Program Thinking: Pathway to Our Industry’s Future

I am consumed by the notion that the capital projects industry is capable of doing so much more and that I have a responsibility to drive the case for change. For the past year, I’ve used this page to address how we can bring about an expanded and robust industry condition. Writing about topics ranging from the power of collaboration to Advanced Work Packaging to the need for a structured digital project delivery process helps set the stage for what’s next in our business. But, in my opinion, noticeable game change will happen when we carefully consider what agents, activities, and resources are best deployed at the program – that is, not project – level.
 
As a researcher of program management for much of my career, I’ve discovered that no one executes programs well. That is because program thinking is not about executing projects. Programs are about creating benefits. At its most basic level, a program is just a group of projects that are organized and controlled in a coordinated way to achieve a set of business objectives that would not be possible were the projects managed independently. As the bridge between project execution and fiscal reward, the amount of added value that program thinking can create depends on how well resources are allocated to individual projects. However, deployed properly, the benefits of program thinking include:

  • Greater visibility of projects amongst executive management
  • Better prioritization of projects
  • More efficient and appropriate use of resources
  • Projects driven by business strategy and needs
  • Better planning and coordination
  • Explicit recognition and understanding of project dependencies
 
While these advantages are not guaranteed, the application of program thinking can make the most of resources (i.e., personnel, technology, money, and time) expended on projects and can sustain the drive to maximize the benefits available to the business and society. It is important to remember that successful benefits delivery does not depend on successful projects. A poorly managed project might still deliver benefits due to changes in the business environment or product market.  In fact, benefits are maximized when combined with the outcomes of other projects. I’ve found that it is helpful to classify projects in terms of their ability to deliver benefits as follows:
  • Direct projects:  projects with direct benefits
  • Enabling projects:  projects that deliver no direct benefit but are vital to the delivery of a whole range of benefits from other projects
  • Passenger projects:  projects that can only add to benefits expected from other projects
  • Synergistic projects:  a group of projects, each of which makes no (or only a small) contribution, unless combined into a program
 Programs require continual changes to their composition in order to preserve benefits. Successful program management requires that individual projects be dropped or modified and new projects be introduced in order to carefully preserve and maximize benefits. Although it sounds counterintuitive, I’ve uncovered numerous scenarios where a project that is under budget and ahead of schedule should be slowed, changed, or cancelled in order to maximize the benefits emanating from its program.
 
So, why doesn’t our industry subscribe to program thinking? I believe it’s because today’s project management explicitly understands and uses techniques that helps one project succeed at the expense of another inside a company. Most owners and engineering and construction firms treat the combination of projects (i.e., the portfolio) as one ‘large project’ to be managed using single-project management techniques originally intended to obtain technical outcomes. This leads project managers to independently carry out actions to attract resources and attention for their own projects. In fact, when CII Research Team 303 (2012-2014) examined the best practices for managing a portfolio of projects in our industry, they found few coordinated efforts other than the occasional aggregated reporting by business unit. That’s unfortunate because potentially dire economic consequences can befall owners and contractors that incorrectly and/or unknowingly perform program work. 
 
Despite the path we’ve experienced to date, I’m convinced that our industry can embrace program thinking as a highway to a successful future.  I’m highly encouraged by the work of Professor David Mosey at the Centre for Construction Law at Kings College in London. Over the past seven years, the Centre has developed a multi-party and multi-project Framework Alliance Contract known as FAC-1 and it has demonstrated real advantages on completed building and highway programs in the UK. Premised on five aspects (i.e., planning success metrics, information exchange, stakeholder inclusion, protection of IP rights, and incentives leading to more work), FAC-1 is credited with overall cost savings of 15% and higher facility quality evidenced by project warranties being extended from two to ten years.  While more information can be found at www.allianceforms.co.uk, I believe that efforts such as the FAC-1 program contract may be the impetus needed to drive program thinking into our industry.


Date posted: April 4, 2019

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