ACHIEVING HIGH VALUE PROGRAMS AND PROJECTS BY MANAGING THE WHOLE VALUE IMPROVEMENT CYCLE

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ACHIEVING HIGH VALUE PROGRAMS AND PROJECTS BY
MANAGING THE WHOLE VALUE IMPROVEMENT CYCLE

• Michael Thompson
• for Martyn Phillips
• The TEAM FOCUS Group

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Purpose

• To encourage use of Value Management as a
  systematic long-term process of analytical and
  innovative explorations that culminate in firm,
  tested proposals for business improvement.
• To describe a VALUE ASSURANCE approach to
  achieving high performance and value

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Topics of Discussion

• Need for Change
• Background
• Context
• Performance and Value
• Different VM Approaches
• Value Assurance
• Conclusion

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Questions

• How many value practitioners find themselves
  being involved in a project from cradle to grave?
• How many project teams consider it necessary to
  involve an external party to assist them with
  ensuring that high performance is achieved?

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Need for Change

• Alternative needed to Get Fixed Quick
• Continuum approach rather than Intervention

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Background

• Management staff trapped in a world of tight
  timelines and high expectations
• Dealing with fuzziness and uncertainty of needs
  and costs
• Value supposedly built in no formal processes
• No universal agreement on value delivery

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Context

• Stakeholders
• Widely differing needs and expectations
• Return on investment and expected value not in
  line with business case

• Project Team
• Well intentioned undertakings often lead to
  costly overruns, disruptions to service
• Often unaware of value expected from them

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Context

• Return on Investment criteria not evident, and
  therefore not necessarily attained
• Key knowledgeable people are lost to the next
  critical project
• Information may not be passed on and many
  assumptions may have to be made by the next wave
  of project personnel (no continuity)

• Some examples of where it can go wrong
• Business people often absent during project
  development

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Performance Value

• Value determined not solely by the producer /
  promoter, but in concert with the customer /
  user.
• Not solely money

• Value includes
• Aesthetics
• Functionality
• Ease of OM
• Fastest time to market
• Sustainability
• Clients seeking to buy overall performance
  improvement, not just sequence of traditionally
  practiced project development activities

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Performance Value
Receptive to new ideas
Less defensive, broader thinking
Think outside comfort zone
End result not just more of the same
Ownership to ensure change process delivers
expected results
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Different VM Approaches

• There is often confusion over the several,
  various value terms, e.g.
• It is of no surprise that expectations of value
  improvement and what it can do can differ
  considerably
• The traditional VM process does not always fit
  comfortably within the mode of operation of 21st
  century business activities

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Focus

• Quite often, a key piece is missing but the
  project proceeds regardless..

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Focus
Selecting most appropriate concept
Unambiguous strategic direction
Optimising functionality
Assuring best value, managed risk and value
improvement
Reducing development time
Balancing capital and whole life costs
Optimising ongoing process
Rescuing stalled project / program
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Value Engineering
Needs Assessment
On-Time, On Budget, Delivery
Functionality / Fit for Purpose
Continuing Improvement
Concept Engineering
Risk Value Management
Value Engineering is a very powerful tool
But it floats in space!
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Value Assurance
Pro-active and holistic approach
Ensures expectations / results gap closed
The umbrella term that ensures and demonstrates
the effectiveness of many other management
processes
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Value Assurance

• Stage I Initiation Analysis
• Mandate, Scope, Opportunity etc.
• Stakeholder Expectations and Criteria, Needs
  Assessment, Communications Plan
• Project Metrics and Base Case Performance vs.
  Requirements

• Stage II Exploration Potential Options
• Input Summaries, Innovation Judgement
• Development Testing Proposals
• Selection, Integration Planning

• Stage III Consultation Approval to Implement
• Interim Read-out Feedback
• Broad Stakeholder Consultation Fine Tuning of
  Proposals
• Recommendations Approvals

• Stage IV Manage the Change
• Familiarization of Implementers / Training of
  Users Handover Package
• Briefing of other Parties and Buy-in.
• Implementation, Monitoring, Reporting Adjustment

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Conclusion

• The outcomes of programs, project, products and
  services vary significantly
• Success is a relative term and its measurement
  varies greatly
• Dictating factors include
• Overall management approach
• Culture of an organization
• Most value enhancement gains are made through
  strategic decisions, in conjunction with
  stakeholder input

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Conclusion

• A holistic Value Assurance approach can address
  the various issues through a comprehensive,
  integrated guiding approach to derive optimal
  performance
• Maximum effectiveness requires completion of the
  whole program, rather than the commonly observed
  ad hoc interventions
• To attain these benefits, diligent planning,
  senior managerial support and follow-through are
  required

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Real Life

• We were recently invited to undertake a 3-day VE
  study for a high profile multi-storey building
  (not in the UK) including all preparation time,
  workshop time and presentation time
• Objectives were to reduce capital costs by 35
• We considered it impractical to address a job of
  that magnitude adequately in such a short time
  scale
• We declined!
• We also find there is a high demand for tick in
  the box exercises which we prefer not to conduct

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What It All Means
Get away from what we have always done in the past
Use a holistic approach throughout the life of a
project
Pay diligent attention to the 4 Stages and 12
Themes
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A Final Thought

• What if we had a smart system that
• Captures key learnings and project problems?
• Allows corporate feedback to be incorporated in
  future planning?
• Avoids the necessity of every generation to learn
  the hard way?
• Avoids repeated costs for organisations and for
  Society?

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We have!
Value Assurance and Continuing Performance
Improvement
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• Questions
• Feedback

The TEAM FOCUS Group www.teamfocus.org
Martyn Phillips 46 Pineridge Crescent St
Albert Alberta, T8N 4P4 Canada Tel [phone]
1625 Email mphillips_at_teamfocus.org
Michael Thompson 44 Hardy Lane Chorlton Mancheste
r, M21 7LA United Kingdom Tel [phone]
4568 Email mthompson_at_teamfocus.org