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Week of 14 January 2019: Capital Projects are still political

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I say "still" political because I have written about this before.

Mid-career operations managers and capital project managers have usually seen one or two complete disasters by the time they reach this stage in their careers. Typically, they resolve something like this, "If I ever get to the point that I am in charge of a capital project, I am going to do it differently. I will _______."

Their failing is they never spend the time to learn how to do a project correctly and they seldom get a chance to hire someone who knows how to do a project correctly. Of course, for the latter to be true, they have to recognize that they do not know how to do a project correctly and they have to be given the latitude to seek out someone or some firm that does.

In most cases it is more like this analogy. One sees a car wreck happen in real time, and thinks, "I'll never let that happen to me." However, they do not spend any time studying the wreck to see the details of what went wrong and how to avoid the same mistakes. In the car wreck example, the only ones who do the necessary studying are those with a vested interest: race car drivers. Others that study such things are companies with professional drivers--trucking companies and bus lines. The casual daily commuter doesn't invest the time.

This is what happens with capital projects in our industry. Early in one's career, one may be involved in capital projects, but not be a decision maker. When time comes for them to assume the mantle of responsibility, they are no better off than the casual automobile commuter described.

Complicating matters in capital projects is this. Big capital projects attract contractors and equipment builders who have been courting top management for years. For the most critical financial allocation a company may make in five or ten years, the decision as to who will do it and how they will do it will come down to a long-term friendship between heavy hitters who have to listen to no one.

I can think of at least two projects in the United States right now that are being executed in this manner. For folks who do expert witness work, as I sometimes do, I am merely waiting for the lawsuits to start flying two or three years from now in order to cash in in my own way. I am serious--this has happened many times in my career. My first witness experience in a construction case was in the mid-1980's and they have come along on a regular basis from that day to this.

*** has taken off like a rocket! Over twenty jobs are posted, in many interesting categories. These jobs are in at least ten different US states. [02.01.19]


So how do you avoid these situations? Allow professionals, not amateurs, to manage capital projects. Send some folks to classes at the Construction Institute in Austin, Texas. If you are a CEO or board member, eschew contracts based on your personal friendship with your hunting buddies.

In other words, hold capital projects to the same high standards to which you hold construction. Recognize that your best papermaking manager is not likely your best construction manager. Do your homework or have your dedicated professional do their homework to vet all the key contractors and equipment builders. Spend a lot of time talking about schedule and cost.

There is a lot to learn about project management by studying the original construction of the Panama Canal, one of the most political capital projects in modern times. The first manager appointed in the United States era was John Findley Wallace. He was under such pressure to "make the dirt fly" that he failed in less than a year. He was replaced by John Frank Stevens. The first thing Mr. Stevens did was stop all work, for months, while he assessed the condition of the equipment, the training of the workers and anything else to do with the project. He refused to be rushed as he assessed conditions. Mr. Stevens got the project, finally, off to a good start.

Can you imagine the fortitude it would take to stop a project and take the time to assess conditions and make a plan? Again, I can think of a couple of projects in our industry that need this kind of discipline today.

For safety this week, one can often look at the safety record of an ongoing project and determine the overall condition of a project. An unsafe project is likely over budget and out of control from a schedule standpoint, too.

Be safe and we will talk next week.


Employers are on board with There are twenty plus employers located in ten different US states and two other countries. [02.01.19]


Are you struggling to fill Maintenance Technician roles? (9-18-18)


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