Building Organizational Capability of Capital Project Leaders

Given that strong, quality capital project leaders are a key determinant of successful capital project outcomes, and leadership is one of the more frequently cited risks to achieve these, the development of bench strength in project execution organizations requires a clear strategic path forward. When such a path is lacking, companies scramble to fill key project leader positions with inexperienced resources or hire externally with little validation of track record. Either action places the project at risk.

To initiate a meaningful call to action, this discussion proposes a framework for a sustainable solution comprised of a top down approach as outlined in the framework elements below, complemented by a culture of leaders cultivating new leaders.

While directly applicable to challenges facing large industrial capital projects, the principles suggested can be tailored to any sector that requires leadership of multifunctional, multidiscipline project teams.

A sustainable framework is built from strategic intent and unwavering commitment from top company leadership. Implied or informal acknowledgement of such fundamentals is insufficient.

The 10 Framework Elements
Here are key elements to develop and sustain quality project leadership (in order of importance):
1. Development of Capital Project Leaders is part of the business strategy.
2. The leadership values of the organization are embodied in the culture.
3. Leadership development and leadership values are visible at all levels of the organization.
4. Sponsorship is from the highest executive level.
5. There is a corporate/geographic/business level functional responsibility for developing and deploying project leaders with a balance between long and short-term demand supported through corporate level funding.
6. Developmental project leadership assignments are routine, accepted, and budgeted as “the way we do business.”
7. A keen focus is placed on the development of people and team leadership attributes in addition to “technical” expertise.
8. A vibrant ecosystem is in place to drive regular knowledge exchange (and archiving) among project leaders.
9. Flexible compensation and benefits exist to retain key current and future project leaders.
10. Capital project leader ranks are continually grown and culled.

The Enabling Structure
These elements are often impacted and driven by a dispersed group of siloed organizations within a company. Typically falling under the jurisdiction of Human Resources (HR), career path management and Learning and Development (L&D) can fall short of business needs. A closer alliance with a nominated, dedicated “HR Business Partner” is a helpful, collaborative structure for a Projects Organization.

While an HR L&D team may have the academic expertise, the value of experience with capital project leaders’ positions cannot be overlooked. The longer-term strategy of sustaining quality project leadership is perhaps best served by a bespoke team with operations, business and projects representation under the guidance of a seasoned HR L&D professional. Having this team report directly to a corporate executive ensures company-wide visibility and validates candidacy.

In house or third-party accreditation can provide competence assessment that verifies that staff have the required skill and experience levels to carry out a Job Competence profile for project leadership positions. A gap analysis can assist a leader in identifying and pursuing personal development in areas of shortcomings. Such assessment also demonstrates to key stakeholders that competent staff are in business-critical positions.

Each project leader should have a Personal Development Plan (PDP) that is reviewed periodically. The PDP identifies specific assignments that broaden and deepen experience, such as serving on a Peer Review of another project, as well as internal and external courses.

Caution is given to companies who elect to use Project Director positions as a “check-the-box” assignment for rising executives. While the individual may benefit from the experience, a significant capital investment is placed at risk. This can be somewhat mitigated by assigning a number of strong project engineers and seasoned project managers to the team.

The Role of the Current Capital Project Leaders
Another important building block in project leader development is mentoring. The mentor-apprentice relationship is a basic, time-honored approach to assuring succession planning into any leadership position.

Organizations must ask themselves, “Does our culture and expectations of leaders reinforce this relationship?” Demands on leaders to meet business and project performance goals will overshadow investment of personal time in mentoring and coaching, unless such expectations are explicitly set and given priority.

Situations that stretch project leaders such as crisis management, team member turnover, and scope expansion introduce both opportunity and risk. Although often ignored or poorly addressed, organization risk management is a key element of project execution. One clear path of progression is from project engineer positions with increased breadth of scope to deputy project managers and project managers of small to mid-range capital projects (<$500 million). This can be reinforced by having current project leaders develop project-specific succession plans for capital project leaders and putting into place active development plans using the current project environment to exercise them. These plans can be a collaborative and transparent effort between the mentor and apprentice; which in itself builds an individual’s engagement, hence satisfaction and performance improvement.

Granted this “home-grown” approach is challenged by the current compensation models that do not offer incentive for individuals to maintain an allegiance to any one company. More common are the seekers who “follow the money” building careers across an industry sector. Granted this too has advantages in divergent perspectives and learnings.

Wrap-up
There are several levers that must be exercised to drive early yet sustainable quality of Capital Project Leaders. The top down approach as outlined in the 10 framework elements are complemented by a basic leadership culture of “leaders cultivating new leaders”. So when your organization, group, or team considers their performance improvement plans, raise to the top a plan addressing quality of project leadership.