Case Studies

Project Execution Process Improvement

Client and Industry Description
The client provided engineering services to electric power utilities, with over 75% of its revenue derived from the nuclear industry. The company had a decentralized management structure with five regional offices in the U.S. and seventeen project offices located throughout the country.

The company’s market took a dramatic downturn in the early 1990s. Nuclear plants under construction were completed, no new plants had been ordered for over ten years and mandated upgrades to existing nuclear plants diminished significantly.

The Problem
The market changed from a “sellers’ market” to a “buyers’ market” in a relatively short period of time. Competition for the available work increased and margins decreased. Project terms changed from time and materials to either fixed price or time and materials with not-to-exceed limits.

The executive team determined that rapid improvement in the Project Execution Process was essential and that internal resources lacked the focus and methodology to bring about the change.

What Was at Stake?
The company previously had five years of continuous growth. Project Managers were focused on satisfying clients to the detriment of profits; resulting in scope-creep and “gold plated” project deliverables. Both net profit and net profit margin were eroding to the point where the company had to either reverse the trend or go out of business.

The Need
Establish agreement on a new Project Execution Process using best practice principles. Communicate the new process to the company. Implement the new approach uniformly across the company.

The Approach

STEP 1: Conduct interviews, surveys and analysis to understand the skill-gap between best practices and current skills.
STEP 2: Introduce straw-model best practices for Project Execution.
STEP 3: Use a workshop to assemble the executive team and those responsible to execute the process for the purpose of re-defining the process and the appropriate measurements to drive it.
STEP 4: Select a key group of practitioners to train on the best practices using both the new process and the new measurements. Use the learning from this pilot to hone the process and measurements before rolling them out to the rest of the organization.

Deliverables

A process road map for Project Execution with clear responsibilities and defined control points.
A simple measurement system (four key metrics) that captured both driver measures and results measures.
An approach to introduce, train and expand skills of the organization.
A run-rate improvement in project profit margin.

The Results

A clearly defined Project Execution Process as documented in a new Project Management Manual and as implemented throughout the company.
A cross-functional team of senior managers trained  as practitioners of the new process.
A Project Management training and certification program implemented throughout the company.
A 20% improvement in actual project margin in one year.