Implementation Session RT 243 – Enhancing Innovation in the EPC Industry

1. Implementation SessionRT 243 – Enhancing Innovation in the EPC Industry Paul Chinowsky, University of ColoradoModerator

2. The Panel • Paul Chinowsky – University of Colorado • Mike Toole – Bucknell University • Howard Irwin – AMEC • Cathy Myers – CH2MHill • Garry King – WorleyParsons Other Team Members Mauricio Rodriquez – Smithsonian Institution Matt Hallowell – University of Colorado John Strickland – CH2M Hill

3. Agenda • Review of Phase I – Paul • Objectives of Phase II – Validate the IMM – Mike • Maturity Model Findings - Mike • Case Studies • Southland – Howard • Ch2M-Hill – Cathy • Putting This Into Action – Garry • Conclusion - Paul

4. Learning Objectives • Understand Innovation Maturity Model • Understand How to Implement in Your Organization • Understand The Need to Change Innovation Perspectives

5. Phase I Objectives • Determine Innovation Drivers • Determine Innovation Support Components • Focus on Enhancing Innovation After 200 data points and literature review -

6. 8 Key Enablers • Leadership • Learning • Processes • Risk Perspective • Culture • Collaboration • Customer Focus • Resources Innovation Maturity Model

7. Innovation Maturity Model 1=strongly disagree 2=slightly disagree 3=I am neutral 4=slightly agree 5=strongly agree.

8. Innovation Maturity Model

9. Implementation SessionRT 243 – Phase II Objectives and Findings Mike Toole – Bucknell University

10. Objective 1: Validate IMM Evaluation Tool • Confirm content and focus • Improve statement wording • Add demographic questions • Convert Excel to Web tool

11. Objective 2: Improve IMM Process • Discussions with client regarding organizational goals, client IMM sample • Analysis of client IMM evaluation data • Selection of IMM recommendations to be implemented • Monitoring of implementation

12. Objective 3: Document Case Studies • Goal: encourage IMM adoption by CII members • Reduce uncertainty about tool and process • Share pilot client lessons learned • Commitment to confidentiality • Case studies to be included in research report

13. IMM Case Studies Background • 6 volunteer organizations • Southland Industries • WorleyParsons • CH2M Hill • Fluor • CSA • US Army Corps of Engineers • Web based • Sample chosen by organizationSample size varied

14. Case Study Comparison

15. Barrier Comparison Non-Billable Hours Projects Focus on the Contract Non-Billable Hours Work Days Too Full Leadership Fostering Innovation Leadership Fostering Innovation Funding From Corporate Funding From Corporate Multi-Disciplinary Teams Focus on Innovation Work Days Too Full Funding From Corporate Risk-Taking is Recognized as Part of Innovation Innovation Incentives Work Days Too Full Leadership Tolerates Some Failure Innovation Incentives Non-Billable Hours Risk-Taking is Recognized as Part of Innovation

16. Summary of Findings • IMM is a valuable evaluation tool • Results very similar within pilot clients and similar to survey data • Implementation of recommendations is critical

17. Implementation SessionRT 243 – Case Study: Southland Industries Howard Irwin - AMEC

18. Case Study: Southland Address two pertinent topics: • Can innovation maturity be measured? • Road test the survey and its output • Do the recommendations work? • Test the process of assigning recommendations based on the survey • Test the validity of the recommendations

19. Case Study: Southland Case Study Process: • Maturity Model Survey - Round 1 • Benchmarking Analysis • Recommendations for Improvement • Implementation of Recommendations • Maturity Model Survey - Round 2 • Improvement Analysis

20. Maturity Model: Round 1

21. Maturity Model: Round 1

22. Recommendations • Set aside a “pool” or “incentive pot” of funds for project innovations. • Establish “contingency” limits (higher than normal) to be applied to projects to offset risks of trying innovations Q22. Our organization has incentives and/or ways to indemnify a project that is implementing an innovation.

23. Recommendations • Assign the responsibility of “Learning Coordinator (LC)” to a COP • Develop and implement a monthly knowledge letter sent by each LC • Create a searchable library of innovations Q61. Our organization has a process for ensuring innovation-related learning from one project modifies behavior on subsequent projects.

24. Recommendations • Establish Communities of Practice • Establish a Recognition System for outstanding performance Q48. Our organization expects individuals to share ideas through formal forums.

25. Southland – Case Study Highlights • IMM provided targeted areas to address. • Recommendations fit well into Southland’s continuous improvement program • However, base recommendations needed to be adjusted to fit the organization • Second Round survey showed marked improvements in the three areas addressed

26. Implementation SessionRT 243 – Case Study: CH2M HILLElectronics & Advanced Technology Cathy Myers– CH2M Hill

27. Background • Electronics & Advanced Technology • Focus on Leading Edge Industrial Technologies

28. Using the Maturity Model • 51 Responses from 2 Groups • Recently Involved in Lean Initiative (Responsibility Based Project Delivery) • Similar Project Not Using Lean Approach • Formula for Finding Greatest Opportunity • (ideal score – actual score) x importance factor

29. Maturity Model Mapping

30. Findings • Generally Positive Perception • Areas of Strength • Culture • Leadership • Plenty of Room for Potential Improvement

31. Biggest Opportunities • Non-Billable Hours • Corporate Funding for Innovation • Leadership Investing in Innovation • Incentives and Project Indemnification • Sharing of Knowledge • Failure Tolerance • Risk Taking for Long-Term Advancement

32. Path Forward • Clear Connection to Lean Project Delivery Initiative • Incorporate Findings to Improve Learning • New Thinking on Risk Perspective

33. Putting the Research to Work Garry King – WorleyParsons

34. Changing The Game • Recognize the Strategic Importance • Guide the Culture • Engage the Talent • Stimulate Collaboration and Learning • Create the Processes (transform ideas to action) • Change the Risk Perspective

35. Syndicating vs. Isolating Risk Some Industries Make Good Money By Taking Advantage of Multiple Iterations

36. Where Do I Start? • Measure your organization (IMM survey) • Analyze IMM results and recommendations • Select specific areas for improvement • Adjust and implement to fit your organization • Measure again to confirm effectiveness • Take a long term perspective