Government Agencies including NASA and has served in multiple senior capacities in governance, transformation and capability since 2006. 15
INNOVATIONS AND INSIGHTS
In these strange and changing times of
PROJECT GOVERNANCE AND WHY PROMPT DECISION MAKING IS THE NEW BLACK
COVID-19 where companies are under
HOW CAN WE APPLY THE LESSONS FROM THE CURRENT SITUATION TO THE WAY WE GOVERN OUR PROJECTS TO GET BETTER OUTCOMES AS THE NEW WORLD ORDER EMERGES?
(Source: Canva)
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threat to completely overhaul their financial management forecasts and review new and different business opportunities, there has never been a better time for those in a position of project governance to step up to the mark. One of the most interesting things for me about COVID-19 has been to see governments (state and federal) demonstrating the ability to make quick and effective decisions. When making those decisions, upon which we have been dependent on for survival and income, they have been honest in acknowledging when there have been defects along the way and not been afraid to readjust the path when needed. This has resulted in us all being ‘in this together’ and getting the majority to dance to their COVID-19 tune.
LESSON 1 – ‘TIMES THEY ARE A CHANGING’ SO MOVE IT OR LOSE IT! Things will never be the same again and hopefully nor will your organisation. If your business hasn’t changed and become more creative and innovative in the way it operates you may find yourself frozen in time. Yes, it is time for a review from strategy through to project delivery. Don’t pick up your projects where you left off. Review, revamp, and realign.
LESSON 2 – LISTEN TO THE EXPERTS, THEY KNOW THINGS Decisions about each stage of lockdown have been made based on relevant data and the advice of subject matter experts (SMEs). Asking the right questions when presented with information is vital to make sure we have our facts straight. Give your SMEs the respect due to them and consider the facts, information, and recommendations they provide – even if you don’t agree with them.
LESSON 3 – DETERMINE THE NEW (CRITICAL) SUCCESS FACTORS What does success look like today? How have priorities changed? Your stakeholders may have come out of this pandemic with different perspectives, but what are they? Communication is going to be critical to your success in this new environment so openly listen to what your stakeholders are saying. Poor financial management is out of fashion so keep project outcomes and benefits real and measurable.
LESSON 4 – TIMING IS EVERYTHING! The ‘T’ at the end of SMART objectives is more than just a timeline. Consider whether this is the right time to do the project, followed by the right time to complete it. Our governments have given us a good lesson in fast decision making but we have seen that when people get impatient and restless, they are not prepared to wait, irrespective of the risk. Timing is everything. As is your ability to link the speed of your decision making to match the urgency of the project.
LESSON 5 – EVERYTHING IS PART OF A SYSTEM COVID-19 has shown that EVERYTHING is connected. If you haven’t used systems thinking before, now is the time to start. Whether you are conducting a risk analysis, procuring goods, or deciding on a new program, taking a systems thinking approach can add a realistic dimension to your decision making. All decisions have a knock-on effect, good, bad or ugly, so consider what systems you will be impacting when you make yours.
LESSON 6 – MAKE FULL USE OF THE RESOURCES AVAILABLE TO YOU Utilising resources in different ways and providing them with new skills has been part of the COVID-19 process. There is no need to lock team resources into boxes defined by their job title. Break down those walls of constraints and see how team skills can be mixed and matched for a better workflow and efficiency. Know your team and what they can do. Be creative and resourceful in how you use them.
LESSON 7 – OPPORTUNITY IS A KNOCKIN’ Opportunities are no longer a subset of a risk management table. They are real and plentiful, and we need to be proactively looking for them if we are to boost our project benefits. Let’s build entrepreneurial thinking into the way we run our projects and be proactive about building on opportunities. Include opportunity into the decision-making mix to enable best value for the project, the customer, and the organisation.
LESSON 8 – WITHOUT COMMITMENT YOU’RE DOOMED! We have witnessed the results that can occur when everyone is committed to the same goal – success! Now is a good time to review the what’s in it for me project communications and put effort into identifying a purposeful why for your projects that will connect with your stakeholders. Make the why relevant to your key stakeholders to gain their support and commitment.
LESSON 9 –‘WE’RE ALL IN THIS TOGETHER’ – COMMUNITY MATTERS Community, connection, and collaboration. COVID-19 has given a sense of belonging to individuals. We are seeing streets or apartment blocks united via Facebook where residents had not previously ‘spoken’ to their neighbours. People have sung in choral unison across the world in the warmth of community. Consider how you will bring a sense of community and belonging to your project. If people feel they belong, they will feel they matter, and commitment will follow.
LESSON 10 – RECOGNISE CONTRIBUTION What COVID-19 has shown us is that all jobs matter whatever the pay scale. Recognition of contribution and work well done helps to boost morale and motivation. Individual acknowledgement is great, but don’t miss out on the energy generated when team contributions are recognised as a whole. Celebrations give the team a chance to stop and recharge ready for the next challenge the project brings. If the world was moving at a fast rate of change pre COVID-19 it is now zooming ahead in light years! Informed and prompt decision making is crucial as we take action to succeed in these financially challenging times. Don’t lose the sense of urgency, drive and energy that was required to survive COVID-19, use it to propel your organisation and project forward. Author: Georgina Rowe is passionate about project management and has worked in the industry for over fifteen years, more recently working with organisations to improve their strategic and project governance. Georgina is a Founder and Executive Director of the Australian Institute of Leaders and Entrepreneurs (aile) aile.com.au, where the focus is on providing training and coaching that is outcome driven and enables individuals and organisations to make a positive difference. 17
PROJECT IN THE SPOTLIGHT
THE EMPLOYMENT OF RISK MANAGEMENT PRACTICES IN THE AUSTRALIAN DEFENCE FORCE WING COMMANDER ROB SEABROOK LOOKS AT THE EMPLOYMENT OF RISK MANAGEMENT PRACTICES IN THE AUSTRALIAN DEFENCE FORCE, AND THE IMPORTANCE OF RISK MANAGEMENT IN BOTH MILITARY AND PROJECT MANAGEMENT ENVIRONMENTS.
I don’t profess to be an expert or an academic specialising in risk management (let’s call it RM to save some time), but I am a practitioner – having in ADF service regularly employed RM techniques both formally in a governance sense and informally as a method of day-to-day management. Assuming a knowledgeable audience I do not propose to explain the “how” of RM, but rather I will present a discussion of the why (and even the why not) particularly in military service, and in providing an overview of how the ADF utilises RM I hope to demonstrate why sensible and adaptive methods are necessary rather than just slavish adherence to a policy.
THE PURPOSE OF RISK MANAGEMENT Succinctly clarifying the purpose of RM is useful for context. In short, it is a management tool to prevent impact from unforeseen circumstances. This immediately makes it indispensable in a range of enterprise activities regardless of whether they are military, public or private. The methods can of course also apply to seeking more impact from desirable circumstances (called opportunity) but that is largely semantics in the context of this short article. Most importantly, RM enables one to make informed decisions by making the available information as useful as possible. Essentially it does this through reducing the unforeseen aspect of the circumstances and putting structure around the measurement and comparison of cost to benefit. Standardised processes put in place a common language, ensuring team understanding and enabling wide team input. As with many management processes, often the value lays in simply having any sensible process rather than shooting for nirvana in the elusive perfect process. Often much time is wasted in changing processes, outsourcing, or adopting the latest proprietary methods, when improvement is sometimes impossibly difficult to measure. Sometimes new methods are just different, in reality no better or worse. Granted, there are complex situations where the investment to carry out quantitative analysis to increase accuracy and fidelity is warranted, however it is my view that the so-called law of diminishing returns often results in the investment not providing value for money, and the alleged benefits not being realised.
RISK MANAGEMENT IN THE ADF Regardless of whether conducted intuitively and quickly in a dangerous operational environment, or deliberately and mathematically in a project environment, RM is the basis for all decision-making in the ADF.
As with many management processes, often the value lays in simply having any sensible process rather than shooting for nirvana in the elusive perfect process. 18
In planning activities, it is an aid to considering options; balancing advantages and disadvantages and considering what is known as the what if? question. In reality the only practical variation in RM between types of work area or operational environment is the speed and accuracy of analysis required in different circumstances. To expand upon this with examples, an infantry officer in the field or a fighter pilot in flight is often making rapid
decisions which place people’s lives at risk, and their key considerations are of immediate mission success and casualties. Most risk causal factors relate to actions of the adversary. The timeframes they are considering are in the range of minutes to hours, with decisions often being made in seconds to minutes under severe stress. Conversely, a staff officer conducting operational planning has a much higher-level focus, and usually far more time with which to make deliberate considerations. They are considering risk in the context of broad operational success and national or organisational reputation, across a longer timeframe and larger geographical area, and with a broad range of causal factors beyond just the adversary to political, environmental, and even public relations factors. Additionally, in developing options for Government to apply military influence, the operational planner is also giving consideration to the risk related to other Government levers of influence – that is, diplomatic and economic – so that possible Government responses to an event are synchronised across these areas. A project manager overseeing what the ADF calls capability development and acquisition activities has a more traditional view of risk. The project risk consequence areas of scope/ quality, cost and schedule are at the fore, and an ADF concept known as the “fundamental inputs to capability” (FIC) is often used to bound the relevant risks. FIC includes not only the system being acquired, but also essential contributing elements such as personnel, support, and facilities. Work Health and Safety is also a key consideration, and the timeframe being considered is across the life of the system – sometimes decades. Finally, whenever developing project business cases for Government approval the project manager must also consider risk from the Government’s perspective, such as reputational, environmental and impact on Australian industry.
Good RM practice is just a tool for managers to use; it is an enabler for decision-making, not a security blanket to be desperately clung to at all costs. Across all these areas there is significance in the term “acceptable risk”. It tells us firstly that there is a degree of risk that is acceptable – it is rarely if ever possible to achieve zero risk – and secondly it implies that someone must make a judgement to determine what loss or impact is acceptable. This consideration differs according to the environment and the type of risk, but in the ADF it is often formally specified and sometimes delegated. Finally, RM serves the ADF as a common language to translate between technical and operational environments. Ultimately all activity in the ADF is conducted in support of operations, either directly or indirectly, so RM serves to enable a technical, administration or logistics specialist to
Wing Commander Rob Seabrook. (Source: Australian Defence Force)
express answers to the so what? question to operational commanders in operational terms. ADF policy specifies that commanders must have the flexibility to deviate from formal process when “compelling operational imperatives” exist, which reinforces that good RM practice is just a tool for managers to use; it is an enabler for decision-making, not a security blanket to be desperately clung to at all costs.
CONCLUSION The real value of RM, regardless of the method employed and regardless of the organisation, is in paying conscious attention to the “unforeseen circumstances” that create risk events. Actively identifying, analysing, managing and tracking risks by some standardised method can only serve to improve the individual, organisational or project resilience to “stuff that goes wrong”, and does not need to be a complicated process. These factors make RM an indispensable management tool regardless of military or civil application. Author: Rob Seabrook joined the Air Force in 1990 and has worked in a range of technical, operational and staff positions as an engineer, a communications officer and a project manager. He is an electrical engineer by trade, and is both a Certified Practising Senior Project Manager (CPSPM) and a chartered professional engineer. Disclaimer: The views expressed in this article are those of the author, and do not necessarily reflect the official position of the Royal Australian Air Force or the Australian Department of Defence. 19
PROJECT IN THE SPOTLIGHT
HOW ZINFRA GAS SERVICES COMBATTED COVID-19 CHALLENGES
WITH THE FAST-CHANGING ENVIRONMENT AND ESCALATED RISKS BROUGHT UPON BY COVID-19, THE ZINFRA GAS SERVICES TEAM HAD TO ADAPT TO ENSURE THE CONTINUED SUPPLY OF NATURAL GAS TO RESIDENTIAL AND COMMERCIAL CUSTOMERS.
In responding to these risks, our project teams were required to lean heavily upon their key project management skills, embrace available technology, and become more reliant upon alternate corporate and team resources.
EMBRACING TECHNOLOGY With quarantine restrictions implemented, our office-based team members had to adapt to working and communicating remotely quickly. To smooth the transition, team members were consented to take home monitors and keyboards to allow for a more ergonomic home set up. Traditional face to face activities were quickly modified to accommodate remote situations through a larger reliance upon technology applications, including Skype, SharePoint and Microsoft Teams. Team connectivity and comradery was maintained through virtual coffees and drinks, trivia sessions and casual lunchtime catchups. Technology was paramount in shortening the distance for our stranded Project Manager in Germany, who then also had to contend with the eight-hour time difference between the two locations. Technology also played a key role in enabling facility commissioning operations to continue, linking field technicians in Queensland, with Melbourne based engineers, and Sydney based project management. Essentially, while the embracement of technology was unavoidable, even more important was the breaking of norms and “Traditional Mindset,” achieved mainly through strong leadership and necessity.
FRONTLINE HEALTH AND SAFETY As State and Federal Government and international restrictions rapidly rose, the Zinfra Gas Services (ZGS) project teams needed to assess the risks and implement new measures and ways of working to ensure the continued safety of our people while minimising disruption on works.
While our office-based workers were able to be confined to working from home, our field-based workers on the frontline were required to continue working on-site. Foremost, the safety and wellbeing of these essential workers was our main priority, and required the swift
From early March, our teams were confronted with numerous challenges, including: • Aligning with continually evolving government quarantine and travel restrictions • Shifting and enabling more than 180 office-based workers to work from home • The continued health and safety of more than 350 fieldbased team members deemed as “Essential Workers” • Accessing the short supply and distribution of available PPE and sanitiser • Maintaining a connected workplace between the virtual office and field team members • Limitations on travel and physical site visits borne from strict quarantine requirements On top of these challenges was the inability of a key Project Team member to return home from a European holiday due to international travel restrictions, resulting in her working through the pandemic from Germany. 20
Safety controls. (Source: Zinfra Gas Services)
introduction of a number of new COVID-19 measures and safety protocols, which included: • The rapid introduction of fitness to work protocols • Physical distancing measures employed on our worksites, including confined spaces • Increased cleaning of sites and fleet • The procurement and distribution of COVID-19 PPE items including masks, sanitisers and thermometers • Restrictions on site visitors, non-essential travel and health assessments of Sub-Contractors • S taggered field crew break times and outside meetings The introduction of these measures was also crucial in instilling the confidence in our field teams and their families that we were creating a safe working environment for them to work daily.
MENTAL HEALTH AND WELLBEING While the initial focus on health and safety was on minimising the exposure of Coronavirus, we also had a focus on the psychological wellbeing of all our team members. We were mindful of the additional pressures on people born from the need to isolate from their extended networks, necessities to home school children, and the varied impacts of COVID-19. Additional measures implemented to help emotionally support our team included: • Discussions on the importance of maintaining personal mental health • The continued promotion of our Employee Assistance Program available to employees and immediate team members • Encouraging team members to virtually connect with others for social interactions • The establishment of a COVID-19 Nurse On Call service for our frontline workers • Increased stakeholder communications
INCREASED COMMUNICATIONS With team members in isolation and field crews on the frontline, stakeholder communication also became paramount. To allow for an end to end flow of key information we increased communication to all through: • COVID-19 business communications
• People leader calls • Regular field updates
• Daily and weekly stand-ups • Increased email with teams and contractors communications
A RELIENCE UPON OTHERS As a part of a larger corporate group, it was fortunate we could lean upon the resources available to us from the wider team. A COVID-19 Response Team (CRT) was established to ensure the company developed protocols and safety alerts aligned with evolving state and federal restrictions and sourced the necessary PPE and materials as a group. To ensure relevance to our teams, a subordinate COVID-19 Task Group (CTG) was established to ensure that individual business unit and project needs were met accordingly. From a micro level, with limited on-site visits, it became necessary for our Project Managers to also become more reliant upon the help of Field Supervisors to become the ‘eyes and ears’ on-site and help troubleshoot issues. Positively, strong bonds of trust and acknowledgement of our roles have become even more apparent. Now a few months into restrictions, our teams are looking at how we can start implementing a return to work and work within the ‘new normal.’ Taking a slow and steady approach, the lessons learned during the initial stages of the COVID-19 pandemic will become instrumental in establishing a way forward and building new efficiencies and ways of working. Authors: Eran Cook, Gas Services Project Manager, Jodie North, Zinfra Internal Communications and Paul Handley, Gas Services Construction Manager.
Virtual team meeting (including Project Manager in Germany). (Source: Zinfra Gas Services)
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RESEARCH
MANAGING RISKS: THE PROJECT “TOOLBOX” APPROACH
THE HUMAN MIND IS FUNDAMENTALLY AN ADAPTIVE TOOLBOX – LEARNING, ADAPTING, AND EVOLVING TO ITS ENVIRONMENT.
Dr Duro Kolar, academic of Project Management, School of Business, Leadership and Executive Education Group at Monash University places the lens over the subject of managing risk in the current climate, and how you can develop a project “toolbox” which combines computational information and your own expertise and knowledge. Consider this scenario: Your client or executive director asks you to provide a comprehensive approach to manage risks on a large infrastructure or defence project. You start drafting the risk management plan, and then you suddenly stop. You realise that such projects are prone to cost overruns, delays, and failed procurement from an article you read on the weekend. However, in your view, most of these risks are foreseeable and avoidable. You’ve run the algorithms on your state-of-the-art technology platform. They’re saying with confidence that such risks are insignificant. Basically, they’ve been addressed. Yet, intuitively, you hesitate in making a choice. It’s like a trade-off: ignore the computationally derived information and proceed based on a gut feel, or not. What do you do? 22
This is a common scenario in today’s project world. Project managers continually face the challenge of managing risks in a technologically advanced society. However, what are we truly managing? Is it the risk or ourselves? Or are we living an illusion? Although such questions permeate academic studies, dividing researchers in their wake, we stand together on one point: we either see risk as objective or subjective, which determines our ability to manage it, or not. If we take the former dominant view, risks can be managed based on some objective facts about the material world (i.e., the roulette table or known future). With the latter controversial view, risks cannot be managed as it materialises in institutional behaviour and social relations (i.e. the business world or unknown future).
In a world of uncertainty, such as COVID-19, cyber security, and geopolitics, do we ignore the facts and trust oneself? This leads to an investigation into behaviour and implicitly indicating intuition to achieve the right outcome without focusing on information when we respond to risk. Particularity, in times of uncertainty.
HOW DO WE RESPOND TO RISK IF WE CANNOT SEE IT? That being the case, does risk truly exist? Risk is considered from a probabilistic dimension, a quantitative analysis of reality. However, humans do not analyse risk in a pure probabilistic way. We tend to see risk differently. In other words, risk is a subjective construction of reality, a psychological or political reaction to experiences. Take for example someone trying to reduce the chances of another economic crisis, cyber-attack or political play for power, these factors are unknown phenomena, hard to predict, paralysing at times, where calculations cannot only lead to illusory outcomes but a fundamental loss in the confidence of algorithms.
In such times of uncertainty, simple rules prevail not statistical reasoning. Heuristics become an indispensable tool. A way to tackle risks head-on in the real-world. Heuristics are mental shortcuts, simple rules of thumb that solve complex and uncertain situations. More simply, it is a strategy that ignores information. Humans have survived through time on making such simple intuitive or gut feel decisions.
(Source: iStock)
Empirical evidence from longitudinal studies also confirms this assertion. Taken further, research shows that heuristics often outperform statistical models. For example, sophisticated algorithm models performed badly during the recent global financial crisis and in the current COVID-19 environment. And more alarming, showing embarrassing vulnerabilities in defence, high stakes combat missions incorporating the most advanced technology. Fundamentally, heuristics win. However, this case is not closed.
And in such a world, technological models are showing their weaknesses, forcing humans to step in.
WHICH HEURISTIC DOES A PROJECT MANAGER CHOOSE?
Managing risk therefore entails taking an adaptive mindset to the world. Educating and training the project mind i.e., the building blocks of heuristics, through experiences.
Although there is no universally best heuristic that can be applied in managing risk, research shows that the ‘take-thebest’ heuristic prevails, as it enables humans to learn from cues and signals in their environment. And consequently, giving humans the confidence to choose the right course of action. Even with noise and cognitive biases. The human mind is fundamentally an adaptive toolbox – learning, adapting, and evolving to its environment. These survival capacities are usually acquired through personal experiences, training and evolutionary learning which shapes our behaviour. Heuristics and their building blocks exploit these capacities, enabling us to make faster and better decisions. So, a core question remains:
HOW SHOULD PROJECT MANAGERS MANAGE RISK? Especially, considering the rapid and at times scary evolution of artificial intelligence and machine learning. Those neural networks and decision tree algorithms are winning, right?
Some scholars even labelling such a phenomenon as “fauxtomation,” a marketing ploy by technopoles e.g., Silicon Valley in the US or the IT cluster Rhine-Main-Neckar in Germany, to make pointless products seem cutting-edge. Secondly, when making judgments and decisions, less effort tends to lead to greater accuracy – the effort-accuracy trade-off. And even if technology was more accurate than humans, we still must decide what to do with the generated information.
This is on par with similar professions, such as medical professionals, judges, and executives, which are guided by evolved capacities and experiences rather than structured rules. So, when it comes to managing risk, work with the computational information whilst expanding your project ‘toolbox,’ and trust yourself! Author: Dr Duro Kolar is an academic of Project Management at the Leadership and Executive Education Group at Monash University. His research interests include strategic decisionmaking, large-scale projects, innovation and geopolitics. Duro has received nominations for several research excellence awards including university, vice-chancellor and the best PhD in the world on management decisions. He continues to work on cutting-edge, project strategy and decision research shaping the project world. Prior to his academic appointment, Duro worked for government and private institutions on the strategic implementation of large-scale infrastructure projects and taskforces transforming the built environment space for the better.
Well, not necessarily. First and foremost, technology is a tool, an extension of the human organism, working with us to navigate the complexities and uncertainties of the world. 23
FELLOWS FORUM
In the last 18 months I have been heavily
TWO PROJECTS – TWO VERY DIFFERENT OUTCOMES
involved in two projects/programs that
FELLOWS HAVE GIVEN EXCEPTIONAL CONTRIBUTION TO THE PROJECT MANAGEMENT PROFESSION. HEAR FROM ONE HERE EACH QUARTER.
had vastly different outcomes for their respective organisations. Whilst project professionals all acknowledge risk management is vital for a project’s success, it does continually amaze me how little diligence and perseverance is committed to “actively” managing risks throughout a project’s lifecycle.
SITUATION 1: There are 11 large, white legal binders lined up, four binders per box, across my study floor. In total they represent nearly five years of governance body minutes for a project that was supposed to run for 18 months. In reading each of the monthly governance minutes, I am struck by the minimal risk and issue discussion and the completely absent dependency management discussions. After all, this was a highly complex technology based project with significant impacts across all of the client’s business functions and with significant impact on the client’s customers.
SITUATION 2: The project managers are all in the room for the first of what would become a weekly 90 minute risks, issues and dependencies discussion. There are eight project managers representing streams such as change management, systems delivery, process development, communications and stakeholder engagement etc. The program has a dropdead delivery date of 1 July 2019. There are eight concurrent streams of work with significant up-stream and down-stream dependencies across the eight streams of work. The Program Manager has an excel spreadsheet which she maintains.
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Before this kick-off meeting the Program Manager had 1:1 sessions with each of her Projects Managers to build the initial version of the risks, issues and dependencies (RIDS) register. She has taken responsibility to own and maintain the RIDS register. In “Situation 2”, the technology and process improvement streams were being run using an adaptive delivery method – develop, showcase, take feedback on board, iterate etc. The technology stream was pure Scrum whilst the process stream was not. The other six streams were more traditional Waterfall in their approach. 1. All eight Project Managers were thankful the Program Manager was going to record the RIDS into a register, manage and maintain the register. It was one less piece of administrivia they had to worry about 2. The companies PPM tool was not used for risk tracking 3. The Program Manager had: a. a scheduler to iterate the programs stream schedules each week b. a PMO co-ordinator to help develop the various governance packs, update the Kanban board etc. What was illuminating was the Program Manager owned and diligently ran the one project function that could undermine her ability to deliver on 1 July 2019 – the RIDS register. By doing so she was across every single risk, issue and dependency that was impacting her program. She was able to ascertain if her Project Managers were focusing on ameliorating the right RIDS by checking what RIDS had been highlighted in each project managers weekly status reports as “high”. RIDS are the pulse of your project. It is not sexy managing them and it does require conversation that many project professionals consider “not adding value”, so the regular assessment of RIDS is often neglected. Often with disastrous consequences!
In “Situation 1” the governance minutes are effusive about schedule and budget performance but lacked consistent updates on the high RIDS that are compromising the project and their respective mitigation strategies. In comparison, the governance body in “Situation 2”, focused considerable attention on “what was worrying” the Program Manager and was very active in assisting the Program Manager mitigate those RIDS. By owning the RIDS register, the Program Manager, had her “finger on the pulse” and could escalate the right RIDS at the right time for governance body assistance. The role of the governance body and how a Project Manager uses the sponsor and governance body to enable effective RIDS mitigation is an important feature of successful projects. The Project Manager’s ability to enable effective engagement with the sponsor and the governance body is important, but more important, is their knowledge of their role and responsibilities in the project. In “Situation 1”, the governance body had the right decision makers, but they were not educated on their role and responsibilities. The lack of a governance body charter (that was tabled and signed-off), lead to ineffective governance body performance – RIDS were not effectively mitigated. In “Situation 2”, the Program Manager was highly experienced and knew that to meet her 1 July deadline she would require quick decision making and support from the program’s sponsor and governance body. Her governance body charter was very clear about what she needed from the sponsor and governance body to ensure barriers for 1 July delivery were quickly overcome. In “Situation 2” an excel spreadsheet was used even though a company-wide PPM tool was available. The Program Manager told me that she wanted face-to-face RIDS conversations each week with her Project Managers. She wanted confidence that they were effectively “taking the pulse” of their stream. The immediacy of a weekly meeting with the Program Manager each week ensured the Project Managers came prepared. By obviating the recording of the RIDS into a PPM tool, the Program Manager was concerned: 1. The RIDS would not be filled out in a timely manner, and 2. She would miss the nuances of the streams RIDs only a discussion can bring I am sure none of the above is new to you the reader. It is not rocket science. But it never ceases to amaze me how just doing the basics consistently (like risk management) can be the difference between a career ending catastrophe that ends in Supreme Court litigation (like Situation 1) or delivering a highly complex program on-time and under budget (like Situation 2). Author: Phil Nash is an AIPM Fellow, PMAA Judge and former AIPM Australian Project of the Year Award winner. Previously he spent 10 years at Bupa establishing and leading the Bupa ePMO. He is currently an “Expert Witness” for an international software litigation case and working as a project implementation and governance consultant with Exco Partners. He has a low threshold of excitement, as he genuinely loves analysing the project delivery life cycle (and going for walks with his Golden Retriever, Sam). 25
CONNECT PROJECT MANAGEMENT ACHIEVEMENT AWARDS (PMAAs) SUBMISSIONS NOW OPEN Have your project or individual success recognised by entering the 20th Anniversary PMAAs. We’ve made the process more streamlined for entrants with: •R educed overall submission length •R evised submission criteria •P ure online submission process •N ew categories •N o Expression of Interest phase Submissions close 31 July start yours today!
SAVE THE DATE – AIPM CONFERENCE As COVID-19 continues to disrupt face to face events, the AIPM annual conference has been postponed to Sunday 28 February to Tuesday 2 March 2021. It will be hosted at the Gold Coast Convention and Exhibition Centre, with more details to come.
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Have a project that you would like our project community to know about? Do you have a project insight you believe needs to be shared? Our next theme is RECOVERY and we would love you to consider contributing. Email communications@aipm.com.au with the subject line ‘Paradigm Shift article contribution’ and tell us what you have in mind before Friday, 3 July. Our next issue will be out in September 2020.
