McKinsey recently released a study entitled, The Art of Project Leadership: Delivering the world’s largest projects. It was written by the McKinsey Capital Projects and Infrastructure Practice Team.
The report focuses on the art of project management and covers some of the critical talents needed to manage ultra large projects, defined by the researchers as those with a budget “Greater than $5 billion US”. Most of us will never get close to a project of that scale never mind ever managing a construction project of that scale. In reading the report, I found that the traits spelled out were applicable to project management on any scale project large or small. Their focus on the “soft side” talents was a slightly different approach than the usual “Scientific” approach we see. It reminded me a bit of the book “Leadership as an Art” by Max Depree, former Chairman of Herman Miller.
The McKinsey team posed the question: “Why do so many large projects continue to fall short of expectations despite so much global experience, learning, discussion, and analysis?” To find out they “researched the literature and had in-depth interviews with 27 large project practitioners, who collectively have more than 500 years of project delivery experience.”
So, you ask, to satisfy your short-term span of focus, what does the report say? First, to lay the ground work for why McKinsey was looking at this issue anyway? According to the report there are currently 3,600 megaprojects announced around the globe. Megaprojects have budgets greater than $1 billion US. That stat alone is staggering. The key is that, according to the historical data, 37% of those projects are likely to be over budget and 53% of those are likely to have schedule overruns. The potential impact of those two figures alone should make you sit up and take notice.
Starting one of those 3,600 mega projects with the potential of cost and schedule over runs should make any owner or project management team do everything they can to understand why that might happen and what they could do to limit the downside. Of course, these are complex projects in sometimes unfamiliar cultures using unfamiliar contractors and subs supplying materials that may require 3-5-year lead times. I would say that every contractor or sub estimating even a small project knows that even those are complex and have subsets of the complexities of a megaproject. Just ask those folks working on the Harvey and Irma recovery in the US or the typhoon or the flooding in Asia.
The “science” of project management is well known to every architectural, engineering or construction management student. Colleges teach that every day. The “Art” of project management, those soft skills needed to make a project successful and the project manager successful, are not well known.
When the McKinsey team did a literature word search for their report, 99% of the findings were related to the “science” aspects of project management. When they conducted their in-depth interviews with leaders in the business, 45% of them mentioned the soft skills as critical to the overall success of a project manager and the project management team. Quite a difference.
What then are the “soft skills” that experience teaches us that can “make or break” a project or project manager?
McKinsey found that there are four mindsets that make for a successful project manager.
“Lead the project as a business, not as a project.”
“Take full ownership of outcomes.”
“Make your contractor successful.” (or your vendors or your subs)
“Trust your processes but know that leadership is required.”
McKinsey also identified the “Deadly Sins” that can doom a project.
“Failing to inspire the team to operate like a business rather than a traditional project”
“Believing you can delegate delivery”
“Blaming the contractor and not solving the problem”
“Blindly following processes”
The Report goes on to define the practices that are necessary for a successful project manager to execute an ultra-large project.
Practices for Setup:
“Define purpose, identity and culture.”
“Assemble the right team.”
“Carefully allocate risk and align incentives.”
“Work on relationships with stakeholders.”
Deadly Sins during project setup according to McKinsey:
“Failing to inspire the organization with a meaningful purpose”
“Taking comfort in a ‘lump sum’ contract”
“Hiring individuals who do not have the right mindsets and behaviors”
“Under investing in community engagement.”
Practices for delivery (of the project):
“Invest in your team.”
“Ensure timely decision making.”
“Adopt a 'forward looking' performance management.”
“Drive desired behaviors consistently.”
Deadly sins during delivery:
“Managing, not leading and investing in the team”
“Failing to delegate decision making to the lowest possible level”
“Creating over-cautious behavior by over-reacting to bad news”
“Starting a 'review' of the project after every setback.”
The report is filled with pointed advice and quotes from the interviewees that you can use in your own work. Additionally, the report goes into detail on each item offering question sets that you can ask yourself in your current role.
One of the most poignant parts of the report is to explain that while the “mega project” or any project is a defined period of time, it does take a toll on you and your family. The McKinsey team offers some advice that will give you an awareness of a “soft area” that most of us neglect to discuss with our “stakeholders.”
Two other interesting parts of this report that I found informative are the quotes from the interviewees and the question sets for the owner and project manager or director.
All in all, I found this to be an outstanding paper that is full of relevant information from professionals who have mega project experience and who have earned their stripes learning the art of Project Management.