Office of Project Scope & Cost Management Creating a Culture of Project Management

1. Office of Project Scope& Cost ManagementCreating a Culture ofProject Management ACEC Mn/DOT Consultant Conference – March 2, 2010

2. Presentation Outline Introduction/background; Mn/DOT’s objectives; national DOT trends and perspectives (Jean Wallace – Mn/DOT) Project management peer review process; Mn/DOT best practices and the panel’s best practices and observations (Jim Grothaus – CTS) Consultant perspective; organizing around project management (Doug Abere – CH2M HILL) Construction industry perspective; issue management (Kendall Griffith – Mortenson Constr.) Next Steps Q & A Project Management

3. Introduction/Background (jean 5-7 mins) Why do this peer review? Improve project delivery performance = on time and on budget (issue we share with peers) Benchmark Mn/DOT’s project management practices Initial step in a change management process Check for best industry practices Build from our success Mn/DOT’s strategic vision and strategic directions… Project Management

4. Project Management Aligns with Mn/DOT’s Strategic Vision Project Management is viewed as a key element to successfully implement the Strategic Directions of Safety, Mobility, Innovation, Leadership, and Transparency A “Project Management Culture” is Mn/DOT’s Goal—to create, implement, support, and sustain this culture Project Management

5. Mn/DOT Steering Committee and Project Team Leadership Project Oversight and Champions for Change… Steering Committee Commissioner Deputy Commissioner 3 Division Directors 1 Asst. Div. Director 2 District Engineers FHWA • Project Team • Advisory to Steering Committee • Developed the Peer Review agenda • Communicated with stakeholders • Cross-sectional representation of Mn/DOT and external partners Project Management

6. Priority Recommendations/Actions(see handout) Clarify the authority and responsibilities of PMs More broadly establish the use of Project Mgmt. Plans Implement team charters Complete project-level risk management plans Update training for PMs Explore PM core competencies Explore project management and other career tracks with Human Resources Develop an Implementation Plan for long-term sustained change Project Management

7. How Can We Develop a Project Management Culture? Increase the organizational value project management Address issues that impact the effectiveness of project managers (as supported by US industry peers and similar reviews)…note: Jim/Doug to follow up… Emphasize the use of project management plans Clarify the authority and responsibilities of project managers (and team members) Project Management

8. Industry-wide Reviews Recent National Work in Transportation Project Management NCHRP 20-68A, AASHTO Domestic Scan 07-01, “Best Practices in Project Delivery Management” NCHRP 20-69, NCHRP Web-only Document 137, “Guidance for Transportation Project Management” Project Management

9. The Peer Review Process and Observations Jim Grothaus U. of MN Center for Transportation Studies (CTS) Project Management

10. Peer Review Process Background documents provided context White Paper (current practices; national studies) Survey of Mn/DOT staff (180+ responses) Peer Review Panel (visited wk. of Oct 5-8, 2009) Pasco Bakotich, Washington DOT Sidonia Detmer, Virginia DOT Tucker Ferguson, Pennsylvania DOT Larry Langer, Arizona DOT Jim McMinimee, Utah DOT George Jones, FHWA Laurie McGinnis, Univ. of Minnesota, CTS John Conrad, CH2M HILL Tim Neuman, CH2M HILL Mike Paddock, CH2M HILL Project Management

11. Panel Members Learned How Mn/DOT “Does Business” Conducted 20 Group Interviews Interviewed 100+ Mn/DOT Staff Interviews focused on program delivery in four categories: • Project Phases • Planning through Maintenance • Functional/Program Areas • e.g. Environment, Traffic, Design-Build • Initiatives and Support • CSS, HEV, Risk/Conflict Management, Metro Matrix • Specific Projects • TH 10 in Detroit Lakes • TH 62/I-35W Crosstown Project Management

12. Best Practices Exist in Mn/DOT • Widespread implementation of scoping process and support for total project cost estimating, includes: • Routine project reviews • Scope amendment process • There is a strong project delivery focus and culture • Informal networks for resource sharing • Empowered to use consultants • Training programs are valued and encouraged Project Management

13. Best Practices Exist in Mn/DOT (cont.) • Innovation is promoted, for example: • Contracting (contractor incentives, Design-Build process) • Utility group process; Right-of-Way “REALMS” • IT Program Office PM organization and use of PMBOK processes • Hear Every Voice and CSS are valuable tools • Annual reporting of schedule delays and reasons given helps overall program review Project Management

14. What are Good PM Skills? • Good communication skills • “Big picture” point of view; ambiguity about project details will not hinder progress • Understanding of Mn/DOT processes to ground decision-making • Able to manage project change Project Management

15. Project Management Challenges and Opportunities • The Panel identified several opportunities for change • Two major themes help organize the findings: • Development of a project management organization and culture • Enhancing project management tools, technology, training, and methods Project Management

16. Panel Observations(1 of 3) • There is no definition of a Mn/DOT Project Manager, resulting in: • unclear transitions in the PM role • no performance measures to work from • Build understanding of baseline schedules and cost estimates • Early involvement of construction and maintenance staff Project Management

17. Panel Observations (2 of 3) • Include tools for risk and conflict management • Develop resource/knowledge management systems and networks • Gaps exist in training for experienced PMs Project Management

18. Panel Observations (3 of 3) • Project Management Plans are not used on a regular basis • PPMS (Mn/DOT’s project tracking software/system) does not provide the capabilities needed for advanced project management • Other potential areas for improvement: • Track and keep project commitments • Integrate project lessons learned; enhance closeout Project Management

19. Consultant Perspective Doug Abere CH2M HILL Project Management

20. Project Management Culture • Leadership thoughts on creating a project management culture (Jim H1owland, 1982) • “There is no more important work in the firm than project management.” • “Respect should follow those who voluntarily move down or sideways on the org. chart.” • “No matter what the organizational structure, if the people in it want it to work, it will.” • Project Delivery System (PDS) – 1990s: A process for project delivery success Project Management

21. Project Management Defined • See the Peer Review’sWhite Paper • Selected definitions: • A methodical approach to planning and guiding project processes from start to finish and …involves many processes organized into five groups: initiation, planning, executing, controlling, and closing. (PMI, PMBOK) • Includes: (1) chartering, building and sustaining the team; (2) developing the work plan; (3) endorsing the project; (4) executing work and managing change; and (5) closing the project. (CH2M HILL PDS) • Many definitions also reference resource limitations, financial objectives, and managing risks Project Management

22. How Do Organizations Approach Project Management? • Distributed (Flat) • Priorities set from the bottom up and the top down • Project decisions managed according to project-specific plans, roles, and status Centralized (Hierarchy) • Organizational priorities set at the top • Project decisions managed by positions in the organization Quote from sr. executive (re. distributed org.): “The only way to lose your authority around here is to exercise it…” (firms typically blend both models) Project Management

23. The Peer Review and Project Management Effectiveness • Address distinctions between project objectives/processes and project management tools (every project is unique) • All approaches and tools should be appropriately scaled (no one size fits all) • Highlight: More broadly establish the use of Project Management Plans (PMPs) • Rigorous work plans are not only for complex projects; risks add up across portfolios of small/mid-sized projects • Mn/DOT will consider mentoring and portfolio management approaches • Changes can only be managed with reference to a plan (team member roles, tasks, schedule, and decision-making) Project Management

24. The Peer Review and Project Management Effectiveness (cont.) • Highlight: Explore project manager core competencies • Competency framework for Mn/DOT project management is the subject of review/revision • Be careful to address project management vs. technical capabilities and alternate career paths; how do staff develop into PMs • Highlight: Implement team charters • A charter is typically led by the PM and is developed early by the team • It is focused on stakeholders and related project objectives—important for all team members to participate • Strong tie to the PMP Project Management

25. Construction Industry Perspective Kendall Griffith Mortenson Construction Project Management

26. Construction Industry Perspective • Most everything that we do is project management • Though our roles and scope differ from those of Mn/DOT, our priorities and focal points are often similar – a shared focus on the delivery of project • Critical to our Project Management is a careful balance between structured project management processes (technical aspects), and the importance of softer skills and forward-looking strategies Project Management

27. Highlight: Clarify the authority and responsibilities of Project Managers • The PM is the leader of our project team • “CEO of the Project”, with full responsibility for the success of the project: • Preconstruction and design-phase management • Safety, quality, productivity management • Scheduling and budget management • Procurement, insurance, billings, etc. • …Customer relationship Project Management

28. Highlight: Clarify the authority and responsibilities of Project Managers Where do our project managers come from? • Typically “grown” within the Company, trained by peers • 4 year degree, 5-10 years in the business • Establish themselves as leaders early in their careers How do we groom them? • Experience with other Project Managers • Trial by fire • Estimating and scheduling training programs • Constant safety and quality training efforts • Periodic soft-skill training Project Management

29. Highlight: Clarify the authority and responsibilities of Project Managers (cont.) • Our PMs are responsible to deploy our “project management control systems” (PMCS), including: • Primavera Expedition (documentation) • Primavera Project Planner (scheduling) • Our PMCS tools support what we do, they do not define what we do. They are our 3rd most important tool. • Our second most important PM tool is verbal communication • Our most important PM tool is in-person, face-to-face communication Project Management

30. Highlight: Complete project-level risk management plans • …The PRIMARY determinant of our project management success is how effectively we manage through “issues” that arise on the project. • Establishing plans for cost schedule, and quality management early in the project “clears the deck” to allow primary PM focus on Issue Management • Proactive identification of issues • Team collaboration on solutions • Timely communication and resolution …While the following are key fundamentals to successful project management…: • Cost awareness and responsibility • Schedule foresight and discipline • Quality Management Planning • Good planning and communication • On-site presence, attention to progress Project Management

31. Highlight: Complete project-level risk management plans • “Issues” are specific circumstances or occurrences that can potentially affect the project in any way • Issue management involves: • Identify, track, and report on any potential issue on the project • Assess budget and schedule implications; analyze multiple scenarios • Advise Owner and design team to facilitate timely decision-making • Our project management focus is Issue Management • Pro-active Issue Management is good • Re-active issue management is bad (traditional “cost issue” management) Project Management

32. Highlight: Complete project-level risk management plans Three simple mechanisms for issue management (“risk management planning”) are implemented on our projects: • IDENTIFY - Pre-project risk and hazard analysis (large projects or unusual risk = many people) • TRACK - Fundamental database with simple numbering scheme tracks every issue on a project • MONITOR - Periodic issue review meetings to ensure issues are identified and resolved in a timely manner (scaled to project size and scope) Project Management

33. Highlight: Complete project-level risk management plans • Issue management is our most critical project management effort • If we plan well - schedule and cost goals will be accomplished. Issues create the only exposures. • If issues are effectively managed - Zero injuries arise in the workplace; Zero defects occur in the work during and after construction • If issues are managed effectively - our project team is focused on the success of the total project throughout, to provide an exceptional experience for our Customers and design partners. Project Management

34. Construction Industry perspective on Project Management success: • …understand the Customer’s goals and priorities • …start with a well-planned schedule and budget framework that support Customer goals and priorities • …build a relationship that ensures clear communication of status of all project issues • …actively manage the issues on the project to ensure the Customer’s goals are achieved Project Management

35. Next Steps / Discussion Jean Wallace Mn/DOT Project Management

36. Next Steps Action Items Clarify the authority and responsibilities of PMs More broadly establish the use of PM Plans Implement team charters Complete project-level risk management plans Update training for PMs Explore PM core competencies Explore project management and other career tracks with Human Resources Develop an Implementation Plan for long-term sustained change Project Management

37. Comments/Questions ? Project Management