Global Implementation of a Project Risk Management Process

1. Global Implementation of a Project Risk Management Process gordon.stewart@pragmatique.co.uk www.pragmatique.co.uk

2. Gordon A Stewart • IBM – Manufacturing Engineer, Site Start ups – China, Singapore, Russia, South Africa, Israel • Compaq – New Products and 6 Sigma Blackbelt • Bombardier - World Wide Director of Risk Management and Project Management Training • BEng (Hons) Manufacturing Systems Engineering & MBA with distinction • NLP Practitioner (Neuro Linguistic Programming) • Extensive international business experience • Enjoy – Sailing, Hockey, Golf, Learning & indeed Life! Gordon.Stewart@pragmatique.co.uk Tel - 07919 304948

3. Our Ground Rules Could I suggest :- • Please switch your phone to mute • Participate actively (good questions welcome!) • Avoid unnecessary side conversation • Help each other learn with our questions Have fun! X

4. What we will cover: • Project Risk Management - What is it? • Strategy, Structure & Culture • The Three Structural Secrets of Risk Management • Stakeholder Management • It’s the soft stuff that is hard! Is there anything on Risk Mgt, Process Implementation or Change Management you would like me to cover during this talk?

5. Bombardier Inc • Planes, Trains and… …Recreational Vehicles • Corporate office based in Montréal, Canada • Workforce of some 64,600 people worldwide • Revenues of $15.4 billion US for fiscal year ended January 31, 2004 • More than 95% of revenues generated outside Canada

6. Bombardier* Learjet* 40 Bombardier* Q100/200* Bombardier* Challenger* 604 Bombardier* Global Express* Bombardier* CRJ700* Planes *Trademark(s) of Bombardier Inc. or its subsidiaries.

7. Trains & …… Trams Metros High-speed Trains Intercity Trains 100% Low Floor (Linz, Austria) Interregional Trains Voyager** DEMU,(UK) ICE** 3 EMU (Germany/Netherlands) Monorail Systems London (UK) – Sub Surface Electrostar* EMU (UK) Las Vegas (USA) Double Deck Trains BiLevel* Coaches(Canada, USA) Also build Propulsion Units, Control Units, Signalling, Locomotives, Freight, Services * Trademark(s) of Bombardier Inc. or its subsidiaries

8. …..Recreational Vehicles

9. The high flying world of excitement and business jets??? The thrills and exhilaration of Ski Doos??? So which Division did I get to work in???

10. APM Systems Nope ladies and gents….. …I got the Train Division!!

11. ‘Yellow Blood’Does anybody know what it is?

12. ‘Project Risk Management’Does anybody know what it is?

13. My mission turned out to be.. ….Implement Risk Management into • All eleven of Bombardier Transportation’s Divisions • In over 600 projects • Worldwide in over 28 countries • Training over 3000 people • In 5 different languages

14. Project Plan Project Execution Activities PLAN DO ACT Reviews Key Performance Indicators Change Management CHECK Risk Mgt Process Introduction Project Closeout

15. No mitigation mindset – more “provide enough money to cover the risks” mindset • Focus more on firefighting rather than Risks • Viewed as a task to be completed only when asked for The Initial Situation 2001 • Non Standard Process – blend of many Bombardier, Adtranz, Site & Project specific approaches • Applied in an ad hoc way EXISTING STRATEGY (Situation) • No formal Risk Mgt structures existed • Reported in an ad hoc manner • Different formats of Risk Process – checklists, workshops, meetings used through BT EXISTING STRUCTURES EXISTING CULTURE

16. NEW RISK MANAGEMENT STRATEGY EXISTING STRATEGY DEFINE THE STRATEGY DEFINE & IMPLEMENT PROCESSES, ORG STRUCTURES, REPORTING STRUCTURES, MEETING STRUCTURES NEW RISK MANAGEMENT STRUCTURES NEW RISK MANAGEMENT CULTURE EXISTING STRUCTURES EXISTING STRUCTURES ? EXISTING CULTURES EXISTING CULTURES New 2001

17. Project Plan Project Execution Activities PLAN DO ACT Reviews Key Performance Indicators Change Management CHECK Risk Mgt Process Introduction Project Closeout

18. Risk Management - The Transition New 2001 EXISTING STRATEGY NEW RISK MANAGEMENT STRATEGY • Define the Process x 1 • Communicate the process x 11 divisions • Train BT Personnel x 11 divisions Ongoing Ongoing Ongoing STRATEGY ACTIONS EXISTING STRUCTURES EXISTING CULTURE

19. Best Practice Sources Bombardier Transportation Risk Group BID Bid Negotiation Marketing Pre Bid Divisional Risk Management Champions Divisional Risk Management Champions DESIGN REALIZATION FIELD SUPPORT START UP Preliminary Detail Work 1st Series Product Operation & Qualification Design Design Preparation Product Realization Introduction Maintenance RISK MANAGEMENT ‘BEST PRACTICE’ INTO OUR PROJECTS THROUGHOUT THEIR LIFECYCLE BEST PRACTICE TO ACTION

20. Scope Define requirements, divide project into phases and define milestones Scope Create project WBS (work packages, activities & deliverables) Time Create a logical network and critical path Time Prepare the project schedule HR/Cost Define the need for resources Scope The project structure (consortium, partners, etc.) Integration Optimize and harmonize the functional plannings Risk Analyse the risks and opportunities and run the Risk funnel Cost Prepare the project budget Integration Get approval and set the baseline project plan including detailed project schedule Communication Communicate the project plan Project Management Institute Body of Knowledge (PMBOK)

21. The 5 Step Risk Management Process

22. New NEW RISK MANAGEMENT STRATEGY NEW RISK MANAGEMENT STRUCTURES NEW RISK MANAGEMENT CULTURE Risk Management - The Transition - New 2001 EXISTING STRATEGY • Define & Implement Divisional Org Structures x 11 • Standard Risk Workshop format x 2 • Standard Risk Agendas x 1 • Standard reporting – • White Book, IRAR, Blue Book, • MOR • Tools – Risk Database (ROP), Risk Funnel Training Roll Out EXISTING STRUCTURES Training Roll Out Training Roll Out Complete / Ongoing STRUCTURAL ACTIONS EXISTING CULTURE

23. Senior Management Commitment • Letters to the 11x Divisional President, copying the CEO who was sponsoring the initiative • Presentation of Project plan, to Divisional Presidents for support, at CEO Management Meeting

24. Divisional Structures • 11 x

25. Three distinct risk management training phases took place. • Phase 1 – June to September 2002 (80 Key Staff Trained – Train the Trainer) • Phase 2 – September to February 2003 (1200 Staff Trained across 11 Divisions) • Phase 3 – October 2003 to February 2004 • Upgrade the learning, from new learnings • Specificknowledge to super users instead of a generic course for all.

26. Modular Training Courses

27. Risk Identification & Assessment Workshops RISK Workshops RISK Meetings RISK Reporting • Risk Management - core item on all Project Meeting agendas – again varies by division • Blue Book – Risk section, varies by division • MOR – Risk Mgt section to be released Oct 2003 • Standard Risk Workshops deployed to various degrees by different Divisions The Three Structural Secrets

28. RISK FUNNEL • Aug 2003 - Now available in 4 languages! - English, French, Italian and German ROP DATABASE • Continually being improved based on Divisional user feedback • Improved 4 times latest release Rev 3.08 released in 18th August 2003 • Application varies by division Risk Management Core Tools

29. Risk Management - A common language - The 3C’s - Condition, Cause and Consequence Condition • There is a risk that….[describe the adverse event or series of events that might happen] Cause • The risk is caused by…. [Identify the generic cause area and describe the specific source of the risk] Consequence • The direct impact of the risk occurring will be…….[Describe the direct impact in terms of the adverse effect on the objectives of the work area in which the risk occurs] Ease of Mitigation The 3C’s assists the project teams in clearly defining risks and so enabling them to attack the cause and/or impact of a risk.

30. Risk Management Tools- Risk & Opportunity Database -

31. Risk Management Tools- Risk & Opportunity Database - Assessing (Prioritising the risk)

32. Risk Management Tools- Risk & Opportunity Database - • ROP enables project teams to reporting and tracking the risks/opportunities and more importantly the mitigating actions

33. Risk & Opportunity Management Implementation In summary then, we had now completed the following: • Developed the process • Trained the people • Put divisional risk champions in place • Developed the tools • Standardised workshops, risk meetings and reporting ……having completed all this then surely we should have a well implemented process across all Divisions?

34. Project Plan Project Execution Activities PLAN DO ACT Reviews Key Performance Indicators Change Management CHECK Risk Mgt Process Introduction Project Closeout

35. Some people approached Risk Management in a different way to others…..

36. Others had a different opinion of themselves to reality…..

37. We felt that we should maybe put a few key measures in place

38. Risk Database Rollout • Total Q1’04

39. Risk Maturity Matrix Increase in maturity of Risk Mgt core skill sets Increasing number of Risk Mgt core skill sets Risk Mgt Maturity Score

40. Divisional ProgressRisk Maturity Matrix • Above shows the processes and tools that were measured for maturity

41. TTS (except LUL) no evidence in ROP of Risk being actively managed • Services – no owner • Bogies – no clear owner • Car bodies – tend to sit in Vehicle Division activity • Ind Zones 2 & 3 returned answers in different format • BTNA – piloting new maturity matrix for us

42. Measurement by Keeping in Touch

43. Project Plan Project Execution Activities PLAN DO ACT Reviews Key Performance Indicators Change Management CHECK Risk Mgt Process Introduction Project Closeout

44. ACT – Change Management • We had to retrain Phases 2 & 3 training • Super User training – Sites and Divisions • Targeted Priority Projects to Support • For Example London Underground • Actively manage stakeholders throughout entire change implementation

45. Stakeholder Management Interest Power

46. Project Plan Project Execution Activities PLAN DO ACT Reviews Key Performance Indicators Change Management CHECK Risk Mgt Process Introduction Project Closeout

47. What did we learn? Because it is never too late to learn!

48. We implemented the same • Process • Training • Tools – ROP, Risk Funnel • Structures • Support • Yet we achieved different results!! Why?

49. Harness powerful planning. Keys to Success • It’s the soft stuff that is hard • Fundamentally it is all about ‘excellent leadership’ and the right people with ‘the right attitude’ • Sponsorship and active interestby the Divisional President & Head of PM led to successful implementations • Reporting – What gets measured gets managed! • Define clearly your new organisation structure to support the implementation of your strategy

50. Keys to Success "The thing I have learned at IBM is that culture is everything.“ Louis Gertsner – CEO IBM Strategy • A clearly defined vision and strategy to get there Structure • Organisational, Process, Tools Leadership & Culture • A change in Leadership, a change in culture? • We witnessed a transformation in attitude on a major BT project • The culture was changed from that point on