Many capital project owners assemble strong teams of architects, builders, and consultants. What’s often missing is a clearly defined system for how those teams work together.
As a result, projects are often delivered by teams but managed as silos. Without a defined system and project performance standards, decisions are made across multiple touchpoints. Teams operate within their own scope creating gaps, delays, and rework.
Owners are responsible for defining not just the outcome of a project, but how the team works to achieve it.
When teams are not working together, project progression slows. Decisions take longer and surprises arise later in the delivery process, when they are harder and more costly to resolve.
As inefficiencies compound over time, costs typically increase by 10-20%, while schedules extend by 20-30%. As costs increase and schedules extend, friction and tension between teams is introduced, creating a greater challenge for teams to work together effectively.
In most cases, the problem is not a lack of talent amongst the teams, but a due to a broken system.
Top performing projects operate as a single system rather than a collection of strong parties. Success is a direct result of how teams collaborate and work together. The way decisions are made, the methods in which information flows, and how accountability is shared shapes the outcome of a project.
As discussed in Why Lean Fails On Most Capital Projects (And How To Fix It) tools alone do not create alignment without a system in place.
Without a system in place, teams default to independent decision-making and lose alignment. With a system in place, outcomes become consistent.
Project performance standards shape the ways in which teams work together by establishing communication behaviors, workflows, and expectations that result in increased consistency.
At a high level, project performance standards fall in the following areas:
Project performance standards should be seen in day-to-day operations.
In practice, standards look like:
Owners are responsible for deciding how decisions are made, how work is assigned, and how performance.
Without clear definition from the owner on how the team is expected to operate, the team will take the task into their own hands. As a result, teams focus on serving their own scope rather than the overall outcome.
There are three methods to define and implement project performance standards:
Use established methods to develop a framework internally. This method can work with the correct amount of time and internal capability to maintain the standards.
In some instances, individual parties come with strong internal systems that can be used across the project. When aligned early, this method can define and implement standards. However, it is rare to find teams with this capability and alignment across parties is still required during the entire duration of the project.
Owner’s representatives may be used to define how the team is expected to operate and maintain the structure throughout project delivery. An external party focused on the desired outcome ensures alignment across all parties without being partial to individual party scope workflows.
Not every project needs to implement a fully developed system. Every project needs to define the way work will be completed.
Project performance standards are flexible and may be scaled to fit the size, complexity and risk associated with the individual project.
For example, smaller projects may simply define roles, a planning cadence, and clear communication protocols. Meanwhile, a larger project may require a more structured method of decision making and performance tracking.
The focus should not be to over define the process but to define the minimum structure needed to keep teams aligned and working towards the desired outcome.
Project outcomes are a result of how teams work together.
Strong teams are not enough to reach the desired outcome. Without a defined system from leadership, even the most capable teams fail to reach the desired outcome, leading to cost increases, schedule delays, and friction.
If your projects are experiencing misalignment, delays or rework, it may be time to define project performance standards at the ownership level.
For questions or to discuss how this approach may apply to your projects, reach out to tomrichert@keelpm.com.
