MANAGING IN A CORRUPTION-FREE CONSTRUCTION INDUSTRY

1. MANAGING IN A CORRUPTION-FREE CONSTRUCTION INDUSTRY INSTRUCT PROJECT MANAGEMENT CONFERENCE BANGALORE, INDIA MARCH 2013 WILLIAM P. HENRY, P.E., D.WRE PRESIDENT.2005.ASCE, CHAIR.2006.AAES

2. INTRODUCTION IT’S GREAT TO BE AN ENGINEER BECAUSE THE PROJECTS WE PLAN DESIGN CONSTRUCT OPERATE, AND MAINTAIN MAKE THE WORLD A BETTER PLACE FOR PEOPLE

3. BASIC PREMISE MANAGEMENT IS NOT ENGINEERING ENGINEERING PRODUCES PRODUCTS (PROJECTS) MANAGEMENT IS A PROCESS – ON- GOING, NEVER ENDING

4. MANAGEMENT TODAY WE WILL CONSIDER WHAT IS MANAGEMENT? CORRUPTION IN CONSTRUCTION WHAT DOES A MANAGER DO? HOW TO MANAGE IN A CORRUPTION-FREE CONSTRUCTION INDUSTRY

5. WHAT IS MANAGEMENT? MANAGEMENT IS THE DESIGN OR CREATION AND MAINTENANCE OF AN INTERNAL ENVIRONMENT IN AN ENTERPRISE WHERE INDIVIDUALS, WORKING TOGETHER IN GROUPS, CAN PERFORM EFFICIENTLY AND EFFECTIVELY TOWARD THE ATTAINMENT OF GROUP GOALS

6. WHAT IS MANAGEMENT? MANAGEMENT IS GETTING THINGS DONE THROUGH OTHER PEOPLE

7. PROJECT MANAGEMENT IDENTIFYING AND INFLUENCING WHAT YOUR TEAM MUST DO TO DELIVER THE PROJECT AT THE REQUIRED QUALITY WITHIN THE BUDGET, SCHEDULE, EQUIPMENT & PERSONNEL CONSTRAINTS PROJECT MANAGEMENT IS A MISNOMER – THE PROJECT MANAGER (PM) MANAGES THEPEOPLE WORKING ON THE PROJECT, NOT THE PROJECT

8. BEGIN BY MANAGING YOURSELF VITAL PERSONAL ATTITUDES BE PROACTIVE – ANTICIPATE NEEDS START WITH THE END IN MIND PRIORITIZE YOUR USE OF TIME AND RESOURCES

9. BEGIN BY MANAGING YOURSELF  SKILLS IN DEALING WITH OTHERS THINK WIN – WIN SEEK 1ST TO UNDERSTAND; THEN TO BE UNDERSTOOD SYNERGIZE

10. BEGIN BY MANAGING YOURSELF  REFRESH YOURSELF REGULARLY – KEEP YOUR TOOLS SHARPENED CONCEPTS FROM: THE 7 HABITS OF HIGHLY EFFECTIVE PEOPLE BY STEVEN COVEY

11. 3 IMPORTANT CONCEPTS THAT AFFECT YOUR ABILITY TO MANAGE  1. AUTHORITY – THE POWER TO COMMAND OTHERS FORMAL AUTHORITY – THE POWER TRANSMITTED BY AN ORGANIZATION TO A MANAGER INFORMAL AUTHORITY – DISPOSITION OF SUBORDINATES TO ACCEPT AUTHORITY. IT RESULTS FROM THE INFORMAL ORGANIZATION. THIS IS REAL AND IMPORTANT

12. 3 IMPORTANT CONCEPTS THAT AFFECT YOUR ABILITY TO MANAGE  2. RESPONSIBILITY – THE OBLIGATION TO PERFORM AN ASSIGNED DUTY

13. 3 IMPORTANT CONCEPTS THAT AFFECT YOUR ABILITY TO MANAGE  3.DELEGATION ASSIGN TASKS TO A PERSON DELEGATE AUTHORITY NEEDED T0 ACCOMPLISH THE TASKS TO THAT PERSON EXACT RESPONSIBILITY FOR ACCOMPLISHING THE TASKS FROM THAT PERSON DELEGATION IS NOT ABDICATION!!!! THE PM RETAINS RESPONSIBILITY FOR GETTING RESULTS

14. 3 IMPORTANT CONCEPTS THAT AFFECT YOUR ABILITY TO MANAGE   1. AUTHORITY 2. RESPONSIBILITY 3. DELEGATION DELEGATION IS NOT ABDICATION!!!!

15. CORRUPTION IN CONSTRUCTION CORRUPTION ISN'T A 20TH OR 21ST CENTURY INVENTION HAMMURABI'S CODE OF LAW 1750 BC -– STANDARDS FOR COMMERCIAL TRANSACTIONS MOSES AND THE 10 COMMANDMENTS – 1200 1200 BC – THOU SHALL NOT STEAL CORRUPTION HAS BEEN AROUND AS LONG AS PEOPLE HAVE! SO, WHY WORK ON IT NOW?

16. CORRUPTION IN CONSTRUCTION CORRUPTION KILLS! POORER QUALITY STRUCTURES AND EQUIPMENT PUT PEOPLE AT RISK NEEDED PROJECTS GO UNBUILT PEOPLE DIE DUE TO LACK OF POTABLE WATER AND HEALTH CARE

17. CORRUPTION IN CONSTRUCTION CORRUPTION UNDERMINES SUSTAINABLE DEVELOPMENT PROJECT QUALITY DECREASES REQUIRED MAINTENANCE INCREASES PROJECT USEFUL LIFE IS SHORTENED UNNECESSARY USE OF RESOURCES PEOPLE ARE NOT SERVED WELL

18. CORRUPTION IN CONSTRUCTION WORLD CONSTRUCTION SPENDING FOR 2011 = $5.8 TRILLION (USD) 10 PERCENT +/- IS LOST TO BRIBERY AND CORRUPTION – MORE THAN $580 BILLION (USD) ANNUALLY! THE ECONOMIC MAGNITUDE OF THE PROBLEM IS ENORMOUS!

19. CORRUPTION IN CONSTRUCTION FORECASTS 2015 - 80% OF INFRASTRUCTURE $ SPENT IN DEVELOPING COUNTRIES 2020 – 2/3 OF MAJOR CITIES IN THE WORLD WILL BE IN DEVELOPING COUNTRIES WHAT DOES THIS MEAN FOR YOU?

20. CORRUPTION IN CONSTRUCTION INSUFFICIENT NUMBER OF LOCAL ENGINEERS AND CONSTRUCTORS TO DO THAT QUANTITY OF WORK MEANS: MORE GLOBAL PRACTICES THAN EVER BEFORE IN HISTORY MORE TEAMING ARRANGEMENTS WITH NEW PARTNERS NEW RELATIONSHIPS MEAN LEARNING NEW WAYS OF DOING BUSINESS – GOOD OR BAD! THE DEVELOPING COUNTRIES RATE LOWEST IN OPENNESS AND TRANSPARENCY IN DECISION MAKING THE POTENTIAL FOR CORRUPTION IS HIGH !

21. WHAT IS CORRUPTION THE IMPAIRMENT OF INTEGRITY, VIRTUE OR MORAL PRINCIPLE AN INDUCEMENT TO DO WRONG BY IMPROPER OR UNLAWFUL MEANS 2 PEOPLE MAKING 1 BAD DECISION

22. WHO CAN BE CORRUPT CONSTRUCTION PARTICIPANTS OWNER ENGINEER CONSTRUCTOR PROJECT MANAGER MATERIAL SUPPLIER EQUIPMENT SUPPLIER LENDER REGULATORY/PERMITTING AGENCY

23. FORMS OF CORRUPTION KICKBACKS / BRIBERY FRONT COMPANIES BID RIGGING / COLLUSION CONFLICTS OF INTEREST NON-COMPLIANCE WITH SPECS

24. CORRUPTION IN CONSTRUCTION CORRUPTION IS A MANAGEMENT PROBLEM!!! FIGHTING CORRUPTION MEANS PUTTING ANTI-CORRUPTION MANAGEMENT SYSTEMS, POLICIES AND PRACTICES IN PLACE IN YOUR ORGANIZATION AND IMPLEMENTING THEM VIGOROUSLY AT ALL LEVELS

25. HOW DOES INDIA RATE? LOOK AT CONSTRUCTION EXPENDITURES (IN $US B) AND TRANSPARENCY INTERNATIONAL’S CORRUPTION PERCEPTIONS INDEX (CPI) (SCORE AND NATIONAL RANKING) FOR THE PERIOD 2000 - 2009

26. HOW DOES INDIA RATE? YEAR SPENDING (US$B) CPI (SCORE/RANK) 2000 69.6 2.8/69 (90) 2001 75.4 2.7/71 2002 85.2 2.7/71 2003 100.1 2.8/83 2004 147.3 2.8/90 2005 175.5 2.9/88 2006 208.2 3.3/70 2007 248.5 3.5/72 2008 293.8 3.4/85 2009 316.8 3.4/84 (180)

27. WHAT DOES A MANAGER DO ? 5 ACTIVITIES PLANNING ORGANIZING STAFFING DIRECTING CONTROLLING

28. PLANNING PARAMOUNT IMPORTANCE SELECTING FROM AMONG ALTERNATIVES FOR FUTURE ACTIONS PROCESS IS VITAL PRODUCT (PLAN) IS A SNAPSHOT AT A GIVEN TIME THE ONLY THING YOU CAN SAY WITH CERTAINTY ABOUT ANY PLAN YOU MAKE IS THAT IT’S WRONG!!!!

29. PLANNING 4 CHARACTERISTICS OF GOOD PLANS CONTRIBUTE TO OBJECTIVES OVERARCHING DOCUMENTS COVER ALL NEEDED ISSUES EFFICIENT – COST VS. CONTRIBUTION TO SUCCESS

30. PLANNING TYPES OF PLANS GRAND STRATEGIES COMPETETIVE STRATEGIES OBJECTIVES POLICIES PROCEDURES RULES PROGRAMS BUDGETS

31. PLANNING PROJECT PLANS WORK BREAKDOWN STRUCTURE BUDGET - MONEY SCHEDULE – TIME / INTERRELATIONSHIPS ORGANIZATION – SKILLS NEEDED STAFFING – PEOPLE WITH THE NEEDED SKILLS RISK MANAGEMENT REGISTER

32. PLANNING PROJECT PLANS (cont.) QUALITY CONTROL – FOR EACH TASK ANTI-CORRUPTION – FOR PROJECT CASH FLOW – MONEY COMMUNICATION – INTERNAL / EXTERNAL AMENDMENTS AND ADJUSTMENTS – WHY, HOW, WHEN LESSONS LEARNED

33. PLANNING PLANNING STEPS SET OBJECTIVES ESTABLISH PREMISES DETERMINE ALTERNATIVES EVALUATE ALTERNATIVES / SELECT FORMULATE DERIVATIVE PLANS

34. ORGANIZING GROUPING OF ACTIVITIES NEEDED TO REACH OBJECTIVES WHAT SKILLS ARE NEEDED TO SUCCESSFULLY COMPLETE THE PROJECT? GROUPING THE SKILLS DELEGATING NECESSARY AUTHORITY TO THE MANAGER OF EACH GROUP

35. ORGANIZING TYING THE GROUPS TOGETHER HORIZONTALLY AND VERTICALLY THROUGH AUTHORITY RELATIONSHIPS AND INFORMATION TECHNOLOGY SYSTEMS FORMAL VS.INFORMAL – REMEMBER WE TALKED ABOUT THIS UNDER AUTHORITY

36. ORGANIZING SPAN OF CONTROL SPAN IS THE NUMBER OF SUBORDINATES A MANAGER CAN SUPERVISE SPAN DETERMINANTS NUMBER OF CONTACTS COMPLEXITY OF CONTACTS DIFFERENTIATION OF CONTACTS TIME RATIO

37. STAFFING POPULATING THE GROUPS – THE PEOPLE YOU MANAGE RECRUITMENT SELECTION TRAINING – TECHNICAL, SAFETY, ANTI- CORRUPTION PROMOTION DISCIPLINE PROJECT NEEDS VS. ORGANIZATION NEEDS

38. DIRECTING GUIDING AND SUPERVISING SUBORDINATES   OBJECTIVES HARMONY UNITY OF COMMAND PRODUCTIVITY

39. DIRECTING HUMAN FACTORS INDIVIDUAL IS PRIMARY CONCERN INDIVIDUAL WILL WORK TO SATISFY DEMANDS IF THE BENEFITS TO HIM/HER EXCEED THE COSTS INDIVIDUAL CAN BE LED (INFLUENCED) INDIVIDUAL WANTS A SOCIAL ENVIRONMENT THERE IS NO “AVERAGE” PERSON INDIVIDUAL RISES TO THE CHALLENGE OF HIS/HER FULL CAPABILITIES

40. DIRECTING RELATIONS WITH SUBORDINATES MANAGER IS IN THE SAME GROUP AS HIS/HER SUBORDINATES MUST UNDERSTAND SUPERVISOR / SUPERVISED RELATIONSHIP MUST REALIZE HIS/HER INFLUENCE ON THE MORALE & BEHAVIOR OF SUBORDINATES - POSITIVE OR NEGATIVE

41. DIRECTING 2 KEY ASPECTS OF DIRECT 1. MOTIVATION PROVIDING REASONS TO ACT(MASLOW) PHYSIOLOGICAL SAFETY EGO – LOVE/AFFECTION ESTEEM – GOOD OPINION OF OTHERS AND OF SELF SELF – ACTUALIZATION LOWEST UNSATISFIED NEED IS THE MOTIVATOR

42. DIRECTING POSITIVE MOTIVATION – REINFORCE NEEDS OF SUBORDINATES (HERZBERG) CHALLENGING WORK RECOGNITION OPPORTUNITY FOR ADVANCEMANT NEGATIVE MOTIVATION – DISCIPLINARY CONSEQUENCES

43. DIRECTING 2. COMMUNICATION THE VEHICLE FOR MOTIVATION TRANSFER OF INFORMATION IN A WAY THAT IS UNDERSTANDABLE TO THE RECEIVER NEEDED FOR: DECISION MAKING PROCESS HUMAN FACTORS / MOTIVATION IMAGE

44. DIRECTING 4 PRINCIPLES FOR EFFECTIVE COMMUNICATION CLARITY ATTENTION INTEGRITY – SUPPORTS GOALS STRATEGIC USE OF INFORMAL ORGANIZATION

45. DIRECTING BARRIERS TO EFFECTIVE COMMUNICATION POORLY EXPRESSED MESSAGE FAULTY TRANSLATION POOR RETENTION BY RECEIVER INATTENTION UNCLARIFIED ASSUMPTIONS

46. DIRECTING BARRIERS TO EFFECTIVE COMMUNICATION (cont.) INSUFFICIENT ADJUSTMENT PERIOD  DISTRUST OF COMMUNICATOR  PREMATURE EVALUATION  FEAR FAILURE TO COMMUNICATE

47. CONTROLLING MEASURING IN A TIMELY MANNER AND CORRECTING PERFORMANCE OF SUBORDINATES TO ASSURE THAT OBJECTIVES AND PLANS WILL BE MET

48. CONTROLLING 3 STEPS SET STANDARDS MEASURE PERFORMANCE CORRECT DEVIATIONS FROM PLAN CHANGE WHAT YOU’RE DOING CHANGE HOW YOU’RE DOING IT, OR CHANGE THE PLAN TIMELINESS IS VITAL!

49. CONTROLLING 10 REQUIREMENTS FOR EFFECTIVE CONTROL SYSTEMS REFLECT THE NEEDS OF THE ACTIVITY REPORT DEVIATIONS PROMPTLY ARE FORWARD LOOKING POINT UP EXCEPTIONS AT STRATEGIC POINTS ARE OBJECTIVE

50. CONTROLLING 10 REQUIREMENTS FOR EFFECTIVE CONTROL SYSTEMS (cont.) ARE FLEXIBLE REFLECT THE ORGANIZATION STRUCTURE ARE ECONOMICAL ARE UNDERSTANDABLEBY ALL INDICATE CORRECTIVE ACTION