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MAKING COLLABORATIVE PROJECTS WORK · MAKING COLLABORATIVE PROJECTS WORK ... and all of a sudden the benefits ... Collaboration gets exponentially difficult for every extra partner

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Page 1: MAKING COLLABORATIVE PROJECTS WORK · MAKING COLLABORATIVE PROJECTS WORK ... and all of a sudden the benefits ... Collaboration gets exponentially difficult for every extra partner

Making Collaborative Projects Work by S Henley © ICCPM 2014 Page 1

MAKING COLLABORATIVE PROJECTS WORK

A presentation to the 2014 IPMA World Congress by Simon Henley

Good Evening, I’ve had some graveyard speaking slots in the past, but being the only thing between you and a delicious dinner is a whole new level of pressure. I feel as if I might have done better to try stand up comedy than speak on a serious note, but as an ex member of the military, most of my jokes are either not that funny, or not suitable for a general audience, so here goes.

I’m going to talk a bit about Collaborative projects, that is projects where either the customer, the stakeholders, or those performing the project are made up of a group of 2 or more entities. They can be groups of countries joining together with a joint requirement for affordability reasons, two or more companies working together for political or socio-economic reasons, or perhaps a consortium or Joint Venture company where the stakeholders are different companies.

I speak to you from a position of knowledge of such projects, either as a customer, as a stakeholder, and as the CEO of a company executing such a project. I have learnt over the years that these projects require extra skills and knowledge from their project managers, skills which are not widely taught, and more often than not have to be learnt the hard way. And yet these projects are increasingly essential given the global nature of today’s world, and some of the problems facing us which can only be tackled by working in collaboration.

So in the next 12 minutes or so, this is what I’ll cover

• Introduction

• Why are Collaborative Projects Important to the Project Management Profession?

• Collaborative Projects Track Record

• Common Failure Modes

• Examples of Good and Bad Practice

• Key Learning Points

Many Projects which “Move the Dial” are necessarily Collaborative

I mentioned how Collaboration is becoming increasingly important, and it is worth reflecting on how a number of projects which have really “moved the dial” have necessarily been collaborative:

Historical

Concorde not only made history as the only successful supersonic airliner, but it was responsible for massive leaps forward in technology as the engineering teams sought to understand the physics of propelling and controlling an aircraft at very high speed and altitude. The anglo-French collaboration is well known, but less well known is the degree to which the US and UK teams shared understanding of mutual benefit to both sides.

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The Channel Tunnel has transformed travel between UK and France, opening up the feasibility of short breaks across the channel for many more people in either country. The project required close co-operation both at the government level, and between the industries involved – imagine the embarrassment if when “breaking through” between the two tunnels started at each end it was discovered that they had missed each other

The Olympics is probably one of the longest standing collaborative projects. Sure, each four years one country hosts the games and uses local companies to build the infrastructure and facilities, but the games themselves are a collaboration of all the nations, and the global implications have been huge.

Lastly there is Airbus. A very European collaboration which stemmed the tide of US domination of the airliner market in the late 60s and early 70s. A government-sponsored, but commercially executed collaboration which produced radical new thinking in airliner design, and lead to the situation today where Airbus competes on a level basis with Boeing for the majority of airliner sales. No one nation in Europe could have done that, but collaboratively the nations acted to benefit the entire world.

Current

Ebola Virus

Drug enforcement

CERN

The Track Record of Collaborative Projects is very mixed

But the track record of collaborative projects is very mixed. I’ll apologise now that many of the examples I use are military projects, but that’s because it’s my background, and it’s also where many of the collaborations occur for affordability or interoperability, or for political reasons. So let’s just look at a few:

Concorde – commercial disaster, but political and technical triumph.

Channel Tunnel – commercial, technical, and political success – but we kind of forget that it was 80% over budget, and that the Eurotunnel company went bankrupt in the early years of operation due to too much debt and not enough passengers.

Olympic Games – overall success, but have Greece and China benefitted from being recent hosts to the games – the abandoned and decaying facilities would indicate that any benefits have been short-lived.

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Eurofighter Typhoon – great aircraft, leading edge performance, but commercially not successful due to the cost base and therefore price of the aircraft in a competitive market. Successful operationally, but the business case for the governments is in tatters.

Horizon Common New Generation Frigate – cancelled due to inability of governments (UK, Fr, It) to agree a single requirement, but technology lives on in separate nations ships.

Multi Role Armoured Vehicle – political football, cancelled when UK pulled out, but then taken forward as a successful German-Dutch product, now in service. The UK has still to get a new vehicle.

Joint Strike Fighter – highly successful, producing a state of the art fighter which will dominate the western world fighter market for the next 50 years. But not all original nations have held their nerve, and the tag of “affordable” is now pretty much forgotten.

Airbus A400M Military Airlifter - one where the contractors (Airbus, engine manufacturers, Thales) bore most of the pain of overruns. It’s late and over budget, but has produced a world beating aircraft which is very relevant to the needs of the world today, and it is anticipated that it will sell in large numbers.

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Common failure modes in Collaborative Projects

So why do Collaborative projects have such a bad history?

Requirements creep/divergence destroys business case for project

Well it’s worth remembering that in most cases the project involved too much risk or too much investment for one nation or company to do it alone. As soon as you involve more than one nation’s government in funding, there will come political baggage, and it is this which often causes the poor performance. Typically nations will be keen to join a project at the early stages to maximise their potential industrial or economic benefits, often before the requirements have been fully agreed. As the project progresses, then the detailed requirements of the participants diverge, driving up cost, or causing delays as the final specification is negotiated. Delay and the need for national variants will quickly destroy reduce the benefits of scale, and undermine the business case for the project.

One or more partners withdraws for political or financial reasons

Most of these projects run over a prolonged timescale, and the relative wealth, political environment, and even the key relationships between the partners can change during the project, leading to one or more partners withdrawing. Risk appetite can vary between partners, so that whereas one will be happy to agree a level of contingency, others will stop, again leading to breakdown of the partnerships. These factors are equally true of customer nations or providing industries, particularly if the contract is anything other than cost plus.

Excessive bureaucracy results in delays which destroy benefits case

Some national cultures or norms allow faster progress and leaner bureaucracy than others. What is for sure is that the more partners, the more debate and therefore the slower the decision making.

Technical or other issues lead to cost overruns unforeseen in original collaboration arrangements

These projects are nearly always technically ambitious, so unforeseen technical issues are commonplace. My previous comments about risk appetite apply here – an unbalanced risk appetite amongst either the customers or the industrial participants will lead to great difficulties when these technical issues arise.

Once project delivery goes outside expected parameters, partners turn on each other and lose sight of delivery goals

All collaborative partnerships start off in a highly optimistic mood and everyone is friendly and giving on the basis that the project will provide bountiful benefits with plenty to go round. When reality strikes and technical issues or delays occur, and all of a sudden the benefits are less, or partners are even losing money, then it is not unusual for partners to turn upon each other, to such an extent that I’ve seen projects where the partners completely lost sight of delivering the benefits, and spent all their time ensuring that no other partner got a better deal than they did.

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Two examples of current collaborative programmes

Now all of this would lead one to believe that collaboration is a bad thing, and no Project leader or Manager has any chance with a collaborative project. In fact the opposite is the case. I’ve already shown that collaboration is often essential for projects which are going to have significant global impact – they simply can’t be afforded on a national or non-collaborative basis, or they are by their nature multinational or multi organisational and therefore collaboration is inherent in the makeup of them. And my experience is that Project leaders and appropriately skilled Project Managers can and regularly do make the difference between successful and unsuccessful collaboration. Extra skills are required, but the benefits to be gained are really substantial, and the satisfaction of leading a successful collaborative project is huge. So I’ll use two projects to draw some common lessons which are slightly controversial, and for which history has yet to decide their degree of success, but which are just coming to fruition now. I have personal experience of managing the collaboration at senior level for both of them, so these comments are very much my own thoughts.

F-35 Joint Strike Fighter

The Joint Strike Fighter programme is a US-lead collaborative programme, with 6 other nations as collaborative partners, and a completely global industrial base, working under a two US Prime Contractors, one for the airframe and systems, and one for the propulsion system. Initial programme is for over 2,000 aircraft for the 7 nations, with several additional export customers. The contract was a cost-plus development, with aggressively incentivised pricing of the subsequent production buys.

Airbus A400M Military Airlifter

The A400M is a Military airlifter developed for a 7 nation group who contracted the European Defence Acquisition Agency OCCAR to manage the project. They in turn contracted Airbus Military as prime contractor in a fixed price development and production contract.

So let’s look at the observations from a comparison of the two projects’ good and bad points.

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Key Learning Points

Collaboration gets exponentially difficult for every extra partner above 2 - use of “Tiered” partner/contract

The first and probably most fundamental learning point is to ensure that the collaboration is on a firm foundation. This may seem obvious, but it is often overlooked in the jockeying for position during negotiations, and then the usual rush to get the collaboration in place once the final partnership arrangements are settled and the project is kicked off in a blaze of optimism. An imperative here is to ensure that the decision making process between collaborative partners is efficient and effective. In the case of the A400M (in common with most European collaborations), all 7 partner nations were equal in the decision making process, and at the industrial level the Europrop International Joint Venture had 4 equal partners. The result was very difficult and prolonged discussions, and often compromised the ability to take firm resolution action. During the most difficult times, an ad-hoc “lead coalition” of 2 partners would emerge to break a deadlock, but there can be no doubt that a hierarchy of partnerships, with no more than 2 partners at the top will make the collaboration much more manageable.

The Joint Strike Fighter programme followed the path of a tiered participation between nations, with the US dominating the decision process, and the UK as the only tier one partner during development being the other major participant in decisions. Hence the difficult decisions about weight and cost growth and other technical issues arising during the programme were much more easily (and quickly) dealt with. It had the side effect of accelerating the ability of individual nations to make decisions as well. If they wanted to contribute to the decision making process, they had to do it in a timescale which matched that of the overall programme – otherwise whatever decisions they made individually would be overtaken by events and not be taken into account.

Final Collaborative arrangement may be significantly different from that originally envisaged - ensure collaboration arrangements fully reflect the agreement before execution starts

Continuing on the point of ensuring the Collaborative arrangements are right at the outset, it is important to ensure that the final collaborative arrangement matches the final outcome of negotiations for collaborative involvement. It is highly likely that during the formative stage of the project the number and identities of collaborators will change, as well as the degree of commitment and participation between them.

Joint Strike Fighter SDD Collaborative Arrangements

“The United Kingdom, Australia, Canada, Denmark, Italy, Netherlands, Norway and Turkey are participating in the System Development and Demonstration (SDD) phase of the program. Depending on how much money they contributed, countries are ranked on a scale of one to four. Based on the ranking, each participant is given access to program data and allowed a certain number of personnel to work in the Washington-based JSF office. “

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This graphic shows the final participation and workshare of the partners in the A400M programme, but at various stages this diagram would have included Italy and South African participation. Some nations and industries are masters at “gaming” the process to achieve maximum benefit by overstating their commitment and then scaling back at the last minute in the hope that by then it will be too late to change the collaborative arrangement. I have experienced the difficulties that arise when a subcontract has been negotiated in the expectation that the sub-contractor is also a risk sharing partner, and then executed on a no-risk basis due to a last minute change in the participation arrangements, and would advise that a delay in starting execution to get these things right more than pays off in overall timescale and efficient and effective execution of the project.

Ensure all key stakeholders share the same objectives for the programme

Ensure that the collaboration agreements cover what happens when the project/programme diverges from the plan - debates over liability will cripple delivery to cost and time

The last two points seem obvious, but are at the heart of most of the difficulties which collaborative programmes experience when technical or cost issues arise. Although these programme launch in a very optimistic environment with a common perception that the benefits are big enough for all to share comfortably, the reality is that most of these projects are technically and politically demanding, and will stretch the capabilities of all involved, both on the client side and on the industry provider. Nations and their industries often have different motivation for participation in these projects. Some are absolutely dependent on a successful product to integrate into their national infrastructure. Others are less dependent from a domestic point of view, but want to participate in the export opportunities of a big project. Others still participate simply to fill available capacity, or in some cases to grow new industrial capability jointly funded by all participants. All of these are legitimate reasons to collaborate, but will engender very different reactions and decision paths when issues start to arise. So it is imperative to ensure that a set of project objectives are drawn up which cover the strategic intent as well as the tactical deliverables for the project, and that all participants commit to (and are held to) those objectives. Without that the collaboration will at best encounter delay, and at worst founder as the desired outcomes of the participants diverge.

Similarly, it is vital to sort the dispute resolution process up front while all are bathing in the glow of launching a big collaborative project and the optimism that surround it. This process needs to go all the way up to the unthinkable in terms of deviation from original performance, time or cost objectives. Trying to establish a resolution process at the same time as trying to resolve technical or cost issues can and will add enormous delay and create significant tension, just at a time when the partnership needs to pull together to find a solution to whatever issues are confronting it.

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Extra Considerations for Project Managers in Collaborative Programmes

So the Project Manager in a collaboration needs extra skills to manage the collaboration in parallel with delivering to the Iron Triangle of Cost, Time and Performance.

Culture

Different nations and different companies have their own culture, and these can be harnessed to work positively for the collaboration by playing to particular cultural strengths, or if not managed can be very destructive by either not recognising an insidious influence, or by trying to execute something which is counter-cultural to a key participant. In EPI we had German, French, Spanish and English participants both in my team and in my customer’s team. Negotiation strategy needed to take into account who was negotiating; - a hard-nosed, factual negotiation was best done between Germans. When some emotion was appropriate to win a particular point, then it was best to bring the French into play. Sometimes a big explosion was required to make a significant shift in stance, and here a Spaniard was a vital asset. Lastly the Brits would be used where a pragmatic solution was required which probably wouldn’t suit either side particularly well, but would at least keep the programme moving forward.

Language

Language shouldn’t be an issue – I was always amazed and humbled in my team at the grasp of highly technical English across my team (and the Italians in my principal sub-contractor). However there are huge advantages for the Project Manager to speak the other languages within the community – particularly French when things get difficult, otherwise you will be ignorant to the uniquely French way of solving difficult issues.

Strengths and weaknesses inherent in choice of partners

I mentioned earlier that different participants have different reasons for collaborating. If one of the partners is there to grow a previously non-existent capability, then it will need the support of the other partners if everybody is not to suffer from a massive learning curve – it is generally advisable to play to known strengths of partners rather than try to build new capabilities in the heat of the project.

Politics (and politics)

Politics (with a big and little P) plays a major role in multinational and inter-industry collaboration, and the Project Manager needs to be immersed in the political environment, whilst himself/herself remaining politically neutral.

Geography

Geography at the very least is very time consuming; no matter how good the teleconferencing/ webex/ video conferencing facilities. There are still times when a face to face meeting or a hands on walk around of the factory is required to bring a decision home, and the project manager can expect to have to cover the geographical patch.

Sponsorship

Sponsorship can be an issue for the Project Manager. When things get tough in a single-owner project, the sponsor has a role to promote the benefits of the project in the stakeholder community and help garner support for difficult issues. But on a multinational, multi-industry programme, it’s much harder to identify who will act as the project’s champion, and with whom. The stakeholder community is more dispersed, and the project manager needs to do a comprehensive stakeholder analysis to identify who can and will act as a champion when things get tough.

Governance

Governance needs to be simple and effective, not overly bureaucratic and time consuming, but again this is an issue that the project manager will need to manage, because the tendency within these programmes is for governance to be burdensome and ineffective.

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Conclusion

So in sum, collaborative projects are here to stay, and increasingly are becoming the mainstay of globally-vital projects. We as a profession must develop people and capability to manage these projects effectively and efficiently if we are to remain relevant as a profession. That requires research to identify the extra skills and characteristics required, education to spread and grow knowledge within our communities, and an extension of our current bodies of knowledge to capture and preserve learning points from successes and failures in past and present collaborative projects. But the rewards for doing so are enormous, both in terms of personal and professional satisfaction, and in keeping our profession relevant. So the challenge for today is to ask yourself why you shouldn’t manage a collaborative project for your next role.

• Collaboration is a vital part of delivering nation-critical or globally vital projects and programmes now and increasingly into the future

• Ebola Virus

• Climate Change

• World Food distribution

• Sustainable Energy

• The PM Profession must develop and sustain capability to lead and deliver these vital projects

• Extra skills and capabilities are needed to tackle the additional complexity which arises in a collaborative environment – are we ready to rise to the challenge?

WHAT’S STOPPING YOU FROM MANAGING A COLLABORATIVE PROJECT NEXT?